Chapter 10

Brand insistence

- a customer strongly prefers a specific brand, will accept no other substitute, and is willing to spend a great deal of time and effort to acquire the brand. Brand insistence is the strongest degree of brand loyalty; it is a branders dream. However, it is the least common type of brand loyalty.

Brand Loyalty

A customer's favorable attitude toward a specific brand. If brand loyalty is strong enough, customers may purchase this brand consistently. Customer satisfaction with a brand is the most common reason for loyalty to the brand. Development of brand loyalty in a customer reduces their risk and shortens the time spend buying the product. However, the degree of brand loyalty varies from one product category to another. Brand loyalty is an important component of brand equity because it reduces a brand's vulnerability to competitor's actions. Loyal customers provide brand visibility and reassurance to potential customers.

Product Line

A group of closely related product items that are considered to be a unit because of marketing, technical, or end- use considerations. For example, Purina's Fancy feast includes five different varieties of wet, dry, or kitten gourmet car food in the same product line. The exact boundaries of a product line (although sometimes blurred) are usually indicated by the use of descriptive terms such as "frozen dessert product line" or "shampoo product line." Thus, to develop the optimal product line, marketers must understand buyers' goals. Firms with high market share are likely to expand their product line aggressively, as are marketers with relatively high prices or limited product lines.

Product Item

A specific version of a product that can be designated as a distinct offering among an organization's products. An Abercrombie & Fitch polo shirt represents a product item.

Family Branding

All of a firm's products are branded with the same name or at least part of the name, Kellogg's Frosted Flakes vs. Kellogg's Rice Krispies. In some cases, a company's name is combined with other words to brand items. Unlike individual branding, family branding means that the promotion of one item with the family brand promotes the firm's other products.

Brand associations

At times, a marketer works to connect a particular lifestyle or, in some instances a certain personality type with a specific brand. These types of brand associations contribute significantly to the brand's equity. Brand associations are sometimes facilitated by using trade characters, such as the jolly green giant or the Pillsbury Dough Boy.

Brand Name Awareness

Being aware of a brand leads to brand familiarity, which in turn results in a level of comfort with the brand. A familiar brand is more likely to be selected than an unfamiliar brand because the familiar brand often is viewed as more reliable and more acceptable quality. The familiar brand is likely to be in a customer's consideration set, whereas the unfamiliar brand is not.

Labeling

Closely interrelated with packaging, it's used for identification, promotional, informational, and legal purposes. Labels can facilitate the identification of a product by displaying the brand name in combination with a unique graphic design. By drawing attention to products and their benefits, labels can strengthen an organization's promotional efforts. Labeling can be important part of the marketing strategy. Labeling can include claims about sustainability as well as other information that is potentially valuable to the buyer.

Manufacturing Brands

Initiated by producers and ensure that producers are identified with their products at the point of purchase- for example, Green Giant, Dell Computer, and Levi jeans. A manufacture brand usually requires a producer to become involved in distribution, promotion, and to some extent, pricing decisions

Perceived Brand Quality

In many cases, customers cannot actually judge the quality of the product for themselves and instead rely on the brand as a quality indicator. Perceived brand quality helps to support a premium price, allowing marketers to avoid severe price competition. Also, favorable perceived brand quality can ease the introduction of brand extensions because the high regard for the brand likely will translate into high regard for the related products.

Private label

Initiated and owned by resellers - wholesalers or retailers. The major characteristic of private brands is that the manufactures are not identified on the products. Retailers and wholesalers use private distributor brands to develop more efficient promotion, generate higher gross margins, and change store image. Private distributor brands give resellers freedom to purchase products of a specified quality at the lowest cost without disclosing the identities of the manufacturers. An example would be Wal-Mart.

Shopping

Items for which buyers are willing to expend considerable effort in planning and making the purchase. Buyers spend much time comparing stores and brands with respect to prices, product features, qualities, services, and perhaps warranties. These products are expected to last a fairly long time and are purchased less frequently than convenience items. They require fewer retail outlets than convenience products. Inventory turnover is lower because these products are purchased less frequently, so marketing channel members can expect to receive higher gross margins. In certain situations, both shopping and convenience products may be marketed in the same location. Examples: Shoes, appliances, bikes, cameras, furniture, etc.

Unsought

Products purchased when a sudden problem must be solved, products of which consumers are unaware, and products that people do not necessarily think of purchasing. In such cases, speed and problem resolution are far more important than price and other features buyers might normally consider if they had more time for making decisions. Examples: Emergency medical services and car repairs; little time to plan on your way to the ER, and little consideration on what tire is best if you get a flat tire on the highway.

Types of products convenience

Relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort. The buyer spends little time planning the purchase or comparing available brands or sellers. Even a buyer who prefers a specific brand will generally choose a substitute if the preferred brand is not conveniently available. Because sellers experience high inventory turnover, per-unit gross margins can be relatively low. Packaging and displays are also important because many convenience items are available only on a self-service basis at the retail level, and thus the packaging plays a major role in selling the product. Examples: bread, soft drinks, chewing gum, mints, etc.

Trade Name

The full and legal name of an organization, such as Ford Motor Company, rather than the name of a specific product.

decline stage

Sales fall rapidly. When this happens, the marketer considers pruning items from the product line to eliminate those not earning a profit. The marketer also may cut promotion efforts, eliminate marginal distributors, and finally, plan to phase out the product. Usually a declining product has lost its distinctiveness because similar competing or superior products have been introduced. An outlet not previously used, such as a factory outlet or Internet retailer, sometimes will be used to liquidate remaining inventory of an obsolete product. As sales decline, the product becomes more inaccessible, but loyal buyers seek out resellers who still carry it. Spending on promotion efforts is usually reduced considerably. Advertising of special offers may slow the rate of decline.

