Marketing Exam III: Ch. 10- Product

Multi product branding

(Family or Corporate Branding) Product Line Extensions Sub-branding Brand Extension Co-Branding

Three issues with product

1. Branding should ideally establish intense brand loyalty. Is brand loyalty based on taste or marketing? Taste tests engage consumers and build loyalty. Brand loyalty in many markets is driven by marketing and packaging, much more than by taste. When an item is a commodity, it is highly susceptible to branding for the primary purpose of differentiation. Consumers have an emotional connection with chocolate. (Private label chocolate has 5% of the market, compared to 20% of most other categories of food and beverages.) When I ask about your favorite chocolate, consider how much you are influenced by emotional issues, as described before the tasting, rather than purely on taste. Emotional issues also include prior associations with these products. 2. What constitutes QUALITY to you, with regard to chocolate bars? Each individual interprets this differently. Quality is not only the taste, mouth feel, richness and other physical experiences of eating a chocolate bar. In addition, consider that bar's brand image (remember product positioning) and its emotional history with you. Consider the effect of culture on consumer decisions about which chocolate bars they buy. What about the effect of packaging (including size impression) on consumer behavior when most purchase decisions are impulse purchases? Americans love chocolate. Valentine's: 48 million pounds chocolate sold in Valentine's week. Easter: 71 million pounds chocolate sold in the week before Easter. Halloween: 90 million pounds chocolate sold in the last week of October. Biggest chocolate eaters in the world = Switzerland: 26 lb pp pa; this is equivalent to ±240 bars of chocolate per year. Americans eat ±12 lb pp pa. Snickers - worldwide annual sales $2b; 400m units sold in the last year; world's/America's most popular candy bar?; started 1930; named after Mars family's favorite horse! M&Ms - first manufactured to avoid melting; sold to military; first in space; started 1941 Reese's Peanut Butter Cups - worldwide > 400 million sold; started 1928 Hershey bars - iconic American chocolate bar; standard rations for WW II troops (1 billion); started in 1900; 1st mass-produced choc in N.America Kit Kat - chocolate-covered wafer; designed for sharing (usually has 2 or 4 'fingers'); worldwide > a billion bars sold; world's most popular candy bar?, Rowntree's brand bought by Nestlé in 1988; started in London, UK, in 1935; >200 flavors; this is the only top-selling bar in America that isn't American; made under license for the US market only by Hershey's since 1970. Kit Kat is one of Hershey's top 5 brands. 3 Musketeers; started 1932; outside the US and Canada, this bar is sold as Milky Way Milky Way = Mars Bar outside the US; Mars' 1st candy bar; started 1923; chocolate-malt nougat covered in milk chocolate; American version also has caramel topping Baby Ruth - officially named after Ruth Cleveland, daughter of Pres. Cleveland; invented 1923 in Chicago Butterfinger - 1923; name as a result of a competition, meaning "klutz" 3. Test market Is this class's preference representative of America's order of preferences? i.e. could we use this class as a test market that represents the US taste for chocolate? (slide 25)

