CHAPTER
MANAGING
PRODUCTS,
SERVICES,
AND BRANDS
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-1
AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
1. Explain the product life cycle concept.
2. Identify ways that marketing executives
manage a product’s life cycle.
3. Recognize the importance of branding
and alternative branding strategies.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-2
AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
4. Describe the role of packaging and
labeling in the marketing of a product.
5. Recognize how the four Ps framework
applies to services.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-3
GATORADE: AN UNQUENCHABLE
THIRST FOR COMPETITION
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Slide 11-4
Gatorade TV Ad
What is effective product & brand management?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-5
THE PRODUCT LIFE CYCLE
• Product Life Cycle
• Introduction Stage
 Primary Demand
 Selective Demand
 Skimming Pricing Strategy
 Penetration Pricing Strategy
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-6
FIGURE 11-1 How stages of the product life
cycle relate to a firm’s marketing objectives
and marketing mix actions
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Slide 11-7
FIGURE 11-2 Product life cycle for the
stand-alone fax machine for business use:
1970–2008
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Slide 11-8
THE PRODUCT LIFE CYCLE
• Growth Stage
 Repeat Purchasers
• Maturity Stage
• Decline Stage
 Deletion
 Harvesting
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Slide 11-9
Honda Insight Hybrid Automobile and
Casio EXILM Digital Camera
What stage of the product life cycle?
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Slide 11-10
THE PRODUCT LIFE CYCLE
• Some Dimensions of the Product Life
Cycle
 Length of the Product Life Cycle
 Shape of the Product Life Cycle
• Generalized Life Cycle
• Fashion Product
• High-Learning Product
• Fad
• Low-Learning Product
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-11
FIGURE 11-3 Alternative product life cycles
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Slide 11-12
THE PRODUCT LIFE CYCLE
• Some Dimensions of the Product Life
Cycle
 The Life Cycle and Consumers
 Diffusion of Innovation
• Innovators
• Late Majority
• Early Adopters
• Laggards
• Early Majority
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-13
FIGURE 11-4 Five categories and profiles of
product adopters
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-14
Concept Check
1. Advertising plays a major role in the
introductory stage of the product life
__________
sales promotion plays a
cycle, and _____________
major role in maturity.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-15
Concept Check
2. How do high-learning and
low-learning products differ?
A: A high-learning product requires
significant customer education and there
is an extended introductory period.
A low-learning product requires little
customer education because the benefits
of purchase are readily understood,
resulting in immediate sales.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-16
MANAGING THE
PRODUCT LIFE CYCLE
• Modifying the Product
 Product Modification
• Modifying the Market
 Market Modification
• Finding New Users
• Increasing Use
• Creating New Use Situations
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Slide 11-17
Milk Processor Education Program
What modification strategy?
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Slide 11-18
MANAGING THE
PRODUCT LIFE CYCLE
• Repositioning the Product
 Product Repositioning
 Reacting to a Competitor’s Position
 Catching a Rising Trend
 Changing the Value Offered
• Trading Up
• Downsizing
• Trading Down
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-19
Concept Check
1. What does “creating new use
situations” mean in managing a
product’s life cycle?
A: Finding new uses or applications for
an existing product.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-20
Concept Check
2. Explain the difference between trading up
and trading down in repositioning.
