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Marketing

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Title: Slide 1 Author: Information Technologies Last modified by: Dkimball Created Date: 8/29/2007 7:26:05 PM Document presentation format: On-screen Show – PowerPoint PPT presentation

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Title: Marketing


1
  • Marketing
  • And
  • IT initiatives

2
Marketing
  • Session One Marketing For the 21st Century
  • Session Two Core Marketing Concepts
  • Session Three Core Marketing Concepts
  • Session Four The CMO, CIO, and Strategic IT
    Initiatives

3
Session One
  • Marketing For the 21st Century

4
Starbucks!
  • Phenomenal growth
  • Battling it out in the USA
  • World class competitor
  • Practicing both the art and science of
    marketing!

5
What is marketing?
  • Advertising
  • Selling
  • Branding
  • Market segmentation
  • Product development
  • Market forecasting
  • Sales forecasting
  • Sales promotion

6
What is marketing?
  • Pricing
  • Product/Market positioning
  • Repositioning
  • Market analysis
  • Geographic
  • Demographic
  • Psychographic
  • Behavioral

7
What is Marketing?
  • Competitive analysis
  • Market research
  • Product rollout strategies
  • Distributing retailing, wholesaling, supply
    chain management
  • Marketing strategies
  • Marketing plans

8
What is Marketing?
  • Marketing is extremely broad and touches nearly
    every aspect of the firm
  • Marketing is horribly misunderstood and poorly
    defined, even by many business professionals
  • Marketing, as it is practiced today, has evolved,
    particularly since WWII

9
Marketing A Brief History
  • 16th century scientists
  • Copernicus The sun, not the earth!
  • Business parallel The customer, not the product
  • If you build a better mousetrap . . .
  • Really?

10
Marketing A Brief History
  • Production Era 1870s-1930s (Industrial
    Revolution)
  • Sales Era 1930-1950s (Quality Products)
  • Marketing Department Era 1950s (Marketing
    emerges)
  • Market Driven Era 1960-2000 (Customer focus)
  • Experience Driven Era (Appealing to senses)
    Ex. Disney, Starbucks

11
Marketing Defined
  • An organizational function and a set of
    processes for creating, communicating, and
    delivering value to customers and for managing
    customer relationships in ways that benefit the
    organization and its stakeholders. American
    Marketing Association, 2004

12
Marketing Management
  • The art and science of choosing target markets
    and getting, keeping, and growing customers
    through creating, delivering, and communicating
    superior customer value. A Framework for
    Marketing Management, Kotler Keller, 4th Ed.,
    Pearson Prentice Hall, 2009

13
Marketing Basics
  • Focus The CUSTOMER His needs (wants) must be
    satisfied
  • Duration Begins by analyzing the customer and
    his needs (wants) and ends . . . well, marketing
    never really ends as long as there are repeat
    purchases to be made.
  • Away from transactional to relational
  • Away from short term to long term

14
Marketing Basics
  • The Marketing Concept
  • The catch phrase for modern marketing through
    the last 50 years
  • Simply put, Find out what the customer wants
    and do what it takes to satisfy him.
  • The key is to focus on the customer.
  • The customer is king?

15
Marketing Basics
  • From a marketers perspective, the critical
    business issue in todays global economy
  • Not can we produce enough . . .
  • But will we produce the right . . .
  • car . . . house . . .ceiling fan . . .shotgun
    software . . .textbook. . .dining experience,
    educational program, etc.

16
Marketing Basics
  • For nearly everything that is purchased in
    todays developed economies, were in a buyers
    market.
  • The customer does not have to purchase his
    groceries, wallpaper, chainsaw, oil change,
    coffee, car, airplane, or software from you and
    your company.
  • Your firm doesnt even have to pay YOU to provide
    their IT support services!!!

