Chapter 9 Product, Branding, and Packaging Decisions
Complexity of Products and Types of Products
Complexity of Products
Core customer values: the basic problem-solving benefits that consumers
o “What are customers looking for?”
o Marketers convert these values into an actual product.
o Brand name o Quality level
o Features/design o Packaging
Associated services (or augmented product): the nonphysical attributes of
o Product warranties o Product support
o Financing o After-sale service
Types of Products
Consumer products: products and services used by people for their
Marketers further classify these products by the way they are used and purchased:
o Specialty Products/Services: customers show a strong preference that
they will expend considerable effort to search for best suppliers.
o Shopping Products/Services: customers will spend a fair amount of
time comparing alternatives. (Furniture, apparel, fragrances)
o Convenience Products/Services: consumers are not willing to spend
any effort to evaluate prior to purchase.
o Unsought Products/Services: consumers either do not normally think
of buying, or do not know about.
Product Mix and Product Line Decisions
Product mix: the complete set of all products offered by a firm.
o Product lines: groups of associated items, such as those that consumers
use together of think of as part of a group of similar products.
Product category: an assortment of items that the customer
sees as reasonable substitutes for one another.
Brand: the name, term, design, symbol, or any other
features that identify one seller’s good or service as
distinct from those of other sellers.
Product mix breadth: the number of product lines, or variety, offered by the firm.
Product line depth: the number of products within a product line.
Stock keeping units: individual items within each product category; the
smallest unit available for inventory control. The decision to expand product lines and categories depends on several
industry-, customer-, and firm-level factors.
Firms expand their product lines (breadth) when it is relatively easy to enter
a specific market and/or when there is a substantial market opportunity.
Adding unlimited numbers of new products can have adverse consequences.
o Too costly to maintain
o Too many brands may weaken the firm’s brand reputation
Change Product Mix Breadth
Increased Breadth: Firms often add new product lines to capture new or
evolving markets, increasing sales, and compete in new ventures.
Decreased Breadth: Sometimes it is necessary to delete entire product lines
to address changing market conditions or meet internal strategic priorities.
Change Product Line Depth
Increased Breadth: Firms may add new products within a line to address
changing consumer preferences or pre-empt competitors while boosting sales. A
firm may also add new products to its product line to serve new target segments.
Decreased Breadth: It may be necessary to delete product categories to
Change Number of SKUs
A very common activity for many firms is the addition or deletion of SKUs in
existing categories to stimulate sales or react to consumer demand.
Product Line Decisions for Services
Very similar to product line decisions for physical products.
o Ex: a bank – business/consumer accounts represent product lines.
Branding provides a way for a firm to differentiate its product offerings from
those of its competitors
Branding can also be used to represent the name of the firm and its entire
product mix, one product line, or a single item.
Value of Branding for the Customer and the Marketer
Brands Facilitate Purchasing: brands are often easily recognized by
consumers and can help consumers make quick decisions.
Brands Establish Loyalty: consumers learn to trust certain brands.
Brands Protect from Competition and Price Competition: strong brands are more
established in the market and have a loyal customer base, neither competitive
pressures on price nor retail-level competition is a threat.
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 an asset that can be legally protected through
trademarks and copyrights.
Brands Impact Market Value: having a well-known brand can have a direct
impact on the company’s bottom line.
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 .
Experts look at four aspects of a brand to determine its equity:
o 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, in the firm’s
communications to consumers.
Matters most for products that are bought without much thought.
Also for infrequently purchased items
Marketers create brand awareness through r