* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Principles of Marketing
Brand loyalty wikipedia , lookup
Celebrity branding wikipedia , lookup
Neuromarketing wikipedia , lookup
Marketing mix modeling wikipedia , lookup
Multicultural marketing wikipedia , lookup
Brand equity wikipedia , lookup
Integrated marketing communications wikipedia , lookup
Target audience wikipedia , lookup
Youth marketing wikipedia , lookup
Perfect competition wikipedia , lookup
Green marketing wikipedia , lookup
Brand ambassador wikipedia , lookup
Market penetration wikipedia , lookup
Planned obsolescence wikipedia , lookup
First-mover advantage wikipedia , lookup
Segmenting-targeting-positioning wikipedia , lookup
Food marketing wikipedia , lookup
Emotional branding wikipedia , lookup
Advertising campaign wikipedia , lookup
Global marketing wikipedia , lookup
Pricing strategies wikipedia , lookup
Marketing channel wikipedia , lookup
Product placement wikipedia , lookup
Product lifecycle wikipedia , lookup
Sensory branding wikipedia , lookup
Marketing strategy wikipedia , lookup
Principles of Marketing Lecture-7 Today’s Topics Product Strategies and Features Product Mix and Product Line Product Mix The set of all product offered for sale by a company is called a product mix. Breadth and Depth Breadth = the number of product lines carried Depth = variety of sizes, colors and models within each product line. Product Line A group of products similar in usage and physical characteristics. Product Mix – Kraft Foods Beverages Cheese & Dairy Snacks Coffee Refreshment Beverages Confectionery Salty snacks Biscuits Convenient Meals Grocery Desserts Enhancers (dressings and spreads) Cereals Kraft –Beverages Beverages > Coffee Kraft –Beverages Beverages > Coffee Kraft –Beverages Beverages > Coffee Kraft –Beverages Beverages > Refreshment Beverages Kraft –Beverages Beverages > Refreshment Beverages Kraft –Beverages Beverages > Coffee Kraft – Cheese and Dairy Kraft – Cheese and Dairy Product Mix – Kraft Foods Snacks Confectionery Salty snacks Biscuits Convenient Meals Grocery Desserts Enhancers (dressings and spreads) Cereals Positioning the Product Management's ability to: bring attention to a product differentiate it in a favorable way from similar products goes a long way toward determining that product’s revenues and the company’s profits. Thus management engages in positioning the product Developing the image that a product projects in relation to competitive products and to the firm’s other products. Marketing executives can choose from a variety of positioning strategies. Sometimes they decide to use more than one for a particular product. Positioning Strategies Positioning in Relation to Competitor Positioning in Relation to a product Class or Attribute Positioning by Price and Quality Positioning in Relation to Competitor This strategy is especially suitable for a firm: Has a solid differential advantage Trying to solidify such an advantage. Example. Intel launched a campaign to convince buyers that its product is superior to competitors. The company even paid computer makers to include the slogan, “Intel Inside,” in their ads. Coca-Cola and Pepsi-Cola compete directly with each other in virtually every element of the marketing mix (even celebrity endorsers). For other products, head-to-head positioning is exactly what not to do, especially when a competitor has strong market position. Positioning in Relation to a Product Class or Attribute Positioning strategy entails associating its product with (or dissociation it from) a product class or attribute. Promoting products as being in a desirable class, such as “Made in America,” or having an attractive attribute, such as “low energy consumption” or “environmentally friendly.” Widely used for food products. For example, Libby’s, Del Monte, Campbell’s, Kellogg’s No (or very little) salt. Low calories, Low cholesterol and fat (frozen foods) Positioning by Price and Quality Certain producers and retailers are known for their high-quality products and high prices. Saks Fifth Avenue, Neiman-Marcus Target, Kmart are at the other. Saks Fifth Avenue Saks Fifth Avenue Saks Fifth Avenue Kmart Kmart Kmart Think ….. Will celebrities endorse Kmart or Saks? Which magazines will Kmart advertise in? Which magazines will Saks advertise in? Others? The Product Life Cycle The Product Life Cycle Management must be able to recognize what part of the life cycle its product is in at any given time. The competitive environment and marketing strategies that should be used depends on the particular life-cycle stage. The Product Life Cycle Introduction Stage:During the introduction stage, product is launched into the market in a full-scale marketing program. Growth Stage:In the growth stage, or market-acceptance stage, sales and profits rise, often at a rapid rate. Competitors enter the market, often in large numbers if the profit outlook is particularly attractive. Maturity:During the first part of the maturity stage, sales continue to increase, but at a decreasing rate. When sales level off, profits of both producers and middlemen decline. The Product Life Cycle Decline Stage:- For most products, a decline stage, as gauged by sales volume for the total category, is inevitable for one of the following reasons: The need for the product disappears. A better or less expensive product is developed