Class 5_July 26 Building Strong Brands: Crafting the Brand Positioning and Competing Effectively (Ch 9) To accompany A Framework for Marketing 1 Management, 5 E by Kotler © Jihye Lee
Review To accompany A Framework for Marketing 2 Management, 5 E by Kotler © Jihye Lee
Positioning • The Subway example illustrates the importance of positioning. Then, what is positioning? • Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market. To accompany A Framework for Marketing 3 Management, 5 E by Kotler © Jihye Lee
Value Propositions • Perdue Chicken – More tender golden chicken at a moderate premium price (key benefits: tenderness) • Domino’s – A good hot pizza, delivered to your door within 30 minutes of ordering, at a moderate price (key benefits: delivery speed and good quality) • Volvo - The safest, most durable wagon in which your family can ride (key benefits: durability and safety) (Refer Table 9. 1) To accompany A Framework for Marketing 4 Management, 5 E by Kotler © Jihye Lee
A Useful Tool for Positioning Decision Making Not Sweet ? ? Sweet Nutritious Not Nutritious Where would you plot your favorite cereals? Your kids’ favorites? Your grandma’s? To accompany A Framework for Marketing 5 Management, 5 E by Kotler © Jihye Lee
Competitive Frame of Reference • The competitive frame of reference defines which other brands a brand competes with and therefore which brands should be the focus of competitive analysis. Ø Identifying competitors Ø Analyzing competitors To accompany A Framework for Marketing 6 Management, 5 E by Kotler © Jihye Lee
Identifying Competitors • Category membership: the products with which a brand competes and which function as close substitutes. Ø Pepsi. Co Aquafina vs. Coca. Cola’s Dasani bottled-water Ø Citigroup vs. Bank of America Ø Pestmart. com vs. Petco. com Energy-bar market has fragmented into a number of subcategories(specific segments: such as Luna bars for women and some possessing specific attributes: protein-laden and the calorie-control bar), each appealing to different people to different situations. To accompany A Framework for Marketing 7 Management, 5 E by Kotler © Jihye Lee
Analyzing Competitors Well known and respected for producing high-quality products sold by a good sales force, but poor at providing product availability and technical assistance. This result suggests that in its positioning, the company could attack Competitor A on product availability and technical assistance and Competitor C on almost anything, but it should not attack B, which has no glaring weaknesses. To accompany A Framework for Marketing 8 Management, 5 E by Kotler © Jihye Lee
Definitions for POD and POP • POD and POP are essentially opposite in nature, with the first this referring to differences in the second referring to similarities. • POD: The aspects of the product offering that are relatively distinct to the offerings of like competitors • POP: The aspects of the product offering that are largely similar to the offerings of like competitors. To accompany A Framework for Marketing 9 Management, 5 E by Kotler © Jihye Lee
Point-of-Difference Criteria Desirable: personally relevant/ distinctive & superior/ believable & credible Deliverable: feasible/profitable/pre-emptive, defensible Mountain Dew GM- Cadillac &difficult to attack Differentiating: brand association as distinctive and superior to relevant competitors Splenda sugar substitute To accompany A Framework for Marketing 10 Management, 5 E by Kotler © Jihye Lee
Understanding POD and POP POD Core Needs of the Target Market (POP) POD To accompany A Framework for Marketing 11 Management, 5 E by Kotler © Jihye Lee
POP versus POD • Visa’s POD: most widely available card(category’s main benefit of convenience) vs. AMEX is not. • Amex: built the equity of its brand by highlighting the prestige associated with the use of its card. • Now Visa offers gold and platinum cards to enhance the prestige of brand • Amex has substantially increased the number of merchants that accept its card and created other value enhancements. • Visa has established a strong point-ofdifference versus American Express on the basis of acceptability. To accompany A Framework for Marketing 12 Management, 5 E by Kotler © Jihye Lee
Example of POP vs. POD POP: Features and benefits offered by basically everyone. They do not differentiae, but a brand that falls short on theses dimensions will surely be hurt. For example, all small cars have four wheels, a steering wheel, lights and pretty good gas mileage. These are all points of parity POD: Things that help a brand stand out. These are the factors that drive purchase. For example, small cars are all pretty similar but the Mini Cooper is uniquely sporty and fun to drive. How about Mc. Donald’s Internet access? Is POP or POD? POP because almost everywhere coffee shop offer free Internet access. To accompany A Framework for Marketing 13 Management, 5 E by Kotler © Jihye Lee
