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CHAPTER 9 Product Branding and Packaging Decisions highlightscore customer value which defines the basic problemsolving benefits that consumers are seeking associated services also referred to as the augmented product include the nonphysical aspects of the product such as product warranties financing product support and aftersale serviceConsumer products are products and services used by people for their personal useSpecialty ProductsServices are products or services toward which customers show such a strong preference that they will expend considerable effort to search for the best suppliersShopping productsservices are products or services such as furniture apparel fragrances appliances and travel alternatives for which consumers will spend a fair amount of time comparing alternativesConvenience productsservices are those products or services for which the consumer is not willing to spend any effort to evaluate prior to purchaseUnsought productsservices are products consumers either do not normally think of buying or do not know about The complete set of all products offered by a firm is called its product mixproduct lines which are groups of associated items such as items that consumers use together or think of as part of a group of similar productsproduct category is an assortment of items that the customer sees as reasonable substitutes for one another brands which are the names terms designs symbols or any other features that identify one sellers good or service as distinct from those of other product mix breadth sometimes also referred to as variety represents the number of product lines offered by the firm Product line depth in contrast is the number of products within a product linestock keeping units SKUs which are the smallest unit available for inventory controlIncrease Breadth Firms often add new product lines to capture new or evolving markets increase sales and compete in new venuesDecrease Breadth Sometimes it is necessary to delete entire product lines to address changing market conditions or meet internal strategic prioritiesIncrease Depth Firms may add new products within a line to address changing consumer preferences or preempt competitors while boosting sales Decrease Depth From time to time it is necessary to delete product categories to realign resources A very common and ongoing activity for many firms is the addition or deletion of SKUs in existing categories to stimulate sales or react to consumer demandBranding provides a way for a firm to differentiate its product offerings from those of its competitors and can be used to represent the name of a firm and its entire product mixBrands Facilitate 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 decisionsBrands Establish LoyaltyOver time and with continued use consumers learn to trust certain brandsBrands Protect from Competition and Price CompetitionStrong brands are somewhat protected from competition and price competition Because such brands are more established in the market and have a more loyal customer base neither competitive pressures on price nor retaillevel competition is as threatening to the firmBrands Reduce Marketing CostsFirms with wellknown brands can spend relatively less on marketing costs than firms with littleknown brands because the brand sells itselfBrands Are AssetsBrands are also assets that can be legally protected through trademarks and copyrights and thus constitute a unique ownership for the firmBrands Impact Market ValueHaving wellknown brands can have a direct impact on the companys bottom linebrand equity or the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or serviceBrand awareness measures how many consumers in a market are familiar with the brand and what it stands for and have an opinion about that brandMarketers create brand awareness through repeated exposures of the various brand elements brand name logo symbol character packaging or slogan in the firms communications to consumersPerceived value therefore is the relationship between a product or services benefits and its cost Customers usually determine the offerings value in relationship to that of its close competitors Brand associations reflect the mental links that consumers make between a brand and its key product attributes such as a logo slogan or famous personality Brand personality refers to a set of human characteristics associated with a brandwhich has symbolic or selfexpressive meanings for consumersBrand loyalty occurs when a consumer buys the same brands product or service repeatedly over time rather than buying from multiple suppliers within the same categoryManufacturer brands are owned and managed by the manufacturer are also known as national brandsBy owning their brands manufacturers retain more control over their marketing strategy are able to choose the appropriate market segments and positioning for the brand and can build the brand and thereby create their own brand equityprivatelabel brands or store brands Brands that are owned and managed by retailersGeneric products are those sold without brand names typically in commodities marketscorporate brand or family brand the individual brands benefit from the overall brand awareness associated with the family namecombinations of the corporate and product line brands to distinguish its products A firm can use individual brand names for each of its productsIndividual brands allow a company to compete within one categorycompanies should consider the following desirable qualities 1 The brand name should be descriptive and suggestive of benefits and qualities associated with the product 2 The brand name should be easy to pronounce recognize and remember such as Tide Crest or Kodak 3 The company should be able to register the brand name as a trademark and legally protect it 4 For companies looking to global markets the brand name should be easy to translate into other languagesbrand extension refers to the use of the same brand name for new products being introduced to the same or new marketsBrand dilution occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold
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