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8. Product, Services, Branding Notes

MKT201 - AE

March 24, 2025

BELC N175, 6:15 PM

Nicola DiFusco, MFA

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Learning Objectives

8.1 Define product and describe the major classifications of products and services.

8.2 Describe the decisions companies make regarding their individual products and services, product lines, and product mixes.

8.4 Discuss branding strategy—the decisions companies make in building and managing their brands.

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A product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline.

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Introduction Stage

Stimulate trial.
Primary demand.
Selective demand.
Skimming strategy.

High Price

Penetration pricing.

Low Price

Rabbit r1 - AI Companion

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Growth stage:

Rapid sales growth.
More competitors.
Profits peak.
Advertising for selective demand.
Repeat purchasers.
New features.
Broad distribution.

Electric Vehicles

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Maturity stage:

Industry/product sales slow.
Fewer new buyers.
Profit declines.
Product differentiation.
Fewer competitors.
Examples: Soft drinks, breakfast cereals.

Chobani 2024 Product Lines

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Decline stage:

Industry/product sales drop.
Price drops.
Environmental changes.
Deletion.
Harvesting.

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Charting the Product Life Cycle:

1.Length of the product life cycle.

2.Shape of the life-cycle curve.

•Generalized life cycle.

•High-learning product.

•Low-learning product.

•Fashion product.

•Fad product.

3.Difference between product classes and forms

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The product life cycle and diffusion of innovation have barriers to adoption:

Usage – compatible with habits.
Value – incentive to change.
Risk – physical, economic, social.
Psychological – culture or image.

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Product/brand manager responsibilities for managing the Product Life Cycle:

•Manage product life cycle stages.

•New product development.

•Marketing program implementation.

•Extensive data analysis, including:

•Category Development Index (CDI).

•Brand Development Index (BDI).

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NIKE: More Than Just Innovative Sports Gear—A Total Brand Experience

The Nike “swoosh”—it’s everywhere. Nike’s outstanding success results from creating deep brand-customer engagement, valued brand experiences, and close brand community with and among customers.
Beyond shoes, Nike markets a way of life, a genuine passion for sports, a “just-do-it” attitude. Customers don’t just wear their Nikes, they experience them.

Mkfoto/Shutterstock

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Learning Objective 1

Define product and describe the major classifications of products and services.

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What Is a Product? (1 of 18)

Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want.

Services are a form of product that consists of activities, benefits, or satisfactions and that is essentially intangible and does not result in the ownership of anything.

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What Is a Product? (2 of 18)

Products, Services, and Experiences

Products and services are becoming more commoditized.

Companies are now creating and managing customer experiences with their brands or company.

Products are a key element in the overall market offering. Marketing mix planning begins with building an offering that brings value to target customers. This offering becomes the basis on which the company builds profitable customer relationships.

A company’s market offering often includes both tangible goods and services. At one extreme, the market offer may consist of a pure tangible good, such as soap; no services accompany the product. At the other extreme are pure services, for which the market offer consists primarily of a service. Examples include a doctor’s exam and financial services. Between these two extremes, however, many goods-and-services combinations are possible.

Experiences have always been an important part of marketing for some companies. Disney has long manufactured dreams and memories through its movies and theme parks.

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What Is a Product? (3 of 18)

Products, Services, and Experiences

Creating customer experiences: Airbnb’s “Night At” program transforms iconic locations into unforgettable one-night experiences, everything from an underwater night’s sleep with the sharks at a Paris aquarium (above) to a sleepover at Dracula’s castle in Transylvania for Halloween.

Chesnot/Getty Images

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What Is a Product? (4 of 18)

Figure 8.1 Three Levels of Product

Product planners need to think about products and services on three levels (see Figure 8.1). Each level adds more customer value. The most basic level is the core customer value, which addresses the question: What is the buyer really buying?

At the second level, product planners must turn the core benefit into an actual product. They need to develop product and service features, a design, a quality level, a brand name, and packaging.

Finally, product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits.

Discussion Question

It is a good idea for the students to bring in some products so the class can discuss the levels of product and services. Products including Gatorade, toothpaste, facial moisturizer, or cosmetics work well in this discussion. You can often find augmented product features on product websites including games, features, and support.

