Marketing 6e Chapter 8 PDF

Chapter 8: Product decisions Copyright Permission COPYRIGHT PERMISSION FORM– CP241/AJ2 LEGAL SERVICES: COPYRIGHT 2024 LECTURER DR A. JONAS DEPARTME...

Chapter 8: Product decisions Copyright Permission COPYRIGHT PERMISSION FORM– CP241/AJ2 LEGAL SERVICES: COPYRIGHT 2024 LECTURER DR A. JONAS DEPARTMENT MARKETING T. YASE MANAGEMENT COURSE BBH 1022 NUMBER OF 1114 DPD 1022 ELECTRONIC COPIES TITLES Marketing PERMISSION PRASA Permission 6th Ed (OUP) RECEIVED Permission is restricted to the unadjusted power points included by the Publisher in this prescribed book © Some rights reserved. This time-limited emergency licence (Covid-19) permits non-commercial use, distribution, and reproduction in any medium, provided the original author and source are credited in the customary fashion and provided re- used snippets link back to the original available from the publisher. The moral rights of the author have been asserted. M. HANSFORD COPYRIGHT OFFICER Chapter outline What is a product? Product levels Classifying consumer products Types of consumer products Product items, lines and mixes Branding Packaging What is a product? Product: anything that a buyer receives in an exchange – normally for money A product can be: a tangible product (car) a service (dry cleaning) an idea (“don’t drink and drive”) a person (e.g. actor, musician) a place, city or country (e.g. Garden Route) combination of the above Product levels Classifying consumer products Product classifications Durability Usage Consumer Business Non-durable Durable products products  Types of consumer products Products Consumer Business products products Convenience productsShopping products Specialty products Unsought products staples homogenous new unsought impulse heterogeneous regularly unsought emergency Product items, lines and mixes Product item: specific version of a product Product line: group of closely related items Product mix: all the products of the firm Length of product line: number of variants in product line Width of product mix: number of product lines in product mix Product items, lines and mixes (continued) Organising related items into product lines Benefits of product lines: Advertising economies Package uniformity Standardised components Efficient sales and distribution Equivalent quality Diversified risk Adjustments to product items, lines and mixes Product modifications: Quality modification Functional modification Style modification Product line extension: Upward stretch Downward stretch Two-way stretch  Adjustments to product items, lines and mixes (continued) Product line contraction Symptoms of overextension: o Some products do not contribute to profits, or cannibalise sales of other items o Manufacturing/marketing resources disproportionately allocated to slow-moving products o Obsolete items because of new product entries Benefits of contraction: o Resources focused on important products o Managers don’t waste resources trying to improve sales of poorly performing products o New products have greater chance of success Branding Brand: a name, term, symbol, design or combination that identifies a seller’s products and differentiates them from competitors’ products Brand name: can be verbalised, e.g. Nike Brand mark: cannot be verbalised, e.g. Nike symbol Benefits of branding – Three main purposes of branding 1. Product identification 2. Repeat sales (loyalty) 3. Enhancing new-product sales All three holds benefits for marketers and consumers Benefits of branding Benefits for marketers Distinguish products from others Reduced selling time = cost reductions Brand preference created Charge premium price Faster consumer acceptance of new products Helps image and positioning Fosters brand loyalty Advertising synergies Benefits of branding (continued) Benefits for consumers: o Easier shopping o Gives security and confidence o Brand equity: the monetary value of brand names o High brand equity leads to: high awareness perceived quality brand loyalty Features of effective brand names Easy to pronounce, recognise and remember Short Distinctive, unique Describes the product / product use / product benefits Positive connotation Reinforces desired product image Legally protectable (locally and internationally) Branding strategies Firms face complex branding decisions Whether to brand at all? Consistency om brand positioning and communication of the brand Tool: Brand key/footprint Concrete, functional and tangible way of defining the brand Brand key model Major branding decisions BRAND NO BRAND Manufacturer’s Private brand brand Individual Family Combination Individual Family brand brand brand brand brand Branding strategies Generic products vs. branded products Manufacturers’ brands vs. private brands Individual brands vs. family brands Major branding decisions 1. No brand (unbranded) Generic product (private brand / private label): o no-frills, no-brand-name, low-cost product that is simply identified by its product category Major branding decisions (continued) 2. Branded Manufacturer’s brand (national brand): o defines the brand’s owner Private brand: o a brand name owned by a wholesaler or retailer Individual brand: o use different brand names for different products Family brand: o firm markets several different products under the same brand name. Conditions favourable to branding Unsuitable products: o Physical characteristics make them not brandable e.g. building sand, nails o Do not have characteristic/attribute that could form competitive advantage e.g. eggs Branding works when: o there is sufficient demand to ensure continuity of the brand o benefits of economies of scale are realised Co-branding Co-branding: combining the branding efforts of two powerful brand names. Generally partners share: o R&D costs o Slotting fees o Advertising and promotion budgets Degrees of partnership: Once-off e.g. Disney and Nestle Permanent e.g. Wimpy and Engen The risks associated with co- branding Incompatibility of partners Failure of project because of financial/ strategic objectives not being achieved Change of strategy/withdrawal of products Breach of contract, insolvency or change in control Sudden degeneration of participant’s reputation Unauthorised use of a participant’s trademark Levels of brand familiarity brand rejection brand non-recognition brand recognition brand preference brand insistence Trademarks Trademark: signifies the exclusive right to use a brand or part of a brand; uses the symbol ™ Parts of a brand may qualify for trademark protection Shapes Ornamental colour or design Catchy phrases Abbreviations The legal implications of branding Trademarks are protected by The Trade Marks Act (No. 194 of 1993) Registration for 10 years; can be renewed Generic product name: o Identifies a product by class or type and cannot be trademarked o Danger of generic usage (e.g. Rollerblades) The legal implications of branding Marketers should consider: Check carefully before adopting a trademark or packaging style to make sure you are not infringing on someone else’s distinguishing branding After a thorough search, consider registering your trademark Make your packaging as distinctive as possible Police your trademark Copyright: the exclusive legal right to reproduce, publish and sell the matter and form of a literacy, musical or artistic work uses the symbol © Packaging Contain & protect Promotion Packaging functions Facilitate storage, use & convenience Facilitate recycling & reduce environmental damage Labelling 1. Persuasive labelling 2. Informational labelling Universal product codes (UPC) Product warranties Warranty: protects the buyer and gives essential information about the product Expressed warranty (a written guarantee) o Simple statements (100% cotton) o Statement of performance (complete satisfaction) o Extensive documents written in technical language Implied warranty (an unwritten guarantee)