Category And Brand Management, Product Identification, And New Product Development


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Category And Brand Management, Product Identification, And New Product Development

  1. 1. Part 4: Product Decisions <ul><li>Product and Service Strategies </li></ul><ul><li>Category and Brand Management, Product Identification, and New-Product Development </li></ul>
  2. 2. Chapter 12 Category and Brand Management, Product Identification, and New-Product Development
  3. 3. Chapter Objectives <ul><li>Explain the benefits of category and brand management. </li></ul><ul><li>Identify the different types of brands. </li></ul><ul><li>Explain the strategic value of brand equity. </li></ul><ul><li>Discuss how companies develop strong identities for their products and brands. </li></ul><ul><li>Identify and briefly describe each of the four strategies for new-product development. </li></ul><ul><li>Describe the consumer adoption process. </li></ul><ul><li>List the stages in the process for developing new products. </li></ul><ul><li>Explain the relationship between product safety and product liability. </li></ul>
  4. 4. Managing Brands for Competitive Advantage <ul><li>Branding is the process of creating that identity. </li></ul><ul><li>Buyers respond to branding by making repeat purchases because they identify the item with the name of its producer. </li></ul><ul><li>Brand: name, term, sign, symbol, design, or some combination that identifies the products of a firm while differentiating them from the competition’s </li></ul>
  5. 5. <ul><li>Brand Loyalty </li></ul><ul><ul><li>Brand recognition : Consumer awareness and identification of a brand. </li></ul></ul><ul><ul><li>Brand preference : Consumer reliance on previous experiences with a product to choose that product again. </li></ul></ul><ul><ul><li>Brand insistence : Consumer refusals of alternatives and extensive search for desired merchandise. </li></ul></ul>
  6. 6. Types of Brands <ul><li>Generic product : item characterized by plain label, with no advertising and no brand name </li></ul><ul><li>Manufacturers’ brand or National Brand : brand name owned by a manufacturer or other producer </li></ul><ul><li>Private brands : brand name placed on products marketed by wholesalers and retailers </li></ul>
  7. 7. <ul><li>Captive brands : national brands that are sold exclusively by a retail chain </li></ul><ul><li>Family brand : brand name that identifies several related products </li></ul><ul><li>Individual brand : unique brand name that identifies a specific offering within a firm’s product line and that is not grouped under a family brand </li></ul>
  8. 8. <ul><li>Brand equity : added value that a respected, well-known brand name gives to a product in the marketplace. </li></ul><ul><ul><li>Brand equity increases the likelihood that consumers will recognize the firm’s product when they make purchase decisions </li></ul></ul><ul><ul><li>A strong brand equity can contribute to buyers’ perceptions of product quality </li></ul></ul><ul><ul><li>Branding can also reinforce customer loyalty and repeat purchases </li></ul></ul>
  9. 9. <ul><li>Brand Equity </li></ul><ul><ul><li>The Young & Rubicam Model: </li></ul></ul><ul><ul><li>Brand Asset Valuator </li></ul></ul>
  10. 10. <ul><li>The Role of Category and Brand Managers </li></ul><ul><ul><li>Brand manager : Marketing professional charged with planning and implementing marketing strategies and tactics for a brand </li></ul></ul><ul><ul><li>Category management : Product management system in which a category manager—with profit and loss responsibility—oversees a product line. </li></ul></ul>
  11. 11. Product Identification <ul><li>Brand name : part of a brand consisting of words or letters that form a name that identifies and distinguishes a firm’s offering from those of its competitors </li></ul><ul><li>Brand mark : symbol or pictorial design that identifies a product </li></ul><ul><li>Generic name : branded name that has become a generically descriptive term for a class of products (e.g., nylon, aspirin, kerosene, and zipper) </li></ul>
  12. 12. <ul><li>Trademark : legal protection which confers the exclusive right to user brand name, trade mark, and any slogan or product name abbreviation </li></ul><ul><li>Trade Dress : visual cues used in branding to create an overall look </li></ul><ul><ul><li>The distinctive shape of Philips light bulbs and the McDonald’s arches provide an example of trade dress </li></ul></ul>
  13. 13. <ul><li>Developing Global Brand Names and Trademarks </li></ul><ul><ul><li>Potentially an acute problem for international marketers </li></ul></ul><ul><ul><li>An excellent brand name or symbol in one country may prove disastrous in another </li></ul></ul><ul><ul><li>Trademarks that are effective in their home countries may fare less well in other cultures </li></ul></ul>
