kerinmarketing11

AFTER READING THIS CHAPTER

YOU SHOULD BE ABLE TO:

•Explain the product life-cycle concept and relate a marketing strategy to each stage.

•

•Recognize the differences in product life cycles for various products and their implications for marketing decisions.

•Understand alternative approaches to managing a products life cycle.

•

•Describe elements of brand personality and brand equity and the criteria for the good brand name.

•Explain the rationale for alternative branding strategies employed by companies.

•

•Understand the role of packaging, labeling, and warranties in the
marketing of a product.

MANAGING PRODUCTS
AND BRANDS

GATORADE: A THIRST
FOR COMPETITION

FIGURE 11-1 How stages of the PLC relate to a firm’s marketing objectives and marketing mix actions

Product Life Cycle

The stages a new product goes through in the market place: introduction, growth, maturity, and decline.

THE PRODUCT LIFE CYCLE

•Introduction Stage
•Growth Stage
•Maturity Stage
•Decline Stage

• Deletion

• Harvesting

•

FIGURE 11-2 Product life cycle for the stand-alone fax machine for business use: 1970--2001

THE PRODUCT LIFE CYCLE

•Some Dimensions of the Product Life Cycle
•Length of the Product Life Cycle
•Shape of the Product Life Cycle

The Product Level: Class and Form

FIGURE 11-3 Alternative product life cycles

The entire product category or industry.

Variations of a product within the product class.

FIGURE 11-4 Video game console and software life cycles by product class and product form

THE PRODUCT LIFE CYCLE

•Some Dimensions of the Product Life Cycle (cont)

•The Life Cycle and Consumers

FIGURE 11-5 Five categories and profiles of product adopters

1. Advertising plays a major role in the ___________ stage of the product life cycle and _____
_________ plays a major role in maturity.

A: The Introductory/ Sales Promotion

2. How do high learning and low learning products differ?

A: High learning products require significant education of the customer and extended introductory stages; low learning products require little learning by the consumer and have short introductory stages.

3. What does the life cycle of a fashion product look like?

A: It has the four stages, introduction through decline and then seems to return. The length of the cycle may be years.

MANAGING THE
PRODUCT LIFE CYCLE

•Role of a Product Manager
•Modifying the Product
•Modifying the Market
•Finding New Users
•Increasing Use
•Creating New Use Situation

•Repositioning the Product
•Reacting to a Competitor’s Position
•Reaching a New Market
•Catching a Rising Trend
•Changing the Value Offered
§Trading up
§Trading down
§Downsizing

Product Modification

Altering a product’s characteristic, such as its quality, performance, or appearance, to try to increase and extend the product’s sales.

Market Modification

Strategy in which a company tries to find new customers, increase a product’s use among existing customers, or create new use situations.

Adding value to a product (or line) through additional features or higher-quality materials.

Reducing the number of features, quality, or price.

Reducing the content of packages without changing package size and maintaining or increasing the package price.

1. How does a product manager help manage a product’s life cycle?

A: A product manager develops and executes a marketing program for the product.

2. What does “creating new use situations” mean in managing a product’s life cycle?

A: It means finding new uses for an existing product.

3. Explain the difference between trading up and trading down in repositioning.

A: In trading up, value is added to the product; in trading down, value is lowered.

BRANDING AND
BRAND MANAGEMENT

•Branding
•Brand name
•Trade name
•Trademark

Activity in which an organization uses a name, phrase, design, or symbols, or combination of these to identify its products and distinguish them from competitors.

Any word, “device” (design, shape, sound, or color), or combination of these used to distinguish a seller’s goods or services.

A commercial, legal name under which a company does business.

Identifies that a firm has legally registered its brand name or trade name so the firm has its exclusive use.

BRANDING AND
BRAND MANAGEMENT

•Brand Personality and Brand Equity

•Creating Brand Equity

Brand Personality

A set of human characteristics associated with a brand name.

The added value a given brand name gives to a product beyond the functional benefits provided.

FIGURE 11-6 Customer-based brand equity pyramid

BRANDING AND
BRAND MANAGEMENT

•Brand Personality and Brand Equity (cont)

•Valuing Brand Equity

•Licensing

•Picking a Good Brand Name

A contractual agreement whereby a company allows another firm to use its brand name, patent, trade secret, or other property for a royalty or fee.

