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McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
BRAND (vs. PRODUCT)
Definition: Brand is the "name, term, design, symbol/logo, or any
other feature that identifies one seller's good or service as distinct
from those of other sellers.
Origin: Initially, Branding was adopted to differentiate one person's
cattle from another's by means of a distinctive symbol burned into the
animal's skin with a hot iron stamp
Purpose: product differentiation  premium charge, accountability
Consequences: brand loyalty/preference, way to evaluate quality of
products, more satisfaction, benefits to economic activities
(Q) Firm Name ? = Brand ? = Product ?
GATORADE: BRINGING
SCIENCE TO SWEAT
10-3
GATORADE: BRINGING
Revolution to Evolution
● Kleenex
– Tissue; Jello-O – Gelatin Desserts;
Scotch – Cellophan Tape; Gatorade – Sport Drinks
● Masterful Brand Management
● Stokely-Van Camp  Quaker Oats  ?
PRODUCT
PROMOTION
• Product Category: Sport Drinks
• Unique performance benefits
• More flavors added
• Multiple package sizes offered
PRICE
• Cheap or Expensive ?
• in terms of PLC ?
PLACE
• from convenience stores, supermarkets to
mass merchandisers (e.g., Walmart)
• sold in 80+ countries
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 10, YOU SHOULD BE ABLE TO:
LO1
LO2
Explain the product life-cycle concept.
Identify the ways that marketing
executives manage a product’s life
cycle.
10-6
FIGURE 10-1 How stages of the product life
cycle relate to a firm’s marketing objectives
and marketing mix actions
10-7
FIGURE 10-1A Stages of the product life
cycle and its total industry sales and total
industry profit
10-8
FIGURE 10-1B How stages of the product
life cycle relate to a firm’s marketing
objectives and marketing mix actions
10-9
LO1
CHARTING THE PRODUCT LIFE CYCLE
INTRODUCTION STAGE
Market Trend
Sales grow slowly
? is minimal
Marketing
Objective
?
To stimulate ( ? ) demand for product class rather than a specific
brand (e.g. selective demand)
Promotion
Heavy (who?)
Price
•?
•?
Place
Gaining distribution can be challenge (channel hesitant)
Product
OLED Smart TV, EV, …?
Strategy – to recover the costs, capitalize on early adapter
– to build unit volume
FIGURE 10-2 Product life cycle for the
stand-alone fax machine for business use:
1970-2014
10-11
LO1
CHARTING THE PRODUCT LIFE CYCLE
GROWTH STAGE
Market
Trend
Rapid increase in Sales due to new people trying, repeat purchaser
Competitors appear; Profit usually peaks despite more competitions
(aggressive pricing)
Marketing
Objective
To stimulate ( ? ) demand for a specific brand through differentiation
Promotion
Comparing benefits
Price
• decreases dramatically (e.g., Fax - $500 (1995) from $3300 (1985))
Place
Broader Distribution is important (e.g., Fax - 10% carry 70%)
Not only Office Equipment Retailer but almost all retailers
Product
Differentiation - Improved version or new features  product proliferation
e.g., Smart Phone (US), e-book readers, ?
LO1
CHARTING THE PRODUCT LIFE CYCLE
MATURITY STAGE
Market
Trend
?
Marketing
Objective
To hold market share through further product differentiation and finding
new buyers while controlling overall marketing costs
Promotion
Improving promotional efficiency
Price
Decrease further due to ?
Place
Improving distribution efficiency
Product
Carbonated soft drinks, DVD Players
e.g., Fax - Multi-functional model, a small model for home business
10-13
LO1
CHARTING THE PRODUCT LIFE CYCLE
DECLINE STAGE
Market
Trend
Sales drop (e.g. Fax – 2005) due to environmental change
As a result, products tend to consume a disproportionate share of
management and financial resources relative to their future worth.
Marketing
Objective
To mange a declining product and related costs
Price
Plunged below $100
Deletion
Dropping the product from the firm’s product line
However, some people still consume so caution is needed
?
Retaining the product but reduces marketing costs
: no sales force’s efforts or adv. $ spent
Shows the firm cares “you”
10-14
FIGURE 10-3 Alternative product life cycle
curves based on product types
10-15
LO1
MARKETING MATTERS
Will E-Mail Spell Extinction for Fax Machines?
10-16
LO1
CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS

