This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
The best way to holdThe best way to holdcustomers is tocustomers is toconstantly figure outconstantly figure outhow to give themhow to give themmore for less.more for less.
Chapter Objectives§§ In this chapter, we focus on the followingIn this chapter, we focus on the following
questions:questions:§§ What are the characteristics of products?What are the characteristics of products?§§ How can a company build and manage itsHow can a company build and manage its
product mix and product lines?product mix and product lines?§§ How can a company make better brandHow can a company make better brand
decisions?decisions?§§ How can packaging and labeling be used asHow can packaging and labeling be used as
§§ Product mix (ProductProduct mix (Productassortment)assortment)§§ Product mix has a certain:Product mix has a certain:§§ WidthWidth§§ LengthLength§§ DepthDepth§§ ConsistencyConsistency
§§ ProductProduct--line lengthline length§§ Line StretchingLine Stretching§§ Downmarket StretchDownmarket Stretch
§§ The company may notice strong growth opportunities asThe company may notice strong growth opportunities asmass retailers attract a growing number of shoppersmass retailers attract a growing number of shoppers
§§ The company may wish to tie up lowerThe company may wish to tie up lower--end competitorsend competitorswho might otherwise try to move upmarketwho might otherwise try to move upmarket
§§ The company may find that the middle market isThe company may find that the middle market isstagnating or decliningstagnating or declining
Kmart has entered into branding andKmart has entered into branding anddistribution agreements with celebrities likedistribution agreements with celebrities likeKate Smith for womenKate Smith for women’’s apparel and Marthas apparel and MarthaStewart in house wares, gardening supplies,Stewart in house wares, gardening supplies,etc. Is this an upmarket stretch, aetc. Is this an upmarket stretch, adownmarket stretch or a twodownmarket stretch or a two--way stretchway stretchfor Kmart?for Kmart?
§§ Line FillingLine Filling§§ JustJust--noticeablenoticeable
differencedifference
§§ Line Modernization,Line Modernization,featuring, andfeaturing, andpruningpruning
§§ Brand decisionsBrand decisions§§ What is brand?What is brand?§§ AttributesAttributes§§ BenefitsBenefits§§ ValuesValues§§ CultureCulture§§ PersonalityPersonality§§ UserUser
§§ Commonly used research approachesCommonly used research approachesto determine brand meaning:to determine brand meaning:§§ Word associationsWord associations§§ Personifying thePersonifying the
brandbrand§§ Laddering up theLaddering up the
brand essencebrand essence§§ Brand essenceBrand essence§§ Laddering upLaddering up
§§ Building Brand IdentityBuilding Brand Identity§§ Brand bondingBrand bonding§§ Brands are not built by advertisingBrands are not built by advertising
but by the brand experiencebut by the brand experience§§ Everyone in the company lives the brandEveryone in the company lives the brand§§ Three ways to carry on internal brandingThree ways to carry on internal branding ––
Employees mustEmployees must§§ UnderstandUnderstand§§ Desire, andDesire, and§§ Deliver on the brand promiseDeliver on the brand promise
§§ Building Brands in the new economyBuilding Brands in the new economy§§ Heidi and Don Schultz urge companies to:Heidi and Don Schultz urge companies to:
§§ Clarify the corporationClarify the corporation’’s basic values and build the corporate brand.s basic values and build the corporate brand.§§ Use brand managers to carry out the tactical work.Use brand managers to carry out the tactical work.§§ Develop a more comprehensive brandDevelop a more comprehensive brand--building plan.building plan.§§ Define the brandDefine the brand’’s basic essence to be delivered wherever it is sold.s basic essence to be delivered wherever it is sold.§§ Use the brandUse the brand--value proposition as the key driver of the companyvalue proposition as the key driver of the company’’ss
strategy, operations, services, and product development.strategy, operations, services, and product development.§§ Measure their brandMeasure their brand--building effectiveness, not by the old measuresbuilding effectiveness, not by the old measures
of awareness, recognition, and recall, but by a more comprehensiof awareness, recognition, and recall, but by a more comprehensiveveset of measures including customerset of measures including customer--perceived value, customerperceived value, customersatisfaction, customer share of wallet, customer retention, andsatisfaction, customer share of wallet, customer retention, andcustomer advocacy.customer advocacy.
§§ Brand EquityBrand Equity§§ Brand awarenessBrand awareness§§ Brand acceptabilityBrand acceptability§§ Brand preferenceBrand preference§§ AakerAaker’’s five levels of customer attitude:s five levels of customer attitude:
§§ The customer will change brands, especially forThe customer will change brands, especially forprice reasons. No brand loyalty.price reasons. No brand loyalty.