Long Description:

The figure is presented as three concentric circles. �The details are as follows:�First level: Core customer value�• A note corresponding to the core customer value reads "At the most basic level, the company asks, “What is the customer really buying?” For example, people who buy a classic Airstream travel trailer are buying much more than a trailer. They're buying a vision of where the trailer will take them." �Second level: Actual product�• Brand name�• Features�• Design�• Packaging�• Quality level�Third level: Augmented product�• Deliver and credit�• After-sale service�• Warranty�• Product support.

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What Is a Product? (5 of 18)

Product and Service Classifications

Consumer products
Industrial products

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What Is a Product? (7 of 18)

Product and Service Classifications

Consumer products are products and services bought by final consumers for personal consumption.

Convenience products
Shopping products
Specialty products
Unsought products

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What Is a Product? (8 of 18)

Product and Service Classifications

Convenience products are consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort.

Newspapers
Candy
Fast food

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What Is a Product? (9 of 18)

Product and Service Classifications

Shopping products are less frequently purchased consumer products and services that the customer compares carefully on suitability, quality, price, and style.

Furniture
Cars
Appliances

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What Is a Product? (10 of 18)

Product and Service Classifications

Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort.

Medical services
Designer clothes
High-end electronics

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What Is a Product? (11 of 18)

Product and Service Classifications

Unsought products are consumer products that the consumer does not know about or knows about but does not normally think of buying.

Life insurance
Funeral services
Blood donations

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What Is a Product? (6 of 18)

Table 8.1 Marketing Considerations for Consumer Products

Type of Consumer Product

Marketing Considerations	Convenience	Shopping	Specialty	Unsought
Customer buying behavior	Frequent purchase; little planning, little comparison or shopping effort; low customer involvement	Less frequent purchase; much planning and shopping effort; comparison of brands on price, quality, and style	Strong brand preference and loyalty; special purchase effort; little comparison of brands; low price sensitivity	Little product awareness or knowledge (or, if aware, little or even negative interest)
Price	Low price	Higher price	Highest price	Varies
Distribution	Widespread distribution convenient locations	Selective distribution in fewer outlets	Exclusive distribution in only one or a few outlets per market area	Varies
Promotion	Mass promotion by the producer	Advertising and personal selling by both the producer and resellers	More carefully targeted promotion by both the producer and resellers	Aggressive advertising and personal selling by the producer and resellers
Examples	Toothpaste and laundry detergent	Major appliances, televisions, furniture, and clothing	Luxury goods, such as Rolex watches or fine crystal	Life insurance and Red Cross blood donations

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What Is a Product? (12 of 18)

Product and Service Classifications

Industrial products are those products purchased for further processing or for use in conducting a business.

Materials and parts
Capital items
Supplies and services

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What Is a Product? (13 of 18)

Product and Service Classifications

Materials and parts include raw materials and manufactured materials and parts.

Capital items are industrial products that aid in the buyer’s production or operations.

Supplies and services include operating supplies, repair and maintenance items, and business services.

The three groups of industrial products and services are materials and parts, capital items, and supplies and services.

Materials and parts: Raw materials consist of farm products and natural products. Manufactured materials and parts consist of component materials and component parts. Most manufactured materials and parts are sold directly to industrial users. Price and service are the major marketing factors; branding and advertising tend to be less important.

Capital items are industrial products that aid in the buyer’s production or operations, including installations and accessory equipment. Installations consist of major purchases such as buildings and fixed equipment. Accessory equipment includes portable factory equipment and tools and office equipment. They have a shorter life than installations and simply aid in the production process.

The final group of industrial products is supplies and services. Supplies include operating supplies and repair and maintenance items. Supplies are the convenience products of the industrial field because they are usually purchased with a minimum of effort or comparison. Business services include maintenance and repair services and business advisory services usually supplied under contract.

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What Is a Product? (14 of 18)

Product and Service Classifications

Organizations, Persons, Places, and Ideas

Organization marketing
Person marketing
Place marketing
Social marketing

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What Is a Product? (15 of 18)

Product and Service Decisions

Organization marketing consists of activities undertaken to create, maintain, or change the attitudes and behaviors of target consumers toward an organization.

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What Is a Product? (16 of 18)

Product and Service Classifications

Person marketing consists of activities undertaken to create, maintain, or change the attitudes or behavior of target consumers toward particular people.

