Marketing Chapter 11

Creating Brand Equity

-Develop positive Brand Awareness -Establish a brand's meaning -Elicit the proper response -Create Intense Brand Loyalty

4 Aspects of Product Life Cycle

-Length of product cycle -Shape of their sales curve -how they vary with different levels of products -The rate at which consumers adopt products

Changing the Value offered

-Trading up -Trading down -Down Sizing

Barriers to adoption

-usage -Value -risk -psychological

Picking good brand name

1. The name should suggest the product BENEFITS 2. The name should be memorable distinctive and positive 3. The name should fit the company or product image. 4. No legal or regulatory restrictions 5. Name should be simple

Multiproduct branding

A company uses one name for all its products in a product class. Some times called family branding. Advantage, transfer favorable favorable image to other products, lower advertising and promotion cost. Disadvantages; other items in the product like may sacrifice exposure.

Communication Benefits

A major benefit of packaging is the label information in it to conveyed to the customer, such as directions how, here and when to use the product, and the source and composition of the product, which is needed to satisfied legal requirements of product disclosure.

Functional Benefits

A role such as storage, convenience, protection, or product quality.

Warranty

A statement indicating the liability of the manufacturing for product deficiencies

Trading Up

Adding Value to a product though additional features or higher quality materials.

Brand Development Index

An index that is calculated by taking the percentage of a brand's total sales that occur in a given market as compared to the percentage of the population in the market.

Category Development Index

An index that is calculated by taking the percentage of a product's category's total sales that occur in a given market area as compared to the percentage of the total population in the market.

Branding

An organization uses a name, phase, design, symbols, or combination of these to identify its products and distinguish them from those of competitors.

Branding name

Any words, device (design, shape, sound or color) or combination of these used to distinguish a sellers goods or service.

Low learning product

Begin immediately because little learning is required by the consumer, and the benefits of purchase and readily understood.

Product Repositioning

Changes the place a product occupies in a consumer;s mind relative to competitive products, generally through 4 factors: -reacting to a competitors position -reaching a new market -catching a rising trend -changing the value offered

Subbranding

Combining a corporate or family brand with a new brand to distinguish a part of its product from others

Trade name

Commercial legal name under which a company does business.

Early Majority

Deliberate, many informal social contacts.

Deletion

Dropping the product from the company's product line, is the most drastic strategy.

Fad Product

Experiences rapid sales in introduction and then an equally rapid decline, typically novelties and have short life cycle.

Laggards

Fear of debit; neighbors and friends are informal sources.

Trade mark

Identifies that a firm has legally registered its brand name or trade name so the firm has exclusive use, thereby preventing others from using it.

Fighting Brands

Introducing New brands as a defensive move to counteract competition cheif purpose confront competition brands

Product Modification

Involves altering a product's characteristics such as its quality performance or appearance to increase the products value to customers and increase sales. -Product Bundling (the sales of two or more separate products in one package) -New Characteristics

Fashion Product

Is a style of the times-life cycle appear in women and men's apparel, introduced, decline then seem to return.

Early adapters

Leaders in social setting, slightly above average education

Shape of Life Cycle

Not all products have the same shape: -high learning product -low learning product -Fashion product -Fad product

Introduction Stage

Occurs when a product is introduced to it's intended target market. During this period sales grow slowly and profit is minimal. -Stimulate Trial -Primary Demand -Selective Demand -Skimming Strategy -Penetration Pricing

High learning product

One for which significant customer education is required and there is extended introduction period.

perceptual Benefits

Package shape, color,, and graphics distinguish one brand from another, convey a brand's positioning, and brand equity, creating a perception in the consumer's mind.

