MKTG 300 Chapter 11

Firms should consider the following:

- evaluate the fit between the product class of the core brand and that of the extension -evaluate consumer perceptions of the attributes of the core brand and seek out similar attributes for the extension -refrain from extending the brand name to too many products and categories -consider whether the brand extension will be distanced from the core brand

Brands Facilitate Purchases

-Brands are often easily recognized by consumers, and because they signify a certain quality level and contain familiar attributes, brands help consumers make quick decisions, especially about their purchases -Brands enable customers to differentiate one firm or product from another -Ex: Pepsi drinkers can easily find their brand at a store

Core Customer Value

-Defines the basic problem-solving benefits that consumers are seeking -What are customers looking for?

Brands are Assets

-For firms, brands are also assets that can be legally protected through trademarks and copyrights and thus constitute a unique form of ownership -Firms sometimes have to fight to ensure their brand names are not being used, directly or indirectly, by others Ex: McDonald's

Brands Establish Loyalty

-Over time and with continued use, consumers learn to trust certain brands. They know, for example, that they wouldn't consider switching brands, and, in some cases, feel a strong affinity to certain brands

Value of Branding for the Customer

-brands facilitate purchases -brands establish loyalty -brands protect from competition and price competition -brands are assets -brands affect market value

Product

Anything that is of value to a consumer and can be offered through a voluntary marketing exchange -Can be places, ideas, organizations, people, or communities that create value for customers

Too much breadth in the product mix becomes ______ to maintain

Costly

Depth

Equals the number of products within a product line

Increase Depth

Firms might add items to address changing consumer preferences or to preempt competitors while boosting sales -Ex: Philadelphia creating jalapeno flavored cream cheese - increases the product line's depth

Increase Breadth

Firms often add new product lines to capture new or evolving markets and increase sales -Ex: Firm adds whole new line of yogurt

Decrease Depth

From time to time, it is also necessary to delete products within a product line to realign the firm's resources -Ex: P & G merging, eliminating, or selling many of its brands -An underperforming brand today might become a superior revenue generator a year later

Product Lines

Groups of associated items that consumers tend to use together or think of as part of a group of similar products or services -Ex: Daimler's product lines include Mercedes-Benz cars, smart cars, vans, etc.

Brands Affect Market Value

Having well-known brands can have a direct impact on the company's bottom line -The value of a company is its overall monetary worth, comprising a vast number of assets -When the brand loses value, it threatens other assets -Ex: Radio Shack

Associated Services (Augmented Product)

Include the nonphysical aspects of the product, such as product warranties, financing, product support, and after-sale service

Brand Awareness

Measures how many consumers in a market are familiar with the brand and what it stands for and have an opinion about it -Familiarity matters most for products that are bought without much thought like soap or gum

Brand Dilution

Occurs when a brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold -Ex: Ferrarie selling sunglasses, perfume, cologne, skis, guitars, phones, watches, legos, etc. TO WIDE OF A SPECTRUM -Ex: Life Savers Soda

Brand Loyalty

Occurs when a consumer buys the same brand's product or service repeatedly over time rather than buying from multiple suppliers within the same category

Manufacturer Brands (National Brands)

Owned and managed by the manufacturer -Majority of brands in US are manufacturer brands -Ex: Nike, Coca-Cola, Sony

Unsought Products/Services

Products consumers either do not normally think of buying or do not know about at all -Requires a lot of marketing effort

Retailer/Store Brands (Private-Label Brands)

Products developed by retailers -Can develop own products or develop the design and contract with manufacturers -Ex: Costco and Trader Joe's

Brand Repositioning (Rebranding)

Refers to a strategy in which marketers change a brand's focus to target new markets or realign the brand's core emphasis with changing market preferences -Ex: Cow Wow milk repositioned from children to adults -Corn industry tried rebranding high fructose corn syrup to "corn sugar" - Failed

Brand Extensions

Refers to the use of the same brand name in a different product line -Ex: The dental hygiene market is full of brand extensions; Colgate and crest sell toothpaste, toothbrushes, etc. even though their original product line was just toothpaste

Brand Associations

Reflect the mental and emotional links that consumers make between a brand and its key product attributes, such as a logo and its color, slogan, or famous personality -Ex: State Farm jingle or Grumpy cat with Friskies

