Setting Product and Brand Strategy
(Chapter 11)
Consumer Goods Classification
1. Convenience goods: purchased
immediately, minimum of effort
Price - ____________
Implications: readily available, many outlets, brand
name, packaging, mass advertising
,
Consumer Goods Classification
2. Shopping goods: comparison shopping for
suitability, quality, price, and style
Price: ___________
Implications: brand; type of retailer ___________
Consumer Goods Classification
3. Specialty goods: unique characteristics or brand
identification; special purchasing effort; frequency
of purchase is low
Price: _________
Implications: brand; type of retailer (store name)
4. Unsought goods: consumers _________ or do not
normally think of buying
Implications: advertising; _________________
Product Mix Decisions
Procter & Gamble's Product Mix
Baby Care
Beauty Care
 Width – number of
Fabric & Home
Care
Food &
Beverage
product lines
 Length – total number of items the
company carries
product lines
 Depth – number of versions offered of
each product in line
Health Care
Six Toothpastes
in Line
Crest Multicare
Crest Cavity
Protection
Crest Tartar
Protection
Product Management Challenge
Should product line be extended, maintained, or
reduced? Why?
Should new product lines be added to the mix?
Should existing lines be deleted?
Organizational objectives: ____________________
etc.
Projections/trends – external environment
Product Line Length Issues
Lengthen/shorten product line (vary products within
a given line)
Lengthening product lines could mean higher
market share and market growth (customer
satisfaction)
But, longer lines result in
: design,
engineering, inventory carrying, new promotion,
etc.
Product Line Length Issues
1. Growth strategies: line stretching
downmarket stretch: enter low end of the market
(Sony Value Line)
upmarket stretch: enter high-end (Toyota-Lexus;
Honda-Acura)
two-way stretch: both directions (Marriott:
____________________________________
Product Line Length Issues
2. Line modernization: improvements to
encourage customer
higher priced items
3. Pruning:
to higher valued,
product from the line
Product is not selling
Limited production capacity
Adding/Deleting Product Lines
Adding product lines (expanding width)
1. Response to ________________
2. Increase growth/profits AND ___________
3. Economical use of resources: Spread operational
costs over a series of products; reduce average
production and marketing costs
Deleting product lines
Brand Management / Strategies
Brand: one of the most fundamental pieces of
information customers use to simplify
choices and reduce purchase risk.
name, term, sign, symbol, or design, or a
combination of them, intended to identify
the goods or services of one seller or group
of sellers to differentiate them from those of
competitors
Brand Management / Strategies
Brand Equity: marketplace value of a brand based on
reputation and goodwill
• Value to customer: interpretation/processing of
information, confidence in purchase decision, use
satisfaction
• Value to firm: marketing programs, brand loyalty,
prices/margins, brand extensions, trade leverage,
competitive advantage
Brand Equity Implications
 Trade leverage in bargaining with retailers because
customers expect them to carry the brand
 Company can charge
price because brand
has higher perceived quality
 Easier to launch extensions because brand name
carries high _________________
 Brand offers defense against price competition
Brand Management / Strategies
- company attaches corporate name
to a product either to enter a new market segment
or a different product class
Brand Management / Strategies
Product Category
Existing
New
Line
Brand
Existing
extension
extension
New
Multibrands
Brand Name
New brands
Brand Management/Strategies
Line extension – company introduces
additional items in a given product category
under the same brand name (existing brand
name; existing product category)
New flavors, forms, colors, ingredients, package
sizes
Brand Management/Strategies
Brand extension – successful brand name is used to
launch new or modified products in a new product
class (new product category; existing brand name)
Honda: snowblowers, lawnmowers
Mattel: Barbie Doll brand –
Brand Management/Strategies
Multibrands: establish different features and appeal
to different buying motives (existing product
category; new brand name)
NewBrands: create a new name in a new product
(new product category; new brand name)
Brand Management/Strategies
Dual branding (co-branding) - integrating two
or more branded products
VISA & American Airlines
Pillsbury Cookie Dough & Nestle Chocolate