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What Is a Product? (17 of 18)

Product and Service Classifications

Place marketing consists of activities undertaken to create, maintain, or change attitudes and behavior toward particular places.

Social marketing uses commercial marketing concepts to influence individuals’ behavior to improve their well-being and that of society.

Place marketing: Cities, states, regions, and even entire nations compete to attract tourists, new residents, conventions, and company offices and factories. The New Orleans city website shouts “Go NOLA” and markets annual events such as Mardi Gras festivities and the New Orleans Jazz and Heritage Festival.

Brand USA, a public–private marketing partnership created by a recent act of Congress, promotes the United States as a tourist destination to international travelers. Its mission is to “represent the true greatness of America—from sea to shining sea” through country-by-country ads and promotions and a DiscoverAmerica.com website that features destinations, U.S. travel information and tips, and travel planning tools.

Social marketing: Ideas can also be marketed. In one sense, all marketing is the marketing of an idea, whether it is the general idea of brushing your teeth or the specific idea that Crest toothpastes create “healthy, beautiful smiles for life.” Here, however, we narrow our focus to the marketing of social ideas. This area has been called social marketing.

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Social

Place

Person

Organization

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Learning Objective 2

Describe the decisions companies make regarding their individual products and services, product lines, and product mixes.

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Product and Service Decisions (1 of 11)

Figure 8.2 Individual Product Decisions

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Product and Service Decisions (2 of 11)

Individual Product and Service Decisions

Communicate and deliver benefits by product and service attributes.

Quality
Features
Style and design

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Product and Service Decisions (3 of 11)

Individual Product and Service Decisions

Product quality refers to the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs.

Total quality management
Return-on-quality
Quality level
Performance quality
Conformance quality

Conformance quality: By consistently meeting or exceeding customer quality expectations, Americas Best Value Inn recently earned the J.D. Power Award for highest customer satisfaction among the nation’s economy hotel chains.

Gary Armstrong

Product quality is one of the marketer’s major positioning tools. Quality affects product or service performance; thus, it is closely linked to customer value and satisfaction. In the narrowest sense, quality can be defined as “freedom from defects.” But most marketers go beyond this narrow definition. Instead, they define quality in terms of creating customer value and satisfaction.

Total quality management (TQM) is an approach in which all of the company’s people are involved in constantly improving the quality of products, services, and business processes.

Today, companies are taking a return-on-quality approach, viewing quality as an investment and holding quality efforts accountable for bottom-line results.

Product quality has two dimensions: level and consistency. In developing a product, the marketer must first choose a quality level that will support the product’s positioning. Here, product quality means performance quality—the product’s ability to perform its functions.

Beyond quality level, high quality can also mean high levels of quality consistency. Here, product quality means conformance quality—freedom from defects and consistency in delivering a targeted level of performance. All companies should strive for high levels of conformance quality.

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Product and Service Decisions (4 of 11)

Individual Product and Service Decisions

Product Features

Competitive tool for differentiating a product from competitors’ products
Assessed based on the value to the customer versus its cost to the company

A product can be offered with varying product features. A stripped-down model, one without any extras, is the starting point. The company can then create higher-level models by adding more features. Being the first producer to introduce a valued new feature is one of the most effective ways to compete.

How can a company identify new features and decide which ones to add to its product? It should periodically survey buyers who have used the product and ask these questions: How do you like the product? Which specific features of the product do you like most? Which features could we add to improve the product? The answers to these questions provide the company with a rich list of feature ideas.

The company can then assess each feature’s value to customers versus its cost to the company. Features that customers value highly in relation to costs should be added.

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Product and Service Decisions (5 of 11)

Individual Product and Service Decisions

Style describes the appearance of the product.

Design contributes to a product’s usefulness as well as to its looks.

Good design doesn’t start with brainstorming new ideas and making prototypes. Design begins with observing customers, understanding their needs, and shaping their

product-use experience. Product designers should think less about technical product specifications and more about how customers will use and benefit from the product. For

example, using smart design based on consumer needs, Sonos created a wireless, internet-enabled speaker system that’s easy to use and fills a whole house with great sound.

Another way to add customer value is through distinctive product style and design. Design is a larger concept than style.

