MARK1012 Lecture Notes - Brand Loyalty, Brand Awareness, Brand Equity
PRODUCT AND BRANDING DECISIONS
Complexity and types of products
• Core customer value: defines the basic problem-solving benefits
that consumers are seeking
o What are customers looking for?
• Marketers convert core customer value into an actual product
• Brand name, features/design, quality level and packaging are
important but level of importance varies
• Associated services (augmented product): non-physical
aspects of the product (e.g. warranties, financing, product support
and after-service)
o number of associated services varies
Types of Products
• type of product affects how it should be promoted, priced and
distributed
• 2 primary categories of goods and services that reflect who buys
them: consumers or businesses
CONSUMER PRODUCTS: goods and services used by people for
their personal use.
• Specialty products/services: customers express such a strong
preference that they will expend considerable effort to search
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for the best suppliers (e.g. Running enthusiasts → Nike Plus,
luxury cars, legal or medical professionals)
• Shopping products/service: for consumers who spend a fair
amount of time comparing alternatives (e.g. furniture, clothing,
fragrances, appliances and travel alternatives)
• Convenience products/services: consumer is not willing to
spend any effort to evaluate prior to purchase. Frequently
purchasing commodity items, bought with little thought
• Unsought products/services: consumers either do not normally
think of buying or do not know about at all. Requires a lot of
marketing effort and various forms of promotion. E.g. new-to-
the-world products
PRODUCT MIX AND PRODUCT LINE DECISIONS
• The complete set of all goods and services is called its product
mix
o Consists of various product lines (associated items that
consumers tend to use together to think of as part of a group
of similar goods or services)
o Reflects the breadth and depth of the company’s product
lines
o Breadth: count of the number of product lines offered by the
firm
▪ Too much breadth in product mix becomes costly to
maintain and weaken the firm’s reputation
o Depth: number of products within a product line
INCREASE DEPTH
• May add items to address changing consumer preferences or to
pre-empt competitors while boosting sales
• E.g. bank → customer accounts as part of product lines. Increase
depth→ new types of accounts
DECREASE DEPTH
• Decrease depth to realign the firm’s resources
• Prune product lines to eliminate unprofitable or low-margin items
and refocus their marketing efforts on their more profitable items
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DECREASE BREADTH
• Delete entire product lines to address changing market
conditions or meet internal strategic priorities
• E,g, firm drops line of bread and focuses on dairy products
INCREASE BREADTH
• Firms add new product lines to capture new or evolving markets
and increase sales
• E.g. firm adds a whole new line of jam to complement bread
BRANDING
• Generates revenue
• Provides a way for a firm to differentiate its product offering from
those of its competitors
• What makes a brand?
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Document Summary
Types of products: type of product affects how it should be promoted, priced and distributed, 2 primary categories of goods and services that reflect who buys them: consumers or businesses. Frequently purchasing commodity items, bought with little thought: unsought products/services: consumers either do not normally think of buying or do not know about at all. Requires a lot of marketing effort and various forms of promotion. Increase depth: may add items to address changing consumer preferences or to pre-empt competitors while boosting sales, e. g. bank customer accounts as part of product lines. Decrease depth: decrease depth to realign the firm"s resources, prune product lines to eliminate unprofitable or low-margin items and refocus their marketing efforts on their more profitable items. Decrease breadth: delete entire product lines to address changing market conditions or meet internal strategic priorities, e,g, firm drops line of bread and focuses on dairy products.
