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LEARNING OBJECTIVES

Learning Objectives

How do firms adjust their product lines to changing market conditions?

Why are brands valuable to firms? How do firms implement different

branding strategies? How do a product’s packaging and label

contribute to a firm’s overall strategy?

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Air Jordan

• Moved beyond athletic endorsement to creation of entire line

• NBA fees fueled interest

• Priced at $125

Nike/Air Jordan Website

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Product Assortment and Product Line Decisions

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Product Assortment and Product Line Decisions

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Change Product Mix Breadth

• Increase Breadth

– True Religion Brand Jeans now are a lifestyle brand with apparel, belts, swimwear and fragrances

• Decrease Breadth

– Due to competitive changes, TCBY is now focusing on Yogurt.

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Change Product Mix Depth

Increase Depth Band-Aid now has

over 40 products to heal cuts.

Decrease Depth McCormick spices

eliminates dozens of products each year.

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Product Line Decisions

How is this changing the product mix?

Does it increase breadth or depth?

Is this research or advertising?

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The same types of decisions can be used for servicesThe same types of decisions can be used for services

Product Line Decisions for Services

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A brand can use: Name, logo symbols, characters, slogans, jingles and even

distinctive packages.

A brand can use: Name, logo symbols, characters, slogans, jingles and even

distinctive packages.

Branding

Oscar Meyer Commercial

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What Makes a Brand?

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Value of Branding for the Customer and the Marketer

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History in Advertising

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Brand Equity: Awareness

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Brand Equity: Perceived Value

How do discount retailers like Target, T.J. Maxx, and H&M create value for customers?

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Brand Equity: Brand Associations

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Brand Equity: Brand Loyalty

Consumers are often less sensitive to price

Marketing costs are much lower

Firm insulated from the competition

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Brand Ownership

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Brand Ownership

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Brand Ownership

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Naming Strategies

Corporate or family brand The Gap

Corporate and product line brands Kellogg’s Corn

Flakes

Individual lines Mr. Clean (Proctor

& Gamble)

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Brand Extension

State Farm Website

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Brand Dilution

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Co-branding

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Brand Licensing

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Brand Repositioning

How is this repositioning?

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Packaging

What other packaging do you as a consumer find useful?

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Product Labeling

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iPod Anticipation

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Within each product line, there are often multiple:

A. product categories.

B. primary packaging parts.

C. product breadth.

D. product assortment.

E. private label brands.

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Check Yourself

1. Why change product line depth?

2. What is the difference between product line breadth versus depth?

3. Why change product line breadth?

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One of the dangers of hiring celebrities like Mel Gibson to endorse a company’s products is that when they engage in embarrassing behavior, to

the degree that they are associated with the company’s brands, their actions hurt:

A. brand equity.

B. brand awareness.

C. brand recognition.

D. corporate brand category depth.

E. all of the above.

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1. How do brands create value for the customer and the firm?

2. What are the components of brand equity?

Check Yourself

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Which of the following is a potential benefit of brand extension?

A. It allows the perception of a brand with a quality image to be carried over to the new product.

B. It lowers marketing costs.

C. It can boost sales of the core brand.

D. The firm can spend less on creating brand awareness and associations.

E. all of the above.

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Check Yourself

1. What is the difference between manufacturer, private/label, and generic brands?

2. What is co-branding?

3. What are some advantages and disadvantages of brand extensions?

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Chianti that comes in wicker-clad bottles and tortillas that come in zip lock bags are examples of brand _____________ that differentiate these companies’

products from their competitors’ offerings.

A. names

B. slogans

C. symbols

D. characters

E. packaging

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Glossary

A brand association reflects the mental links that consumers make between a brand and its key product attributes, such as a logo, slogan, or famous personality.

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Glossary

Brand dilution occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold.

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Glossary

Brand equity is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.

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Glossary

A brand extension refers to the use of the same brand name for new products being introduced to the same or new markets.

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Glossary

Brand licensing is a contractual agreement between firms, whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee.

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Glossary

Brand loyalty occurs when a consumer buys the same brand’s product or service repeatedly over time rather than buy from multiple suppliers within the same category.

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Glossary

Brand repositioning or rebranding refers to a strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences.

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Glossary

Co-branding is the practice of marketing two or more brands together, on the same package or promotion.

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Glossary

Perceived value of a brand is the relationship between a product or service’s benefits and its cost.

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Glossary

Product assortment or product mix is the complete set of all products offered by a firm.

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Glossary

Product lines are groups of associated items, such as items that consumers use together or think of as part of a group of similar products.

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Glossary

Product mix or product assortment is the complete set of all products offered by a firm.

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