Growth stage

Sales rise rapidly; profits reach a peak and then start to decline. The growth stage is critical to a product's survival because competitive reactions to the product's success during this period will affect the product's life expectancy. As sales increase, management must support the momentum by adjusting the marketing strategy. The goal is to establish and fortify the product's market position by encouraging brand loyalty. To achieve greater market penetration, segmentation may have to be used more intensely. Gaps in geographic market coverage should be filled during the growth period. Promotion expenditures may be slightly lower than during the introductory stage but are still quite substantial. A falling ration between promotion expenditures and sales should contribute significantly to increased profits. Profits begin to decline late in the growth stage as more competitors enter the market, driving prices down and creating the need for heavy promotional expenses. Aggressive pricing, including price cuts, is also typical during this stage.

Product Mix

The composite, or total, group of products that an organization makes available to customers.

Brand Name

The part of the brand that can be spoken- including letters, words, and numbers- Such as 7UP or V8. A brand name is often a product's only distinguishing characteristic. Without the brand name, a firm could not differentiate its products.

Introduction stage

The product life cycle begins at a product's first appearance in the marketplace, when sales start at zero and profits are negative. In the chart, notice how sales should move upward from zero, and profits also should move upward from a position in which they are negative because of high expenses. Efforts to highlight a new product's value can create a foundation for building brand loyalty and customer relationships. Two difficulties may arise at this point: First, sellers may lack the resources, technological knowledge, and marketing know-how to launch the product successfully. Second, the initial product price may have to be high to recoup expensive marketing research or development costs. Many products never get beyond the introduction stage. Marketing strategy should be designed to attract the segment that is most interested in the product

Brand preference

a strong degree of loyalty, in which the customer definitely prefers one brand to another. However, if the brand is not available, the customer will accept a substitute brand.

Product life cycle

a. Product Life Cycles- As a product moves through it cycle, the strategies relating to competition, pricing, distribution, promotion, and market information must be evaluated periodically and possibly changed. Astute marketing managers use the life-cycle concept to make sure that the introduction, alteration, and deletion of products are timed and executed properly. By understanding the typical life-cycle pattern, marketers can maintain profitable product mixes.

Brand Equity

a. The marketing and financial value associated with a brand's strength in a market. A well-managed brand is an asset to an organization. The value of this asset is often referred to as brand equity. Although difficult to measure, brand equity represents the value of a brand to an organization. Besides the actual proprietary brand assets, such as patents and trademarks

Width of product mix

measured by the number of product lines a company offers.

Brand Recognition

occurs when a customer is aware that the brand exists and views it as an alternative purchase if the preferred brand is unavailable or if the other available brands are unfamiliar. This is the mildest form of brand loyalty.

Brand Mark

The element of a brand that is not made up of words- often a symbol or design- is a brand mark. The part of a brand not made up of words. Examples" McDonalds Golden Arches, Nike Swoosh, Etc.

Maturity stage

The sales curve peaks and starts to decline, and profits continue to fall. This stage is characterized by intense competition because many brands are now in the market. Competitors emphasize improvements and differences in their versions of the product. As a result, during the maturity stage, weaker competitors are squeezed out of the market. The producers who remain in the market are likely to change their promotional and distribution efforts. Advertising and dealer-oriented promotions are typical during this stage of the product life cycle. Consumers are no longer inexperienced generalists; instead, they are experienced specialists which may begin to alter their product needs. To increase the sales of mature product, marketers may suggest new uses for them. In general, marketers go to great lengths to serve resellers and provide incentives for selling their brand. Maintaining market share requires moderate, and sometimes large, promotion expenditures.

Co-Branding

The use of two or more brand on one product. Markers employ co-branding to capitalize on the brand equity of multiple brands. Effective co-branding capitalizes on the trust and confidence customers have in the brands involved. The brands should not lose their identities, and it should be clear to customers which brand is the main brand. When a co-branded product is unsuccessful, both brands are implicated in the product failure. To gain customer acceptance, the brands involved must represent a complementary fit in the minds of buyers. Example, Nike and Apple successfully teamed up to release a co-branded running shoe, Nike+.

Line extension

a. The development of a product closely related to one or more products in the existing product line but designed specifically to meet somewhat different customer needs. Line extensions are more common than new products because they are a less expensive, lower-risk alternative for increasing sales. A line extension may focus on a different market segment or may be an attempt to increase sales within the same market segment by more precisely satisfying the needs of people in that segment. The success of a line extension is enhanced if the parent brand has a high-quality brand image and if there is a good fit between the line extension and its parent. (294)

Specialty

posses one or more unique characteristics, and generally buyers are willing to expend considerable effort to obtain them. Buyers actually plan the purchase of a specialty product; they know exactly what they want and will not accept a substitute. Buyers do not compare alternatives. They are concerned primarily with finding an outlet that has the preselected product available. Products are often distributed through a limited number of retail outlets. Like shopping products, they are purchased infrequently, causing lower inventory turnover and thus requiring relatively high gross margins. However, just because specialty products are purchased less frequently does not necessarily make them less profitable. Examples: Baseball memorabilia, something one-of-a-kind.

Depth of product mix

the average of different product items offered in each product line.