10 examples of successful brand extensions

1. Shift the form: Starbucks Frappuccino, Snickers Ice Cream Bars, Black & Decker Role Play Tool Toys, Clorox Bleach Pen, Dial Hand Wash. 2. Transfer a component: Crayola soap paints (creative color), Entenmann's "Fresh Baked" Candles, Dr. Scholl's shoes, Ghirardelli Brownie Mix. 3. Transfer a benefit: Arm & Hammer Car Litter Deodorizer, Mr. Clean Magic Eraser, Ziplock Food Containers, Weight Watchers Ice Cream Bars. 4. Leverage an expertise: Food Network cookware, Honda lawnmowers, Gold's Gym 7-in-1 Body Building system, Mayo Clinic Diet, Reebok Sports Club. 5. Companion products: Coleman Sleeping bags, Coppertone Sunglasses, Harley Davidson Apparel, Mr. Coffee Premium Coffee, Steinway Furniture Polish, Weber Seasonings. 6. Leverage the customer base: Trix Yogurt, Smith & Wesson Tactical Police Mountain Bikes, Sesame Street Toys, Barbie Scooter, Adidas Watches, Fisher-Price Diapers. 7. Leverage a lifestyle: Biggest Loser Kitchen Scale, Coach Fragrance, Cover Girl Sunglasses, Discovery Kids Telescope, ESPN Restaurants, Esquire Furniture, Porsche Kitchen Appliances, Rolling Stone Restaurant. 8. Leverage a celebrity expertise: Jack LaLanne's Power Juicer, Jack Welch Management Institute, Jan Fonda Workout DVD, Martha Stewart Bedding, Ralph Lauren Paints, Wolfgang Puck Frozen Pizza. 9. Leverage a celebrity lifestyle: Cindy Crawford Jewelry, Donald Trump Signature Collection Apparel, Eddie Bauer Baby Stroller, Jessica Simpson Luggage, Kelly Ripa Shoes, Lakers Bottled Water, George Foreman Grill. 10. Change the game by changing a brand image: Old Spice High Endurance Deodorant, V8 V-Fusion Vegetable and Fruit Juice, Zagat Health Survey Doctor's Ratings David Aaker, Ten Routes to a Successful Brand Extension; www.prophet.com April 11, 2012

How does a broad product line benefitboth consumers & retailers?

A broad product line enables both consumers and retailers to simplify their buying decisions

More great packaging

A spoon that contains creamer so you just squeeze and stir - yankodesign.com Coffee spoon designed by Yu-Ren Lai Wine bottle packaging that creates two drinking glasses - hongkiat.com by Ampro A sushi to-go box that uses chopsticks as the handle - behance.net Concept by Ashley Buerkett "Anti-smoking cigarette packaging that really drives the message home" behance.net by Reynold and Reyner

What factor triggered repositioning of milk?

Children under 18 drink 46% of the milk consumed in the USA. The Dairy Industry is really big business, with sales > $11 billion for milk and $16 billion for cheese, annually, in the USA alone. The Dairy Management Inc.'s purpose is to build demand for dairy products on behalf of America's > 80,000 dairy producers. Benefits of Vitamin D: = "sunshine vitamin"; produced in skin in response to sunlight regulates absorption of calcium & phosphorus, which leads to healthy bones facilitates normal immune system functioning important for normal growth & development of bones & teeth NIH (National Institute of Health) says people over age 50 need more vit.D than younger people decreased risks of Type 1 diabetes, muscle and bone pain, cancers of breast, colon, prostate, ovaries, esophagus, lymphatic system, heart disease, multiple sclerosis, flu 3 sources of vit. D:1. sunlight (>10 minutes a day) 2. certain foods (salmon, shrimp, sardines, egg yolk; fortified in milk, cereal, o.j.) 3. Supplements

What is a new product?

Compared to Existing Products - if a product is functionally different from existing products Legal terms - FTC: up to 6 months after product has entered 'regular' distribution Organization - indicated by level of innovation in company Consumer's perspective - degree of learning required by consumer

Food Packaging: PERCEPTUAL

Coordinate design with package Image Brand recognition Brand personality Country of origin bias Attractive Convenient Value TARGET MARKET

Alternative product life cycle curves based on product types

Examples: A: High-learning product - microwave oven, fancy camera B: Low-learning product - razor, ketchup squeeze bottle C: Fashion product - stiletto heels, bell bottoms D: Fad product - beanie babies, yo-yos

Food Packaging: FUNCTIONAL- Glass

Glass / plastic Compatible with food Protects against contamination; tamper-proof; sanitary Environmentally sound Functions as preparation and/or serving vessel One of the main benefits of using glass over other types of food packaging is that it is non-reactive with virtually all foods. In addition, it contains the product totally, because it is impervious to moisture and gases. Like metal, glass allows you to cook the food inside the container. It is also good from a marketing perspective-because it is transparent, the consumer can see the contents. Not only is glass recyclable, but it is also often re-used by some food processors. The drawback of glass as a food packaging material is that it is extremely fragile and very heavy, which adds to distribution costs. The standard glass for food packaging is soda-lime glass. It can be formed into unique shapes and sizes. It can also be colored for an attractive appearance or to screen out light that could cause unwanted changes in the product.

