McGraw-Hill/Irwin
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Learning Objectives
LEARNING OBJECTIVES

How do firms adjust their product lines to
changing market conditions?

Why are brands valuable to firms?

How do firms implement different branding
strategies?

How do a product’s packaging and label
contribute to a firm’s overall strategy?
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iPod Anticipation
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Air Jordan
•
Moved beyond athletic
endorsement to
creation of entire line
•
NBA fees fueled
interest
•
Priced at $125
Nike/Air Jordan Website
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Product Assortment and
Product Line Decisions
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Product Assortment and
Product Line Decisions
Breadth
•Number of product lines
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Depth
•Number of categories within
a product line
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Change Product Mix Breadth
•
Increase Breadth
–
•
True Religion Brand Jeans
now are a lifestyle brand
with apparel, belts,
swimwear and fragrances
Decrease Breadth
–
Due to competitive
changes, TCBY is now
focusing on Yogurt.
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Change Product Mix Depth

Increase Depth


Band-Aid now has over
40 products to heal
cuts.
Decrease Depth

McCormick spices
eliminates dozens of
products each year.
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Product Line Decisions

How is this changing
the product mix?

Does it increase
breadth or depth?

Is this research or
advertising?
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Within each product line, there are often
multiple:
A.
product categories.
B.
primary packaging parts.
C.
product breadth.
D.
product assortment.
E.
private label brands.
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Product Line Decisions for Services
The same types of decisions can be used for services
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Check Yourself
1.
Why change product line depth?
2.
What is the difference between product
line breadth versus depth?
3.
Why change product line breadth?
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Branding
A brand can use: Name, logo symbols, characters,
slogans, jingles and even distinctive packages.
Oscar Meyer Commercial
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What Makes a Brand?
Logos and
symbols
Slogans
URLs
Brand
name
Characters
Branding
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Jingles
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Value of Branding for the
Customer and the Marketer
Facilitate Purchasing
Establish Loyalty
Protect from Competition
Reduce Marketing Costs
Are Assets
Impact Market Value
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History in Advertising
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Brand Equity: Awareness
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Brand Equity: Perceived Value

How do discount
retailers like Target,
T.J. Maxx, and H&M
create value for
customers?
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Brand Equity: Brand Associations
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One of the dangers of hiring celebrities like Mel Gibson to endorse a
company’s products is that when they engage in embarrassing behavior, to the
degree that they are associated with the company’s brands, their actions hurt:
A.
brand equity.
B.
brand awareness.
C.
brand recognition.
D.
corporate brand category depth.
E.
all of the above.
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Brand Equity: Brand Loyalty

Consumers are often
less sensitive to price

Marketing costs are
much lower

Firm insulated from the
competition
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Check Yourself
1.
How do brands create value for the
customer and the firm?
2.
What are the components of brand equity?
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Brand Ownership
Private-label brands or
Store Brands
Manufacturer brands
or national brands
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•Premium
•Generic
•Copycat
•Exclusive co-branded
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Brand Ownership
Private Label
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Brand Ownership
Exclusive Co-brands
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Naming Strategies

Corporate or family
brand


The Gap
Corporate and product
line brands


Individual lines

Mr. Clean (Proctor &
Gamble)
Kellogg’s Corn Flakes
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Brand Extension
State Farm Website
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Which of the following is a potential
benefit of brand extension?
A.
It allows the perception of a brand with a
quality image to be carried over to the new
product.
B.
It lowers marketing costs.
C.
It can boost sales of the core brand.
D.
The firm can spend less on creating brand
awareness and associations.
E.
all of the above.
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Brand Dilution
Evaluate the fit between
the product class
of the core brand
and the extension.
Evaluate consumer
perceptions of the
attributes of the core
brand
and seek out extensions
with similar attributes.
Refrain from
extending the brand
name to too many
products.
Is the brand
extension distanced
enough from the
core brand?
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Co-branding
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Brand Licensing
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Brand Repositioning

How is this
repositioning?
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Check Yourself
1.
What is the difference between
manufacturer, private/label, and generic
brands?
2.
What is co-branding?
3.
What are some advantages and
disadvantages of brand extensions?
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Packaging

What other packaging
do you as a consumer
find useful?
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Chianti that comes in wicker-clad bottles and tortillas that come in zip lock
bags are examples of brand _____________ that differentiate these companies’
products from their competitors’ offerings.
A.
names
B.
slogans
C.
symbols
D.
characters
E.
packaging
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Product Labeling
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Glossary
A brand association reflects the mental links that
consumers make between a brand and its key
product attributes, such as a logo, slogan, or
famous personality.
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Glossary
Brand dilution occurs when the brand extension
adversely affects consumer perceptions about the
attributes the core brand is believed to hold.
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Glossary
Brand equity is the set of assets and liabilities linked
to a brand that add to or subtract from the value
provided by the product or service.
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Glossary
A brand extension refers to the use of the same
brand name for new products being introduced to
the same or new markets.
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Glossary
Brand licensing is a contractual agreement between
firms, whereby one firm allows another to use its
brand name, logo, symbols, and/or characters in
exchange for a negotiated fee.
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Glossary
Brand loyalty occurs when a consumer buys the
same brand’s product or service repeatedly over
time rather than buy from multiple suppliers
within the same category.
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Glossary
Brand repositioning or rebranding refers to a
strategy in which marketers change a brand’s
focus to target new markets or realign the brand’s
core emphasis with changing market preferences.
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Glossary
Co-branding is the practice of marketing two or
more brands together, on the same package or
promotion.
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Glossary
Perceived value of a brand is the relationship
between a product or service’s benefits and its
cost.
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Glossary
Product assortment or product mix is the complete
set of all products offered by a firm.
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Glossary
Product lines are groups of associated items, such
as items that consumers use together or think of
as part of a group of similar products.
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Glossary
Product mix or product assortment is the complete
set of all products offered by a firm.
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