1 lamb, hair, mcdaniel chapter 10 product concepts 2010-2011
Post on 22-Dec-2015
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TRANSCRIPT
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LO 1 Define the term product
LO 2 Classify consumer products
LO 3 Define the terms product item, product line, and product mix
LO 4 Describe marketing uses of branding
Learning OutcomesLearning Outcomes
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LO 5 Describe marketing uses of packaging and labeling
LO 6 Discuss global issues in branding and packaging
LO 7 Describe how and why product warranties are important marketing tools
Learning OutcomesLearning Outcomes
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What Is a Product?
Everything, both favorable
and unfavorable, that a
person receives in an
exchange.
Tangible Good
Service
Idea
ProductProduct
LO1
6
What Is a Product?
Product is the starting point of Marketing Mix
PromotionPromotion
Place (Distribution)Place (Distribution)
PricePrice
Product Product
LO1
8
Types of Products
BusinessProduct
BusinessProduct
Consumer Product
Consumer Product
A product used to manufacture other goods or services, to facilitate an
organization’s operations, or to resell to other consumers.
A product used to manufacture other goods or services, to facilitate an
organization’s operations, or to resell to other consumers.
A product bought to satisfy an individual’s personal needs or wants
A product bought to satisfy an individual’s personal needs or wants
LO2
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Types of Consumer Products
UnsoughtProducts
UnsoughtProducts
SpecialtyProductsSpecialtyProducts
ShoppingProducts
ShoppingProducts
ConvenienceProducts
ConvenienceProducts
ConsumerProducts
ConsumerProducts
BusinessProductsBusinessProducts
ProductsProducts
LO2
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Types of Consumer Products
MarketDevelopment
Diversification
Increase market share among existing customers
Attract new customers to existing products
Introduce new products into new markets
Create new products for present markets
ConvenienceProduct
ShoppingProduct
SpecialtyProduct
UnsoughtProduct
A relatively inexpensive item that merits little shopping effort
A product that requires comparison shopping, because it is usually more expensive and found in fewer stores
A particular item for which consumers search extensively and are reluctant to accept substitutes
A product unknown to the potential buyer or a known product that the buyer does not actively seek
LO2
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Define the terms product item, product line,
and product mix
Product Items, Product Items, Lines, and MixesLines, and Mixes
LO3
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Product Items, Lines, and Mixes
Product ItemProduct Item
Product LineProduct Line
Product MixProduct Mix
A specific version of a product that can be designated as a distinct offering among an organization’s products.
A specific version of a product that can be designated as a distinct offering among an organization’s products.
A group of closely-related product items.
A group of closely-related product items.
All products that an organization sells.
All products that an organization sells.
LO3
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Benefits of Product Lines
Equivalent QualityEquivalent Quality
Efficient Sales andDistribution
Efficient Sales andDistribution
Standardized Components
Standardized Components
Package UniformityPackage Uniformity
Advertising EconomiesAdvertising Economies
LO3
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Adjustments
Product Modification
Product Modification
ProductRepositioning
ProductRepositioning
Product LineExtension or Contraction
Product LineExtension or Contraction
Adjustments to Product Items,
Lines, and Mixes
Adjustments to Product Items,
Lines, and Mixes
LO3
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Types of Product Modifications
Quality ModificationQuality Modification
Functional ModificationFunctional Modification
Style ModificationStyle Modification
Planned Obsolescence: The practice of modifying products so those that have already been sold become obsolete before they actually need replacement.LO3
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Repositioning
Changing Demographics
Changing Demographics Declining SalesDeclining Sales
Changes in Social
Environment
Changes in Social
Environment
Why reposition Why reposition established brands?established brands?
Why reposition Why reposition established brands?established brands?
LO3
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Product Line ExtensionAdding additional products to an existing product
line in order to compete more broadly in the
industry.
Symptoms of Overextension • Some products have low sales or
cannibalize sales of other items• Resources are disproportionately allocated
to slow-moving products• Items have become obsolete because of
new product entries
LO3
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Branding
Brand Name
BrandMark
Brand Equity
That part of a brand that can be spoken, including letters, words, and numbers
The elements of a brand that cannot be spoken
The value of company and brand names
GlobalBrand
A brand where at least 20 percent of theproduct is sold outside its home country
LO4
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Benefits of Branding
Product Identification
Product Identification
Repeat SalesRepeat Sales
New Product Sales
New Product Sales
LO4
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Top Ten Global Brands
LO4
1. Coca-Cola U.S.
2. IBM U.S.
3. Microsoft U.S.
4. GE U.S.
5. Nokia Finland
6. McDonald’s U.S.
7. Google U.S.
8. Toyota Japan
9. Intel U.S.
10. Disney U.S.
Source: Burt Helm, "Best Global Brands," BusinessWeek September 28, 2009
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Branding Strategies
Brand No Brand
Manufacturer’s Brand Private Brand
IndividualBrand
Family Brand
Combi-nation
IndividualBrand
Family Brand
Combi-nation
LO4
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Branding Strategies
Manufacturers’ Brand
Private Brand
The brand name of a manufacturer.