17
Marketing Basics
  • Great marketing is market oriented, not
    product oriented
  • Especially in developed nations, the customer is
    king
  • The customer can find what he wants in todays
    mature, technology driven, global economy
  • Q He can find high quality
  • P He can find the low price
  • S He can find great service

18
What is a market?
  • Marketers see sellers as the industry and buyers
    as constituting the market
  • Marketers talk about
  • Need markets (diet-seeking market)
  • Product markets (shoes)
  • Demographic markets (youth)
  • Geographic markets (French)
  • Voter, labor, and donor markets

19
What is a market?
  • Marketers serve
  • Consumer markets
  • Business markets
  • Global markets
  • Nonprofit markets
  • Government markets
  • Some combination of the above

20
What is a market?
  • Marketers talk about metamarkets, referring to
    clusters of products that would appeal to two
    people getting married, expecting their first
    child, buying a vehicle, and metamediaries to
    assist buyers in moving through these groups.
  • Ex Edmunds (www.edmunds.com) will help you buy
    your car by finding the features, prices, lowest
    price dealer, financing, car accessories, and
    more that meets your requirements

21
Everything needs to be marketed!
  • Goods
  • Services
  • Events
  • People
  • Places
  • Properties
  • Organizations

22
Everything needs to be marketed!
  • Information
  • Ideas
  • Experiences

23
  • The
  • Core

24
  • The
  • Core
  • of the
  • Core

25
  • The Core
  • Of
  • The Core
  • Of
  • The Core

26
Core Marketing Concepts
  • Needs, Wants, and Demands
  • The Marketing Plan
  • 3) Environmental (situation) Analysis
  • 4) SWOT Analysis
  • 5) Marketing Strategies
  • 6) Market Segmentation, Targeting, and
    Positioning
  • 7) Product Development
  • 8) Brands and Branding

27
Marketing Defined
  • The aim of marketing is to make selling
    superfluous. The aim of marketing is to know and
    understand the customer so well that the product
    or service fits him and sells itself. Ideally,
    marketing should result in a customer who is
    ready to buy. All that should be needed then is
    to make the product or service available.
  • Peter Drucker, 1973

28
Session 2
  • Core
  • Marketing
  • Concepts

29
Core Marketing Concepts
  • Needs, Wants, and Demands
  • The Marketing Plan
  • 3) Environmental (situation) Analysis
  • 4) SWOT Analysis
  • 5) Marketing Strategies
  • 6) Market Segmentation, Targeting, and
    Positioning
  • 7) Product Development
  • 8) Brands and Branding

30
Core Marketing Concept 1
  • Needs, Wants,
  • and
  • Demands

31
Needs, Wants, and Demands
  • Needs are basic human requirements food, air,
    water, clothing, and shelter to survive.
    Recreation, education, and entertainment might
    also be classified as needs.
  • Wants develop when these needs are directed
    toward specific products/services You need
    food but you want a burrito, etc.
  • Wants seem to be shaped by ones culture.

32
Needs, Wants, and Demands
  • Demands are wants for specific products along
    with the ability to pay
  • A firm must not only measure the wants for
    their products/services but also the willingness
    and ability to make the purchase.

33
Needs, Wants, and Demands
  • Marketers are often falsely charged with
    creating needs, but need preexist marketers.
  • Marketers, along with other societal factors,
    influence wants.
  • Marketers might promote the idea that living in a
    certain neighborhood would satisfy your need
    for social status, but they dont create the need
    for such status.

34
Five types of Needs
  • Stated needs An inexpensive car
  • Real needs Low operating costs but not low
    initial price
  • Unstated needs Good service from dealer
  • Delight needs Free onboard navigation system
  • Secret needs Recognized by friends as hip.

35
Needs, Wants, and Demands
  • An important point Simply providing customers
    with what they say they want doesnt quite get it
    anymore.
  • Great marketers get a leg up on competitors by
    helping customers learn what they want.
  • The challenge and necessity of this important
    aspect of great marketing is directly related to
    the increasing complexity of 21st century
    lifestyles and opportunities.