Good design doesn’t start with brainstorming new ideas and making prototypes. Design begins with observing customers, deeply understanding their needs, and shaping their product-use experience. Product designers should think less about technical product specifications and more about how customers will use and benefit from the product.

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Product and Service Decisions (6 of 11)

Individual Product and Service Decisions

Brand is the name, term, sign, or design or a combination of these, that identifies the maker or seller of a product or service.

A classic stunt by former bargain footwear retailer Payless dramatically illustrated the power of brands in shaping perceptions. Fashion influencers paid as much as $645 for “Palessi” shoes that normally sold for less than $40.

Collective Brands Inc.

Discussion Questions

What brands do you tend to purchase consistently? Why?

This discussion should lead to the consumer benefits of brands including quality and consistency. It is interesting to now ask students what the benefits might be for the seller of a strong brand. This will include segmentation, positioning, and the ability to communicate product features.

Consumers view a brand as an important part of a product, and branding can add value to a consumer’s purchase. Customers attach meanings to brands and develop brand relationships. Branding has become so strong that today hardly anything goes unbranded. Brand names help consumers identify products that might benefit them and say something about product quality and consistency.

Branding also gives the seller several advantages. The seller’s brand name and trademark provide legal protection for unique product features that otherwise might be copied by competitors. Branding helps the seller to segment markets.

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Product and Service Decisions (7 of 11)

Individual Product and Service Decisions

Packaging involves designing and producing the container or wrapper for a product.

Labels identify the product or brand, describe attributes, and provide promotion.

Smart packaging: British dairy brand Yeo Valley Organic uses “always on” connected packaging across its full range of 90 organic products.

Courtesy of Sharp End

Traditionally, the primary function of the package was to hold and protect the product. Now, packaging represents prime marketing space.

Labels and logos range from simple tags attached to products to complex graphics that are part of the packaging. The label performs several functions: the label identifies the product or brand; describes several things about the product—who made it, where it was made, when it was made, its contents, how it is to be used, and how to use it safely; and helps promote the brand and engage customers.

Shoppers who scan the QR codes printed on Yeo Valley’s packaging are taken to a web page introducing the brand’s “Put Nature First” campaign, where they can also find product information and

recipes or access informational and entertaining features. “The flexibility of QR codes is we can change the message remotely without needing to reprint the packaging,” explains Yeo Valley Organic‘s managing director. “The communication potential is phenomenal.

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Product and Service Decisions (8 of 11)

Individual Product and Service Decisions

Product support services augment actual products.

Brand logo makeovers: Many companies are redesigning their logos to keep them in sync with the rapidly evolving digital times.

rvlsoft/Shutterstock, General Motors, International House of Pancakes, L L C, and Audi of America

A logo is no longer just a static symbol placed on a printed page, package, TV ad, billboard, or store display. Instead, today’s logos must also be capable of meeting the demands of an ever-more-diverse set of media. Text that comes through clearly in a print ad or billboard may be too small to read on a smartphone. A color that can be presented easily in the digital medium may be challenging to create on a physical medium like paper. Thus, many brands are adapting their logos to be easily reproducible and interpretable across diverse media.

Long Description:

The details of the images are as follows: �• Uber�o Old logo: A white circle is layered over a black square. Within the white circle are a small black square with a straight line extending to the left.�o New logo: The word Uber is written in white text on a black background.�• General Motors�o Old logo: The uppercase letters G M are written in white with a white underline below on a blue background.�o New logo: The lowercase letters g m are written in blue with a blue underline below the m. The background is white with a blue border around the outside.�• IHOP restaurant�o Old Logo: On a blue rectangular background, the word IHOP is written in white with “restaurant” written in white on a red background arch below Ihop.�o New logo: Ihop is written in blue on a white background with a red half circle drawn under the letters “o p” to resemble a smiley.�• Audi�o Old logo: Four interlocking rings in silver.�o New logo: Four interlocking rings in black.

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Product and Service Decisions (9 of 11)

Product Line Decisions

Product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.

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Product and Service Decisions (10 of 11)

Product Line Decisions

Product line length is the number of items in the product line.

Line stretching
Line filling

Product line stretching and filling: Through skillful line stretching and filling, Google Nest is positioning itself to more fully serve the smart homes of the future.