POP vs. POD: Fast food example Higher quality ingredients : Organics More menu flexibility: (e. g. healthy concern) Similar menu choice, similar in-store facilities, similar pricing (POP) Service: Internet order and pickup To accompany A Framework for Marketing 14 Management, 5 E by Kotler © Jihye Lee
POP vs. POD: Education Smaller classes: more interactive Flexible timetable & locations: Online class Similar education qualification, similar courses and content (POP) Practical teaching focus: hands-on class To accompany A Framework for Marketing 15 Management, 5 E by Kotler © Jihye Lee
Choosing POPs and PODs • Marketers typically focus on brand benefits in choosing the Points-Of-Parity and Points-Of-Difference that make up their brand positioning. • Consumers are usually more interested in benefits and what exactly they will get from a product • For choosing specific benefits as POPs and PODs to position a brand, perceptual maps may be useful • Perceptual map: visual representations of consumer perceptions and preferences. To accompany A Framework for Marketing 16 Management, 5 E by Kotler © Jihye Lee
Choosing POPs and PODs Perceptual Map: Current Perceptions Consumers in Segment 3 prefer beverages with a strong taste and traditional imagery. Brand D is wellpositioned for this segment as it is a strongly associated in the marketplace with both these benefit. Taste profile (light vs. strong) Ideal Points: each segment's most preferred (“ideal”)combination of taste and imagery Personality and imagery (contemporary vs. modern) To accompany A Framework for Marketing 17 Management, 5 E by Kotler © Jihye Lee
Figure 9. 1 b Perceptual Map: Possibilities A’ A’’ By making its image more contemporary, Brand A could move to A’ to target Consumers in Segment 1 and achieve a point-ofparity on imagery and maintain its point-of-difference on taste profile with respect to Brand B. By changing taste profile to make it lighter, Brand A could move to A’’ to target consumers in Segment 2 and achieve a point-of-parity on taste profile and maintain its point-ofdifference on imagery with respect to Brand C To accompany A Framework for Marketing 18 Management, 5 E by Kotler © Jihye Lee
Brand Mantras • Short 3 to 5 word phrases that capture the irrefutable essence or spirit of the brand • Brand mantra must clearly delineate what the brand is supposed to represent and therefore, at least implicitly, what it is not. • Brand mantras typically are designed to capture the brand’s points-of-difference, i. e. , what is unique about the brand To accompany A Framework for Marketing 19 Management, 5 E by Kotler © Jihye Lee
Good Example of Brand Mantra Nike’s brand mantra of “authentic athletic performance” guides the types of products it makes and the athletes it hires as endorsers. Disney’s brand mantra of “fun family entertainment” provides guardrails so its marketing stays on track. Nike expands->”running shoes”, “athletic shoes” to “all things associated with athletics” -> guided by their brand mantra To accompany A Framework for Marketing 20 Management, 5 E by Kotler © Jihye Lee
Brand Mantras • To arrive at the final brand mantra, the following considerations should come into play Ø Communicate: A good brand mantra should define the category (or categories) of business for the brand set the brand boundaries. It should also clarify what is unique about the brand Ø Simplify: An effective brand mantra should be memorable. As a result, it should be short, crisp, and vivid in meaning Ø Inspire: Ideally, the brand mantra would also stake out ground that is personally meaningful and relevant to as many employees as possible To accompany A Framework for Marketing 21 Management, 5 E by Kotler © Jihye Lee
Group Exercise : Brand Mantra • Please sit by number that you called • Please define brand mantra for Starbucks and Alterra Coffee To accompany A Framework for Marketing 22 Management, 5 E by Kotler © Jihye Lee
Establishing Brand Positioning • Establishing the brand positioning in the marketplace requires that consumers understand what the brand offers and what makes it superior competitive choice. • To do so, consumers need to understand in which category or categories it competes and its points-ofparity and points-of-difference with respect to those competitors. To accompany A Framework for Marketing 23 Management, 5 E by Kotler © Jihye Lee
Category Membership • Marketers inform to consumers of brand’s category membership before POP or POD • Category membership is obvious in well-known brands. Ø Maybelline – leading brand of cosmetics Ø Cheerios – leading brand of cereal Ø Accenture – leading consulting firm • However, some case is not, for example, new product launching or high-tech products. • Brands are sometimes affiliated with categories in which they do not hold membership. To accompany A Framework for Marketing 24 Management, 5 E by Kotler © Jihye Lee