Breadth

Represents a count of the number of product lines offered by the firm

Decrease Breadth

Sometimes it is necessary to delete entire product lines to address changing market conditions or meet internal strategic priorities -Ex: Firm drops it line of protein bars and focuses on energy drinks instead

Brands Protect from Competition and Price Competition

Strong brands are somewhat protected from competition from other firms and price competition -Because such brands are more established in the market and have a more loyal customer base, neither competitive pressures on price nor retail-level competition is a threatening to a firm -- BUY NO MATTER THE PRICE

Cannibalize

Take away sales from the other brand, with no net sales, profit, or market share increase - Products are too similar

Product Mix

The complete set of all products and services offered by a firm -Consists of various product lines and their breadth and depth

Primary Package

The one the consumer uses, such as the toothpaste tube -Seek convenience

Actual Product

The physical attributes of a product including the brand name, features/design, quality level, and packaging -Marketers convert core customer value into an actual product

Co-Branding

The practice of using the established brand names of two different companies on the same package, promotion, or store -Ex: Yum brand paired A&W, KFC, Pizza Hut, etc. -Fails when brands are too different

Perceived Value

The relationship between a product's or service's benefits and its cost -If customers believe a less expensive brand is about the same quality as a premium brand, the perceived value of that cheaper choice is high

Brand Equity

The set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service

Individual Brands

The use of individual brand names for each of a firm's products -Ex: Kraft allows Philadelphia cream cheese, Cracker Barrel, and steak sauce to keep their individual identities

Secondary Package

The wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners -can contain additional product information that may not be available on the primary package -adds value by facilitating the convenience of carrying, using, and storing the product

Specialty Products/Services

Those for which customers express such a strong preference that they will expend considerable effort to search for the best suppliers -Ex: Choosing a bike, luxury car, designer apparel, etc.

Convenience Products/Services

Those products or services for which the consumer is not willing to expend any effort to evaluate prior to purchase - Often simple commodities -Ex: Beverages, bread, soup, etc.

Too many brands may ______ the firm's reputation

Weaken

Firms occasionally change/update their packaging to __________ the ___________

reposition; product -Attract new market -Make consumers feel they're receiving something new -More recognizable

Branding

-Consumers cannot buy products they don't know exist -Provides a way for a firm to differentiate its products from their competitors

Brand Ownership Strategies:

1) Manufacturer brands 2)Retailer/Store brands

Brand Licensing

A contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols, or characters in exchange for a negotiated fee -Ex: Disney flooded retail stores with Frozen products -Is an effective form of attracting visibility for the brand and thereby building brand equity while also generating revenue -Runs risk of dilution though

Family Brands

A firm's own corporate name used to brand its product lines and products - all under one name -Ex: Kraft Foods uses its family brand name prominently on its cheese, pasta, and condiment brands

Brand Ownership

Brands can be owned by any firm in the supply chain, whether manufacturers, wholesalers, or retailers

2 Categories of products and services that reflect who buys them:

Consumers or Businesses

Packaging plays several key roles:

It attracts consumers attention. It enables products to stand out from their competitors. It offers promotional tools "new and improved!" Promises on the label. It allows for the same product to appeal to different markets with different sizes such that convenience stores stock little packages that travelers can buy last minute, whereas Costco sells extra large versions of products.

Product Labeling

Labels on products and packages provide information the consumer needs for his or her purchase decision and consumption of the product -Stem from many laws -Used as a communication tool -Ex: Communicates benefits like ingredients, vitamin content, country of origin, etc.

Sustainable Packaging

Product packaging that has less of a negative impact on the environment -Ex:Coca-cola, Microsoft, Waste Management, etc. use environmentally responsible packaging

Consumer Products

Products and services used by people for their personal use

Line Extension

The use of the same brand name within the same product line and represents an increase in a product line's depth Ex: Kellog's branched out from just cereal to Eggo waffles

Shopping Products/Services

products or services for which consumers will spend a fair amount of time comparing alternatives, such as furniture, apparel, fragrances, appliances, and travel alternatives -Ex: Comparing types of shoes to buy from store to store