Category and Brand Management, Product Identification, and NewProduct Development

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Chapter 12

• Category and Brand Management, Product
  Identification, and New-Product Development

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Chapter Objectives

• Explain the benefits of category and brand
  management.
  
• Identify the different types of brands.
• Explain the strategic value of brand equity.
• Discuss how companies develop strong identities
  for their products and brands.
  
• Identify and briefly describe each of the four
  strategies for new-product development.
  
• Describe the consumer adoption process.
• List the stages in the process for developing new
  products.
  
• Explain the relationship between product safety
  and product liability.

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Creating and Protecting a Strong Identity for
Products

• Branding is the process of creating that
  identity.
  
• Buyers respond to branding by making repeat
  purchases because they identify the item with the
  name of its producer.
  
• Pillsburys Doughboy creates an identity for the
  brand.

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Managing Brands for Competitive Advantage

• Brand name, term, sign, symbol, design, or some
  combination that identifies the products of a
  firm while differentiating them from the
  competitions

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• RolexSeveral examples of the Rolex brand can be
  seen in this advertisement

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• Brand Loyalty
• Brand recognition Consumer awareness and
  identification of a brand.
  
• Brand preference Consumer reliance on previous
  experiences with a product to choose that product
  again.
  
• Brand insistence Consumer refusals of
  alternatives and extensive search for desired
  merchandise.

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Types of Brands

• Generic product item characterized by plain
  label, with no advertising and no brand name

SODA
SOAP
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• Manufacturers brand or National Brand brand
  name owned by a manufacturer or other producer
  
• TabascoA manufacturers brand

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• Private brands brand name placed on products
  marketed by wholesalers and retailers
  
• Figure 12.2 Arizona private brand at JCPenney

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• Craftsman and Kenmore private brands at Sears

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• Captive brands national brands that are sold
  exclusively by a retail chain
  
• KmartKmarts captive brands include womens
  clothing with the Jaclyn Smith Label (from TVs
  Charlies Angels)
  

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• Family brand brand name that identifies several
  related products
  
• HeinzA well known family brand

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• Figure 12.3
• Products Marketed by Honda Using a Family Brand

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• Individual brand unique brand name that
  identifies a specific offering within a firms
  product line and that is not grouped under a
  family brand
• Irish Spring SportColgate-Palmolive using
  individual branding for soaps

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• Brand equity added value that a respected,
  well-known brand name gives to a product in the
  marketplace.
  
• Brand equity increases the likelihood that
  consumers will recognize the firms product when
  they make purchase decisions
  
• A strong brand equity can contribute to buyers
  perceptions of product quality
  
• Branding can also reinforce customer loyalty and
  repeat purchases

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• Brand Equity
• The Young Rubicam Model
• Brand Asset Valuator
• 90,000 consumers
• Four dimensions of brand personality as viewed by
  consumers

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• The Role of Category and Brand Managers
• Brand manager Marketing professional charged
  with planning and implementing marketing
  strategies and tactics for a brand
  
• Category management Product management system
  in which a category managerwith profit and loss
  responsibilityoversees a product line sometimes
  within a customer.

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Product Identification

• Brand name part of a brand consisting of words
  or letters that form a name that identifies and
  distinguishes a firms offering from those of its
  competitors
• Brand mark symbol or pictorial design that
  identifies a product
  
• Generic name branded name that has become a
  generically descriptive term for a class of
  products (e.g., nylon, aspirin, kerosene, and
  zipper)

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• SlinkyAn effective brand name

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• Trademark legal protection which confers the
  exclusive right to user brand name, trade mark,
  and any slogan or product name abbreviation
  
• The red disk, brand name, and distinctive bottle
  design are all Coca-Cola trademarks

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• Oscar MayerReceived trademark protection for its
  slogan and Wienermobile.