Example of Category Membership • Instead of putting it in the frozen pizza category, The marketers have positioned it in the delivered pizza category with ads that claim. • “It’s Not Delivery, It’s Di. Giorno!” • Di. Giorno has cleverly positioned itself as a convenient, tasty alternative to home-delivered pizza. To accompany A Framework for Marketing 25 Management, 5 E by Kotler © Jihye Lee
Communicating Category Membership • Announcing category benefits: marketers frequently use benefits to announce category membership. e. g. , industrial tools-durability, brownie mix-benefit of great taste and high-quality ingredients • Comparing to exemplars: well-known, noteworthy brands in a category can help a brand specify its category membership. e. g. , Tommy Hilfiger(unknown)->famous U. S designer (recognized member of the category) • Relying on the product descriptor: brand name is often a concise means of conveying category origin. e. g. , Amazon. com calls its KINDLE a “wireless reading device” to communicategory membership. To accompany A Framework for Marketing 26 Management, 5 E by Kotler © Jihye Lee
Differentiation Strategies • Competitive advantage: Company’s ability to perform in one or more ways that competitors cannot or will not match e. g. , Wal-Mart: low price, Apple: creative, Toyota: reliability Progressive supports is low-price point-ofdifference by providing competitive quotes online To accompany A Framework for Marketing 27 Management, 5 E by Kotler © Jihye Lee
Differentiation Strategies • The obvious means of differentiation, and often the ones most compelling to consumers, relate to aspects of the product and service. • In competitive markets, firms also need to consider other dimensions which can make the company to be differentiate Employee Differentiation Channel Differentiation Image Differentiation Service Differentiation To accompany A Framework for Marketing 28 Management, 5 E by Kotler © Jihye Lee
Employee Differentiation Company can have better-trained employees who provide superior customer service. Singapore airlines: good reputation Northwestern Mutual: great sales force To accompany A Framework for Marketing because of flight attendants Cisco, Frito-Lay, Pfizer, General Electric 29 Management, 5 E by Kotler © Jihye Lee
Channel Differentiation Distribution channels’ coverage, expertise, and performance to make buying the product easier and more enjoyable and rewarding. Online grocer that delivers to residences IAMS- selling premium food through and offices in the New York City regional veterinarians, breeders, and pet To accompany A Framework for Marketing metropolitan area 30 Management, 5 E by Kotler stores. © Jihye Lee
Image Differentiation Companies can craft powerful, compelling images that appeal to consumers’ social and psychological needs. “Rolex: Roger Federer”- history “Macho Cowboy”-distinct and making, classic, professional unique image: brawny, To accompany A Framework for Marketing 31 and timeless luxury adventurous and masculine Management, 5 E by Kotler © Jihye Lee
Service Differentiation Service firm can differentiate itself by designing a better and faster delivery system that provides more effective and efficient solutions to consumer Deluxe check printer: on-time delivery Baxter Healthcare: easy ordering service, covering speed, accuracy and process To accompany A Framework for Marketing customer care 32 Management, 5 E by Kotler © Jihye Lee
Competitive Dynamics To accompany A Framework for Marketing 33 Management, 5 E by Kotler © Jihye Lee
Competitive Strategies for Market Leaders Mc. Donalds • Largest market share • Leads in price changes, new-product introductions, distribution coverage, and promotional intensity. To stay number one, the market leader must find ways to 1) expand total market demand, 2) protect its current share through good defensive and offensive actions, and 3) increase market share To accompany A Framework for Marketing 34 Management, 5 E by Kotler © Jihye Lee
Expanding the Total Market • New Customers : Potential buyers who are unaware of the product or are resisting because of price or lack of certain feature. • More Usage : Marketers try to increase the amount, level, or frequency of consumption. It can boost the amount through packaging or product redesign. e. g. , larger package Starbucks Frappuccino coffee: specialty sales group and supermarket. It has a new source of growth and revenues for Starbucks To accompany A Framework for Marketing 35 Management, 5 E by Kotler © Jihye Lee
