Chapter Objectives Developing and Managing Brand and Product Categories CHAPTER 12 1 2 4 7 8 Explain t he benefit s of category and brand management. Identify the different types of brands. Explain t he st rat egic value of brand equity. Discuss how companies develop strong identities for their products and brands. Identify and briefly describe each of the new-product development st rat egies. Describe t he consumer adoption process. List the stages in the new-product development process. Explain the relationship between product safety and product liability. 5 3 6
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Chapter Objectives
Developing and Managing Brand and Product Cat egories
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APT
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Explain t he benef it s of cat egory and brand management .
Ident ify t he dif ferent t ypes of brands.
Explain t he st rat egic value of brand equit y.
Discuss how companies develop st rong ident it ies for t heir product s and brands.
Ident ify and brief ly describe each of t he new-product development st rat egies.
Describe t he consumer adopt ion process.
List t he st ages in t he new-product development process.
Explain t he relat ionship bet ween product safet y and product liabilit y.
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CHAPTER 12 Developing and Managing Brand and Product Categories
MANAGING BRANDS FORCOMPETITIVE ADVANTAGE
• Brand Name, term, sign, ____________, design, or some combination that identifies the products of one firm while _______________ them from the competition’s.
• Brands have a _________ influence on consumer behavior.
CHAPTER 12 Developing and Managing Brand and Product Categories
BRAND LOYALTY• Measured in three stages:
• Brand recognition Consumer awareness and identification of a brand.
• Brand preference Consumer reliance on previous experiences with a product to choose that product again.
• Brand insistence Consumer refusal of alternatives and extensive search for desired merchandise.
CHAPTER 12 Developing and Managing Brand and Product Categories
BRAND LOYALTY• Measured in three stages:
• Brand recognition Consumer awareness and identification of a brand.
• Brand preference Consumer reliance on previous experiences with a product to choose that product again.
• Brand insistence Consumer refusal of alternatives and extensive search for desired merchandise.
TYPES OF BRANDS• Brands classified in a number of ways.
• Generic products Products characterized by plain labels, no advertising, and the absence of brand names.
CHAPTER 12 Developing and Managing Brand and Product Categories
Manufact urer’s Brands versus Privat e Brands• Manufacturer’s brand Brand name owned by a manufacturer or other producer.
• Examples: Sony, Pepsi, Dell.
• Private brands—brands offered by wholesalers and retailers.
• Account for one of every five items sold in the United States.
Capt ive Brands• National brands sold exclusively by a retail chain.
• Example: Target’s sale of products by Michael Graves.
Family and Individual Brands• Family brand Single brand name that identifies several related products.
• Individual brand—uniquely identifies the item itself.
CHAPTER 12 Developing and Managing Brand and Product Categories
BRAND EQUITY• Brand equity Added ________ that a respected, well-known brand name gives to a product in the _____________.
• Strong brand equity
• Increases likelihood customers will _________firm’s product or product line.
• Can contribute to buyers’ perceptions of product _________.
• Can reinforce customer ________ and ________ purchases.
• Facilitates expansion into international markets.
• Built sequentially on four dimensions: differentiation, relevance, esteem, and knowledge.
CHAPTER 12 Developing and Managing Brand and Product Categories
THE ROLE OF CATEGORY AND BRAND MANAGEMENT• Category management Product management system in which a category manager—with profit and loss responsibility—oversees a product line.
• Help retailer’s category buyer maximize sales for the whole category, not just particular manufacturer’s product.
• Also identify opportunities for growth, set performance targets, and create marketing strategy.
CHAPTER 12 Developing and Managing Brand and Product Categories
PRODUCT IDENTIFICATION
• Products identified in the marketplace by brand names, symbols, and distinctive packaging.
• Choices about how to identify products are a major strategic decision.
BRAND NAMES AND BRAND MARKS• Brand name Part of a brand consisting of words or letters that form a name that identifies and distinguishes a firm’s offerings from those of its competitors.
• Brand mark—symbol or pictorial design that distinguishes a product.
• Effective brand names are easy to pronounce, recognize, and remember.