A: Trading up involves adding value to the product
(or line) through additional features or higherquality materials. Trading down involves
reducing the number of features, quality, or
price, or downsizing—reducing the content of
packages without changing package size and
maintaining or increasing the package price.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-21
BRANDING AND
BRAND MANAGEMENT
• Branding
• Brand Name
 Logotype or Logo
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Slide 11-22
BRANDING AND
BRAND MANAGEMENT
• Brand Personality and Brand Equity
 Brand Personality
 Brand Equity
 Creating Brand Equity
 Valuing Brand Equity
• Brand Licensing
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-23
got2b Hair Products and
Mambo Fragrances
What are their brand personalities?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-24
FIGURE 11-5 Customer-based brand equity
pyramid
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Slide 11-25
Hummer Footwear by Roper
How does brand licensing create brand equity?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-26
BRANDING AND
BRAND MANAGEMENT
• Picking a Good Brand Name
 Suggest the Product Benefits
 Be Memorable, Distinctive, and Positive
 Fit the Company or Product Image
 Have No Legal or Regulatory Restrictions
 Be Simple and Emotional
 International: Be Nonmeaningful
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Slide 11-27
BRANDING AND
BRAND MANAGEMENT
• Branding Strategies
 Multiproduct Branding (Family/Corporate)
• Line Extension
• Subbranding
• Brand Extension
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-28
FIGURE 11-6 Alternative branding strategies
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-29
BRANDING AND
BRAND MANAGEMENT
• Branding Strategies
 Multibranding
• Fighting Brands
 Private Branding (Private Labeling/Reseller)
 Mixed Branding
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-30
Black & Decker and DeWalt Tools
What is each firm’s branding strategy and why?
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Slide 11-31
CREATING CUSTOMER VALUE
THROUGH PACKAGING
AND LABELING
• Packaging
• Label
• Communication Benefits
• Functional Benefits
• Perceptual Benefits
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Slide 11-32
L’eggs Sheer Energy
What packaging benefits?
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Slide 11-33
Lay’s Stax and Pringles
What packaging benefits?
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Slide 11-34
Celestial Seasonings Tea
What packaging benefits?
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Slide 11-35
MANAGING THE MARKETING
OF SERVICES
• Product (Service)
 Exclusivity
 Branding
 Capacity Management
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Slide 11-36
McDonald’s
Why is a logo an important aspect of branding?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-37
MANAGING THE MARKETING
OF SERVICES
• Pricing
 Off-Peak Pricing
• Place (Distribution)
• Promotion
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-38
United States Postal Service
Why do service organizations advertise?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-39
Concept Check
1. What is the difference between a line
extension and a brand extension?
A: A line extension is the practice of using a
current brand name to enter a new market
segment in its product class. A brand
extension is the practice of using a current
brand name to enter a completely
different product class.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-40
Concept Check
2. Explain the role of packaging in
terms of perception.
A: A package’s color, shape, and
graphics can connote status,
economy, and product quality.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-41
Concept Check
3. How do service businesses use offpeak pricing?
A: Service businesses charge different
prices during different times of the
day or days of the week to reflect
variations in demand for the service.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-42
GOING ONLINE
BRAND NEWS YOU CAN USE
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-43
Going Online
1. Visit the brandchannel.com website.
Pick a brand appearing in Chapter 11
and find a feature or debate pertaining
to it either in the archives or from the
current page. Summarize the views
expressed in brandchannel.com.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-44
Going Online
2. Click the “papers” icon and read a
paper on a topic covered in Chapter
11. Compare and contrast the views
in this paper with the coverage found
in the chapter.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-45
VIDEO CASE 11
PHILADEPHIA
PHILLIES, INC.:
SPORTS MARKETING 101
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Slide 11-46
VIDEO CASE 11
Philadelphia Phillies
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Slide 11-47
VIDEO CASE 11
Philadelphia Phillies
TABLE 1 Sources of revenues for the
Philadelphia Phillies
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-48
VIDEO CASE 11
Philadelphia Phillies
1. (a) What is the “product” that the
Phillies market? (b) What
“products” are the Phillies careful
not to market?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-49
VIDEO CASE 11
Philadelphia Phillies
2. How does the “quality” dimension in
marketing the Philadelphia Phillies
differ from that in marketing a
consumer product such as a breakfast
cereal or cake mix?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-50
VIDEO CASE 11
Philadelphia Phillies
3. When David Montgomery talks about
reducing the “inventory of seats” in
the new versus old stadium, what
does he recognize as (a) advantages
and (b) disadvantages?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-51
