Chapter 9 – Product, Branding and Packaging Decisions
Product - Anything that is of value to a consumer and can be offered through a voluntary marketing
exchange. All create value for consumers in their respective competitive marketing arenas...
Ideas – Lectures, philosophy, scientific theory etc.
Organizations – Canadian Blood Services
People - Jay-Z other marketable personalities and celebrities
Communities – Facebook, MySpace, Twitter
Product Assortment/Mix- The complete set of all products offered by a firm
Product Lines – Groups of associated items, such as those that consumers can use together or think of
as part of a group of similar products. Colgate-Palmolive’s lines include oral care, personal care,
household care etc.
Product Category – An assortment of items that the consumer sees as reasonable substitutes for one
another – for example the oral care product line consists of several categories such as toothpaste, floss,
whitening, toothbrushes etc.
Brand – The name, term, design symbol or any other feature that identifies one sellers goods or services
as distinct from those of other sellers. Nike, Apple, HP etc.
Product line Breadth – The number of product lines or variety offered by the firm
Product line Depth – The number of categories within each product line.
Stock Keeping Units (SKU’s) – Individual items within each product category, the smallest unit available
for inventory control. Each product or offering within the category has a unique SKU.
Changing Product mix Breadth
Increase – Firms will often add new product lines to capture new or evolving markets, increase
sales, and compete in new areas. For example Porsche released the Cayenne after learning that
40% of its customers purchased a SUV as their second vehicle.
Decrease – Sometimes firms find it necessary to delete entire product lines to address changing
market conditions or meet internal strategic priorities.
Changing Product mix Depth
Increase – Firms may add new product lines to address changing consumer preferences or pre-
empt competitors while boosting sales. A firm might also add new products to its product lines
in order to service new target segments Decrease – From time to time its necessary to delete product categories to realign resources.
Not taken lightly because substantial money has been allocated to build these products brands
and value etc. Firms do this to eliminate unprofitable items and refocus marketing efforts on
more profitable items.
Changing Number of SKUs – very common to add or delete number of product offerings or SKUs in
existing categories to stimulate sales or react to consumer demand. Fashion retailers change number
and type of SKU’s seasonally.
Product Line Decisions for Services – Most strategies used to make product line decisions for
physical goods can also be applied to services.
Branding – provides a way for a firm to differentiate its product offerings from those of its
competitors and can be used to represent he name of a firm and its entire product assortment, one
product line, or a single item. Logos, Symbols, slogans, jingles, unique packaging, characters, URLs etc.
Facilitate in Purchasing – Brands are often easily recognized by consumers and
because they signify a certain quality level and contain familiar attributes, brands help
consumers make quick decisions. Enable customers to differentiate one firm or
product from another
Establish Loyalty – Over time and continued use consumers learn to trust certain
brands and their product offerings. Many consumers become extremely loyal to brands
Protect from Competition and Price Competition – Brands are more established
in the marketplace and have a more loyal customer base, neither competitive pressure
on price or retail level competition is threatening to a brand
Reduce Marketing Costs – Firms with well known brands can spend relatively less on
marketing costs because the brand sells itself
Brands are Assets – Brands can be legally protected through trademarks and
copyrights and thus constitute a unique ownership for a firm
Impact Market Value – Well known brands can have direct impact on bottom line.
Brand Equity – The set of assets and liabilities linked to a brand that add or subtract from the value
provided by the product or service. Like physical possessions brands are built and managed over time to
increase their value and profitability. Firms spend millions promoting brands throughout their life cycle.
Experts look at 4 aspects to determine a brand’s equity...
Brand Awareness – Measures how many consumers in a market are familiar with the brand and
what it stands for or represents. This is created through repeated exposures of the various
brand elements. (logo, jingle etc.) The more aware the customers are the easier their decision
Perceived Value – The relationship between a product or services perceived benefits and costs.
Usually use competing products as basis for comparison. Mostly based on what individual
consumer or targeted consumers value, some value luxury while others low cost.
Brand Associations – The mental link that consumers make between a brand and its key product
attributes such as logo, slogan or celebrity endorser. Firms attempt to create specific associations for their brands with positive consumer emotions such as happiness, friendship, fun
o Brand Personality – A set of human characteristics associated with a brand which has a
symbolic or self-expressive meaning for consumers.
Brand Loyalty – Occurs when a consumer buys the same brands product or service repeatedly
over time rather than buying from multiple suppliers with offerings in the same category. Loyal