PRODUCT STRATEGY AND
BRANDING
Professor Chip Besio
Cox School of Business
Southern Methodist University
What Is the Product?
Augmented Product
Installation
Packaging
Brand
Name
Delivery
& Credit
Quality
Level
Core Features
Benefit
or
Design
Service
AfterSale
Service
Actual Product
Warranty
Source: Prentice Hall
Core Product
Types of Products
CONSUMER PRODUCTS
Source:
Prentice
Hall
Convenience Products
Shopping Products
>
>
>
>
>
>
>
>
Buy frequently & immediately
Low priced
Many purchase locations
Includes:
• Staple goods
• Impulse goods
• Emergency goods
Buy less frequently
Gather product information
Fewer purchase locations
Compare for:
• Suitability & Quality
• Price & Style
Specialty Products
Unsought Products
>
>
>
>
> New innovations
> Products consumers don’t
want to think about
> Require much advertising &
personal selling
Special purchase efforts
Unique characteristics
Brand identification
Few purchase locations
Types of Products
INDUSTRIAL PRODUCTS
Materials and
Parts
Capital
Items
Supplies and
Services
Source: Prentice Hall
Characteristics of Services
Intangibility
Can’t be seen, tasted, felt, heard,
or smelled before purchase
Inseparability
Can’t be separated from service
providers
Variability
Perishability
Quality depends on who provides
them and when, where and how
Can’t be stored for later sale or use
Source: Prentice Hall
Multi-Product Strategy Decisions
 Branding
 Product Lines
 Product Mix
– Variety
– Assortment
What Do Brands Mean to
Customers?
Quality
Value
Attributes
Benefits
Brand
User Characteristics
Company Values
Personality
Culture
Brand Equity
 The value your customers perceive to be uniquely
associated with your brand
= Awareness + Associations
 Awareness
– Recall
– Recognition
 Associations
– Perceived Quality
– Image
Brand Equity 
BRAND LOYALTY
Brand loyalty - the probability of choosing a brand given
that you are a user of that brand - can result from:
 Inertia: the general tendency to repeat previous purchases
due to high switching costs, convenience, or habit
 Preference: 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 Name
Selection
Protection
Brand Sponsor
Manufacturer’s Brand**Co-branding
Private Brand**Licensed Brand
Brand Strategy
Line Extensions***Brand Extensions
Multi-brands***New Brands
Source: Prentice Hall
Brand Strategy
Brand Name
Product Category
Currently Served
New
Existing
Line
Extension
Brand
Extension
New
Multi-brand
New
Brand
Source: Prentice Hall
Brand Strategy
BRAND EXTENSION
 Brand associations determine which brand
extensions will be successful
B
8
Close-Up
Cheerios
Crest
C
Froot Loops
6
4
4
2
2
0
REALITY
Breath Mint
Coors
IBM
Budweiser
E
8
Higher price,
6 & benefits
C 4
0
Moisturizer
Deodorant
8
6
4
2
E
0
Source: Wes Hutchinson
Lollipops
Apple
Segment 2
2 D
Waffles
Irish Spring
6
4
0
Higher income
Toothbrush
Camay
8
D
8
Original
6
Market
2
New
VideoMarket
Games Cellular Phone
0
Bottled
Water
Scotch
Product Mix
Variety - number of
different product
lines
Product Mix all the product
lines offered
Assortment number of items
within product lines