Increasing frequency of consumption: Additional Opportunities to Use the Brand Communicate the appropriateness and advantages of using the brand • Clorox ads stress the many benefits of its bleach, such as that it eliminates kitchen odors To accompany A Framework for Marketing 36 Management, 5 E by Kotler © Jihye Lee
Increasing frequency of consumption: New Ways to Use a Brand Identify completely new and different application. • After discovering that some consumers used Arm & Hammer baking soda as a refrigerator deodorant, the company launched a heavy promotion campaign focusing on this use and succeed in getting half the homes in U. S. to adopt it • Thy have expanded its classic baking soda product line to encompass many new products and uses To accompany A Framework for Marketing 37 Management, 5 E by Kotler © Jihye Lee
Protecting Market Share • While trying to expand total market size, the dominant firm must actively defend its current business: Google against Microsoft, Staples against Office Depot • Defensive Marketing : To reduce the probability of attack, divert attacks to lessthreatened areas, and lessen their intensity. To accompany A Framework for Marketing 38 Management, 5 E by Kotler © Jihye Lee
Six Defense Strategies 1) Position defense: Occupying the most desirable market space in consumers’ mind. P&G Tide for cleaning , Crest toothpaste for cavity, Pampers diapers for dryness 2) Flank defense: Protecting a weak front or support a possible counterattack. P&G – Gain detergent, Luvs diapers 3) Preemptive defense: Aggressive maneuver is to attack first. Microsoft announce new product development vs. smaller firms – another product development efforts 4) Counteroffensive defense: To crush a competitor by subsidizing lower prices or prematurely announce a product upgrade. e. g. , by introducing ground delivery, Fed. Ex challenged UPS on its home turf. 5) Mobile defense: Stretches its domain over new territories thru market broadening and market diversification. e. g. , BP-energy companies 6) Contraction defense: no longer defend all their territory. e. g. , Motorola sold network equipment business to Nokia Siemens Network so it concentrate on other communications equipment To accompany A Framework for Marketing 39 Management, 5 E by Kotler © Jihye Lee
Types of Defense Strategies To accompany A Framework for Marketing 40 Management, 5 E by Kotler © Jihye Lee
Increasing Market Share Company should consider four factors: • The possibility of provoking antitrust action: Microsoft and Intel numerous lawsuits and legal challenges as a result of abuse of market power • Economic cost: profitability might fall with market share gains after some level. Optimal market share is 50 percent. • Pursuing the wrong marketing activities: Cut prices more deeply than competitors typically don’t achieve significant gains • The effect of increased market share on actual and perceived quality: too many customers can strain the firms’ resources, hurting product value and service delivery. To accompany A Framework for Marketing 41 Management, 5 E by Kotler © Jihye Lee
Market Challenger Strategies • Define the strategic objective and opponents : usually to increase market share • Decide whom to attack : attacking the leader is a high-risk but potentially high-payoff strategy • Attack firms of its own size that are underperforming and underfinanced • Attack small local and regional firms To accompany A Framework for Marketing 42 Management, 5 E by Kotler © Jihye Lee
General Attack Strategies • Frontal attack: matches opponent’s product, ads, price and distribution (e. g. , cutting prices) • Flank attack: identifying shifts causing gaps to develop, then rushing to fill the gaps (e. g. , Independent News and Media) • Encirclement attack: wide slice of territory by launching a grand offensive on several fronts. (e. g. , Sun Microsystems- Java Software) • Bypass attack: attack easier markets (e. g. , Pepsi: Aquafina bottled water, Tropicana and Quaker Oats company, • Guerilla attack: small, intermittent, conventional and unconventional (e. g. , Guerrilla campaign) To accompany A Framework for Marketing 43 Management, 5 E by Kotler © Jihye Lee
Market Follower Strategies Pepsi has used a bypass approach to battle Coke by finding new marketers to enter. To accompany A Framework for Marketing 44 Management, 5 E by Kotler © Jihye Lee
Specific Attack Strategies • • • Price discounts Lower-priced goods Value-priced goods Prestige goods Product proliferation Product innovation • Improved services • Distribution innovation • Manufacturing-cost reduction • Intensive advertising promotion To accompany A Framework for Marketing 45 Management, 5 E by Kotler © Jihye Lee
Market Nicher Strategies • Alternative to being a follower in a large market is to be a leader in a small market or niche. • Telepizza adapted Domino’s pizza delivery concept to Spain To accompany A Framework for Marketing with much success. 46 Management, 5 E by Kotler © Jihye Lee
