Chapter 13
DEVELOPING
AND
MANAGING
BRAND AND
PRODUCT
CATEGORIES
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not be scanned, copied or duplicated, or posted to a
publicly accessible website, in whole or in part.
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Chapter 13 Developing and Managing Brand and Product Categories
Objectives
1. Determine how to define a brand.
2. Identify the different types of brands.
3. Explain the strategic value of brand
equity.
4. Explain the benefits of category and
brand management.
5. Discuss how companies develop a strong
identity for their product or brand.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 13 Developing and Managing Brand and Product Categories
Objectives
6. Identify and briefly describe each of the
new-product development strategies.
7. Describe the consumer adoption process.
8. List the stages in the new-product
development process.
9. Explain the relationship between product
safety and product liability.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 13 Developing and Managing Brand and Product Categories
Managing Brands for Competitive
Advantage
▮Brands have a powerful influence on
consumer behavior
▮Brand - Name, term, sign, symbol, design,
or some combination that identifies the
products of one firm while differentiating
them from competitors’ offerings
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 13 Developing and Managing Brand and Product Categories
Table 13.1 – Selected Brands, Brand Names,
and Brand Marks
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Chapter 13 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 choice of a
product on the basis of a previous experience
• Brand insistence - Consumer refusal of
alternatives and extensive search for desired
merchandise
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Chapter 13 Developing and Managing Brand and Product Categories
Types of Brands
▮Generic products - Products characterized
by plain labels, no advertising, and the
absence of brand names
▮Manufacturer’s brand - Brand name
owned by a manufacturer or other producer
▮Private brands - Brands offered by
wholesalers and retailers
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Chapter 13 Developing and Managing Brand and Product Categories
Types of Brands
▮Captive brands - National brands sold
exclusively by a retail chain
• Example: Target’s sale of products by Michael
Graves
▮Family brand - Single brand name that
identifies several related products
▮Individual brand - Single brand that
uniquely identifies a product
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Chapter 13 Developing and Managing Brand and Product Categories
Brand Equity
▮Added value that a respected, well-known
brand name gives to a product in the
marketplace
▮Built sequentially on four dimensions
•
•
•
•
Differentiation
Relevance
Esteem
Knowledge
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Chapter 13 Developing and Managing Brand and Product Categories
The Role of Category and Brand
Management
▮Brand manager - Marketer responsible for
a single brand
▮Category management - Product
management system in which a category
manager—with profit and loss
responsibility—oversees a product line
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Chapter 13 Developing and Managing Brand and Product Categories
Product Identification
▮Products identified in the marketplace by
brand names, symbols, and distinctive
packaging
▮Choosing how to identify a firm’s output
represents a major strategic decision for
marketers
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Chapter 13 Developing and Managing Brand and Product Categories
Brand Names and Brand Marks
▮Brand name - Part of a brand that can be
spoken
▮Brand mark - Symbol or pictorial design
that distinguishes a product
▮Effective brand names are easy to
pronounce, recognize, and remember
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Chapter 13 Developing and Managing Brand and Product Categories
Brand Names and Brand Marks
▮Brand name
• Should give buyers the correct connotation of
the product’s image
• Must qualify for legal protection
▮A brand name loses protection when a class
of products generally comes to be known by
that name
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Chapter 13 Developing and Managing Brand and Product Categories
Trademarks
▮Brand for which the owner claims exclusive
legal protection
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Chapter 13 Developing and Managing Brand and Product Categories
Protecting Trademarks
▮Gives firms the exclusive legal right to use a
brand name, brand mark, and any slogan or
product name abbreviation
▮Firms can also seek protection for
packaging elements and product features
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Chapter 13 Developing and Managing Brand and Product Categories
Trade Dress
▮Visual components that contribute to the
overall look of a brand
▮Visual components may be related to color
selections, sizes, package, label shapes, and
similar factors
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Chapter 13 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
▮A firm marketing a product in multiple
countries has two choices
• Use a single brand name for universal
promotions
• Tailor names to individual countries
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Chapter 13 Developing and Managing Brand and Product Categories
Packaging
▮Serves three major objectives
• Protection against damage, spoilage, and
pilferage
• Assistance in marketing the product
• Cost effectiveness
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Chapter 13 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
▮Universal product code (UPC) - Numerical
bar code system used to record product and
price information
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Chapter 13 Developing and Managing Brand and Product Categories
Labeling
▮RFID tags may replace some of the
functions of UPC codes
• Reduce labor costs and improve inventory
control
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Chapter 13 Developing and Managing Brand and Product Categories
Brand Extensions
▮Attaching a popular brand name to a new
product in an unrelated product category
▮Line extension - Development of individual
offerings that appeal to different market
segments while remaining closely related to
the existing product line
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Chapter 13 Developing and Managing Brand and Product Categories
Brand Licensing
▮Practice that expands a firm’s exposure in
the marketplace
▮Brand name’s owner receives royalties,
typically 8 to 12 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
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Chapter 13 Developing and Managing Brand and Product Categories
Figure 13.1 – Alternative Product
Development Strategies
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Chapter 13 Developing and Managing Brand and Product Categories
Product Development Strategies
▮Market penetration - Increase sales of
existing products in existing markets
▮Product positioning - 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