36
Core Marketing Concept 2
  • The
  • Marketing Plan

37
The Marketing Plan
  • Executive Summary
  • Environmental Analysis
  • SWOT Analysis
  • Marketing Goals Objectives
  • Marketing Strategy
  • Marketing Implementation
  • Evaluation Control

38
Core Marketing Concept 3
  • Environmental
  • Analysis

39
Environmental Analysis
  • Also known as environmental monitoring
  • Gathering and analyzing information
  • Forecasting impact of environmental trends

40
Environmental Analysis
  • The Internal Environment
  • The External Environment
  • The Customer Environment

41
External Macroenvironment
  • Demographics
  • Economic conditions
  • Competition
  • Social and cultural forces
  • Political and legal forces
  • Technology

42
Demographics
  • Characteristics of population groups
  • Size
  • Distribution (rural, urban)
  • Population growth
  • Income
  • Education
  • Gender
  • Race

42
43
Economic Conditions
  • Stage of the business cycle (recovery,
    prosperity, recession, depression)
  • Inflation
  • Unemployment
  • Interest rates

43
44
Competition
  • Brand competitors directly similar products
    (Coke vs Pepsi)
  • Total Budget competitors totally dissimilar
    products (New car vs room addition)
  • Substitute products Same class of products
    (entertainment baseball vs symphony or wood
    flooring vs carpeting)

44
45
Competition
  • The goal to gain a differential advantage
  • Also known as competitive differential
    advantage
  • Should provide at least a temporary monopoly in
    your own little market.
  • Should provide a hard to copy marketing mix.
  • Opposite of a differential disadvantage.

45
46
Social Cultural Environment
  • Concern about natural environment
  • Changing gender roles
  • A premium on time
  • Physical fitness and health

47
Political Legal Forces
  • Monetary and fiscal policies
  • Social legislation regulations
  • Governmental relationships w/industries
  • Legislation related specifically to marketing

48
Technology
  • Living in a technology revolution
  • Tech breakthroughs affect us in three ways
  • By starting entirely new industries
  • Radically altering/destroying existing industries
  • By stimulating markets/industries not related to
    the new technology. Rippling effect

49
Technology (continued)
  • Affects how marketing is carried out
  • Global market/sourcing
  • 24/7


50
External Microenvironment
  • The firms market
  • The firms suppliers
  • Various marketing intermediaries

51
External Microenvironment
  • External to the firm
  • Generally uncontrollable
  • But they can be influenced
  • Pressure on suppliers and middlemen
  • Advertising influences your market

52
The firms market
  • Market defined
  • People or organizations with
  • Needs (synonymous with wants) to satisfy
  • Money to spend
  • Willingness to spend it (buying behavior)

53
Suppliers
  • Often carelessly overlooked by marketers
  • Increasing need for cooperative relationships
    with suppliers
  • Increasingly competitive due to technology and
    instant global communication

54
Marketing Intermediaries
  • Independent organizations aid in the flow of g/s
    between businesses and suppliers as well as their
    markets
  • Middleman wholesalers, retailers, distributors
  • Various facilitating organizations
    transportation companies, warehousing, financing
    (banks and other lenders)

55
Marketing Intermediaries
  • Huge question To what degree should our firm use
    marketing intermediaries?
  • I could buy directly, sell directly, do my own
    shipping, warehousing, financing, etc.
  • Or I could hire specialists to do a better, more
    efficient job.
  • Answer Examine the value chain
  • Challenge Value can be intangible and difficult
    to measure

56
Universal Functions of Marketing
  • Buying
  • Selling
  • Transporting
  • Storing
  • Standardizing or grading
  • Financing
  • Risk-taking
  • Information gathering

57
Universal Functions of Marketing
  • Super-critical issue
  • Each of these functions must be performed for
    every product/service that is successfully
    marketed
  • Responsibility can be shifted and shared

58
Environmental Analysis
  • Customer Environment
  • Who are our current/potential customers?
  • What do customers do with our products?
  • Where do customers purchase our products?
  • When do customers purchase our products?
  • Why/how do customers select our products?
  • Why do potential customers not purchase our
    products?