BRANDING AND
BRAND MANAGEMENT

•Branding Strategies

•Manufacturer Branding

§Multiproduct branding

Manufacturer Branding

The producer dictates the brand name using either a multiproduct or multibranding approach.

Multiproduct Branding

A company uses one name for all products; also called blanket or family branding.

FIGURE 11-7 Alternative branding strategies

BRANDING AND
BRAND MANAGEMENT

•Manufacturer Branding (cont)

§Co-branding
§Multibranding
§Eurobranding
•Private Branding
•Mixed Branding
•Generic Branding

The pairing of two brand names of two manufacturers on a single product.

A manufacturer’s branding strategy giving each product a distinct name.

The strategy of using the same brand name for the same product across all countries in the European Union.

Private Branding

When a company manufactures products but sells them under the brand name of a wholesaler or retailer (often called private labeling or reseller branding).

A firm markets products under its own name an that of a reseller because the segment attracted by the reseller is different from its own market.

A no-name product with no identification other than a description of contents.

PACKAGING AND LABELING

•Creating Customer Value Through Packaging and Labeling

•Communication Benefits
•Functional Benefits
•Perceptual Benefits

•Global Trends in Packaging

•Environmental Sensitivity
•Health and Safety Concerns

Any container in which a product is offered for sale and on which label information is communicated.

An integral part of the package that typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients.

§Express warranty
§Limited coverage
§Full coverage
§Implied coverage

A statement indicating the liability of the manufacturer for product deficiencies.

1. How does a generic brand differ from a private brand?

A: Generic brands have no names, private brands have the name of a wholesaler or retailer.

2. Explain the role of packaging in terms of perception.

A: A package can connote status, economy, or quality.

3. What is the difference between an expressed and an implied warranty?

A: Express warranties are written statements of liabilities. Implied warranties assign the manufacturer responsibility for product deficiencies, even if the product is sold by a retailer. These are unwritten.

Chapter 11 - Summary

Products have a finite life cycle consisting of four stages: introduction, growth, maturity, and decline. The marketing objectives for each stage differ.
In the introductory stage the need is to establish primary demand, whereas the growth stage requires selective demand strategies. In the maturity stage the need is to maintain market share; the decline stage necessitates a deletion or harvesting strategy.
There are various shapes to the product life cycle. High learning products have a long introductory period, and low learning products rapidly enter the growth stage. There are also different curves for fashions and fads. Different product life-cycle curves can exist for the product class and product form.
In managing a product's life cycle, changes can be made in the product itself or in the target market. Product modification approaches include changes in the quality, performance, or appearance. Market modification approaches entail increasing a product's use among existing customers, creating new use situations, or finding new users.
Product repositioning can come about by reacting to a competitor's position, reaching a new market, capitalizing on a rising trend, or changing the value offered in a product.
Branding enables a firm to distinguish its product in the marketplace from those of its competitors. Successful and established brands take on a brand personality, a set of human characteristics associated with a brand name. A good brand name should suggest the product benefits, be memorable, fit the company or product image, be free of legal restrictions, and be simple and emotional. A good brand name is of such importance that is has led to a concept of brand equity, the added value a given brand name gives to a product beyond the functional benefits provided.
Licensing of a brand name is being used by many companies. The company allows the name to be used without having to manufacture the product.
Manufacturers can follow one of three branding strategies: a manufacturer's brand, a reseller brand, or a mixed brand approach. With a manufacturer's branding approach, the company can use the same brand name for all products in the line (multiproduct, or family, branding) or can give products different brands (multibranding).
A reseller, or private, brand is used when a firm manufactures a product but sells it under the brand name of a wholesaler or retailer. A generic brand is a product with no identification of manufacturer or reseller that is offered on the basis of price appeal.
Packaging and labeling provide communication, functional, and perceptual benefits. The two global emerging trends in packaging are greater concerns regarding the environmental impact and the health and safety of packaging materials.
The warranty, a statement of a manufacturer's liability for product deficiencies, is an important aspect of a manufacturer's product strategy.

Chapter 11

Marketing: Managing Products and Brands