Product & Branding Strategies

1Product strategy

Product strategy is a high-level plan describing what a business hopes to achieve with its product and how. It answers:

• Who will it serve (target market)?
• How will it benefit them?
• What are the product's goals over its life cycle?

It's the roadmap for developing a product. It covers quality, NPD, packaging, branding and R&D, and serves as the baseline for measuring success before, during and after production.

2Three levels of a product

3Product classifications

By durability and tangibility

The four characteristics of services:

• Intangible: can't be seen, tasted, felt, heard or smelled before purchase
• Inseparable: produced and consumed at the same time
• Variable: quality depends on who, when and where
• Perishable: can't be stored

Consumer goods, by shopping habits

4Product mix and product line decisions

Product mix (assortment): all the product lines and items a seller offers.

Four ways to grow using these dimensions:

1. Widen: add new lines to serve more customers.
2. Lengthen: add more items to each line.
3. Deepen: add more variants.
4. Pursue more or less consistency: a strong reputation in one field, or a presence in several.

Product line decisions

Kotler: a product line is a group of products that are closely related because they perform a similar function, are sold to the same customer groups, go through the same channels, or fall in a particular price range.

5Brands, brand meaning and brand equity

• A brand name is the word or letters part.
• A trademark is a legal term: the marks the law protects.
• Brands never expire, unlike patents and copyrights.
• Brands create expectations about purpose, performance, quality and price, which lets marketers add value and differentiate.
• A brand is the seller's commitment to deliver consistent features, benefits and services. The best brands convey a warranty of quality.

Six levels of brand meaning (the Mercedes example)

Brand equity

Brands differ in power and value. They move from awareness → acceptability → preference → loyalty.

Aaker's five levels of customer attitude (lowest to highest):

1. Changes brands, especially for price: no loyalty
2. Satisfied: no reason to change
3. Satisfied and would incur costs by switching
4. Values the brand and sees it as a friend
5. Devoted to the brand

Brand equity is high when many customers are at levels 3, 4 and 5. It also depends on name recognition, perceived quality, strong mental and emotional associations, and assets such as patents, trademarks and channel relationships.

6Branding decisions

Branding? ─▶ Brand sponsor ─▶ Brand name ─▶ Brand strategy ─▶ Repositioning?
 brand /      manufacturer /    individual /     line ext. / brand ext. /   reposition /
 no brand     private /         blanket family / multibrands / new brands / no reposition
              licensed          separate family / co-brands
                                company + individual

1. To brand or not

Branding costs money but gives:

• legal protection (trademark)
• a loyal, profitable customer base to face competition
• the ability to segment the market
• a corporate image that makes new launches easier

Distributors want brands because they're easier to handle and signal quality. Customers use brands to identify quality and shop efficiently.

2. Brand sponsor

3. Brand name strategy

Qualities of a good brand name:

Process: brainstorm a list, debate it, then test with target customers.

4. Brand strategy

5. Brand repositioning

New competition or changing preferences may force a brand to reposition.

Example: 7 Up started as a mild lemon drink for older people. Research showed many soft-drink drinkers didn't want cola all the time, so 7 Up repositioned as "the Uncola": youthful, refreshing, the alternative to colas.

7Packaging & labelling

Some marketers call packaging the "fifth P"; others treat it as part of product strategy.

• Packaging is designing and producing the container, with up to three levels: primary (immediate container), secondary (outer box), shipping packaging.
• Packaging grew in importance because of self-service, consumer affluence, company and brand image, and innovation opportunities. It gives convenience and promotional value.

Packaging decisions:

1. Define the packaging concept (what the package should be and do).
2. Decide size, shape, materials, colour, text, brand, consistent with price and advertising.
3. Test it: - Engineering: does it survive normal conditions? - Visual: legible, harmonious colours? - Dealer: attractive and easy to handle? - Consumer: a favourable response?
4. Consider environmental and safety concerns.

Labels range from simple tags to elaborate graphics that are part of the package. Some carry only the brand; others carry lots of information, some of it required by law.

8Quiz 10: model answer

From Week 11/Quiz 10.docx in the Marketing folder.

9Quick revision sheet