59
Core Marketing Concept 4
  • SWOT
  • Analysis

60
Major Benefits of SWOT Analysis
  • Simplicity
  • Lower Costs
  • Flexibility
  • Integration and Synthesis
  • Collaboration

61
SWOT Analysis
  • Strengths and Weaknesses are internal
  • Opportunities and Threats are external
  • Try to convert weaknesses into strengths
  • Try to convert threats into opportunities
  • Strengths matched with opportunities provide
    capabilities
  • Capabilities provide competitive advantages if
    they provide better value to customers than
    competitive offerings

62
SWOT Analysis
  • SWOT Analysis allows the marketer to get his
    arms around the business.
  • SWOT Analysis can be done quantitatively or
    qualitatively or both
  • A major goal of SWOT Analysis The development of
    competitive advantage

63
Common Sources of Competitive Advantage
  • Relational Advantages
  • Legal Advantages
  • Organizational Advantages
  • Human Resource Advantages
  • Product Advantages
  • Pricing Advantages
  • Promotion Advantages
  • Distribution Advantages

64
Strategies for Competitive Advantage
  • Operational Excellence
  • Product Leadership
  • Customer Intimacy

65
Core Marketing Concept 5
  • Marketing
  • Strategies

66
Marketing Strategy
  • Selecting a Target Market(s)
  • Developing a Marketing Mix(es)
  • Product
  • Price
  • Promotion
  • Placement (distribution

67
Core Marketing Concept 6
  • Market Segmentation,
  • Targeting
  • And
  • Positioning

68
Dunkin Donuts!!
  • A sleeping giant!
  • Serving the same market as KK and Starbucks?
  • How are they alike?
  • Ans Coffee and pastries

69
DD, Starbucks, KK
  • How are they different?
  • SB Upscale hangout providing an experience.
    Work, home, and Starbucks, the third place
  • KK Dietary splurge or special indulgence
    rather than a regular habit
  • DD Get em in, sell em coffee snack, and get
    em out.

70
Question Is it wise (or even necessary) for the
firm to bet that a large part of the coffee and
pastry market is more interested in convenience
and speed of service than dunking?
71
DD, Starbucks KK
  • Additional questions to ponder
  • How are these competitors different?
  • Is this a zero-sum game or can all three
    companies grow simultaneously?

72
Welcome to Market Segmentation, Targeting,
and Positioning
73
Structured segmentation (steps)
  • Identify current and potential wants within
    market
  • Identify characteristics that distinguish among
    segments
  • Determine potential of segments and how well they
    are being satisfied
  • Select the right segment (s) as your target
    market (s). Ideally, market (s) whose needs are
    not being met well.

74
Selecting a Target-Market
  • Compatible with organizations goals and image
  • Matches market opportunity with companys
    resources
  • Attractive ROI projections
  • Weak or few competitors

75
Characteristics of segments
  • Characteristics must be measureable and data
    describing segments must be obtainable
  • Market segments should be accessible through
    existing marketing institutions middlemen,
    media, sales force with minimal cost, waste, and
    effort.
  • Each segment should be substantial (large enough)
    to be profitable. Note Micromarketing is more
    common but risky and challenging. (Trucks,
    houses, computers via mass-customization)
    Benefits vs costs!

76
The First Cut
  • Consumer markets/Business markets either or both
  • Very significant
  • Why?
  • Both the buyers and buying process are very
    different

77
Segmenting Consumer Markets
  • Consumers are still quite varied
  • Need Further subdividing
  • Four traditional segmentation dimensions
  • Geographic
  • Demographic
  • Psychographic
  • Behavioral

78
Geographic Segmentation
  • Similarities within local/regional locations
    (Southwest, Midwest, South, Northeast, etc.)
  • Differences between also exist
  • Survey of Buying Power provides information on
    pop., income, and spending behavior by state,
    county, major metro markets, TV and newspaper
    markets
  • Walmarts initial strategy lt 35,000 to limit
    competition

79
Demographic Segmentation
  • Characteristics Age, gender, occupation, income,
    and education
  • Geodemographic Clustering An application with
    some imagination
  • US census data demographic
  • Claritas private research firm
  • 36,000 zip codes turned into 15 groups and 66
    homogeneous clusters or segments

80
Demographic Segmentation
  • Clusters are defined by lifestyles, consumption
    behavior, etc.
  • Cluster names
  • kids and cul-de-sacs
  • gray power
  • shotguns and pickups
  • town and gown
  • blue-blood estates
  • Used for locating retail outlets, designing
    direct mail campaigns, selecting products and
    brands

