Marketing Chapter 8

Consumer Products

Consumer products are products and services bought by final consumers for personal consumption. Consumer products include convenience products, shopping products, specialty products, and unsought products.

Product Classifications

Products and services fall into two broad classes based on the types of consumers who use them: consumer products and industrial products. Broadly defined, products also include other marketable entities such as experiences, organizations, persons, places, and ideas.

Co-Branding

Co-branding occurs when two established brand names of different com- panies are used on the same product. Co-branding offers many advantages. Because each brand operates in a different category, the combined brands create broader consumer ap- peal and greater brand equity. Taco Bell and Doritos teamed up to create the Doritos Locos Taco. Co-branding can take advantage of the complementary strengths of two brands. It also allows a company to expand its existing brand into a category it might otherwise have dif- ficulty entering alone. Such relationships usually involve complex legal contracts and licenses. Co-branding partners must carefully coordinate their advertis- ing, sales promotion, and other marketing efforts. Finally, when co-branding, each partner must trust that the other will take good care of its brand.

Brand Names

(1) It should suggest some- thing about the product's benefits and qualities: Beautyrest, Slimfast, Snapchat, Pinterest. (2) It should be easy to pronounce, recognize, and remember: iPad, Tide, Jelly Belly, Twitter, JetBlue. (3) The brand name should be distinctive: Panera, Swiffer, Zappos, Nest. (4) It should be extendable—Amazon.com began as an online bookseller but chose a name that would allow expansion into other categories. (5) The name should translate easily into foreign languages. The official name of Microsoft's Bing search engine in China is bi ying, which literally means "very certain to respond" in Chinese. (6) It should be capable of reg- istration and legal protection. A brand name cannot be registered if it infringes on existing brand names.

Brand Equity

Brand equity is the differential effect that knowing the brand name has on customer response to the product and its marketing. It's a measure of the brand's ability to capture consumer preference and loyalty. A brand has positive brand equity when consumers react more favorably to it than to a generic or un- branded version of the same product. It has negative brand equity if consumers react less favorably than to an unbranded version.

Convenience Products

Convenience products are consumer products and services that customers usually buy frequently, immediately, and with minimal comparison and buying effort. Examples include laundry detergent, candy, magazines, and fast food. Convenience products are usually low priced, and marketers place them in many locations to make them readily available when customers need or want them.

Labeling

Labels and logos range from simple tags attached to products to complex graphics that are part of the packaging. They perform several functions. At the very least, the label identifies the product or brand, such as the name Sunkist stamped on oranges. The label might also describe several things about the product—who made it, where it was made, when it was made, its contents, how it is to be used, and how to use it safely. Finally, the label might help to promote the brand and engage customers. For many companies, labels have become an important element in broader marketing campaigns.

Packaging

Packaging involves designing and producing the container or wrapper for a product. Traditionally, the primary function of the package was to hold and protect the product. In recent times, however, packaging has become an important marketing tool as well. Increased competition and clutter on retail store shelves means that packages must now perform many sales tasks—from attracting buyers to communicating brand positioning to closing the sale. Not every customer will see a brand's advertising, social media pages, or other promotions. However, all consumers who buy and use a product will interact regu- larly with its packaging. Thus, the humble package represents prime marketing space. Innovative Distinct Frustration-Free Product Safety

Brand Strategy

Line Extensions. Line extensions occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category. For ex- ample, over the years, KFC has extended its "finger lickin' good" chicken lineup well be- yond original recipe, bone-in Kentucky fried chicken. A brand extension extends a current brand name to new or modified products in a new category. For example, Nest—the maker of stylish, connected, learning thermostats that can be controlled remotely from a phone—extended its line with an equally smart and stylish Nest Protect home smoke and carbon monoxide alarm. Companies oftenmarketmanydifferentbrands in a given product category. For example, in the United States, PepsiCo markets at least eight brands of soft drinks (Pepsi, Si- erra Mist, Mountain Dew, Manzanita Sol, Mirinda, IZZE, Tropi- cana Twister, and Mug root beer), Multibranding offers a way to establish different features that appeal to different customer segments, lock up more reseller shelf space, and capture a larger market share A major drawback of multibranding is that each brand might obtain only a small market share, and none may be very profitable. The company may end up spreading its resources over many brands instead of building a few brands to a highly profitable level A company might believe that the power of its existing brand name is wan- ing, so a new brand name is needed. Or it may create a new brand name when it enters a new product category for which none of its current brand names is appropriate. For exam- ple, Toyota created the separate Lexus brand aimed at luxury car consumers and the Scion brand targeted toward millennial consumers.As with multibranding, offering too many new brands can result in a company spreading its resources too thin. And in some industries, such as consumer packaged goods, consumers and retailers have become concerned that there are already too many brands with too few differences between them. T