Google Nest is a trademark of Google L L C

Consider Google Nest and its lines of smarthome devices. Google Nest began with a single smart thermostat that monitored and efficiently controlled home heating and cooling and then quickly added the Nest Protect smoke and carbon monoxide alarm. Next came a full line of Nest home security devices, including Nest Hello doorbell cameras, Nest Cam indoor and outdoor security cameras, and Nest key-free smart door locks, along with its Nest Aware subscription service that ties all the security devices together. More recently, the Google Nest line has expanded into smarthome connecting devices, including the Nest Mini and Nest Hub smart speakers and video displays, Nest Wifi routers, and Nest Audio components. Thus, through skillful line stretching and filling, Google Nest is positioning itself to more fully serve the smart homes of the future. “Welcome to Google Nest,” says the brand. “Build your helpful home.”

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Product and Service Decisions (11 of 11)

Product Mix Decisions

Product mix consists of all the product lines and items that a particular seller offers for sale.

Width
Length
Depth
Consistency

The product mix: Colgate-Palmolive’s consistent product mix contains dozens of brands that constitute the “Colgate World of Care”—products that “every day, people like you trust to care for themselves and the ones they love.”

Used with permission of Colgate-Palmolive Company

The product mix: Colgate-Palmolive’s nicely consistent product mix contains many brands that constitute the “Colgate World of Care”—products that “every day, people like you trust to care for themselves and the ones they love.”

Product mix width is the number of different product lines the company carries.

Product mix length is the total number of items the company carries within its product lines.

Product mix depth is the number of versions offered of each product in the line.

Consistency is how closely the various product lines are in end use, production requirements, or distribution channels.

These product mix dimensions provide the handles for defining the company’s product strategy and increasing business.

From time to time, a company may also have to streamline its product mix to pare out marginally performing lines and models and to regain its focus.

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Learning Objective 4

Discuss branding strategy—the decisions companies make in building and managing their brands.

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Branding is a marketing decision in which an organization uses a name, phrase, design, or symbols, or combination of these to identify its products and distinguish them from those of competitors.

Brand Name is any word, device (design, shape, sound, or color), or combination of these used to distinguish a seller’s products or services.

Brand personality is a set of human characteristics associated with a brand name.

Brand equity is the added value a brand name gives to a product beyond the functional benefits provided.

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Creating brand equity:

Develop positive brand awareness.
Establish a brand’s meaning for consumers.
Elicit the proper response to brand’s meaning.
Create intense brand loyalty with consumers.

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How Taco Bell’s CEO Keeps Gen Z Obsessed | WSJ

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Brand Strategy: Building Strong Brands (2 of 6)

Figure 8.5 Major Brand Strategy Decisions

A market is the set of actual and potential buyers of a product or service. Sellers must search for buyers, identify their needs, design good market offerings, set prices for them, promote them, and store and deliver them. Although marketing was traditionally carried out by sellers, the concept now also includes consumers. Consumers engage in marketing when they search for products, interact with companies to obtain information, and make their purchases. Thus, in addition to customer relationship management, companies must also deal with customer-managed relationships as customers are empowered and marketing is made a two-way affair.

Long Description:

The details of the flowchart are as follows:�1. Brand positioning�• Attributes�• Benefits�• Beliefs and values�2. Brand name selection�• Selection�• Protection�3. Brand sponsorship�• Manufacturer’s brand�• Private brand�• Licensing�• Co-branding�4. Brand development�• Line extensions�• Brand extensions�• Multibrands�• New brands�Note: Brands are powerful assets that must be carefully developed and managed. As this figure suggests, building strong brands involves many challenging decisions.

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Brand Strategy: Building Strong Brands (3 of 6)

Building Strong Brands

Brand Positioning

Marketers can position brands at any of three levels.

Attributes
Benefits
Beliefs and values

Brand positioning: Brands like Disney form strong emotional connections with customers. Says one Disney World Resort regular: “I have a deep love and bond to all things Disney.”

Art of Drawing/Alamy Stock Photo

Marketers need to position their brands clearly in target customers’ minds. They can position brands at any of three levels.

At the lowest level, they can position the brand on product attributes. For example, P&G’s Pampers’ early marketing focused on attributes such as fluid absorption, fit, and disposability. Attributes are the least desirable level for brand positioning because competitors can easily copy attributes. Customers are not interested in what the attributes are—they are interested in what the attributes will do for them.