• Should give buyers correct connotation of product’s image and qualify for legal protection.
• Brand name loses protection when class of products generally comes to be known by that name. Examples include nylon, kerosene, and zipper.
CHAPTER 12 Developing and Managing Brand and Product Categories
TRADEMARKS• Trademark Brand for which the owner claims exclusive legal protection.
Prot ect ing Trademarks• Gives firm exclusive legal right to use brand name, brand mark, and any slogan name or product name appreciation.
• Example: Former Beatles and their representatives sued Apple Computer, claiming its iPod product violated the trademarks for Apple Corps, the Beatles record label.
• Firms can also seek protection for packaging elements and product features.
Trade Dress• Visual cues in branding that create an overall look.
• Examples: McDonald’s golden arches, Merrill Lynch’s bull.
CHAPTER 12 Developing and Managing Brand and Product Categories
DEVELOPING GLOBAL BRAND NAMES AND TRADEMARKS�• An excellent name or symbol in one country may be a poor choice in another.
• Some sounds are common to most languages, such as o, k, and short a, so names such as Coca-Cola and Texaco tend to work well worldwide.
PACKAGING• Can powerfully influence buyers’ decisions.
• Many companies conduct research to develop and evaluate packaging.
Prot ect ion Against Damage, Spoilage, and Pilferage• Protection against damaging was original purpose of packaging.
• Packaging can help overcome consumer fears of tampering.
CHAPTER 12 Developing and Managing Brand and Product Categories
Assist ance in Market ing t he Product• Many firms use biodegradable and recyclable materials to respond to consumer preferences.
• Packaging must help product capture the shopper’s attention.
• Can enhance convenience for buyers.
• Example: Squeezable bottles of honey and ketchup.
Cost -Ef fect ive Packaging• Packaging cost must be reasonable.
CHAPTER 12 Developing and Managing Brand and Product Categories
Labeling• Label carries an item’s brand name or symbol, the name and address of the manufacturer or distributor, information about the product’s composition and size, and recommended uses.
• Labels are both promotional and informational.
• Subject to legal restrictions.
• Universal Product Code (UPC)—numerical bar codes printed on packages.
• Reduce labor costs and improve inventory control.
• May one day replace some functions of UPC codes.
CHAPTER 12 Developing and Managing Brand and Product Categories
BRAND EXTENSIONS�• Brand extension Strategy of attaching a popular brand name to a new product in an unrelated product category.
• Development by Mattel of Barbie-branded high-end clothing and accessories for women from their teens through their 30s.
BRAND LICENSING• Authorizing other companies to use a firm’s brand name.
• Brand’s owner receives royalties, typically four to eight percent of wholesale revenues.
• Can hurt a brand if the licensed product is poor quality or ethically incompatible with the brand.
• Another risk is overextending the brand.
CHAPTER 12 Developing and Managing Brand and Product Categories
NEW-PRODUCT PLANNING
• Firms must add new products in order to continuing prospering as other items reach the later stages of the product life cycle.
PRODUCT DEVELOPMENT STRATEGIES
CHAPTER 12 Developing and Managing Brand and Product Categories
• Product positioning—refers to consumers’ perceptions of a product’s attributes, uses, quality, and advantages and disadvantages relative to competing brands.
• Market development—concentrates on finding new markets for existing products.
• Product development—introduction of new products into identifiable or established markets.
• Product diversification—focuses on developing entirely new products for new markets.
• Firms must avoid cannibalization—introducing a new product that adversely affects sales of existing products.
CHAPTER 12 Developing and Managing Brand and Product Categories
CONSUMER ADOPTION PROCESS�• Adoption process Stages that consumers go through in learning about a new product, trying it, and deciding whether to purchase it ____________.
• Consumers go through five stages:
• ___________—individuals first learn of the new product, but they lack full information about it.
• _________—potential buyers begin to seek information about it
• _________—they consider the likely benefits of the product.
• _______—they make trial purchases to determine its usefulness.
• ________/_______—decide whether to use the product regularly.
• Example: Schick gave away samples of its Quattro razor to move buyers through the evaluation and trial stages.