Growth Stage

Part of life cycle characterized by rapid increase in sales and appearance of competitors. Profit tend to peak during this stage and advertising shifts emphasis to stimulating selective demand. -Rapid Sales Growth -More Competitors -Repeat Purchases -New Features -Broad Distribution

Maturity Stage

Part of the cycle characterized by a slowing of total industry sales or product class revenue. Competitors begin to leave the market. Sales increase at a decreasing rate and obtaining new customers becomes more costly. Marketing is focused on holding marketing share. -Industry/product sales slow -Profit Declines -Product Differentiation -Fewer Competitors

Decline Stage

Part of the life cycle characterized by the dropping of sales, often caused by environmental or technological changes. Results in one of two strategies: -Deletion -Harvesting

product form

Pertains to variations within the product class. For prerecorded music, this exists in the technology used to provide the music such as cosset tapes, compact disks and digital music player.

Product line extensions

Practice of using a current brand name to enter a new market segment in its product class

Penetration Pricing

Pricing strategy which the sellers charges a low price on a new product to discourage competition and gain market share.

Private Branding

Private Labeling or reseller branding When a company manufacturers products but sells them under the brand name of a wholesaler or retailer, also called private labeling or reseller branding It is estimated that 1 in 5 items purchased at US supermarkets, drug store and mass merchandisers bears this branding.

Trading down

Reducing the number of features, quality or price.

Packaging

Refers to the container in which a product is offered for sale and on which label information is conveyed.

Product class

Refers to the entire product category or industry such as prerecorded music.

Skimming Strategy

Setting a high initial cost to recover the costs of development as well as capitalize on the price insensitivity of early buyers.

Late Majority

Skeptical; below average social status.

Limited coverage warranty

Specifically states the bounds of coverage and more important areas of non coverage.

Market Modification

Strategies used by companies trying to fins new customers, increase a products use among existing customers, or create new use situations -Finding New Customers -Increase a Product use -Creating a new use situation

Brand Equity

The added Value a brand name gives to a product beyond the functional benefits provided giving two distinct adventures (the economic value of a brand name) -Brand awareness -Brand performance& Brand imagery -consumer judgment & Consumer feelings -Consumer brand connection

Primary Demand

The desire for the product class rather that for a specific brand, since there are few competitors with the same product.

Brand Awareness

The first step in creating Brand Equity consists of developing positive brand awareness and an association of the brand in consumer's minds with a product class or needs to give the brand an identity.

Consumer brand connection

The fourth/final step in creating Brand Equity consists of creating an intense, active loyalty relationship between consumers and the brand. A deep psychological bond characterized the connection and the personal identification consumer have with the brand.

Stimulation Trial

The initial purchase of a product by a consumer.

Brand Extension

The practice of using a current brand name to enter a different product class. Risks include having too many uses for one brand can dilute the meaning of the brand to consumer

Selective Demand

The preference for a specific brand.

Diffusion of innovation

The process whereby a new product, service, or idea spreads through a population.

Brand imagery and performance

The second step in creating Brand Equity consists of establishing a brand's meaning in the minds of consumers through two dimensions 1. functional, performance-related dimensions 2. an abstract image-related dimensions

Product Life Cycle

The stages a new product goes through in the market place. -Introduction -Growth -Maturity -Decline

Consumer judgement & Feelings

The third step in creating Brand equity consists of eliciting the proper consumer responses to a brand's identity and meaning. Here attention is placed on how consumers think and feel about the brand. Thinking is focused on a brand's perceived quality, credibility, and superiority relative to other brands. Feeling relates to the consumer's emotional reaction to a brand.

Innovators

Venturesome, higher educated, use multiple information sources.

Harvesting

When a company retains a product but reduces marketing costs. The product continues to be offered but sales people do not allocate time in selling nor are advertising dollar spent.

Express Warranties

Written statement

Multibranding

involves giving each product a distinct name, a useful strategy when each brand is intended for a different market segment.

Brand Licensing

is contractual agreement whereby one company (licensor) allows its brand names(s) or trade mark (s) to be used with product or services offered by another company (licensee) for a royalty fee

Label

on integral part of package and typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients.

Co-Branding

the pairing of two branding names of two manufactures on a single product.

Mixed branding strategy

where a firm markets products under its own name and that if a reseller because the segment attracted to the reseller is different from its own market.