For Review • How can a firm develop and establish an effective positioning? • How are brands successfully differentiated? • How do marketers identify and analyze competition? • How can market leaders, challengers, followers, and nichers compete effectively? To accompany A Framework for Marketing 47 Management, 5 E by Kotler © Jihye Lee
Class 5_July 26 Product Management: Setting Product Strategy and Marketing Through the Life Cycle (Ch 10) To accompany A Framework for Marketing 48 Management, 5 E by Kotler © Jihye Lee
Chapter Questions • What are the characteristics of products and how do marketers classify products? • How can companies differentiate products? • How can a company build and manage its product mix and product lines? To accompany A Framework for Marketing 49 Management, 5 E by Kotler © Jihye Lee
Chapter Questions • How can companies use packaging, labeling, warranties, and guarantees as marketing tools? • What strategies are appropriate for new product development and through the product life cycle? To accompany A Framework for Marketing 50 Management, 5 E by Kotler © Jihye Lee
Setting Product Strategy: Ford • Public perception- not high quality • CEO knew reliable, stylish, and affordable vehicle – performed well • Redesigned high-mileage Ford Fusion with innovative electronics and environmentally friendly hybrid option • Striking example of world-car concept: For Fiesta hatchback - successful in China, Europe and U. s. • Fiesta received thousands of preorders and helped Ford return to profitability To accompany A Framework for Marketing 51 Management, 5 E by Kotler © Jihye Lee
What is a Product? A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas. To accompany A Framework for Marketing 52 Management, 5 E by Kotler © Jihye Lee
Product Levels: Five Product Levels 1) Core benefit: Service/benefit 2) Basic product: turn basic benefit into basic product 3) Expected product: attributes & conditions buyer normally buy 4) Augmented product: exceeds customer expectation 5) Potential product: encompasses all the possible augmentations To accompany A Framework for Marketing 53 Management, 5 E by Kotler © Jihye Lee
Example of Five Product Levels: Mobile handsets 1. Core benefit: Communication 2. Basic product: • Features and design- small size, sliding, flip open, touch screen • Quality level – excellent qualities • Brand name – LG, Samsung, Sony, Apple 3. Expected product: looks good, light weight, easy to open, battery durable, easy to operate 4. Augmented product: MP 3 player, camera, voice dialing, etc 5. Potential product: Interne, email, camcorder for videos, TV channels, GPS To accompany A Framework for Marketing 54 Management, 5 E by Kotler © Jihye Lee
Product Classification Marketers classify products on the basis of durability, tangibility, and use. Durability and Tangibility Consumer-goods Industrial-goods To accompany A Framework for Marketing 55 Management, 5 E by Kotler © Jihye Lee
Durability and Tangibility Nondurable goods Durable goods Services Tangible goods normally consumed in one or few uses, such as beer and shampoo. Purchased frequently, - many locations available Durable goods – survive many uses: refrigerators, machine tools, and clothing. More personal selling and service. Service – intangible, inseparable, variable, and perishable products. e. g. , haircuts, legal advice, and appliance repairs. To accompany A Framework for Marketing 56 Management, 5 E by Kotler © Jihye Lee
Consumer Goods Classification Convenience Shopping Specialty Unsought Purchased frequently, immediately, and with minimal effort (e. g. , soft drinks, soaps, newspapers) Consumers compare on the basis of suitability, quality, price, and style (e. g. , furniture, clothing and major appliances) Unique characteristics or brand identification with special purchasing effort (e. g. , cars, stereo components, and men’s suits) Consumer doesn’t know about or normally think of buying (e. g. , life insurance, cemetery plots, smoke detectors) To accompany A Framework for Marketing 57 Management, 5 E by Kotler © Jihye Lee
Industrial Goods Classification Materials and parts Capital items Supplies/business services Raw materials (wheat, iron) & manufactured materials (cement, small motors) Long-lasting goods for developing or managing the finished product (factories, trucks) Short-term goods and services that facilitate developing or managing the finished products (paints, nails, brooms) To accompany A Framework for Marketing 58 Management, 5 E by Kotler © Jihye Lee