1. Length of the Product Life Cycle
- Consumer product vs. B2B product about ?
- What shorten?

2. Shape of the Product Life Cycle
• Generalized Life Cycle – Figure 10-1
• High-Learning Product – PC,
Convection ovens, what else?
• Low-Learning product – Gillette
Fusion Razor
• Fashion Product – women’s hosiery
• Fad Product – car tattoos, vinyl dresses
LO1

CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS
3. The Product Life Cycle and Consumers – the life cycle of a
product depends on sales to consumers
• Diffusion of Innovation – a product diffuses, or spreads,
through the population; Who are the key for success?
 Innovators
 Late Majority
 Early Adopters
 Laggards
 Early Majority
10-18
FIGURE 10-4 Five categories and profiles of
product adopters (diffusion of innovation)
10-19
LO1
CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS

4. Common reasons for resisting a product in the introduction
stage are …
 Usage barriers (the product is not compatible with existing habits)
 Value barriers (provides no incentive to change)
 Risk (physical, economic, or social)
 Psychological (cultural differences or images)
Q) What companies do about the below?
LO2

MANAGING THE PRODUCT LIFE CYCLE
ROLE OF A PRODUCT MANAGER
Product/Brand Manager Responsibilities
• Product Life Cycle
• New Product Development
• Marketing Program Implementation
• Data Analysis
 CDI
 BDI
10-21
LO2
USING MARKETING DASHBOARDS
Knowing Your CDI and BDI
Category Development Index (CDI) and Brand Development Index (BDI)
10-22
LO2

MANAGING THE PRODUCT LIFE CYCLE
MODIFYING THE PRODUCT OR MARKET
Product Modification – quality, performance, or design
• Product
Bundling

• New Characteristics
(20 Oz Pepsi Bottle)
Market Modification
• Finding New
Customers – Women (HD,
Gillette)
• Increasing a
Product’s Use – Baking Soda
• Creating a New
Use Situation – Docker (work, weekend, dress & golf)
LO2
MANAGING THE PRODUCT LIFE CYCLE
REPOSITIONING THE PRODUCT

Product Repositioning

Reacting to a Competitor’s Position – e.g., New Balance
(fit durability, comfort)

Reaching a New Market – Unilever’s Iced tea  carbonated
as cold soft drink competing against…

Catching a Rising Trend – “Healthy trend”
10-24
LO2
MANAGING THE PRODUCT LIFE CYCLE
REPOSITIONING THE PRODUCT

Changing the Value Offered
• Trading Up
• Trading Down
• Downsizing
10-25
MAKING RESPONSIBLE DECISIONS
LO2
Consumer Economics of Downsizing—
Get Less, Pay More
10-26
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 10, YOU SHOULD BE ABLE TO:
LO3
LO4
LO5
Recognize the importance of branding
and alternative branding strategies.
Describe the role of packaging,
labeling, and warranties in the
marketing of a product.
Recognize how the 4 Ps framework is
expanded in the marketing of services.
10-28
LO3
BRANDING AND BRAND MANAGEMENT

Branding

Brand Name
• Logotype (Logo)

Trade Name

Trademark
®
™
10-29
Branding
Branding is a marketing decision
in which an organization uses a
name, phrase, design, or symbols,
or combination of these to identify
its products and distinguish them
from those of competitors.
10-30
Brand Name
A brand name is any word, device
(design, shape, sound,
or color), or combination of these
used to distinguish a seller’s
goods or services.
10-31
LO3
BRANDING AND BRAND MANAGEMENT
BRAND PERSONALITY AND BRAND EQUITY

Brand Personality

Brand Equity
• Provides a Competitive Advantage
• Consumers Willing to Pay a Premium
10-32
Brand Personality
Brand ? is a set of human
characteristics associated with a
brand name.
10-33
Brand Equity
Brand equity is the added value
a brand name gives to a product
beyond the functional benefits
provided.
10-34
FIGURE 10-5 The customer-based brand equity
pyramid
10-35
LO3
BRANDING AND BRAND MANAGEMENT
BRAND PERSONALITY AND BRAND EQUITY

Creating Brand Equity
• Develop Positive Brand Awareness
• Establish a Brand’s Meaning
• Elicit the Proper Response
• Create Intense Brand Loyalty
10-36
LO3
BRANDING AND BRAND MANAGEMENT
BRAND PERSONALITY AND BRAND EQUITY

Valuing Brand Equity
• Provides a Financial Advantage
• Brand Licensing
10-37
LO3