A brand can be better positioned by associating its name with a desirable benefit. Thus, Pampers can go beyond technical product attributes and talk about the resulting containment and skin-health benefits from dryness.

The strongest brands are positioned on strong beliefs and values, engaging customers on a deep, emotional level. For example ,Pampers is positioned as a “love, sleep, and play brand where we grow together” that’s concerned about happy babies, parent-child relationships, and total baby care.

Successful brands engage customers on a deep, emotional level. Brands ranging from Apple, Google, Disney, and Coca-Cola to Google and Pinterest have achieved this status with many of their customers. Customers don’t just like these brands, they have strong emotional connections with them and love them unconditionally.

When positioning a brand, the marketer should establish a mission for the brand and a vision of what the brand must be and do. A brand is the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to buyers. The brand promise must be simple and honest.

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Brand Strategy: Building Strong Brands (4 of 6)

Building Strong Brands

Brand Name Selection

Suggests benefits and qualities
Easy to pronounce, recognize, and remember
Distinctive
Extendable
Translatable for the global economy
Capable of registration and legal protection

Store brand quality: A L D I offers a “no risk, all reward” Twice As Nice Guarantee on its store brands. “We’ve designed and tested our brands to meet or exceed the national brands in taste and quality."

Keri Miksza

Desirable qualities for a brand name include the following.

(1) It should suggest something about the product’s benefits and qualities: Beautyrest, Lean Cuisine, Snapchat, Pinterest.

(2) It should be easy to pronounce, recognize, and remember: iPad, Tide, Jelly Belly, Twitter, JetBlue.

(3) The brand name should be distinctive: Panera, Swiffer, Zappos, Nest.

(4) It should be extendable—Amazon.com began as an online bookseller but chose a name that would allow expansion into other categories.

(5) The name should translate easily into foreign languages. Before changing its name to Exxon, Standard Oil of New Jersey rejected the name Enco, which it learned meant a stalled engine when pronounced in Japanese.

(6) It should be capable of registration and legal protection. A brand name cannot be registered if it infringes on existing brand names.

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Brand Strategy: Building Strong Brands (5 of 6)

Brand Sponsorship

Manufacturer’s brand
Private brand
Licensed brand
Co-brand

Protecting the brand name: This ad asks advertisers and others to always add the registered trademark symbol and the words “Brand Tissue” to the Kleenex name, helping to keep from “erasing our coveted brand name that we’ve worked so hard for all these years.”

The popularity of store brands has soared recently. Kroger store brands account for a whopping 25 percent of its sales.

A manufacturer has four brand sponsorship options. The product may be launched as a national brand or a private brand (also called a store brand or distributor brand). Other alternatives include a licensed brand and co-branding.

National brands (or manufacturers’ brands) have long dominated the retail scene. In recent times, however, an increasing number of retailers and wholesalers have created their own store brands (or private brands). Store brands have been gaining strength for more than two decades, but recent tighter economic times have created a store-brand boom.

For example, Walmart’s private brands—Great Value food products; Sam’s Choice beverages; Equate pharmacy, health, and beauty products; White Cloud toilet tissue and diapers; Simple Elegance laundry products; and Canopy outdoor home products—account for a whopping 20 percent of its sales. Its private-label brands alone generate more sales than all P&G brands combined, and Walmart’s Great Value is the nation’s largest single food brand.

At the other end of the grocery spectrum, upscale Whole Foods Market offers an array of store-brand products. Target and Trader Joe’s are out-innovating many of their national-brand competitors. As a result, consumers are becoming loyal to store brands for reasons besides price. Recent research showed that 80 percent of all shoppers believe store brand quality is equal to or better than that of national brands. In some cases, consumers are even willing to pay more for store brands that have been positioned as gourmet or premium items.

Licensing: Some companies license names or symbols previously created by other manufacturers, names of well-known celebrities, or characters from popular movies and books. For a fee, any of these can provide an instant and proven brand name.

Co-branding occurs when two established brand names of different companies are used on the same product. Co-branding offers many advantages. Because each brand operates in a different category, the combined brands create broader consumer appeal and greater brand equity. Examples include Benjamin Moore and Pottery Barn, Taco Bell and Doritos.