Product Differentiation • • • Product form Features Customization Performance Conformance • • Durability Reliability Repairability Style When Mercedes-Benz’s quality ratings took a dive, the automaker instituted a number of significant changes to bring them back up To accompany A Framework for Marketing 59 Management, 5 E by Kotler © Jihye Lee
Service Differentiation • Ordering ease: How easy to place an order? • Delivery: How well offering delivered to customer? • Installation: How is the product made operational in its planned location? • Customer training: Training helps the customer’s employees use the vendor’s equipment properly and efficiently • Customer consulting: Sellers can offer data, information system, advice service to buyers (IBM and Oracle) • Maintenance and repair: Hewlett-Packard and other firms – online technical support for customers • Returns: controllable/uncontrollable To accompany A Framework for Marketing Management, 5 E by Kotler © Jihye Lee
Example of Services Differentiation Cemex guarantees cement delivery as fast as Geek Squad – in-store computer repair placing a pizza order. services. They wear a distinctive “geek” look instead of the traditional Best Buy blue they wear at the in-store service centers. To accompany A Framework for Marketing Management, 5 E by Kotler © Jihye Lee
Example of Services Differentiation • Road Runner Sports sells running shoes, clothing, and equipment through multiple channels • It goes to great lengths to minimize the number of product returns from customers • Return rate decrease from 20 to 15 percent. To accompany A Framework for Marketing 62 Management, 5 E by Kotler © Jihye Lee
Design • As competition intensifies, design offers a potent way to differentiate and position a company’s products and services. • Design offers functional and aesthetic benefits and appeals to both our rational and emotional sides. Bang & Olufsen’s timeless, stylish designs command a significant price premium in the market. To accompany A Framework for Marketing 63 Management, 5 E by Kotler © Jihye Lee
Product Line Length • Company is to create a product line to induce up-selling: e. g. , BMW-from a 3 -series to 5 -series, eventually 7 -series. • Different objective is that facilitates cross-selling: e. g. , HP sells printer as well as computers. • Create a product line that protects against economic ups and downs: e. g. , Electrolux – products(discount, middle-market, and premium segments) • Companies seeking high market share and market growth will generally carry longer product lines. • Product lines tend to lengthen over time. To accompany A Framework for Marketing 64 Management, 5 E by Kotler © Jihye Lee
Line Stretching Down-Market Stretch Up-Market Stretch Two-Way Stretch A company positioned in the middle market may want to introduce a lowerpriced line: e. g. , Kodak Funtime Film: lower priced brands(fails), Mercedes successfully introduced C-Class A company wish to enter the high end of the market to achieve more growth: e. g. , Toyota’s Lexus, Nissan’s Infiniti and Honda’s Acura Companies serving the middle market might stretch their line in both directions: e. g. , Constellation wine brands - $35 bottles of first premium wine/$125 high end wines. To accompany A Framework for Marketing 65 Management, 5 E by Kotler © Jihye Lee
Example of Line Stretching • Intercontinental Hotels Group’s Holiday Inn brand broke four separate chains to tap into different benefit segments Ø Upscale –Crowne Plaza Ø Traditional Holiday Inn Ø Budget Holiday Inn Express Ø Business-oriented Holiday Inn Express To accompany A Framework for Marketing 66 Management, 5 E by Kotler © Jihye Lee
Product-Mix Pricing Marketers must modify their price-setting logic when the product is part of a product mix. • Product-line pricing: e. g. , men’s clothing store($300, $600, and $900) • Optional-feature pricing: e. g. , restaurants price different: foodlow(revenue covers costs)/beverages-high(produce the profit) • Captive-product pricing: e. g. , AT&T gives a cellular phone free if two-years contract • Two-part pricing: e. g. , cell phone users pay a minimum monthly fee plus charges for calls that exceed their allotted minutes. • By-product pricing: e. g. , Australia's CSR(Colonial Sugar Refinery) • Product-bundling pricing: seller often bundle products and features. e. g. , auto manufacturer offer option package at less than the cost of buying all the options separately 67
Ingredient Branding • Special case of co-branding • Successful ingredient brands include Dolby noise reduction technology and GORE TEX water-resistant fibers ØDu. Pont has introduced a number of innovative products such as Corian solid-surface material, for use in markets ranging from apparel to aerospace. ØDu. Pont's Stainmaster carpets have become a household name To accompany A Framework for Marketing 68 Management, 5 E by Kotler © Jihye Lee