  14. 14. Packaging <ul><li>A package serves three major objectives: </li></ul><ul><ul><li>Protection against damage, spoilage, and pilferage </li></ul></ul><ul><ul><li>Assistance in marketing the product </li></ul></ul><ul><ul><li>Cost effectiveness </li></ul></ul><ul><li>Labeling </li></ul><ul><ul><li>Label </li></ul></ul><ul><ul><li>Universal Product Code (UPC) </li></ul></ul>
  15. 15. <ul><li>Brand extension : application of a popular brand name to a new product in an unrelated product category </li></ul><ul><li>Line extensions refers to new sizes, styles, or related products </li></ul><ul><li>Brand licensing : practice allowing other companies to use a brand name in exchange for a payment </li></ul>
  16. 16. New Product Planning <ul><li>As a firm’s offerings enter the maturity and decline stages of the product life cycle, it must add new items to continue to prosper </li></ul><ul><ul><li>Alternative Product Development Strategies </li></ul></ul>
  17. 17. <ul><li>Product Development Strategies </li></ul><ul><ul><li>Product positioning : consumers’ perceptions of a product’s attributes, uses, quality, and advantages and disadvantages in relation to those of competing brands </li></ul></ul><ul><ul><li>Cannibalization : a loss of sales of the current product due to competition from a new product in the same line </li></ul></ul>
  18. 18. The Consumer Adoption Process <ul><li>Adoption process : Stages that consumers go through in learning about a new product, trying it, and deciding whether to purchase it again. </li></ul><ul><ul><li>Awareness </li></ul></ul><ul><ul><li>Interest </li></ul></ul><ul><ul><li>Evaluation </li></ul></ul><ul><ul><li>Trial </li></ul></ul><ul><ul><li>Adoption or rejection </li></ul></ul>
  19. 19. <ul><li>Consumer innovator : People who purchase new products almost as soon as the products reach the market </li></ul><ul><li>Diffusion process : Process by which new goods or services are accepted in the marketplace </li></ul>
  20. 20. <ul><li>Figure 12.8 </li></ul><ul><ul><li>Categories of Adopters Based on Relative Times of Adoption </li></ul></ul>
  21. 21. <ul><li>Identifying Early Adopters </li></ul><ul><ul><li>Substantial benefits may be obtained by locating the likely first buyers of new products (innovators and early adopters) </li></ul></ul><ul><ul><li>Suggestions for modifying the product may be obtained from these individuals </li></ul></ul><ul><ul><li>Acceptance or rejection of the innovation by innovators and early adopters can help forecast sales </li></ul></ul>
  22. 22. <ul><li>Rate of Adoption Determinants </li></ul><ul><ul><li>Characteristics of a product innovation that influence its adoption rate include: </li></ul></ul><ul><ul><ul><li>Relative advantage </li></ul></ul></ul><ul><ul><ul><li>Compatibility </li></ul></ul></ul><ul><ul><ul><li>Complexity </li></ul></ul></ul><ul><ul><ul><li>Possibility of trial use </li></ul></ul></ul><ul><ul><ul><li>Observability </li></ul></ul></ul>
  23. 23. <ul><li>Organizing for New Product Development </li></ul><ul><ul><li>New-Product Committees </li></ul></ul><ul><ul><li>New-Product Departments </li></ul></ul><ul><ul><li>Product Managers </li></ul></ul><ul><ul><li>Venture Teams </li></ul></ul><ul><ul><ul><li>Task forces </li></ul></ul></ul>
  24. 24. New Product Development Process <ul><li>New product development process: six stages through which new product ideas progress before being introduced to the overall market </li></ul>
  25. 25. <ul><li>Idea Generation New product ideas come from many sources including: </li></ul><ul><ul><li>Sales force, Customers, Employees, R&D specialists, The competition, Suppliers, Retailers, Independent inventors </li></ul></ul><ul><li>Screening Screening separates ideas with commercial potential from those that cannot meet company objectives </li></ul><ul><ul><li>Checklists of development standards can be helpful at this stage </li></ul></ul>
  26. 26. <ul><li>Business Analysis The business analysis consists of assessing the new product’s market potential, growth rate, likely competitive strengths, and compatibility of the proposed product with organizational resources </li></ul><ul><ul><li>Concept testing </li></ul></ul><ul><li>Development Converting an idea into a physical product </li></ul><ul><ul><li>Requires interaction among many of the firm’s departments </li></ul></ul><ul><ul><li>Prototypes may go through many changes </li></ul></ul>
  27. 27. <ul><li>Test Marketing Test marketing: Introduction of a trial version of a new product supported by a complete marketing campaign to a selected city of television coverage area </li></ul><ul><ul><li>Some firms skip this stage, moving directly to full-scale commercialization </li></ul></ul><ul><li>Commercialization In this stage, the firm establishes marketing strategies, and funds outlays for production and marketing </li></ul><ul><ul><li>The sales force, marketing intermediaries and potential customers are acquainted with the new product </li></ul></ul>
  28. 28. Product Safety and Liability <ul><li>Product Liability : responsibility of manufacturers and marketers for injuries and damages caused by their products </li></ul>