Brand Positioning

Marketers need to position their brands clearly in target customers' minds. They can po-sition brands at any of three levels. At the lowest level, they can position the brand on product attributes. For example, Whirlpool can position its major home appliance products on attributes such as quality, selection, style, and innovative features. In general, however, attributes are the least desirable level for brand positioning. Competitors can easily copy attributes. More important, customers are not interested in attributes as such—they are interested in what the attributes will do for them. A brand can be better positioned by associating its name with a desirable benefit. Thus, Whirlpool can go beyond technical product attributes and talk about benefits such as taking the hassle out of cooking and cleaning, better energy savings, or more stylish kitchens. The strongest brands go beyond attribute or benefit positioning. They are posi- tioned on strong beliefs and values, engaging customers on a deep, emotional level. For example, Whirlpool's research showed that home appliances are more than just "cold metal" to customers. They have a deeper meaning connected with the value that they play in customers' lives and relationships. Advertising agency Saatchi & Saatchi suggests that brands should strive to become lovemarks, products or services that "inspire loyalty beyond reason." Brands ranging from Disney, Apple, Nike, and Coca-Cola to Trader Joe's, Google, and Pinterest have achieved this status with many of their customers.

Private/store brands

National brands (or manufacturers' brands) have long dominated the retail scene. In recent times, however, increasing numbers of re- tailers and wholesalers have created their own store brands (or private brands). Store brands have been gaining strength for more than two decades, but recent tighter economic times have created a store-brand boom. Studies show that consumers are now buying even more private brands, which on average yield a 25 percent savings.store brands a boost as consumers become more price-conscious and less brand-conscious. In fact, store brands have grown much faster than national brands in recent years. In a recent survey, 65 percent of consumers indicated that they buy store brands whenever they are available in a supermarket. Similarly, for apparel sales, department store private-label brands have shot up.

Shopping Product

Shopping products are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style. When buying shop- ping products and services, consumers spend much time and effort in gathering informa- tion and making comparisons. Examples include furniture, clothing, major appliances, and hotel services. Shopping product marketers usually distribute their products through fewer outlets but provide deeper sales support to help customers in their comparison effort

Speciality Products

Specialty products are consumer products and services with unique characteristics or brand identifications for which a significant group of buyers is willing to make a special purchase effort. Examples include specific brands of cars, high-priced photography equip- ment, designer clothes, gourmet foods, and the services of medical or legal specialists. A Lamborghini automobile, for example, is a specialty product because buyers are usually willing to travel great distances to buy one. Buyers normally do not compare specialty products. They invest only the time needed to reach dealers carrying the wanted brands.

Social Marketing

This area has been called social marketing and consists of using traditional business marketing concepts and tools to encourage behaviors that will create individual and societal well-being. Social marketing programs cover a wide range of issues. The Ad Council of America (www.adcouncil.org), for example, has developed dozens of social advertising campaigns involving issues ranging from health care, education, and environmental sustainability to human rights and personal safety. But social marketing involves much more than just advertising.

Unsought Products

Unsought products are consumer products that a consumer either does not know about or knows about but does not normally consider buying. Most major new innovations are unsought until consumers become aware of them through marketing. Classic examples of known but unsought products and services are life insurance, preplanned funeral services, and blood donations to the Red Cross. By their very nature, unsought products require a lot of promoting, personal selling, and other marketing efforts.

Brand

a type of product manufactured by a particular company under a particular name.