Product Development and Utility
Utility
What is added to the product to make it valuable on the
market
Utility affects
The value equation by providing consumers with
something they did not have before
Types
1.
2.
3.
4.
5.
form
information
place
time
possession
Function
What the product is intended to do
Form follows function
means:
The product’s looks will be dictated by what it’s
intended to do
Components of the Form
Utility
1.
2.
3.
4.
5.
6.
material
scent
flavour
colour
design
packaging
Information utility
Provides consumers with instructions, directions,
manuals
Place utility
Makes it possible for consumers to purchase the product
Time utility refers to
Making the product available when consumer needs it
Possession Utility
When they are easy to purchase
How can we increase
possession utility
1. payment plans
2. lower price
6.1 - Positioning and Branding
“Perception is Reality”
Positioning allows us to
Create an image, the outward representation of the person
we want to be
Positioning by others can
lead to
Misunderstandings and limited choices
Marketers too make choices
about
How to position their product or service
These choices mean
That the brand will appeal to some people and not to
others
6.2 - Types of Positioning
5 Types of positioning:
1.
2.
3.
4.
5.
Benefit
target
price
distribution
service
Benefit positioning
Customers want the product they buy: to do something for
them
Often a company will
position its products or
service as being
One that offers consumers more benefits than competitors
Problem with benefit
positioning
Competition can do the same
Price Positioning
Marketer is faced with 2 options when using price for
positioning:
1. cheapest
2. most expensive
If a marketer chooses a price in the middle range, they must use a different positioning
strategy!
A luxury good offers
Status more than quality
Consumers of luxury
products want
The product to be expensive
Examples of luxury items
1. caviar
2. diamond watches
3. expensive ties
Many consumers are willing Quality
to pay high prices for
Manufacturers who use
price positioning with the
promise of quality must
Be sure to provide it
It is possible that if a
product boasts the same
features but less expensive
consumers will think
The product is of inferior quality.
Distribution Positioning
Examples:
1. Avon
2. Amazon
Service Positioning
Examples:
1. convenience stores
2. free installation
Ikea uses price and service
in combination. Explain
IKEA offers cheap home furnishings at its stores.
6.3 How to Position a Product
The initial positioning
premise
Marketers have to be prepared to alienate some consumers
Businesses may decide that
there are some consumers
It doesn’t want!
Some companies try to be
all things to all consumers
Examples:
1. Wal-Mart
2. Nintendo
3. Target
Clear and coherent
positioning
If consumers don’t know: they won’t go!
A company that does not
position its product in a
distinctive manner will
discover
Consumers have no reason to choose it over a competitors
6.4 Branding
Business creates a brand for
a product to give it
A distinct identity
Why?
To keep consumers from confusing it with competitors
Product Differentiation
includes
A brand consists of
Includes:
1. branding
2. advertising
3. positioning
All the features that make up the product’s image
1. name
2. logo
3. slogan
Commodities
Unbranded products
Why don’t farmer’s need to
engage in marketing
activities?
Too small and local. Marketing is expensive.
Commodity marketing is
usually conducted by:
Marketing boards
Marketing boards try to
Increase the overall consumption of the commodities
Brand Names
1. corporate dominant
2. product dominant
Corporate dominant
Examples:
1. Roots
2. Mastercraft
3. President’s Choice
4. Kelloggs
5. Nike
Product Dominant
Examples:
1. Zest
2. Kodiak
3. Luvs
Logo
Symbolic ways to create a brand
Includes:
1. trademarks
2.
3.
4.
5.
trade names
brand marks
logotypes
symbols
3 types of logos:
1. monogrammatic
Example: President's Choice
2. Visual Symbols
Example: Wikipedia
3. Abstract Symbols
Example: Nike
Slogans
Short catchy phrase that is always attached to the
company’s name and logo
How many words should a
slogan have?
7
Using Google, find 20
slogans that you think were
very good. Identify the
company as well.
“Now you’re playing with power” -Nintendo
“Wii would like to play” -Nintendo
“The quilted quick picker upper” -Bounty
“Why buy a mattress anywhere else?” –Sleep
Country Canada
5. “Just do it” -Nike
6. “Finger licking good” -KFC
7. “It’s not delivery, it’s Delissio” - Nestlé
8. “15 minutes could save you 15% or more on car
insurance” -GEICO
9. "Wikipedia, the Free Encyclopedia" - Wikipedia
10. “Hello moto” -Motorola
11. “What’s in your wallet?” –Capital One
12. "Break me off a piece of that Kit Kat bar!" Nestlé
13. “Redbull gives you wiiings” -Redbull
14. “Do you eat the red ones last?” - Nestlé
15. “Two scoops of raisons” -Kellogg’s
16. “Rip, slip, brush, ahh” –OralB
17. "Snap, Crackle, and Pop” -Kellogg's
18. “"I'm lovin' it"” –McDonald’s
19. “Always fresh” –Tim Horton’s
20. “Our house” –Maxwell Coffee
1.
2.
3.
4.
Brand Strategies
Brand Strategies
1.
2.
3.
4.
5.
Support
Develop Extension
license
co-brand
acquire
Once a brand has been
positioned it is very hard
to
reposition
When is it feasible to
change?
Introducing into foreign market
Brand Extension
Capitalize on other brand’s success
Examples:
1. coke/diet coke
2. Humpty Dumpty chips/Cheezys
3. Nike apparel/golf clubs
4. Pepsi/diet pepsi
5. Tide to go
6. Astro Zero yogurt (fat free)
7. Ipod touch/Ipod nano
8. Mac book/iMac
9. YouTube/Google Video
10. PS2/PS3
Licensing: similar to
Brand extension but for a fee license to other companies
Famous people even
license
Themselves
Co-Branding: when two
Or more brands combine
Acquisition of a
successful brand
If you can’t beat ‘em, buy em!
Brand acquisition strategy
had what effect on the
Internet industry?
Google bought many sites including YouTube. Microsoft
bought Skype.
– Branding for International Markets
The Internet connects
3 choices when going
international:
Factors when choosing:
1. Centralized or not?
Glocal means:
Consumers and businesses around the globe
1. leveraging positive reputation and use the same
brand identification
2. rename to reflect local culture and market
preferences
3. acquire local brand
If centralized, stay the same
Thinking global but acting local
2. Expansion Strategy
If wants to go global, build on original, but if wants
limited trade, acquire or rename
3. Corporate Identity
Strong international identity would lead to keeping it,
otherwise change or merge
4. Similarity of
Products
If the product mix is narrow it is easier to push it into
foreign markets
5. Similarity of markets
The more similar the market is to your own the easier it is
to push the same product
6. Competition in
foreign markets
Joint ventures or buyouts best if heavy competition exists
7. Cultural Associations If bad blood exists, use different brand or acquire/merge
8. Changing Dynamics
Brand can be local one day and international the next