Chapter 10 Product and Brand Decisions

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Introduction to Brands and Products

Brand and product conceptsLocal, international, and global brandsProduct design issuesAttitudes toward foreign productsStrategic alternativesNew product issues

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Basic Product Concepts

A product is a good, service, or idea

Tangible attributesIntangible attributes

Product classificationConsumer goodsIndustrial goods

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Product Types

Buyer orientationAmount of effort expended on purchaseConveniencePreferenceShoppingSpecialty

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Brands

Bundle of images and experiences in the customer’s mindA promise made by a particular company about a particular productA quality certificationDifferentiation between competing productsThe sum of impressions about a brand is the brand image

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Brand Equity

The added value that accrues to a product as a result of investments in the marketing of the brandAn asset that represents the value created by the relationship between the brand and customer over time

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Local Products and Brands

Brands that have achieved success in a single national marketRepresent the lifeblood of domestic companiesEntrenched local products/brands can be a significant competitive hurdle to global companies

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International Products and Brands

Offered in several markets in a particular region

Euro brands

The Smart car was developed by DaimlerChrysler for the European market.

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Global Products and Brands

Global products meet the wants and needs of a global market and are offered in all world regionsGlobal brands have the same name and similar image and positioning throughout the world

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Global Brand Characteristics

Quality signal—allows a company to charge a premium price in a highly competitive marketGlobal myth—marketers can use global consumer culture positioning to link the brand identity to any part of the worldSocial responsibility—shows how a company addresses social problems

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Global Products and Brands

Global brands are not the same as global products

iPod = brandMp3 player= product

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Branding Strategies

Combination or tiered branding allows marketers to leverage a company’s reputation while developing a distinctive identity for a line of products

Sony Walkman

Co-branding features two or more company or product brands

NutraSweet and Coca-ColaIntel Inside

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Brand Extension

Brand acts as an umbrella for new products

Ex: The Virgin Group• Virgin Entertainment: Virgin Mega-stores and MGM

Cinemas• Virgin Trading: Virgin Cola and Virgin Vodka• Virgin Radio• Virgin Media Group: Virgin Publishing, Virgin

Television, Virgin Net• Virgin Hotels• Virgin Travel Group: Virgin Atlantic Airways, Virgin

Holidays

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World’s Most Valuable Brands, 20061. Coca-Cola2. Microsoft3. IBM4. GE5. Intel6. Nokia7. Toyota8. Disney

17. Louis Vuitton18. Cisco19. Honda20. Samsung21. Merrill-Lynch22. Pepsi23. Nescafe24. Google25. Dell

9. McDonald’s10.Mercedes-Benz11.Citi12.Marlboro13.Hewlett-

Packard14.American

Express15.BMW16.Gillette

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Global Brand Development

Questions to ask when management seeks to build a global brand

Does this move fit the company and/or its markets?Will anticipated scale economies materialize?How difficult will it be to develop a global brand team?Can a single brand be imposed on all markets successfully?

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Global Brand Development

Global brand leadershipUsing organizational structures, processes, and cultures to allocate brand-building resources globally, to create global synergies, and to develop a global brand strategy that coordinates and leverages country brand strategies

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Global Brand Development

Create a compelling value propositionThink about all elements of brand identity and select names, marks, and symbols that have the potential for globalizationResearch the alternatives of extending a national brand versus adopting a new brand identity globallyDevelop a company-wide communication system

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Global Brand Development

Develop a consistent planning processAssign specific responsibility for managing branding issues Execute brand-building strategiesHarmonize, unravel confusion, and eliminate complexity

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Slide 11-90

Big brand requires less brain work (top) than weaker one.

This Is Your Brain . . . .

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Local versus Global Products and Brands: A Needs-Based Approach

Physiological

Safety

Social

External/Internal Esteem

Self-actualization

Maslow’s hierarchy of needs

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Asian Hierarchy of Needs

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Packaging

Consumer packaged goods refers to products whose packaging is designed to protect or contain the product during shipping, at retail, or point of useEco-packaging is key because package designers must address environmental issuesOffers communication cues that provide consumers with a basis for making a purchase decision

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Labeling

Provides consumers with various types of informationRegulations differ by country regarding various products

Health warnings on tobacco productsAmerican Automobile Labeling Act clarifies the country of origin and final assembly pointEuropean Union requires labels on all food products that include ingredients from genetically modified crops

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AestheticsGlobal marketers must understand the importance of visual aestheticsAesthetic styles (degree of complexity found on a label) differ around the worldAesthetic elements that are deemed appropriate, attractive, and appealing in one’s home country may be perceived differently elsewhere.

Red: South Africa = mourning; India = purity; China = celebration, good luck; Russia = Bolsheviks, communism; Western = excitementYellow: China = nourishing; Egypt = mourning; India = merchants; Western = hazard, warning, hope

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Green: China = exorcism; India = Islam; Ireland = the country; Western = Spring, rebirth, go, ecologyBlue: Iran = heaven and spirituality; Western = depression, sadness, “something blue” bridal tradition, conservativePurple: Thailand = mourning; Western = royalty

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White: Japan white carnation = death; Eastern = funerals; Western = brides, angels, good guys, hospitals, doctors, peace

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Product Warranties

Express warranty is a written guarantee that assures the buyer is getting what he or she paid for or provides a remedy in case of a product failureWarranties can be used as a competitive tool

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Extend, Adapt, Create: Strategic Alternatives in Global Marketing

Extension—offering product virtually unchanged in markets outside of home countryAdaptation—changing elements of design, function, and packaging according to needs of different country marketsCreation—developing new products for the world market