PRODUCT STRATEGY AND BRANDING

Professor Chip Besio

Cox School of Business Southern Methodist University

WITHIN EVERY BRAND IS A PRODUCT, BUT NOT EVERY PRODUCT IS A BRAND

…DAVID OGILVY

WHAT ARE PRODUCTS AND SERVICES?

GOODS, SERVICES, AND IDEAS  Product  Good • Nondurable Goods • Durable Goods   Services Ideas

WHAT ARE PRODUCTS AND SERVICES?

PRODUCT ITEMS, LINES, AND MIXES  Product Item • Stock Keeping Unit (SKU)  Product Line  Product Mix 10-4

WHAT IS A PRODUCT?

Augmented Product Delivery & Credit Installation Brand Name Quality Level Packaging Core Benefit or Service Features Design After Sale Service Actual Product Warranty Core Product

Source: Prentice Hall

How stages of the product life cycle relate to a firm’s marketing objectives and marketing mix actions

Stages of the product life cycle and its total industry sales and total industry profit

How stages of the product life cycle relate to a firm’s marketing objectives and marketing mix actions

CHARTING THE PRODUCT LIFE CYCLE INTRODUCTION STAGE  Primary Demand  Selective Demand  Skimming Strategy  Penetration Pricing

Product life cycle for the stand-alone fax machine for business use: 1970-2012

CHARTING THE PRODUCT LIFE CYCLE GROWTH STAGE  Rapid Sales Growth  More Competitors  Repeat Purchasers  New Features  Broad Distribution

CHARTING THE PRODUCT LIFE CYCLE MATURITY STAGE  Industry/Product Sales Slow  Profit Declines  Product Differentiation  Fewer Competitors

CHARTING THE PRODUCT LIFE CYCLE DECLINE STAGE  Industry/Product Sales Drop  Environmental Changes  Deletion  Harvesting

CHARTING THE PRODUCT LIFE CYCLE FOUR ASPECTS  Length of the Product Life Cycle  Shape of the Product Life Cycle • Generalized Life Cycle • High-Learning Product • Low-Learning product • Fashion Product • Fad Product

Alternative product life cycle curves based on product types

CHARTING THE PRODUCT LIFE CYCLE FOUR ASPECTS  The Product Level: Class and Form • Product Class • Product Form

Prerecorded music product life cycles by product form

CHARTING THE PRODUCT LIFE CYCLE FOUR ASPECTS  The Life Cycle and Consumers • Diffusion of Innovation  Innovators  Early Adopters  Early Majority  Late Majority  Laggards

Five categories and profiles of product adopters (diffusion of innovation)

CHARTING THE PRODUCT LIFE CYCLE FOUR ASPECTS  The Life Cycle and Consumers • Barriers to Adoption  Usage  Value  Risk  Psychological 11-20

MANAGING THE PRODUCT LIFE CYCLE ROLE OF A PRODUCT MANAGER  Product/Brand Manager Responsibilities • Product Life Cycle • New Product Development • Marketing Program Implementation • Data Analysis (Sales, Market Share, & Profit Trends)  Category Development Index - CDI  Brand Development Index - BDI 11-21

MANAGING THE PRODUCT LIFE CYCLE MODIFYING THE PRODUCT OR MARKET  Product Modification • Product Bundling • New Characteristics  Market Modification • Finding New Customers • Increasing a Product’s Use • Creating a New Use Situation 11-22

MANAGING THE PRODUCT LIFE CYCLE REPOSITIONING THE PRODUCT  Product Repositioning  Reacting to a Competitor’s Position  Reaching a New Market  Catching a Rising Trend 11-23

The Milk Processor Education Program What factor triggered its repositioning?

11-24

MANAGING THE PRODUCT LIFE CYCLE REPOSITIONING THE PRODUCT  Changing the Value Offered • Trading Up (adding value through new features) • Trading Down (reducing features, quality or price) • Downsizing (reducing package content or size) 11-25

BRANDING AND BRAND MANAGEMENT  Branding  Brand Name • Logotype (Logo)  Trade Name  Trademark ® ™ • Product Counterfeiting 11-26

BRANDING AND BRAND MANAGEMENT BRAND PERSONALITY AND BRAND EQUITY  Brand Personality  Brand Equity • Provides a Competitive Advantage • Consumers Willing to Pay a Premium 11-27

GATORADE: QUENCHING THE ACTIVE THIRST WITHIN YOU

Göt2b Hair Products and Degree Deodorant What are their brand personalities?

The customer-based brand equity pyramid

BRANDING AND BRAND MANAGEMENT PICKING A GOOD BRAND NAME  Should Suggest Product Benefits  Should Be Memorable and Positive  Should Fit the Company or Product Image  Should Have No Legal or Regulatory Restrictions  Should Be Simple and Emotional

ALTERNATIVE BRANDING STRATEGIES

BRANDING AND BRAND MANAGEMENT BRANDING STRATEGIES  Multiproduct Branding (Family or Corporate Branding) • Product Line Extensions • Subbranding • Brand Extension • Co-Branding

BRANDING AND BRAND MANAGEMENT BRANDING STRATEGIES  Multibranding • Fighting Brands  Private Branding (Private Labeling or Reseller Branding)  Co-Branding (two brands, one new product)  Mixed Branding

BRANDING STRATEGY

Existing Product Category Currently Served New Line Extension Brand Extension New Multi-brand New Brand

Source: Prentice Hall

Kimberly-Clark’s Huggies What branding strategy is used?

Black & Decker and DeWalt Tools What branding strategy does each use?

INDIVIDUAL PRODUCT STRATEGY DECISIONS  Attributes  Packaging  Labeling  Product Support

PRODUCT ATTRIBUTES WHERE DO THEY COME FROM?

Quality Design Features

Source: Prentice Hall

PACKAGING

Sales Tasks Identifies Competitive Advantages Packaging Labeling Product Safety Promotes Describes

Source: Prentice Hall

“?” and Heinz Ketchup What are the packaging benefits for each?

Lay’s STAX, Pringles and Celestial Seasonings What are the packaging benefits for each?

PACKAGING AND LABELING PRODUCTS PACKAGING AND LABELING CHALLENGES AND RESPONSES  Connecting with Customers  Environmental Concerns  Health, Safety, and Security Issues • Shelf Life  Cost Reduction

BRANDING AND BRAND MANAGEMENT  Warranty • Express Warranties • Limited Coverage Warranties • Full Warranties • Implied Warranties

PRODUCT MIX

Variety - number of different product lines Product Mix all the product lines offered Assortment number of items within product lines