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.
− 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
• 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
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
− They define the image that most people form when they think of a brand.
− These include the wellknown brands of large and established corporations that many
• Private brands (private labels) – brands offered by wholesalers or retailers
− Most manufacturers regard the production of privatelabel 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 wellknown brands to stores, and also put the store’s own label
on similar products, thus increasing profits by marketing one product in two ways.
• National products that are sold exclusively by a retail chain
• They’re spinoffs 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, wellknown 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
thirdparty vendors), and qualitative data such as results from customer surveys.
− they have profit responsibility and help retail buyers maximize sales for the whole
• Almost every product that is distinguishable from another gives buyers some unique way of
• Labeling products, including tricky goods such as produce, represents another way of
• 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.
• A firm’s product strategy must address questions about packaging
− Like its brand name, a product’s package can powerfully influence buyers’ purchase
− Firms use scientific methods and virtual simulations in making packaging decisions,
creating threedimensional 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 pilferag − The original objective of packaging was to offer physical protection for the
• Assistance in marketing the product
− The importance of packaging as a promotional tool has increased in recent years.
• Costeffective 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
• 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
• 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 and language variation