Co-branding can take advantage of the complementary strengths of two brands. It also allows a company to expand its existing brand into a category it might otherwise have difficulty entering alone.

Co-branding has limitations and usually involves complex legal contracts and licenses. Co-branding partners must carefully coordinate their marketing mix, and each partner must trust that the other will take good care of its brand. If something damages the reputation of one brand, it can tarnish the co-brand as well.

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Brand Strategy: Building Strong Brands (6 of 6)

Figure 8.6 Brand Development Strategies

A company has four choices when it comes to brand development (see Figure 8.6). It can introduce line extensions, brand extensions, multibrands, or new brands.

Line extensions occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category. For example, over the years, KFC has extended its “finger lickin’ good” chicken lineup well beyond original recipe and now offers grilled chicken, boneless fried chicken, chicken tenders, hot wings, and chicken bites. A line extension works best when it takes sales away from competing brands, not when it “cannibalizes” the company’s other items.

Brand extension extends a current brand name to new or modified products in a new category. For example, Starbucks has extended its retail coffee shops by adding packaged supermarket coffees, a chain of teahouses (Teavana Fine Teas + Tea Bar), and even a single-serve home coffee, espresso, and latte machine—the Verismo. And P&G has leveraged the strength of its Mr. Clean household cleaner brand to launch several new lines: cleaning pads (Magic Eraser), bathroom cleaning tools (Magic Reach), and home auto cleaning kits (Mr. Clean AutoDry).

Multibrands: Companies often market many different brands in a given product category. For example, in the United States, PepsiCo markets at least eight brands of soft drinks (Pepsi, Sierra Mist, Mountain Dew, Manzanita Sol, Mirinda, IZZE, Tropicana Twister, and Mug root beer), three brands of sports and energy drinks (Gatorade, AMP Energy, and Starbucks Refreshers), four brands of bottled teas and coffees (Lipton, SoBe, Starbucks, and Tazo), three brands of bottled waters (Aquafina, H2OH!, and SoBe), and nine brands of fruit drinks (Tropicana, Dole, IZZE, Lipton, Looza, Ocean Spray, and others). Each brand includes a long list of sub-brands.

New brands: A company might believe that the power of its existing brand name is waning, so a new brand name is needed. Or it may create a new brand name when it enters a new product category for which none of its current brand names are appropriate. For example, Toyota created the separate Lexus brand aimed at luxury car consumers and the Scion brand, targeted toward Millennial consumers.

As with multibranding, offering too many new brands can result in a company spreading its resources too thin. And in some industries, such as consumer packaged goods, consumers and retailers have become concerned that there are already too many brands, with too few differences between them.

Thus, P&G, PepsiCo, Kraft, and other large consumer-product marketers are now pursuing megabrand strategies—weeding out weaker or slower-growing brands and focusing their marketing dollars on brands that can achieve the number-one or number-two market share positions with good growth prospects in their categories.

Long Description:

In the figure, the horizontal side is labeled Product category and the vertical side is labeled brand name. Both sides are divided into two parts; namely, existing and new.�The details of the four cells, from the top left corner in a clockwise direction are as follows:�Line extension:�• Product Category: existing�• Brand name: existing�Brand extension:�• Product Category: new�• Brand name: existing�New brands:�• Product Category: new�• Brand name: new�Multibrands:�• Product Category: existing�• Brand name: new�A note reads "This is a very handy framework for analyzing brand development opportunities. For example, what strategy did Toyota use when it introduced the Toyota Camry Hybrid? When it introduced the Toyota Prius? The Lexus?"

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Join at slido.com�#7361701

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Types of Goods

Convenience
Specialty
Shopping
Unsought

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How would you pair these products & types of goods? (Ex.: 1.A 2.B 3.C 4.D)

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Levels of a Product

An All-Inclusive Resort Vacation

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Explain some features of a Resort Vacation at each level of the product (Ex. Core: xyz, Actual: xyz, Augmented: xyz.)

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Product Lines: Stretching & Filling

Apple’s Website - 1997

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What are some new additions to the Apple product mix since 1997, in regard to Stretching & Filling. (Ex.: Stretching: xyz. Filling: xyz.)

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