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• Developing Global Brand Names and Trademarks
• Potentially an acute problem for international
  marketers
  
• An excellent brand name or symbol in one country
  may prove disastrous in another
  
• Trademarks that are effective in their home
  countries may fare less well in other cultures

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• Figure 12.6
• The Worlds 10 Most Valuable Brands

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Packaging

• A package serves three major objectives
• Protection against damage, spoilage, and
  pilferage
  
• Assistance in marketing the product
• Cost effectiveness
• Labeling
• Label
• Universal Product Code (UPC)

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• Clean ShowerLabels performing an informational
  function

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• Brand extension application of a popular brand
  name to a new product in an unrelated product
  category
  
• Example Utility Lighter A Bic Brand Extension

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• Line extensions refers to new sizes, styles, or
  related products
  
• Coca-Cola line extensions

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• Brand licensing practice allowing other
  companies to use a brand name in exchange for a
  payment
  
• Nabisco Licenses Its Oreo Brand to Post Cereal

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New Product Planning

• As a firms offerings enter the maturity and
  decline stages of the product life cycle, it must
  add new items to continue to prosper
  
• Alternative Product Development Strategies

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• Product Development Strategies
• Product positioning consumers perceptions of a
  products attributes, uses, quality, and
  advantages and disadvantages in relation to those
  of competing brands
• Cannibalization a loss of sales of the current
  product due to competition from a new product in
  the same line

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• Good SeasonsPromoting new ways to use a salad
  dressing

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The Consumer Adoption Process

• Adoption process Stages that consumers go
  through in learning about a new product, trying
  it, and deciding whether to purchase it again.
  
• Awareness
• Interest
• Evaluation
• Trial
• Adoption or rejection

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• Consumer innovator People who purchase new
  products almost as soon as the products reach the
  market
  
• Diffusion process Process by which new goods or
  services are accepted in the marketplace
  

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• Figure 12.8
• Categories of Adopters Based on Relative Times of
  Adoption

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• Identifying Early Adopters
• Substantial benefits may be obtained by locating
  the likely first buyers of new products
  (innovators and early adopters)
  
• Suggestions for modifying the product may be
  obtained from these individuals
  
• Acceptance or rejection of the innovation by
  innovators and early adopters can help forecast
  sales
  

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• Rate of Adoption Determinants
• Characteristics of a product innovation that
  influence its adoption rate include
  
• Relative advantage a far superior innovation
• Compatibility fits with potential adopters
  values and experiences
  
• Complexity relative difficulty of understanding
  the innovation
  
• Possibility of trial use reduce risk
• Observability ability to observe the
  innovations superiority demonstrations

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• Organizing for New Product Development
• New-Product Committees
• New-Product Departments
• Product Managers
• Venture Teams
• Task forces

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New Product Development Process

• New product development process six stages
  through which new product ideas progress before
  being introduced to the overall market

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• Idea GenerationNew product ideas come from many
  sources including
  
• Sales force, Customers, Employees, RD
  specialists, The competition, Suppliers,
  Retailers, Independent inventors
  
• ScreeningScreening separates ideas with
  commercial potential from those that cannot meet
  company objectives
  
• Checklists of development standards can be
  helpful at this stage

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• Business AnalysisThe business analysis consists
  of assessing the new products market potential,
  growth rate, likely competitive strengths, and
  compatibility of the proposed product with
  organizational resources
• Concept testing
• DevelopmentConverting an idea into a physical
  product
  
• Requires interaction among many of the firms
  departments
  
• Prototypes may go through many changes

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• Test MarketingTest marketing Introduction of a
  trial version of a new product supported by a
  complete marketing campaign to a selected city of
  television coverage area
• Some firms skip this stage, moving directly to
  full-scale commercialization
  
• CommercializationIn this stage, the firm
  establishes marketing strategies, and funds
  outlays for production and marketing
  
• The sales force, marketing intermediaries and
  potential customers are acquainted with the new
  product

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End of Chapter Twelve