VIDEO CASE 11
Philadelphia Phillies
4. Considering all five elements of the
promotional mix (advertising,
personal selling, public relations,
sales promotion, and direct
marketing), what specific
promotional activities should the
Phillies use? Which should be used
off-season? On-season?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-52
VIDEO CASE 11
Philadelphia Phillies
5. What kind of special promotion gift
days (with premiums) and event days
(no premiums) can the Phillies use to
increase attendance by targeting
these segments: (a) 14 and under,
(b) 15 and over, (c) other special fan
segments, and (d) all fans?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-53
SUPPLEMENTAL
LECTURE NOTE 11-1
DVD PLAYERS
FOLLOW THE CLASSIC
PRODUCT LIFE CYCLE
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Slide 11-54
FIGURE 11-A DVD player product life cycle
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Slide 11-55
SUPPLEMENTAL
LECTURE NOTE 11-2
ASSESSING
SERVICE QUALITY
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Slide 11-56
FIGURE 11-B Dimensions of service quality
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Slide 11-57
SUPPLEMENTAL
LECTURE NOTE 11-3
CUSTOMER
CONTACT AUDITS
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-58
FIGURE 11-C Customer contact audit for a
car rental (green shaded boxes indicate
customer activity)
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-59
IN-CLASS ACTIVITY 11-1
MANAGING THE
PRODUCT LIFE CYCLE
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Slide 11-60
ACT II Butter Lover’s Microwave Popcorn
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Slide 11-61
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Slide 11-62
ACT II Microwave Popcorn (The Classics)
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Slide 11-63
ACT II Microwave Popcorn (Special Features)
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Slide 11-64
ACT II Microwave Popcorn (Other)
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Slide 11-65
IN-CLASS ACTIVITY 11-2
USING BRAINSTORMING AND
N/3 TECHNIQUES FOR
BREATHE RIGHT® STRIPS
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Slide 11-66
Breathe Right Strip
CNS
Breathe Right
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Slide 11-67
Breathe Right Strip Instructions
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Slide 11-68
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Slide 11-69
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Slide 11-70
Breathe Right Strips
Brand Personality Print Ads
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Slide 11-71
Breathe Right Strips
NYC Marathon Specialty Strip and Print Ad
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Slide 11-72
Breathe Right Strips
Newspaper Free-Standing Insert (FSI) Ad
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Slide 11-73
Breathe Right Strips
Back-in-the-Sack TV Ad
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Slide 11-74
Breathe Right Strips
Snore Relief Throat Spray TV Ad
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Slide 11-75
Breathe Right Strips
Kids TV Ad
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Slide 11-76
IN-CLASS ACTIVITY 11-3
CUSTOMER CONTACT AUDIT
FOR A SERVICE
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Slide 11-77
FIGURE 11-D Customer contact audit for
Hertz Car Rental (green boxes show customer
activity; orange ones show employee activity)
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Slide 11-78
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-79
Product Life Cycle
The product life cycle describes the
stages a new product goes through in the
marketplace: introduction, growth,
maturity, and decline.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-80
Branding
Branding is a basic decision in marketing
products in which an organization uses a
name, phrase, design, or symbols, or
combination of these to identify its
products and distinguish them from those
of competitors.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-81
Brand Name
A brand name is any word, device
(design, shape, sound, or color), or
combination of these used to distinguish a
seller’s goods or services.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-82
Brand Personality
A brand personality is a set of
human characteristics associated
with a brand name.
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Slide 11-83
Brand Equity
Brand equity is the added value a given
brand name gives to a product beyond the
functional benefits provided.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-84
Multiproduct Branding
Multiproduct branding is a branding
strategy in which a company uses one
name for all its products in a product
class.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-85
Multibranding
Multibranding is a branding strategy that
involves giving each product a distinct
name when each brand is intended for a
different market segment.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-86
Packaging
Packaging is a component of a product
that refers to any container in which it is
offered for sale and on which label
information is conveyed.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-87
Capacity Management
Capacity management involves
integrating the service component of the
marketing mix with efforts to influence
consumer demand.
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Slide 11-88
Off-Peak Pricing
Off-peak pricing consists of charging
different prices during different times of
the day or days of the week
to reflect variations in demand
for the service.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Slide 11-89