BRANDING AND BRAND MANAGEMENT
PICKING A GOOD BRAND NAME
Should Suggest Product Benefits

Should Be Memorable and Positive

Should Fit the Company or Product Image

Should Have No Legal or Regulatory Restrictions

Should Be Simple and Emotional
- Movie Naming -
•Concise
•Capturing essence
•Attractive/Memorable
•No Legal Issue
•Familiarity ?
•Creativity ?
10-38
FIGURE 10-6 Alternative branding strategies
10-39
LO3
BRANDING AND BRAND MANAGEMENT
BRANDING STRATEGIES

Multiproduct Branding:
Kraft Fat Free Mayo
(Family or Corporate Branding)
• Product Line Extensions
• Subbranding
• Brand Extension
• Co-Branding
10-40
LO3
BRANDING AND BRAND MANAGEMENT
BRANDING STRATEGIES

Multibranding
• Fighting Brands

Private Branding (Private Labeling or
Reseller Branding: Kenmore, Craftsman)

Mixed Branding
10-41
LO3
Kimberly-Clark’s Huggies
What branding strategy is used?
10-42
PACKAGING AND LABELING PRODUCTS
LO4
CREATING CUSTOMER VALUE AND
COMPETITIVE ADVANTAGE

Packaging – refers to any container in which it is offered for
sale and on which label information is conveyed

Label – an integral part of package and typically indentifies the
product or brand, who made it, where and when it was made,
how it is to be used and package contents and ingredients
• Communication Benefits
• Functional Benefits
• Perceptual Benefits – Celestial Seasoning’s Tea Box
10-43
MARKETING MATTERS
LO4
Creating Customer Value Through Packaging—
Pez Heads Dispense More Than Candy
10-44
PACKAGING AND LABELING PRODUCTS
LO4
PACKAGING AND LABELING
CHALLENGES AND RESPONSES

Connecting with Customers

Environmental Concerns

Health, Safety, and Security Issues
• Shelf Life

Cost Reduction
10-45
PRODUCT WARRANTY
LO4

Warranty
• Express Warranties
• Limited Coverage Warranties
• Full Warranties
• Implied Warranties
10-46
LO5
MANAGING THE MARKETING OF SERVICES
THE SEVEN Ps OF SERVICES

Seven Ps of Services Marketing

Product (Service)
• Branding

Price
• Off-Peak Pricing
10-47
LO5
MANAGING THE MARKETING OF SERVICES
THE SEVEN Ps OF SERVICES

Place (Distribution)

Promotion
• Publicity
• Public Service Announcements (PSAs)
10-48
LO5
MANAGING THE MARKETING OF SERVICES
THE SEVEN Ps OF SERVICES

People
• Customer Experience Management (CEM)

Physical Environment

Process
• Capacity Management
10-49
VIDEO CASE 10
MARY KAY, INC.: BUILDING
A BRAND IN INDIA
10-50
VIDEO CASE 10
MARY KAY
10-51
VIDEO CASE 10
MARY KAY
1. What information should be
included in a written positioning
statement for Mary Kay?
10-52
VIDEO CASE 10
MARY KAY
2. How would you draft a formal,
written positioning statement for
Mary Kay using the information
detailed in question 1?
10-53
VIDEO CASE 10
MARY KAY
3. Is Mary Kay a global brand?
Why or why not?
10-54
VIDEO CASE 10
MARY KAY
4. How has Mary Kay, India,
focused on the different steps
in the customer-based brand
equity pyramid described in
Figure 11-6?
10-55
Product Life Cycle
A product life cycle describes the
stages a new product goes
through in the marketplace:
introduction, growth, maturity,
and decline.
10-56
Multiproduct Branding
Multiproduct branding is a
branding strategy in which a
company uses one name for all
its products in a product class.
10-57
Multibranding
Multibranding is a branding
strategy that involves giving each
product a distinct name when
each brand is intended for a
different market segment.
10-58
Seven Ps of Services Marketing
The seven Ps of services marketing
is an expanded marketing mix for
services that includes the four Ps
(product, price, promotion, and place
or distribution) as well as people,
physical environment, and process.
10-59
Off-Peak Pricing
Off-peak pricing involves
charging different prices during
different times of the day or during
different days of the week to
reflect variations in demand for
the service.
10-60
Capacity Management
Capacity management
integrates the service component
of the marketing mix with efforts
to influence consumer demand.
10-61