chapter 5 mine
TRANSCRIPT
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Chapter 5Chapter 5Product and Service Strategy and
Brand Management
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OFFERING STRATEGYFRAMEWORK
Positioning
Offerings
Branding
Offerings
Modifying the
Offering Mix
h The profitability of an organization depends on its
product or service offering(s) and the strength of its
brand(s).
h Marketers face three offering-related strategy
decisions:
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h An offeringconsists of the benefits or satisfaction
provided to target markets by an organization.
hIt consists of the following elements:
PackagingWarranties/
Guarantees
Brand name(s)
Tangible
product/service(a physical entity)Related services
(delivery, setup, etc.)
Other Features
THEOFFERING CONCEPT
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ADDITIONS TOTHEOFFERING MIX
h Additions take the form of:
How consistentis the new offering with
existing offerings?
h Questions to ask when considering new offerings:
Single
Offering
Entire
Line
Does the organization have the resources tointroduce and sustain the offering?
Is there a viable marketfor the offering?
Resources
Consistency
Market
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ADDITIONS TOTHEOFFERING MIX
h Considerwhether a market exists.
h Consider whether the new offering has a relative
advantage over competitive offerings at a price
consumers are willing and able to pay.
h Consider if there is a distinct buyer group or segment
for which no present offering is satisfactory.
Market
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STAGES INTHENEW-OFFERING
DEVELOPMENT PROCESS
Idea
Screening
BusinessAnalysis
Idea
Generation
Market
Testing
Commercial-
ization
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STAGES INTHENEW-OFFERING
DEVELOPMENT PROCESS
BusinessAnalysis
h Assess financial viability based on estimated:
Sales Costs Profits
h Forecasting sales is difficult for new offerings.
h Profitability analyses relate to:
Investment Break -even Payback Period NO
NONO
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EXHIBIT 5.1:GENERAL FORM OFA
PRODUCT LIFE CYCLE
Sales
Time
Maturity-SaturationGrowthIntroduction Decline
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POSITIONING
Positioningis the act of designing
an organizations offering and
image so that it occupies a distinctand valued place in the target
customers mind relative tocompetitive offerings.
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POSITIONING STRATEGIES
h Strategies include positioning by:
Product or
Brand User
Use or
Application
Attribute or
Benefit
Product or
Service Class
Price and
QualityCompetitors
h Marketers often combine two or more of these strategies when positioning a
product, service, or brand.
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CRAFTINGA POSITIONING STATEMENT
h Once the desired positioning has been
determined, marketers prepare a succinct,
written positioning statement.
h A positioning statement identifies:
The offerings unique attributes or benefits
The target market and needs satisfied
The product (service) class or category in
which the organizations offering competes
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CRAFTINGA POSITIONING STATEMENT
A positioning statement takes this form:
h For (target market and need), the (product, service,
brand name) is a (product/service class orcategory)
that (statement of unique attributes or benefits provided).
h Example:
For upscaleAmerican families who desire a
carefree driving experience, Volvo is a
premium-priced automobile that offers the
utmost in safety and dependability.
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BRANDAND BRANDEQUITY
Brand Brand Equity
A brand name is anyword, device (design,
sound, shape, or color),
or combination of these
that are used to identifyan offering and set it
apart from competing
offerings.
Brand equity is the addedvalue a brand name
bestows on a product or
service beyond the
functional benefitsprovided.
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Branding Strategy (Tactics?)Branding Strategy (Tactics?)
y Multiproduct Branding One name for all
the products in a product class (e.g.,Dell,
Sony). Sub-branding (e.g.,GE, auto cos. )
y Multibranding Giving each product a
distinct brand name (e.g., Proctor &
Gamble)
y Private Branding Manufacturer makesproduct for a reseller (e.g., Sears and
Walmart contract with manufacturers)
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BRANDGROWTH STRATEGIES
Line
Extension
New
Brand
BrandExtension
An organization introduces additional offerings with the same
brand in a product class that it currently serves (e.g., Campbells
chunky style soup).
Fighting/
Flanker Brand
Is the practice of using a current brand name to enter acompletely different product class (e.g., Honda snowblowers).
Involves the development of a new brand and often a new
offering for a product class that has not been previously served
by the organization (Proctor & Gamble ).
Creates new brands for an existing product class that attracts
specific consumer segments not served by an organizations
existing products/brands Represents a defensive move to counteract competitors
Heubleins Smirnoff, Relska and Popov brands
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EXHIBIT 5.4: BRANDGROWTH
STRATEGIES
New
Brand
Strategy
Line
Extension Strategy
Brand
Extension
Strategy
Fighting/
Flanking
Brand Strategy
Existing Product ClassExisting Product ClassNew Product ClassNew Product Class
New BrandNew Brand
Product/Service ClassProduct/Service Class
Served by the OrganizationServed by the Organization
Brand NameBrand Name
Existing BrandExisting Brand