What is the Fifth P? Packaging, sometimes called the 5 th P, is all the activities of designing and producing the container for a product. Altoids’s distinctive packaging, name, and logo are all brand assets. It is an important part of a brand’s equity To accompany A Framework for Marketing 69 Management, 5 E by Kotler © Jihye Lee
Packaging Objectives • Identify the brand • Convey descriptive and persuasive information • Facilitate product transportation and protection • Assist at-home storage • Aid product consumption To accompany A Framework for Marketing 70 Management, 5 E by Kotler © Jihye Lee
Example of Package Marketers must balance competing demands in their packaging: Sun Chips’ environmentally friendly packaging was cut back shortly after its launch because many consumers complained about how noisy the bags were. To accompany A Framework for Marketing 71 Management, 5 E by Kotler © Jihye Lee
Labeling Tropicana found out that labels become icons need to tread very carefully when initiating a redesign to preserve key branding elements Ivory soap has been redone at least 18 times since the 1890 s, with gradual changes in the size and design of the letters. To accompany A Framework for Marketing 72 Management, 5 E by Kotler © Jihye Lee
Figure 10. 2 New-Product Development Decision Process To accompany A Framework for Marketing 73 Management, 5 E by Kotler © Jihye Lee
Ways to Find Great New Ideas • Run informal sessions with customers • Allow time off for technical people to putter on pet projects • Make customer brainstorming a part of plant tours • Survey your customers • Undertake “fly on the wall” research to customers To accompany A Framework for Marketing 74 Management, 5 E by Kotler © Jihye Lee
More Ways to Find Great Ideas • Use iterative rounds with customers • Set up a keyword search to scan trade publications • Treat trade shows as intelligence missions • Have employees visit supplier labs • Set up an idea vault To accompany A Framework for Marketing 75 Management, 5 E by Kotler © Jihye Lee
Drawing Ideas from Customers • • Observe customers using product Ask customers about problems with products Ask customers about their dream products Use a customer advisory board or a brand community of enthusiasts to discuss product To accompany A Framework for Marketing 76 Management, 5 E by Kotler © Jihye Lee
Demand-First Innovation and Growth (DIG) Framework Demand Landscape Opportunity Space Strategic Blueprint To accompany A Framework for Marketing 77 Management, 5 E by Kotler © Jihye Lee
Idea Generation: Creativity Techniques • • • Attribute listing Forced relationships Morphological analysis Reverse assumption analysis New contexts Mind mapping To accompany A Framework for Marketing 78 Management, 5 E by Kotler © Jihye Lee
Figure 10. 3 Product and Brand Positioning To accompany A Framework for Marketing 79 Management, 5 E by Kotler © Jihye Lee
Concept Testing • • • Communicability and believability Need level Gap level Perceived value Purchase intention User targets, purchase occasions, purchasing frequency To accompany A Framework for Marketing 80 Management, 5 E by Kotler © Jihye Lee
Prototype Testing • Alpha testing • Beta testing – Rank-order method – Paired-comparison method – Monadic-rating method • Market testing To accompany A Framework for Marketing 81 Management, 5 E by Kotler © Jihye Lee
Consumer Goods Market Testing • • Sales-Wave Research Simulated Test Marketing Controlled Test Marketing Test Markets To accompany A Framework for Marketing 82 Management, 5 E by Kotler © Jihye Lee
Test Market Decisions • • • How many test cities? Which cities? Length of test? What information to collect? What action to take? To accompany A Framework for Marketing 83 Management, 5 E by Kotler © Jihye Lee
What is Adoption? Adoption is an individual’s decision to become a regular user of a product. To accompany A Framework for Marketing Management, 5 E by Kotler © Jihye Lee
Stages in the Adoption Process Awareness Interest Evaluation Trial Adoption To accompany A Framework for Marketing 85 Management, 5 E by Kotler © Jihye Lee
Figure 10. 4 Adopter Categorization on the Basis of Relative time of Adoption To accompany A Framework for Marketing 86 Management, 5 E by Kotler © Jihye Lee
For Review • What are the characteristics of products and how do marketers classify products? • How can companies differentiate products? • How can a company build and manage its product mix and product lines? To accompany A Framework for Marketing 87 Management, 5 E by Kotler © Jihye Lee
Also For Review • How can companies use packaging, labeling, warranties, and guarantees as marketing tools? • What strategies are appropriate for new product development and through the product life cycle? To accompany A Framework for Marketing 88 Management, 5 E by Kotler © Jihye Lee
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