MK 116 Chapter 10
Benefits of Product Lines
Advertising Economies Package Uniformity Standardized Components Efficient Sales and Distribution Equivalent Quality
Individual Brands Versus Family Brands
Individual Brand: Using different brand names for different products. Family Brand: Marketing several different products under the same brand name.
Benefits of Branding
Product Identification Repeat Sales New-product Sales
Product Items, Lines, and Mixes
Product Item: A specific version of a product that can be designated as a distinct offering among an organization's products. Product Line: A group of closely-related product items Product Mix: All products that an organization sells.
Types of Product Modifications
Quality Modification Functional Modification Style Modification Planned Obsolescence: The practice of modifying products so those that have already been sold become obsolete before they actually need replacement.
Product Warranties
Warranty: A confirmation of the quality or performance of a good or service Express Warranty: A written guarantee Implied Warranty: An unwritten guarantee that the good or service is fit for the purpose for which it was sold.
Repositioning
Why reposition established brands? Changing demographics Declining sales Changes in social environment
Trademarks
A Trademark is the exclusive right to use a brand. A service mark performs the same function for services. Many parts of a brand and associated symbols qualify for trademark protection. Trademark right comes from use rather than registration. The Digital Millennium Copyright Act (DMCA) explicitly applies trademark law to the digital world. Companies that fail to protect their trademarks face the possibility that their product names will become generic.
Universal Product Codes
A series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products.
Product Line Extension
Adding additional products to an existing product line in order to compete more broadly in the industry. Symptoms of Overextension Some products have low sales or cannibalize sales of other items Resources are disproportionately allocated to slow-moving products Items have become obsolete because of new product entries
Branding
Brand Name: That part of a brand that can be spoken, including letters, words, and numbers Brand Mark: The elements of a brand that cannot be spoken Brand Equity: The value of company and brand names Global Brand: A brand where at least a third of the earnings come from outside its home country
Types of Products
Business Product: A product used to manufacture other goods or services, to facilitate an organization's operations, or to resell to other customers Consumer Product: A product bought to satisfy an individual's personal wants
Types of Consumer Products
Chapter 7 examined seven categories of business products: major equipment, accessory equipment, component parts, processed materials, raw materials, supplies, and services. Consumer products are classified into four types: convenience products, shopping products, specialty products, and unsought products. This approach classifies products by how much effort is used to shop for them.
Functions of Packaging
Contain and Protect Promote Facilitate Storage, Use, and Convenience Facilitate Recycling
Types of Consumer Products
Convenience Product: A relatively inexpensive item that merits little shopping effort Shopping Product: A product that requires comparison shopping, because it is usually more expensive and found in fewer stores Specialty Product: A particular item for which consumers search extensively and are reluctant to accept substitutes Unsought Product: A product unknown to the potential buyer or a known product that the buyer does not actively seek
Advantages of Private Brands
Earn higher profits on own brand Less pressure to mark down price Manufacturer can become a direct competitor or drop a brand/reseller Ties customer to wholesaler or retailer Wholesalers and retailers have no control over the intensity of distribution of manufacturers' brands
What is a Product?
Everything, both favorable and unfavorable, that a person receives in an exchange. Tangible Good Service Idea
Advantages of Manufacturers' Brands
Heavy consumer ads by manufacturers Attract new customers Enhance dealer's prestige Rapid delivery, carry less inventory If dealer carries poor quality brand, customer may simply switch brands and remain loyal to dealer
Global Issues in Packaging
Labeling Aesthetics Climate Considerations
Branding Strategies
Manufacturers' Brand: The brand name of a manufacturer. Private Brand: A brand name owned by a wholesaler or a retailer. Also known as a private label or store brand. Captive: A brand manufactured by a third party for exclusive retailer, without evidence of a that retailer's affiliation.
Advantages of Captive Brands
No evidence of store's affiliation Manufactured by third party Sold exclusively at the chain Can ask price similar to manufacturer's brands
Global Issues in Branding
One Brand Everywhere Adaptations & Modifications Different Brand Names in Different Markets
Adjustments
Over time, firms change product items, lines, and mixes to take advantage of new technical or product developments or to respond to changes in the environment. The three strategies for making these changes are: Product modification Product repositioning Product line extension or contraction
Labeling
Persuasive: Focuses on promotional theme Consumer information is secondary Informational: Helps make proper selections Lowers cognitive dissonance Greenwashing Attempting to give the impression of environmental friendliness whether or not it is environmentally friendly.
What is a Product?
Price, distribution, and promotion strategies can not be determined until the firm has a product to sell. Well-conceived price, distribution, and promotion strategies have little value without a strong product offering.
Branding Strategies
The lack of a brand name, a generic product, can be a selling point. If a brand is used, the choice is made between a manufacturers' brand, a private brand, or both. With either a manufacturers' brand or a private brand, a decision is made among: Individual brand—different brands for different products Family brand—common names for different products or a Combination of individual branding and family branding.
Co-branding
Types of Co-branding: Ingredient Branding Cooperative Branding Complementary Branding