A brand name owned by a wholesaler or a retailer. Also
known as a private label or store brand.
Captive
A brand manufactured by a thirdparty for exclusive retailer,without evidence of a thatretailer’s affiliation
LO4
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Advantages of Manufacturers’ Brands
Heavy consumer ads by manufacturers
Attract new customers
Enhance dealer’s prestige
Rapid delivery, carry less inventory
If dealer carries poor quality brand, customer may simply switch brands and remain loyal to dealer
LO4
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Advantages of Private Brands
Earn higher profits on own brand
Less pressure to mark down price
Manufacturer can become a direct competitor or drop a brand/reseller
Ties customer to wholesaler or retailer
Wholesalers and retailers have no control over the intensity of distribution of manufacturers’ brands
LO4
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Advantagesof Captive Brands
• No evidence of store’s affiliation
• Sold exclusively at the chain
• Can ask price similar to manufacturer’s brands
LO4
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Individual Brands Versus Family Brands
Individual Brand
Family Brand
Using different brand names for different products.
Marketing several different products under the same brand name.
LO4
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Cobranding
IngredientBranding
IngredientBranding
Cooperative Branding
Cooperative Branding
Complementary Branding
Complementary Branding
Types of Types of CobrandingCobranding
http://www.bose.com
OnlineLO4
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Trademarks
A Trademark is the exclusive right to use a brand.
Many parts of a brand and associated symbols qualify for trademark protection.
Trademark right comes from use rather than registration.
The mark has to be continuously protected.
Rights continue for as long as the mark is used.
Trademark law applies to the online world.
LO4
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Functions of Packaging
Contain and Protect
Promote
Facilitate Storage, Use, and Convenience
Facilitate Recyclinghttp://www.levesquedesign.com/http://www.design4packaging.com
Online
LO5
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Packaging Innovations
• Packages tend to have the same shapes and sizes– Easy consumer comparison– Innovations for ease of use can be a
competitive advantage• Collection of some great innovations in 2009:
– http://packaginguniversity.com/blog/2009/11/04/my-best-packaging-picks-for-october/
• Great packaging does not make up for an unsatisfactory product
LO5
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Beyond
the
Book
100 Percent Recyclable
SOURCE: Press Release, The Coca-Cola Company, Atlanta, GA, September 5, 2007
Coca-Cola is building the largest recycling plant in the world. The plant will produce 100 million pounds of food-grade recycled plastic for reuse each year. That’s enough plastic to produce two billion 20-ounce Coke bottles.
Coca-Cola’s goal is to recycle or reuse 100 percent of the company’s plastic bottles in the U.S. market. By meeting that goal over the next ten years, the Coca-Cola recycling plant will eliminate the production of one million metric tons of CO2 emissions—the equivalent of removing 215,000
cars from American highways.
LO5
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Labeling
Online
http://www.fda.gov
Persuasive
Focuses on promotional theme
Consumer information is secondary
Informational
Helps make proper selections
Lowers cognitive dissonance
Includes use/care
LO5
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Universal Product Codes
Universal Product Codes
(UPCs)
A series of thick and thin
vertical lines (bar codes),
readable by computerized
optical scanners, that
represent numbers used to
track products.
LO5
38
Discuss global issues in branding
and packaging
Global Issues in Global Issues in Branding and PackagingBranding and Packaging
LO6
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Global Issues in Branding
Adaptations & Modifications
Adaptations & Modifications
Global Options Global Options for Brandingfor Branding
One Brand NameEverywhere
One Brand NameEverywhere
Different Brand Names in Different
Markets
Different Brand Names in Different
Markets
LO6
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Global Issues in Packaging
AestheticsAesthetics
Global Global Considerations Considerations for Packagingfor Packaging
Climate Considerations
Climate Considerations
LabelingLabeling
LO6
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Global Package designs
2009 European Design Awards • Creative global packaging
– Some of the winners
• Blog highlighting interesting global packaging– http://packagingworld.blogspot.com/
LO6
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Describe how and why product
warranties are important
marketing tools
Product WarrantiesProduct Warranties
LO7