Product Line

Group of product or service items that are closely related because they satisfy a class of needs, are used together, sold to the same customer group, are distributed through the same outlets, or fall in the same price range; e.g. Nike's product line includes shoes & clothing; Smuckers' product line includes various flavors of jams, jellies and preserves

Food Packaging: COMMUNICATION- Label (Before creating a label, you should know)

Identifies product Educational & user-friendly Ingredient listing Size & positioning of text Nutrition facts SKU all the regions where your product will eventually be sold, including distribution channels; information your consumers would find helpful; the colors and promotional appeals that are suitable for your audience; how the label will be applied; what labeling material is suitable for the product environment (i.e. does it need to be freezer-proof? Shipping-proof? Smudge-proof?); labeling budget; and regulatory requirements for the product.

Novel packaging

Orange juice boxes: beachpackagingdesign.com by Preston Grubbs YKM fitness shopping bag adforum.com by TWBA/Istanbul yankodesign.com Designed by Yu Kyung Ha, Won Min Jung, and Kwon Young Hee. "An apt "shoebox" for Nike Airs" s-f.com / Via creativebloq.com by Scholz and Friends

Food Packaging: FUNCTIONAL- Plastic

Plastics are ideal for food packaging because they are: resistant to breakage; relatively inexpensive; corrosion resistant; lightweight; and waterproof. Plastics can be produced easily in complex shapes, and they also possess a wide range of colours, or remain transparent. Although plastics have come a long way since their introduction into the food industry, there still remain some drawbacks to using them for food packaging. For example: they can bend, crush or crack easily; some possess little heat resistance; they pick up dust easily; and some of the more complex laminates can be very expensive. Plastics also don't have the excellent barrier properties of glass and metals, so they allow gases to pass in and out of the package. Plastics differ in how effective they are as barriers to the various important gases - oxygen, carbon dioxide and water vapor. Selecting the right plastic packaging requires knowledge of how sensitive the product is to loss or absorption of these gases.

Brand Positioning

Product attributes e.g. toothpaste taste; weak because easy to copy Desirable benefit e.g. cavity prevention, teeth whitening Beliefs & values e.g. Crest gives customers "healthy beautiful smiles for life"

SKU

Stock Keeping Unit = unique identification number that defines an item for ordering or inventory purposes.

Who is this packaging targeting?

TEA OF A KIND Unlike other ingredient containing specialty caps that require an extra step to open, the consumer twists the Vessl cap off as any normal cap. That motion opens a valve inside to release the ingredients directly into the bottle filled with 16oz of purified water. "Releases" is an understatement, the ingredients literally jet under 100 psi of nitrogen pressure, injecting a strong dose of product and consumer interaction into the highly visual process. You can view videos of the dramatic, instant blending process at the company's homepage found below. SQUISHABLE WINE BOX LETS YOU SQUEEZE WINE UNTIL THE LAST DROP As the latest most popular trend in packaging design, interactive design can not only make your product visually stand out, but also serves some bonus purpose such as entertainment or functionality. Hence, compared with normal packaging, interactive packaging is usually more fun, more memorable and maybe more useful in some cases.

foreign branding

The name Häagen-Dazs is simply two made-up words meant to look Scandinavian to American eyes—although in fact, the digraphs "äa" and "zs" are not part of any native words in any of the Scandinavian languages. Wikipedia Mum was the first brand of commercial deodorant, after the word "mum", meaning to keep silent. Joy perfume was created in 1929 by Jean Patou, in response to the 1929 Wall Street crash. It has been extraordinarily successful since then, despite - or maybe because of - its high price

trade name

a commercial, legal name under which a company does business

Product

a good, service or idea, consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something else of value anything that can be offered to a market for attention, acquisition, use, or consumption, and that might satisfy a want or need. physical objects, services, events, people, places, organizations, ideas, or any mixture of these.