81
Psychographic Segmentation
  • Personality Critical differences exist but very
    difficult to measure. Ex. What percentage of
    people are aggressive?
  • How do you access or reach the aggressive
    market. Thru what media?
  • Lifestyle AIO variables Can be difficult to
    measure and access through usual channels of
    distribution and promotional program

82
Psychographic Segmentation
  • Values LOV or List Of Values that relate to
    purchase behavior
  • Self respect
  • Security
  • Excitement
  • Fun and enjoyment in life
  • Having warm relationships

83
Psychographic Segmentation
  • Values LOV or List Of Values that relate to
    purchase behavior (contd)
  • Self-fulfillment
  • Sense of belonging
  • Sense of accomplishment
  • Being well respected

84
Behavioral Segmentation
  • Benefits desired The ideal method for
    segmenting a market! Why? People everywhere buy
    product benefits, not product features.
  • Not the medication but the extra sleep it
    provides
  • Not the car but the comfortable ride or the
    coolness it conveys

85
Behavioral Segmentation
  • Usage rates (another behavioral measurement)
  • Light, medium and heavy users
  • The heavy half 50 of all users account for
    80-90 of total purchases
  • angels are very profitable purchase w/o sales
    or discounts
  • devils are losers for us shop the bargains

86
Segmenting Business Markets
  • Fewer buyers (significantly) but still very much
    need to be segmented
  • Why?
  • Customers can still be successfully grouped for
    greater efficiency and satisfaction

87
Segmenting Business Markets
  • Customer Location
  • Customer Type
  • Transaction Conditions

88
Customer Location
  • Close to natural resources to minimize
    transportation costs
  • Close to clients to minimize transportation costs

89
Customer Type
  • Industry Typically more efficient to segment the
    market and limit the number of industries you
    serve. Not being all things to all potential
    customers.
  • Size Allows for different methods of promotion
    and distribution

90
Customer Type
  • Organizational structure Purchasing departments,
    selling teams for buying centers, lengthy
    government buying w/extensive approval processes
  • Purchase criteria Major purchasers can have
    major requirements of vendors i.e., technical
    capabilities, defect rates, delivery schedules,
    etc.

91
Transaction Conditions
  • Buying situation New, modified, straight
  • Ex IKON, operating supplies via inside sales
  • Usage rate Heavy, light, nonusers (prospects)
  • Purchase procedure simple, negotiated, sealed bid

92
Segmentation Strategies
  • Market aggregation
  • Multiple market segmenter
  • Single market segmenter market concentration
  • Niche marketing extreme concentration
  • Individualized marketing
  • One-to-one marketing
  • Mass customization
  • Permission marketing

93
Positioning
  • Position, positioning, perceptual maps,
    repositioning
  • Positioning is the act of designing the
    companys offering and image to occupy a
    distinctive place in the minds of the target
    market.
  • Good brand positioning helps guide marketing
    strategy by clarifying the brands essence, what
    goals it helps the consumer achieve, and how it
    does so in a unique way.

94
Positioning
  • Positioning is done on a perceptual map and is
    usually the result of formal marketing research
    that acquires information from the firms target
    market on their perceptions of
  • The firms product (s)
  • Competitors product (s)
  • The ideal product (s)

95
Positioning
  • A products position refers to its image on a
    two or three dimensional perceptual map
  • A product is strategically positioned and
    repositioned typically by advertising to give it
    a competitive edge, ideally a type of monopoly
    where it is different.

96
Expensive/Distinctive
Porsche
Mercedes
Lincoln
Cadillac
BMW
VW
Chrysler
Nissan
Buick
Toyota
Honda
Sporty
Conservative
Chevy
Ford
Pontiac
Dodge
Saturn
Affordable/Practical
97
Core Marketing Concept 7
  • Product
  • Development

98
Creativity!
  • Great Ideas!
  • Cornerstone of business success!
  • Improved production processes!
  • Better customer service!
  • Greater cost savings!
  • Superior products!
  • Buthow do you get them? From where?

