Marketing Notes Chapter 9.docx

11 Pages
Unlock Document

Western University
Management and Organizational Studies
Management and Organizational Studies 2320A/B
Kenneth Bowlby

Marketing Notes Chapter 9 Product, Branding, and Packaging Decisions Complexity of Products and Types of Products: Complexity of Products Core customer value – the basic problem-solving benefits that consumers are seeking Marketers convert core customer value into an actual product Attributes such as brand name, features/design, quality, and packing are considered The associated services (augmented product) – nonphysical aspects of the product, such as product warranties, financing, product support, and after-sale service Types of Products There are two primary categories of products and services: consumers or businesses Consumer Products – products and services used by people for their personal use Specialty Product/Services Products or services toward which customers show such a strong preference that they will expend considerable effort to search for the best suppliers Shopping Product/Services Products or services such as furniture, apparel, fragrances, appliances, and travel alternatives, for which consumers will spend a fair amount of time comparing alternatives Convenience Product/Services Products or services for which the consumer is not willing to spend any effort to evaluate prior to purchase Usually commodity items Unsought Product/Services Products consumers either do not normally think of buying or do not know about Require lots of marketing effort and various forms of promotion Product Mix and Product Line Decisions Product mix – the complete set of all products offered by a firm Typically consists of various product lines Product lines – groups of associated items, such as items that consumers use together or think of as part of a group of similar products Within each product line, there are often multiple product categories Product category is an assortment of items that the customer sees as reasonable substitutes for one another Each category within product line may use different brands Brands – the name, term, design, symbol, or any other features that identify any seller’s good or service as distinct The product mix reflects the breadth and depth of a company’s product lines Product mix breadth (variety) – the number of product within a line or variety, offered by firms Product depth – The number of products within a product line Stock keeping units (SKUs) – Individual items within each product category; which are the smallest unit available for inventory control The category depth is the number of SKUs within a category Each SKU has its own unique product code (UPC) code as well Among the industry factors, firms expand their product lines (breadth) when it is relatively easy to enter a specific market (entry barriers are low) and/or when there is a substantial market opportunity. When firms add new lines to their product mix, they often earn significant sales and profits Too much variety is too costly to maintain and too many brands can weaken a firm’s brand rep Change in Product Mix Breadth Firms may change their product mix breadth by either adding to or deleting entire product lines Increase Breadth Firms often add new product lines to capture new or evolving markets, increase sales, and compete in new venues Decrease Breadth Sometimes it is necessary to delete entire product lines to address changing market conditions or meet internal strategic priorities Change Product Line Depth Firms can either add to or delete from their product line depth Increase Depth May add new products within line to address changing consumer preferences or pre-empt competitors while boosting sales Decrease Depth May be necessary to delete product categories to realign resources Decision to delete products is never taken lightly Generally, substantial investments have been made to develop the brand and manufacture the products Change Number of SKUs Very common and ongoing activity for many firms is the addition or deletion of SKUs in existing categories to stimulate sales Product Line Decisions for Services Many of the strategies used to make product line decisions for physical products can also be applied to services Branding Provides way for firm to differentiate its products from competitors and can be used to represent name of firm and its entire mix (General Motors), one product (Chevrolet), or a single item (Corvette) Elements that brands use are: names, logos, symbols, characters, slogans, and even distinctive packages What makes a brand? Value of Branding for the Customer and the Market Brands add value to merchandise and services beyond physical and functional characteristics or the pure act of performing the service Brands Facilitate Purchasing Consumers often easily recognize brands because they signify a certain quality level and contain familiar attributes; brands help consumers make quick decisions Brands enable customers to differentiate one firm or product from another Brand Establish Loyalty Over time and with continued use, consumers trust brand These companies can maintain depth in product lines Brands Protect from Competition and Price Competition Strong brands are somewhat protected from competition and price competition Because such brands are established and have more loyal customers, neither competitive pressures on price nor retail level competition is as threatening to the firm Brands Reduce Marketing Costs Firms with well-known brands can spend relatively less on marketing costs than firms with little-known brands because the brand sells itself Brands Are Assets Brands are also assets that can be legally protected through trademarks and copyrights; therefore mean ownership to firm Brands Impact Market Value Companies’ bottom line, the value of a brand can be calculated by assessing the earning potential of the brand over next 12 months Brand Equity Brand equity – the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service Brands are assets that the firms can build, manage, and harness over time to increase revenue, profits, and overall value Brand Awareness Brand awareness – measures how many consumers in a market are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements (brand name, logo, symbol, character, packaging, or slogan) in the firms communication to consumers More awareness the easier the decision-making process Familiarity matters most for products that are bought without much thought (soap or gum) Communication media include advertising, personal selling, sponsorship and event marketing publicity, and public relations Firms spend loads of money here Perceived Value Perceived value – the relationship between a product or service’s benefits and its cost Customers usually determine the offering’s value in relationship to that of its close competitors Good marketing raises customers’ quality perceptions relative to price, thus, it increases perceived value (higher price associated with higher quality) Brand Associations Brand associations – reflect the mental links that consumers make between a brand and its key product attributes, such as logo, slogan, or famous personality They are a result of firms advertising and promotion efforts Firms also attempt to create specific associations for their brands with positive consumer emotions, such as fun, friendship, good feelings, family gatherings, and parties Brand personality – refers to a set of human characteristics assoc
More Less

Related notes for Management and Organizational Studies 2320A/B

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.