to fill the same need. People simply grow tired of a product (a clothing style, for instance), so it disappears from the market. Characteristics and implication of different PLC Stages Stage Introduction Growth Maturity Decline Loyal customers Characteristics Customers Innovators Mass market Mass market Competition Sales Little if any Low levels, then rising Increasing Rapid growth Intense Decreasing Slow/no annual Declining growth Profits None Strong, then at a peak Declining annually Low/none Overall strategy Market development Market penetration Defensive positioning Efficiency or exit Costs High per unit Declining Stable or increasing Low Product strategy Undifferentiated Improved items Differentiated Pruned line Pricing strategy Most likely high Lower over time Lowest Increasing Distribution strategy Scattered Intensive Intensive Selective Promotion strategy Category awareness Brand preference Brand loyalty Reinforcement Marketing implication Brands Brand A name and/or mark intended to identify the product and differentiate from competitors. Brand name Brands Words, letters, and/or numbers that can be vocalized. Brand mark Part of the brand that appears in the form of a symbol, design, or distinctive color or lettering. Trademark A brand that has been adopted by a seller and given legal protection. Includes brand mark brand name. One method of classifying brands is on the basis of who owns them thus we have producers’ brands and middlemen’s brands, the latter being owned by retailers or wholesalers. Reasons for Branding For consumers, brands make it easy to identify goods or services. They aid shoppers in moving quickly through a supermarket, discount house, or other retail store and in making purchase decisions. Brands also help assure consumers that they will get consistent quality when they reorder. Reasons for not Branding Two responsibilities come with brand ownership: (1) promoting the brand and (2) maintaining a consistent quality of output. Many firms do not brand their products because they are unable or unwilling to assume these responsibilities. Desirable Characteristics Five characteristics determine the desirability of brand name for either a good or service. Suggest something about the product, particularly its benefits and use. Example Mr. Goowrench, Holiday Inn, Minute Rice, and—perhaps best of all— DieHard. Product use is suggested by Dustbuster, La-Z-Boy chairs etc. Be easy to pronounce, spell, and remember. Examples of simple, short, one-syllable names such as Tide, Surf etc. Desirable Characteristics Be distinctive. Examples National, United, Allied, or Standard. But are these really distinctive? Be adaptable to new products that may be added to the product line. Example Kellogg, Lipton, or Ford may serve the purpose better than a highly distinctive name suggesting product benefits. Branding Strategies Both producers and middlemen face strategic decisions regarding the branding of their goods or services. Branding within a Product Mix At lest three different strategies are used by firms that sell more than one product: A separate name for each product. This strategy is employed by Unilever and Procter & Gamble. Branding within a Product Mix The company name combined with a product name. Examples include Johnson’s Pledge and Johnson’s Glo-Coat, and Kellogg’s Rice Krispies and Kellogg’s Corn Pops. The company name alone. Nowadays few companies rely exclusively on this policy. Examples Heinz in the food field, and General Electric in various industries. Packaging & Product Features Packaging Packaging Activities of designing and producing the container or wrapper for a product. Package The actual container or wrapper. Advantages of Packaging Protect the product on its way to the consumer. Provide protection after the product is purchased. Cleaner, spilling, spoilage Be part of the company’s trade marketing program. Shipment, tampering (food, meds) Display and stacking Be part of the company’s consumer marketing program. Identify, “silent sales person” Packaging Strategies Packaging the Product Line Create resemblance Family packaging uses highly similar packages for all products Multiple Packaging Placing several units of the same product in one container e.g. tennis balls, candy bars, towels etc Changing the Packaging Correct a poor feature of a package or new packaging material. Labeling Label A label is the part of a product that carries information about the product & the seller. Types of Labels Brand Label Descriptive Label Simple brand name as label e.g. mangoes Gives objective info about product use, care, performance e.g. bottle of tomato ketchup Grade Label Gives info about product quality with a letter, number or symbol e.g. motor oil etc Labeling Laws The Federal Trade Commission Act (1914) False or deceptive labels are illegal Consumer satisfaction with labeling is low Labels contain incomplete or misleading info Fair Packaging and Labeling Act (1966) Food and Drug Act (1906) Food, Drug and Cosmetic Act (1938) Nutrition Labeling and Education Act (1990) Label Example Other features Design and Color Quality Warranties Assures buyers that they will be compensated in case the product does not perform up to reasonable expectations Warning labels (meds, chemicals, washing) Post-sale service An example IAA IAA at IUB IAA Logo IAA Slogan IAA Website End of Lecture -7