Topic 12 Developing and Managing Brand and Product Categories

DEVELOPING AND MANAGING BRAND AND PRODUCT CATEGORIES

BRAND   We try brands when friends recommend them, when we associate certain images with them, or because we remember their ads   Name, term, sign, symbol, design, or some combination that identifies the products of one firm while differentiating them from the competition.   Brands have a powerful influence on consumer behavior.   Building a brand is costly; a category manager is often responsible for an entire product line, nurturing new and existing brands

BRAND differentiates from competition

BRAND set  of  assets  that  adds  value  to  the  product

BRAND a  promise/pledge  of  sa4sfac4on  and  quality

BRAND a  corner  of  customer’s  mind

BRAND LOYALTY   Weight of customer familiarity and acceptance   Measured in three stages:

  Brand recognition   For new products   Consumer awareness and identification of a brand.   Advertising, free samples, discounts   From unknown to known

BRAND LOYALTY   Measured in three stages:   Brand preference Consumer reliance on previous experiences with a product to choose that product again.   Brand insistence Consumer refusal of alternatives and extensive search for desired merchandise.   Monopoly   Specialty and luxury products

TYPES OF BRANDS   Generic products Products characterized by plain labels, no advertising, and the absence of brand names.   Market share increases in economic downturn Manufacturer’s Brands versus Private Brands   Manufacturer’s/National brand Brand name owned by a manufacturer or other producer.   Private brands —brands offered by wholesalers and retailers.

TYPES OF BRANDS Captive Brands   National brands sold exclusively by a retail chain.

TYPES OF BRANDS Family and Individual Brands Family brand brand name   Individual brandSingle uniquely that identifies several identifies the item itself. related products.   More expensive to market,  butEfficiency promotion effectivein segmentation   Similar quality

BRAND EQUITY   value that a respected, well-known brand name gives to a product in the marketplace.   Strong brand equity   Increases likelihood customers will recognize firm’s product or product line.   Can contribute to buyers’ perceptions of product quality.   Can reinforce customer loyalty and repeat purchases.   Facilitates expansion into international markets. •

BRAND EQUITY   4 dimensions of brand personality   Differentiation—a brand’s ability to stand apart from competitors   Relevance—a real and perceived appropriateness of the brand to a big consumer market   Esteem—a combination of perceived quality and consumer perceptions about the growing or declining popularity of a brand   Knowledge—the extent of customers’ awareness of the brand and understanding of the good or service •

CATEGORY AND BRAND MANAGEMENT   Category management Product management system in which a category manager—with profit and loss responsibility—oversees a product line.   Help retailer’s category buyer maximize sales for the whole category, not just particular manufacturer’s product.   Also identify opportunities for growth, set performance targets, and create marketing strategy.

PRODUCT IDENTIFICATION   Products identified in the marketplace by brand names, symbols, and distinctive packaging.   Choices about how to identify products are a major strategic decision. BRAND NAMES AND BRAND MARKS   Brand name Part of a brand consisting of words or letters that form a name that identifies and distinguishes a firm’s offerings from those of its competitors.

BRAND NAME AND MARK

  Brand mark—symbol or pictorial design that distinguishes a product.   Effective brand names are easy to pronounce, recognize, and remember.   Should give buyers correct connotation of product’s image and qualify for legal protection.   Brand name loses protection when class of products generally comes to be known by that name. Examples include nylon, kerosene, and zipper.

TRADEMARKS

  Brand for which the owner claims exclusive legal protection.   Protecting Trademarks - Gives firm exclusive legal right to use brand name, brand mark, and any slogan name or product name appreciation   Trade Dress - Visual cues in branding that create an overall look.   Examples: McDonald’s golden arches, Merrill Lynch’s bull.

GLOBAL CONSIDERATIONS   An excellent name or symbol in one country may be a poor choice in another.   Some sounds are common to most languages, such as o, k, and short a, so names such as Coca-Cola and Texaco tend to work well worldwide.

GLOBAL CONSIDERATIONS   An excellent name or symbol in one country may be a poor choice in another.   Some sounds are common to most languages, such as o, k, and short a, so names such as Coca-Cola and Texaco tend to work well worldwide.

Branding  Trivia  on  Coca  Cola…   Brand Naming: Even Coke Can Get It Wrong §  When Coke launched in China they naturally wanted to retain the 'Coca-Cola' name. Their first attempt in Chinese was 'Ke-kou-ke-la' which had the benefit of sounding similar, but unfortunately meant "bite the wax tadpole" or "female horse stuffed with wax" depending on the dialect. §  Coke's second brand naming attempt was more effective, using a different set of characters to present which can be loosely translated as "ko-kou-ko-le," "happiness in the mouth.”

More  Branding  Bloopers…  J     •  In Taiwan, the translation of the Pepsi slogan "Come alive with the Pepsi Generation" came out as "Pepsi will bring your ancestors back from the dead.“ •  Also in Chinese, the Kentucky Fried Chicken slogan "finger-lickin' good" came out as "eat your fingers off." •  When General Motors introduced the Chevy Nova in South America, it was apparently unaware that "nova” means “it won’t go”

PACKAGING   Can powerfully influence buyers’ decisions. Protection from Damage and Spoilage

Protection against damaging was original purpose of packaging. Can help overcome fear of tampering

Assistance in Marketing

biodegradable and recyclable to respond to consumer preferences. Attention Convenience

Emergency

Reasonable cost

LABELING   Label carries an item’s brand name or symbol, the name and address of the manufacturer or distributor, information about the product’s composition and size, and recommended uses.   Labels are both promotional and informational.   Subject to legal restrictions.

LABELING .

  Universal Product Code (UPC)—numerical bar codes printed on packages.   Reduce labor costs and improve inventory control.   Radio-frequency identification (RFID) tags—electronic chips that carry encoded product identification.

BRAND EXTENSION   Strategy of attaching a popular brand name to a new product in an unrelated product category   Development by Mattel of Barbie-branded highend clothing and accessories for women from their teens through their 30s.

BRAND LICENSING   Authorizing other companies to use a firm’s brand name.   Brand’s owner receives royalties, typically four to eight percent of wholesale revenues.   Can hurt a brand if the licensed product is poor quality or ethically incompatible with the brand.   Another risk is overextending the brand.

NEW PRODUCT PLANNING   Firms must add new products in order to continuing prospering as other items reach the later stages of the product life cycle.

CONSUMER ADOPTION   Adoption process Stages that consumers go through in learning about a new product, trying it, and deciding whether to purchase it again.   Five stages:   Awareness—individuals first learn of the new product, but they lack full information about it.   Interest—potential buyers begin to seek information about it   Evaluation—they consider the likely benefits of the product.  

Trial—they make trial purchases to determine its usefulness.

 

Adoption/rejection—decide whether to use the product regularly.

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