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McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 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 products packaging and label contribute to a firms overall strategy? McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-2 iPod Anticipation

McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-3 Air Jordan Moved beyond athletic endorsement to creation of entire line

NBA fees fueled interest Priced at $125 Nike/Air Jordan Website McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-4

Product Assortment and Product Line Decisions McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-5 Product Assortment and Product Line Decisions NumberBreadth of product lines McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Number of categories within aDepth product line 10-6 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.

McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-7 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. McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-8 Product Line Decisions

How is this changing the product mix? Does it increase breadth or depth? Is this research or

advertising? McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-9 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.

McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-10 Product Line Decisions for Services The same types of decisions can be used for se McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-11 Check Yourself

1. 2. 3. Why change product line depth? What is the difference between product line breadth versus depth? Why change product line breadth? McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-12

Branding A brand can use: Name, logo symbols, characters, slogans, jingles and even distinctive packages. Oscar Meyer Commercial McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-13 What Makes a Brand? Logos and URLs Slogans

Brand symbolsCharacters Jingles Branding McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-14 Value of Branding for the Customer and the Marketer Facilitate Purchasing Establish Loyalty Protect from

Competition Reduce Marketing Costs Are Assets Impact Market Value McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-15 History in Advertising McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

10-16 Brand Equity: Awareness McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-17 Brand Equity: Perceived Value How do discount retailers like Target, T.J. Maxx, and H&M

create value for customers? McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-18 Brand Equity: Brand Associations McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-19 One of the dangers of hiring celebrities like Mel Gibson to endorse a

companys products is that when they engage in embarrassing behavior, to the degree that they are associated with the companys brands, their actions hurt: A. brand equity. B. brand awareness. C. brand recognition.

D. corporate brand category depth. E. all of the above. McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-20 Brand Equity: Brand Loyalty

Consumers are often less sensitive to price Marketing costs are much lower Firm insulated from

the competition McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-21 Check Yourself 1. 2. How do brands create value for the customer and the firm?

What are the components of brand equity? McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-22 Brand Ownership Manufacturer brands or national brands McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Generic Private-label brands or Store Brands Premium Exclusive cobranded Copycat 10-23 Brand Ownership Private Label

McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-24 Brand Ownership Exclusive Co-brands McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-25 Naming Strategies

Corporate or family brand The Gap Corporate and product line brands

Individual lines Mr. Clean (Proctor & Gamble) Kelloggs Corn Flakes McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-26 Brand Extension

State Farm Website McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-27 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. E. The firm can spend less on creating

brand awareness and associations. all of the above. McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-28 Brand Dilution Evaluate the fit between Evaluate consumer Refrain from

Is the brand McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-29 Co-branding McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-30 Brand Licensing

McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-31 Brand Repositioning How is this repositioning? McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-32

Check Yourself 1. 2. 3. What is the difference between manufacturer, private/label, and generic brands? What is co-branding? What are some advantages and disadvantages of brand extensions?

McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-33 Packaging What other packaging do you as a consumer find useful? McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

10-34 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 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

10-35 Product Labeling McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-36 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.

Return to slide McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-37 Glossary Brand dilution occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold. Return to

slide McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-38 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. Return to slide McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

10-39 Glossary A brand extension refers to the use of the same brand name for new products being introduced to the same or new markets. Return to slide McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-40

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. Return to slide McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-41 Glossary

Brand loyalty occurs when a consumer buys the same brands product or service repeatedly over time rather than buy from multiple suppliers within the same category. Return to slide McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-42 Glossary Brand repositioning or rebranding

refers to a strategy in which marketers change a brands focus to target new markets or realign the brands core emphasis with changing market preferences. Return to slide McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-43 Glossary Co-branding is the practice of marketing

two or more brands together, on the same package or promotion. Return to slide McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-44 Glossary Perceived value of a brand is the relationship between a product or services benefits and its cost.

Return to slide McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-45 Glossary Product assortment or product mix is the complete set of all products offered by a firm. Return to slide McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

10-46 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. Return to slide McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-47

Glossary Product mix or product assortment is the complete set of all products offered by a firm. Return to slide McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-48

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