99
Great Ideas!
  • Just over ½ come from customers, competitors, and
    suppliers
  • Remainder from company employees of all types
    RD staff, salespeople, others
  • Imaginatik provides innovation and idea
    management, an electronic employee suggestion
    box that becomes interactive

100
Imaginatik
  • Systematic way of developing new ideas
  • Harnessing the creative potential of employees

101
The Importance of Product Innovation
  • 1) Business goals
  • Satisfy customers
  • Make a profit

102
The Importance of Product Innovation
  • 2) Critical to being successfulWhy???
  • -technological changesobsolescence
  • -cloning by competitors
  • 3) The core business is innovation. If we
    innovate well, we will win. (P G head)
  • 4) Innovate or die!

103
The Importance of Product Innovation
  • 5) High failure rates of new products
  • -Poor differentiation
  • -Poor positioning
  • -Lack of marketing support (Big bucks and ROI)

104
  • Product!!
  • Product!!
  • Product!!
  • What is a product????

105
What is a product?
  • Good
  • Service
  • Place
  • Person
  • Idea

106
Formal Definition
  • Product A set of tangible and intangible
    attributes, which may include
  • Packaging
  • Color
  • Price
  • Quality
  • Brand
  • Services
  • Reputation
  • Warranty

107
Classifications of Products
  • Two broad classifications
  • Consumer products intended for personal
    consumption by households
  • Business products intended for resale, for use
    in producing other products, or for providing
    services in an organization
  • Key distinguishing issues Who will use them
    and How will they be used

108
Consumer Goods
  • Convenience goods
  • Shopping goods
  • Specialty goods
  • Unsought goods
  • Distinguishing issue Not intrinsic differences
    in products themselves but how consumers go
    about purchasing each product

109
Business goods
  • Raw Materials
  • Fabricating Materials and Parts
  • Installations
  • Accessory Equipment
  • Operating Supplies
  • Key Classifications are based on broad uses

110
Three distinct categories of new products
  • Really innovative
  • Significantly different
  • Imitative me-too

111
New-product strategy
  • Sales-driven protect market share
  • Investment-driven ROI
  • Expansion-driven Establish position in a new
    market

112
Stages in Development Process
  • Generating new product ideas
  • Screening ideas
  • Business analysis
  • Prototype development
  • Market tests
  • Commercialization

113
Stages in adoption process
  • Awareness
  • Interest
  • Evaluation
  • Trial
  • Adoption
  • Confirmation

114
Adoption Categories
  • Innovators
  • Early adopters
  • Early majority
  • Late majority
  • Laggards
  • Additional Non-adopters

115
Organizing for Product Innovation
  • Beginning in 1950s Brand manager or product
    manager
  • Category Manager
  • Endangered species
  • Team efforts new-product departments, product
    planning committees, cross-functional teams

116
The Product Life Cycle
  • The concept of a products life applies to a
    generic category of product (internal combustion
    engines, kerosene lamps, microwave ovens,
    photography film) and not to specific brands
    (Ford, Dell, Sony, General Mills)
  • The PLC consists of the aggregate demand over an
    extended period of time for all brands comprising
    a generic product category.

117
The Product Life Cycle
  • Traditionally, there are four stages
  • Introduction pioneering stage
  • Growth market-acceptance stage
  • Maturity
  • Decline

118
Product Life-Cycle Stages
119
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120
Length of Product Life Cycles
  • Total PLC times can vary
  • Times in each stage can vary, too
  • Extended introduction stage very unusual
  • Fads hoola hoops, nasal dilators, Livestrong
    bands (by Lance Armstrong)
  • Indefinite maturity stage traditional
    automobiles and the internal combustion engine

121
Length of Product Life-Cycle
122
Life Cycles related to Markets
  • A product could be in the maturity or decline
    stage in one market (U.S.) and the introductory
    stage in another market (a primitive or emerging
    market)
  • Ex wringer washing machines
  • So, it would be correct to label the product life
    cycle as a product/market life cycle

123
Entry Strategies
  • Is there a best time to enter a market?
  • Is there any legitimacy to the first-mover
    advantage, or pioneering advantage concept?
  • Answer No consistent advantage. It is temporary
    and not lasting.
  • The first-mover vs the early-leader who
    emerges in the growth stage early leaders seem
    to have the advantage in the long-run

124
Managing On The Rise
  • Putting your product on auto-pilot would not
    work well
  • Careful management (pricing, promotion,
    distribution, additional product uses, and
    further product development/alteration, etc)
    through the PLC is the key to success
  • Eventually, products may need to be abandoned,
    a critical marketing decision

125
Core Marketing Concept 8
  • Brands
  • and
  • Branding

126
Cadillac!
  • King of the luxury car market1950s
  • Definitely dethroned by the imports! (80s-90s)
  • Cool again! (After 2000)
  • The lesson A brand can lose its luster and if
    carefully managed, regain it once again.