§§ Customer is satisfied. No reason to change brands.Customer is satisfied. No reason to change brands.§§ Customer is satisfied and would incur cost byCustomer is satisfied and would incur cost by
changing brand.changing brand.§§ Customer values the brand and sees it as a friend.Customer values the brand and sees it as a friend.§§ Customer is devoted to the brand.Customer is devoted to the brand.
§§ Value of Brand EquityValue of Brand Equity§§ Brand valuationBrand valuation§§ Competitive advantages of high brand equity:Competitive advantages of high brand equity:
§§ The company will have more leverage in bargaining withThe company will have more leverage in bargaining withdistributors and retailers because customers expect themdistributors and retailers because customers expect themto carry the brand.to carry the brand.
§§ The company can charge a higher price than itsThe company can charge a higher price than itscompetitors because the brand has higher perceivedcompetitors because the brand has higher perceivedquality.quality.
§§ The company can more easily launch extensions becauseThe company can more easily launch extensions becausethe brand name carries high credibility.the brand name carries high credibility.
§§ The brand offers some defense against price competition.The brand offers some defense against price competition.
§§ Managing Brand EquityManaging Brand Equity§§ Branding ChallengesBranding Challenges§§ Branding Decision: To Brand or Not to Brand?Branding Decision: To Brand or Not to Brand?
When is a brand more than just a brand?When is a brand more than just a brand?Have you ever based a purchasing decisionHave you ever based a purchasing decisionprimarily on the brand? Was it because ofprimarily on the brand? Was it because ofsome perceived quality difference, or was itsome perceived quality difference, or was itbased on the expectation of how othersbased on the expectation of how otherswould see or treat you? Have you ever seenwould see or treat you? Have you ever seensomeone buying a givensomeone buying a givenbrand of an item in anbrand of an item in anattempt to be seen asattempt to be seen as ““coolcool””??
§§ Branding gives the seller several advantages:Branding gives the seller several advantages:§§ Brand name makes it easier for the seller toBrand name makes it easier for the seller to
process orders and track down problemsprocess orders and track down problems§§ SellerSeller’’s brand name and trademark provide legals brand name and trademark provide legal
protection of unique product featuresprotection of unique product features§§ Branding gives the seller the opportunity toBranding gives the seller the opportunity to
attract a loyal and profitable set of customers.attract a loyal and profitable set of customers.§§ Branding helps the seller segment markets.Branding helps the seller segment markets.§§ Strong brands help build corporate image,Strong brands help build corporate image,
making it easier to launch new brands and gainmaking it easier to launch new brands and gainacceptance by distributors and consumers.acceptance by distributors and consumers.
§§ BrandBrand--Name DecisionName Decision§§ Four available strategies:Four available strategies:§§ Individual namesIndividual names§§ Blanket family namesBlanket family names§§ Separate family names for all productsSeparate family names for all products§§ Corporate name combined withCorporate name combined with
§§ Desirable qualities for a brand nameDesirable qualities for a brand name§§ It should suggest something about the productIt should suggest something about the product’’ss
benefitsbenefits§§ It should suggest the product or service categoryIt should suggest the product or service category§§ It should suggest concrete,It should suggest concrete, ““high imageryhigh imagery””
qualitiesqualities§§ It should be easy to spell, pronounce, recognize,It should be easy to spell, pronounce, recognize,
and rememberand remember§§ It should be distinctiveIt should be distinctive§§ It should not carry poor meanings in otherIt should not carry poor meanings in other
NikeNike’’s arrangement with Michael Jordans arrangement with Michael Jordanhas provided an excellent example of ahas provided an excellent example of acelebrity endorsement. Can you think ofcelebrity endorsement. Can you think ofan endorsement campaign that backfired?an endorsement campaign that backfired?What did it cost the companyWhat did it cost the companyin the short term? What,in the short term? What,if any, have been theif any, have been thelasting effects?lasting effects?
§§ Factors which have contributed to the growing useFactors which have contributed to the growing useof packaging as a marketing toolof packaging as a marketing tool§§ SelfSelf--ServiceService§§ Consumer affluenceConsumer affluence§§ Company and brand imageCompany and brand image§§ Innovation opportunityInnovation opportunity
§§ Consumerists have lobbied for:Consumerists have lobbied for:§§ Open datingOpen dating§§ Unit pricingUnit pricing§§ Grade labelingGrade labeling§§ Percentage labelingPercentage labeling