chapter 10 - developing and managing brand and product.docx

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Grant B Mc Clelland

Chapter 10 – Developing and Managing Brand and Product Strategies Managing Brands for Competitive Advantage  We become loyal to certain brands for many reasons, including quality, price, and habit.  brand  is a name, term, sign, symbol, design, or some combination that identifies the products of one firm while differentiating these products from competitors’ offerings.  Marketers recognize the powerful influence of brands on consumer behaviour, and they work to create and protect strong identities for products and product lines.  Building a brand is costly; a category manager is often responsible for an entire product line, nurturing new and existing brands.  Branding is the process of creating that identity.  Satisfied buyers respond to branding by making repeat purchases of the same product because they identify the item with the name of its producer Brand Loyalty  Brands achieve widely varying consumer familiarity and acceptance, often weighed by the concept of brand loyalty.  Measured in 3 stages:  Brand recognition  is a firm’s first objective for newly introduced products.  Marketers begin the promotion by trying to make items familiar to the public.  Advertising is one effective method for increasing consumer awareness.  Brand preference  is the second level of brand loyalty.  Buyers rely on previous experiences with the product when choosing it, if available, over competitors’ products.  Brand insistence  is the ultimate stage in brand loyalty.  Consumers refuse alternatives and search extensively for the desired merchandise.  A product at this stage has achieved a monopoly position with its consumers. Types of Brands  Companies that practice branding classify brands in several ways: private, manufacturers' or national, family, and individual brands.  Some firms make no effort toward branding, selling generic products that are characterized by plain labels, little or no advertising, and no brand names.  Generic products are often seen in food and household staples.  Market share for generic products increases during economic downturns, but subsides when the economy improves.  Generic products  Manufacturer’s brand  Private brands  Captive brands  Family brands  Individual brands Manufacturers’ Brands vs. Private Brands  Manufacturer’s brand (national brands) — Brand name owned by a manufacturer or other producer  They define the image that most people form when they think of a brand.  These include the well-known brands of large and established corporations that many people recognize.  Private brands (private labels) – brands offered by wholesalers or retailers  Most manufacturers regard the production of private-label goods as a way to reach additional market segments.  They expand the number of alternatives available to consumers and their growth has coincided with the growth of large chain stores.  Manufacturers sell their well-known brands to stores, and also put the store’s own label on similar products, thus increasing profits by marketing one product in two ways. Captive Brands  National products that are sold exclusively by a retail chain  They’re spin-offs to the private label idea.  They typically provide better profit margins than private labels.  They often feature exclusively offered lines of apparel, home décor items, furniture, clothing, or small appliances. Family and Individual Brands  Family brand — Single brand name that identifies several related products  It may be a full line of food, healthcare, beauty, or home appliance goods.  Promotional outlays benefit all items in the line—their familiarity helps in introducing new products within the line.  Family brands should identify products of similar quality or the firms are risking the overall product image.  Individual brand — uniquely identifies the item itself.  It is not promoted under the company or other umbrella name, but instead is given its own unique name.  Individual brands cost more than family brands to market, but they’re very effective aids in implementing market segmentation strategies.  Individual brand names should distinguish dissimilar products. Brand Equity  Added value that a respected, well-known brand name gives to a product in the marketplace  A brand with strong equity has the power to increase a company’s sales and earnings.  In global operations, high brand equity often leads to expansion into new markets.  Research shows that a firm builds brand equity sequentially on four dimensions of brand personality: (brand asset valuator).  Differentiation, Relevance, Esteem, Knowledge The Role of Category and Brand Management  Brand management — Traditionally, companies have assigned the task of managing a brand’s marketing strategies to a brand manager.  Today, because the companies can sell as much as 80 percent of their products to national retail chains, many firms have adopted a strategy called category management, with this responsibility assigned to a category manager.  Category management — Product management system in which a category manager — with profit and loss responsibility — oversees a product line  Category managers assisted by analysts maximize sales for the retailer by overseeing the entire product line.  They track sales history, data from retailers and the entire category (obtained from third-party vendors), and qualitative data such as results from customer surveys.  they have profit responsibility and help retail buyers maximize sales for the whole category Product Identification  Almost every product that is distinguishable from another gives buyers some unique way of identifying it.  Labeling products, including tricky goods such as produce, represents another way of identifying them.  Brand name  is the words or letters forming a name that identifies and distinguishes the firm’s offerings from those of its competitors.  It’s the part of the brand that people can vocalize.  An effective brand name should be easy to pronounce, recognize, and remember.  A short name meets these requirements.  It should give buyers the correct connotation of the product’s image.  It must qualify for legal protection, so it can’t contain generally used words that describe types or categories.  Brand mark is a symbol or pictorial design that distinguishes a product. Packaging  A firm’s product strategy must address questions about packaging  Like its brand name, a product’s package can powerfully influence buyers’ purchase decisions.  Firms use scientific methods and virtual simulations in making packaging decisions, creating three-dimensional images with thousands of colors, shapes, and typefaces.  They conduct marketing research to evaluate current packages and test new designs.  Protection against damage, spoilage, and pilferage  The original objective of packaging was to offer physical protection for the merchandise.  Assistance in marketing the product  The importance of packaging as a promotional tool has increased in recent years.  Cost-effective packaging  Packaging must perform a number of functions but must do so at a reasonable cost.  Simple design changes can often make packages both cheaper and better for the environment. Trademarks  Brand for which the owner claims exclusive legal protection  should not be confused with a “trade name,” which identifies a company—The Coca Cola Company is a trade name, but Coke is a trademark of the company’s product (though some trade names duplicate brand names).  Protecting Trademarks  Trademark protection confers exclusive legal right to use a brand name, brand mark, and any slogan or product name abbreviation.  It designates the origin or source of a good or service.  Trademark protection can be obtained for words or phrases, abbreviations or nicknames for a product, packaging elements, or even product features such as shape, design, or typeface.  Trade Dress  refers to the visual cues used in branding to create an overall look. Developing Global Brand Names and Trademarks  Can be difficult due to cultural an
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