chapter 5 mine

8/9/2019 Chapter 5 Mine

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Chapter 5Chapter 5Product and Service Strategy and

Brand Management


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OFFERING STRATEGYFRAMEWORK

Positioning

Offerings

Branding

Offerings

Modifying the

Offering Mix

h The profitability of an organization depends on its

product or service offering(s) and the strength of its

brand(s).

h Marketers face three offering-related strategy

decisions:


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h An offeringconsists of the benefits or satisfaction

provided to target markets by an organization.

hIt consists of the following elements:

PackagingWarranties/

Guarantees

Brand name(s)

Tangible

product/service(a physical entity)Related services

(delivery, setup, etc.)

Other Features

THEOFFERING CONCEPT


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ADDITIONS TOTHEOFFERING MIX

h Additions take the form of:

How consistentis the new offering with

existing offerings?

h Questions to ask when considering new offerings:

Single

Offering

Entire

Line

Does the organization have the resources tointroduce and sustain the offering?

Is there a viable marketfor the offering?

Resources

Consistency

Market


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ADDITIONS TOTHEOFFERING MIX

h Considerwhether a market exists.

h Consider whether the new offering has a relative

advantage over competitive offerings at a price

consumers are willing and able to pay.

h Consider if there is a distinct buyer group or segment

for which no present offering is satisfactory.

Market


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STAGES INTHENEW-OFFERING

DEVELOPMENT PROCESS

Idea

Screening

BusinessAnalysis

Idea

Generation

Market

Testing

Commercial-

ization


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STAGES INTHENEW-OFFERING

DEVELOPMENT PROCESS

BusinessAnalysis

h Assess financial viability based on estimated:

Sales Costs Profits

h Forecasting sales is difficult for new offerings.

h Profitability analyses relate to:

Investment Break -even Payback Period NO

NONO


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EXHIBIT 5.1:GENERAL FORM OFA

PRODUCT LIFE CYCLE

Sales

Time

Maturity-SaturationGrowthIntroduction Decline


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POSITIONING

Positioningis the act of designing

an organizations offering and

image so that it occupies a distinctand valued place in the target

customers mind relative tocompetitive offerings.


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POSITIONING STRATEGIES

h Strategies include positioning by:

Product or

Brand User

Use or

Application

Attribute or

Benefit

Product or

Service Class

Price and

QualityCompetitors

h Marketers often combine two or more of these strategies when positioning a

product, service, or brand.


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CRAFTINGA POSITIONING STATEMENT

h Once the desired positioning has been

determined, marketers prepare a succinct,

written positioning statement.

h A positioning statement identifies:

The offerings unique attributes or benefits

The target market and needs satisfied

The product (service) class or category in

which the organizations offering competes


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CRAFTINGA POSITIONING STATEMENT

A positioning statement takes this form:

h For (target market and need), the (product, service,

brand name) is a (product/service class orcategory)

that (statement of unique attributes or benefits provided).

h Example:

For upscaleAmerican families who desire a

carefree driving experience, Volvo is a

premium-priced automobile that offers the

utmost in safety and dependability.


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BRANDAND BRANDEQUITY

Brand Brand Equity

A brand name is anyword, device (design,

sound, shape, or color),

or combination of these

that are used to identifyan offering and set it

apart from competing

offerings.

Brand equity is the addedvalue a brand name

bestows on a product or

service beyond the

functional benefitsprovided.


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Branding Strategy (Tactics?)Branding Strategy (Tactics?)

y Multiproduct Branding One name for all

the products in a product class (e.g.,Dell,

Sony). Sub-branding (e.g.,GE, auto cos. )

y Multibranding Giving each product a

distinct brand name (e.g., Proctor &

Gamble)

y Private Branding Manufacturer makesproduct for a reseller (e.g., Sears and

Walmart contract with manufacturers)


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BRANDGROWTH STRATEGIES

Line

Extension

New

Brand

BrandExtension

An organization introduces additional offerings with the same

brand in a product class that it currently serves (e.g., Campbells

chunky style soup).

Fighting/

Flanker Brand

Is the practice of using a current brand name to enter acompletely different product class (e.g., Honda snowblowers).

Involves the development of a new brand and often a new

offering for a product class that has not been previously served

by the organization (Proctor & Gamble ).

Creates new brands for an existing product class that attracts

specific consumer segments not served by an organizations

existing products/brands Represents a defensive move to counteract competitors

Heubleins Smirnoff, Relska and Popov brands


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EXHIBIT 5.4: BRANDGROWTH

STRATEGIES

New

Brand

Strategy

Line

Extension Strategy

Brand

Extension

Strategy

Fighting/

Flanking

Brand Strategy

Existing Product ClassExisting Product ClassNew Product ClassNew Product Class

New BrandNew Brand

Product/Service ClassProduct/Service Class

Served by the OrganizationServed by the Organization

Brand NameBrand Name

Existing BrandExisting Brand

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