Lamb, Hair, McDaniel

2012-2013

CHAPTER 10 Product Concepts

Chapter 1

Copyright 2012 by Cengage Learning Inc. All rights reserved

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What Is a Product?
Product
Everything, both favorable and unfavorable, that a person receives in an exchange.

Tangible Good Service

Idea
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Types of Consumer Products

Products

Consumer Products

Business Products

Convenience Products

Shopping Products

Specialty Products

Unsought Products
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Types of Consumer Products

Convenience Product Shopping Product Specialty Product Unsought Product Increase market share among A relatively inexpensive existing customers item that merits little shopping effort

A product that requires comparison Attract new customers to shopping, because it is usually more existing products expensive and found in fewer stores
A particular item for which for Create new products Market consumers search extensively and Diversification present markets Development are reluctant to accept substitutes A product unknown to the potential Introduce new products buyer or a known product that the into new buyer does notmarkets actively seek
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Product Items, Lines, and Mixes

Product Item
A specific version of a product that can be designated as a distinct offering among an organizations products. A group of closely-related product items.

Product Line

Product Mix

All products that an organization sells.

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Exhibit 10.1
Campbells Product Lines and Product Mix

Source: Campbell's Web site: http://www.campbellsoup.com.

Benefits of Product Lines

Advertising Economies

Package Uniformity Standardized Components Efficient Sales and Distribution Equivalent Quality
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Adjustments
Adjustments to Product Items, Lines, and Mixes

Product Modification

Product Repositioning

Product Line Extension or Contraction

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Branding
Brand Name Brand Mark Brand Equity That part of a brand that can be spoken, including letters, words, and numbers

The elements of a brand that cannot be spoken

The value of company and brand names

Global Brand

A brand where at least a third of the earnings come from outside its home country

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Benefits of Branding
Product Identification

Repeat Sales

New Product Sales

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Branding Strategies
Brand
Manufacturers Brand

No Brand

Private Brand

Individual Brand

Family Brand

Combination

Individual Brand

Family Brand

Combination

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Branding Strategies
Manufacturers Brand

The brand name of a manufacturer. A brand name owned by a wholesaler or a retailer. Also known as a private label or store brand.
A brand manufactured by a third party for exclusive retailer, without evidence of a that retailers affiliation.
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Private Brand

Captive

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Advantages of Manufacturers Brands

Heavy consumer ads by manufacturers
Attract new customers Enhance dealers prestige Rapid delivery, carry less inventory If dealer carries poor quality brand, customer may simply switch brands and remain loyal to dealer
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Advantages of Private Brands

Earn higher profits on own brand Less pressure to mark down price Manufacturer can become a direct competitor or drop a brand/reseller Ties customer to wholesaler or retailer Wholesalers and retailers have no control over the intensity of distribution of manufacturers brands
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Advantages of Captive Brands

No evidence of stores affiliation Manufactured by third party Sold exclusively at the chain Can ask price similar to manufacturers brands

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Characteristic of a Good Brand Name

Short and Simple Easy to Spell and Read Easy to Recognize and Remember Easy to Pronounce Can Pronounce in Only One Way Can Pronounce in All Languages Suggests Product Benefits Meets Packaging/Labeling Needs No Undesirable Imagery Always Timely Adapts to any Advertising Medium Legally Available for Use

Individual Brands Versus Family Brands

Individual Brand

Using different brand names for different products.

Family Brand

Marketing several different products under the same brand name.

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Cobranding
Ingredient Branding Types of Cobranding Cooperative Branding Complementary Branding

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Trademarks
A Trademark is the exclusive right to use a brand.
Many parts of a brand and associated symbols qualify for trademark protection.
Trademark right comes from use rather than registration. To renew the trademark, the company must prove use of the mark. Rights continue for as long as the mark is used. Trademark law applies to the online world.
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Functions of Packaging
Contain and Protect

Promote

Facilitate Storage, Use, and Convenience

Facilitate Recycling
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Labeling
Persuasive
Focuses on promotional theme Consumer information is secondary

Informational
Helps make proper selections Lowers cognitive dissonance

Greenwashing
Attempting to give the impression of environmental friendliness whether or not it is environmentally friendly.
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Global Issues in Branding

One Brand Name Everywhere

Global Options for Branding

Adaptations & Modifications

Different Brand Names in Different Markets

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Global Issues in Packaging

Labeling

Global Considerations for Packaging

Aesthetics

Climate Considerations
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