Brand personality

a set of human characteristics associated with a brand

brand personality

a set of human characteristics associated with a brand name Coca Cola = all-American Pepsi = young & exciting Dr. Pepper = non-conformist & unique Mercedes = assertive & in control; "The Best or Nothing" tag line; luxury brand personality; status symbol BMW = more sexy & desirable; "The Ultimate Driving Machine" tag line; performance Cadillac = luxury & upscale & elegance; GM; hard to shake off image of "old people" brand Levi's jeans = rugged Personality can be measured, i.e. quantified. This will help create locus of each brand on a perceptual map.

product item

a specific product that has a unique brand, size, or price. each size has its on SKU

Trading up

adding value to a product through additional features

Product mix

all, most or many product lines offered by an organization

Coca Cola Billboard

bottle brand shape recognition

Product repositioning

changing the place a product occupies in a consumer's mind

Classifying Products

consumer products and industrial (business) products Difference: purpose- e.g. lawn mower - for personal home use OR for landscaping business

Packaging

container in which product is offered for sale

consumer products

convenience - frequent purchases, minimum effort shopping - compare options, considering price, quality, style specialty - special effort to find and buy unsought - unaware and/or unwanted

Beliefs & Values

create surprise, passion, excitement around a brand e.g. Victoria's Secret, Starbucks, Godiva, Versace, Lancôme

Early Majority (34%)

deliberate, many informal social contacts

Industrial Products

derived demand - as housing market improves, demand for paint rises components - include raw materials, parts support products - used to help make other products & services

Brand contract must be simple and honest, i.e. DELIVERABLE

e.g. Motel 6 promises clean rooms, low prices, good service, but not expensive furniture or large bathrooms Ritz-Carlton offers luxurious rooms, memorable experience, but does not promise low prices

Retail-tainment

experiential shopping

Laggards (16%)

fear of debt, neighbors and friends are information sources

non-durable goods = perishable

goods that last a short period of time, such as food, light bulbs, and sneakers(<3yrs)

Product line

group of product or service items that are closely related because they satisfy a class of needs, are used together, sold to the same customer group, are distributed through the same outlets, or fall in the same price range; e.g. Nike's product line includes shoes & clothing; Smuckers' product line includes various flavors of jams, jellies and preserves

Label

identifies product and supplies essential product information (usually legally mandated)

5 categories & profiles of product adopters (diffusion of innovation)- Product Life Cycle

innovators early adopters early majority late majority laggards

Early Adopters (13.5%)

leaders in social setting, slightly above average education

trademark

legally registered trade name or brand name, to protect exclusive use, and help develop brand loyalty

durable goods

manufactured items that have a life span longer than three years

Private branding

most significant strategy regarding alternative branding strategies

Test marketing

offering a product for sale in a limited area for a limited time

Test market

region whose population represents national average demographic statistics used to test acceptability of a product/ service before a wide scale roll-out to mass market popular test markets in the USA: -Nashville, TN -Charlotte-Gastonia-Rock Hill, NC-SC (#14

Perceptual map

repositioning- graphing the locations of products or brands in consumers' minds, so marketing managers can see how competing products/brands compare to their own products/brands.

Product bundling

sale of 2 or more separate products in one package

Heinz ketchup

shape and brand recognition; clever tag line

Trading down

simplifying the product offering by reducing the number of features, e.g. downsizing

Late Majority (34%)

skeptical, below average social status

Product Life Cycle

stages a product goes through in the marketplace Products are like people. They go through stages of life. Examples of products/services/ideas in each stage of consumer electronics sector: -Introduction: 3D TVs (Been around for decades, but only recently available for home use, after investment by tech companies and broadcast companies) -Growth: Blue Ray players (advanced tech) -Maturity: DVD players (now challenged by alternative technologies) -Decline : Video casette recorders (easier and cheaper for consumers to switch to more modern formats) top line (total industry sales dollars) bottom line (total industry profit

Warranty

statement indicating liability of the manufacturer for product deficiencies

brand equity

the added value a brand name gives to a product beyond the functional benefits provided results from careful building process high brand equity can help move into new markets Strong brand has power to increase sales and profits

brand extension

the use of a well-established brand name for a new product

Branding

using a name, phrase, design, symbol, or combination of these to distinguish a product (or service) from others in the marketplace

branding

using a name, phrase, design, symbol, or combination of these to distinguish a product (or service) from others in the marketplace

Innovators (2.5%)

venturesome, higher educated, use multiple information sources

Brand name

word or device (or combination)

brand name

word or device (or combination)