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Chapter 13 Developing and Managing Brand and Product Categories
Product Development Strategies
▮Product development - Introduction of
new products into identifiable or
established markets
▮Product diversification - Focuses on
developing entirely new products for new
markets
▮Cannibalization - Introducing a new
product that adversely affects sales of
existing products
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Chapter 13 Developing and Managing Brand and Product Categories
Consumer Adoption Process
▮Adoption process – Stages consumers go
through in learning about a new product,
trying it, and deciding whether to purchase
it again
•
•
•
•
•
Awareness
Interest
Evaluation
Trial
Adoption/rejection
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Chapter 13 Developing and Managing Brand and Product Categories
Adopter Categories
▮Consumer innovators - People who
purchase new products almost as soon as
the products reach the market
▮Diffusion process - Process by which new
goods or services are accepted in the
marketplace
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Chapter 13 Developing and Managing Brand and Product Categories
Figure 13.2 - Categories of Adopters Based
on Relative Times of Adoption
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Chapter 13 Developing and Managing Brand and Product Categories
Identifying Early Adopters
▮Firms who reach early purchasers can treat
them as a test market
• Evaluating the product and discovering
suggestions for modifications
▮Early purchasers can act as opinion leaders
from whom others seek advice
• Attitudes toward new products quickly spreads
to others
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Chapter 13 Developing and Managing Brand and Product Categories
Rate of Adoption Determinants
▮Relative advantage - Innovation that
appears far superior to previous ideas
▮Compatibility - Innovation consistent with
the values and experiences of potential
adopters
▮Complexity - Relative difficulty of
understanding the innovation influences the
speed of acceptance
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Chapter 13 Developing and Managing Brand and Product Categories
Rate of Adoption Determinants
▮Possibility of trial use - Initial free or
discounted trial of a good or service reduces
adopters financial risk
▮Observability - Observing an innovation’s
superiority increases the adoption rate
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Chapter 13 Developing and Managing Brand and Product Categories
Organizing for New Product Development
▮New-product committees
•
•
•
•
•
Most common arrangement
Brings together functional experts
Tends to reach decisions slowly
Maintains conservative views
Members may compromise so they can return
to their regular responsibilities
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Chapter 13 Developing and Managing Brand and Product Categories
Organizing for New Product Development
▮New-product departments
• Separate and formally organized
• Aims at generating and refining new product
ideas
• Encourages innovation as a permanent full-time
activity
• Responsible for all phases of a development
project within the firm
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Chapter 13 Developing and Managing Brand and Product Categories
Product Managers
▮Another term for a brand manager;
supports the marketing strategies of an
individual product or product line
▮Set prices, develop advertising and sales
promotion programs, and work with sales
representatives in the field
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Chapter 13 Developing and Managing Brand and Product Categories
Venture Teams
▮Specialists from different areas of an
organization who work together in
developing new products
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Chapter 13 Developing and Managing Brand and Product Categories
Venture Teams
▮The venture team must meet criteria for:
• Return on investment
• Uniqueness of product
• Serving a well-defined need
• Compatibility of the product with existing
technology
• Strength of patent protection
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Chapter 13 Developing and Managing Brand and Product Categories
Figure 13.3 – Steps in the New-Product
Development Process
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Chapter 13 Developing and Managing Brand and Product Categories
The New-Product Development Process
▮Idea generation - New-product
development begins with ideas from many
sources
▮Screening - Separates ideas with
commercial potential from those that
cannot meet company objectives
▮Business analysis - Assessing the new
product’s potential market, growth rate, and
likely competitive strengths
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Chapter 13 Developing and Managing Brand and Product Categories
The New-Product Development Process
• Concept testing - Method for subjecting a
product idea to additional study before actual
development by involving consumers through
focus groups, surveys, in-store polling, and
similar strategies
• Screening and business analysis stages generate
important information because they:
• Define the proposed product’s target market and
customers’ needs and wants
• Determine the product’s financial and technical
requirements
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Chapter 13 Developing and Managing Brand and Product Categories
The New-Product Development Process
▮Development - Financial outlays increase
substantially as a firm converts an idea into
a visible product
▮Test marketing - To verify that the product
will perform well in a real-life environment
▮Commercialization - A product is ready for
full-scale marketing
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Chapter 13 Developing and Managing Brand and Product Categories
Product Safety and Liability
▮Manufacturers must design their products
to protect users from harm
▮Product liability - Responsibility of
manufacturers and marketers for injuries
and damages caused by their products
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Chapter 13 Developing and Managing Brand and Product Categories
Product Safety and Liability
▮The Consumer Product Safety Commission
has jurisdiction over most consumer
product categories
▮The Food and Drug Administration
approves food, medications, and healthrelated devices
▮Liability lawsuits are increasing
domestically and internationally
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Chapter 13 Developing and Managing Brand and Product Categories
Product Safety and Liability
▮To counter increased litigation and
legislation
• Companies sponsor voluntary improvements in
safety standards
▮Safety planning and testing can be an
effective marketing tool
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Chapter 13 Developing and Managing Brand and Product Categories
Zappos Video
http://www.cengage.com/marketing/book_content/boone_9781133628460/
videos/ch13.html
Scripps Networks Interactive & Food
Network Video
http://www.cengage.com/marketing/book_content/boone_9781133628460
/videos/part4.html
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