product strategy and branding professor chip besio cox school of business southern methodist...
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PRODUCT STRATEGY AND BRANDING
PRODUCT STRATEGY AND BRANDING
Professor Chip BesioCox School of Business
Southern Methodist University
What Is the Product?
BrandName
QualityLevel
Packaging
Design
Features
Delivery& Credit
Installation
Warranty
After-Sale
Service
CoreBenefit
orService
CoreBenefit
orService
Actual ProductActual ProductCore ProductCore Product
Augmented ProductAugmented Product
Source: Prentice Hall
Types of ProductsCONSUMER PRODUCTS
Shopping ProductsShopping Products
> Buy less frequently> Gather product information> Fewer purchase locations> Compare for:
• Suitability & Quality • Price & Style
Convenience ProductsConvenience Products
> Buy frequently & immediately> Low priced> Many purchase locations> Includes:
• Staple goods• Impulse goods• Emergency goods
Specialty ProductsSpecialty Products
> Special purchase efforts> Unique characteristics> Brand identification> Few purchase locations
Unsought ProductsUnsought Products
> New innovations> Products consumers don’t want to think about> Require much advertising & personal sellingSource:
Prentice Hall
Types of ProductsINDUSTRIAL PRODUCTS
Supplies andServices
Supplies andServices
Materials andParts
Materials andParts
CapitalItems
CapitalItems
Source: Prentice Hall
Characteristics of Services
IntangibilityIntangibility
InseparabilityInseparability
VariabilityVariability
PerishabilityPerishabilitySource: Prentice Hall
Can’t be seen, tasted, felt, heard, or smelled before purchase
Can’t be separated from service providers
Quality depends on who provides them and when, where and how
Can’t be stored for later sale or use
Multi-Product Strategy Decisions
Branding Product Lines Product Mix
– Variety– Assortment
What Do Brands Mean to Customers?
BrandBrand
PersonalityPersonality
AttributesAttributes
ValueValueQualityQuality
BenefitsBenefits
CultureCultureCompany ValuesCompany Values
User CharacteristicsUser Characteristics
Brand Equity The value your customers perceive to be uniquely
associated with your brand
= AwarenessAwareness + AssociationsAssociations AwarenessAwareness
– Recall
– Recognition AssociationsAssociations
– Perceived Quality
– Image
Brand Equity BRAND LOYALTYBrand loyalty - the probability of choosing a brand given
that you are a user of that brand - can result from:
InertiaInertia: the general tendency to repeat previous purchases due to high switching costs, convenience, or habit
PreferencePreference: an enduring preference for a brand over and above what would be expected based on the benefits derived from the product or from a long-term relationship with the brand
Major Brand Decisions
Brand StrategyBrand Strategy
Line Extensions***Brand ExtensionsMulti-brands***New Brands
Line Extensions***Brand ExtensionsMulti-brands***New Brands
Brand SponsorBrand Sponsor
Manufacturer’s Brand**Co-branding
Private Brand**Licensed Brand
Manufacturer’s Brand**Co-branding
Private Brand**Licensed Brand
Brand NameBrand Name
SelectionProtection
SelectionProtection
Source: Prentice Hall
Brand Strategy
LineExtension
Multi-brand
BrandExtension
NewBrand
Bra
nd
Nam
e
Currently Served New
Product Category
Existing
New
Source: Prentice Hall
Brand StrategyBRAND EXTENSION Brand associations determine which brand
extensions will be successful
B C
REALITY Higher income
D E
Higher price, & benefits
Segment 2
ED C
OriginalMarket
NewMarket
0
2
4
6
8
Breath Mint Toothbrush
Close-Up
Crest
0
2
4
6
8
Waffles Lollipops
Cheerios
Froot Loops
0
2
4
6
8
Moisturizer Deodorant
Camay
Irish Spring
0
2
4
6
8
Video Games Cellular Phone
Apple
IBM
0
2
4
6
8
BottledWater
Scotch
Coors
Budweiser
Source: Wes Hutchinson
Product Mix
Product MixProduct Mix - - all the product
lines offered
Product MixProduct Mix - - all the product
lines offered
VarietyVariety - number of different
product lines
VarietyVariety - number of different
product lines
AssortmentAssortment - number of itemswithin product
lines
AssortmentAssortment - number of itemswithin product
lines