127
Brands, Packaging, and Other Product Features
  • Brands
  • Brand names
  • Branding strategies
  • Brand equity
  • Packaging and labeling
  • Packaging strategies
  • Other product features design, color quality

128
Brands
  • Brand Comprehensive term, a name and/or mark
    identifies and differentiates a sellers product
    or group of products
  • Brand name words, letters and/or numbers that
    can be vocalized
  • Brand mark the part of the brand that appears in
    the form of a symbol, design, or distinctive
    color or lettering, recognized by sight but
    cannot be expressed when pronouncing the brand
    name

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Brands
  • 3) Trademark A brand that has been adopted by a
    seller and given legal protection includes both
    brand name and brand mark

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Examples
  • 1) Brand names Altec, Sony, Maytag
  • 2) Brand marks Nikes swoosh, Prudentials
    rock, Allstates better hands
  • 3) Trademarks Green Giant, Arm Hammer

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Brands Ways of classifying
  • 1) Producers brands like Florsheim and Prozac
    (Eli Lilly antidepressant)
  • 2) Middlemens brands Craftsman (Sears) and St.
    Johns Bay (J.C. Penny)

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Reasons for branding
  • For the buyer
  • Ease of identification by consumers
  • Aids shoppers in locating and decision-making
  • Guarantee of quality
  • For the seller
  • Reduces price comparisons
  • Increases customer loyalty
  • Differentiates commodities

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Reasons for not branding
  • Promoting the brand (takes time money)
  • Maintaining a consistent quality of output
    (requires a high level of commitment)

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Selecting a Good Brand Name
  • The Challenge!
  • Running out of possibilities
  • Average 10,000 new products per year
  • Only 50,000 words in a standard dictionary
  • Many words already being used
  • Many words unsuitable
  • Solution combine words, numbers, letters
  • Ex Formula 409, WD-40, Lotus 123

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Desirable characteristics
  • Suggests benefits and uses of product Mr.
    Goodwrench, La-Z-Boy, Dustbuster
  • Easy to pronounce, spell, remember Tide, Ban,
    Aim
  • Distinctive National, Ideal, United are not
  • Be adaptable to additions to product line. Good
    McDonalds
  • Not so good Burger King, Alaska Air
  • Be capable of registration/legal protection
  • Note Cost? 25,000 and up!

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Protecting a brand name
  • An asset protect it from damage and/or loss
  • Two ways you can get hurt
  • Product counterfeiting the use of someone elses
    brand illegally Ex Rolex, Gucci
  • 250 B annual losses by U.S. companies
  • FBI The crime of the 21st century
  • Huge in softwarevery easy

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Protecting a brand name
  • Generic usage Your brand name becomes the
    commonly descriptive term for a generic class of
    goods. Ex aspirin, escalator, linoleum, thermos,
    cellophane
  • The result You may lose your legally protected
    right to the use of the name.

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Protecting a brand name
  • Generic Usage This can be prevented by using the
    R symbol right after the name (or TM or SM if
    not registered)
  • The better approach Use the brand name together
    with the generic name like, aspirin pain
    reliever or linoleum floor covering
  • Call attention and challenge misuses of your
    brand name

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Branding Strategies
  • Producers strategies
  • Middlemens strategies

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Producers Strategies
  • 1) Marketing entire output under producers own
    brands
  • Usually seen only in large, well-financed,
    well-managed firms
  • Uncommon
  • Very difficult for a new firm
  • Diminishing as a strategy
  • Ex Gillette

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Producers Strategies
  • 2) Branding of fabricating materials and parts.
    Likely to be effective
  • if the good is also sold as a consumer good
    (replacement good)
  • Ex spark plugs, batteries, light bulbs
  • if an integral part of the finished product where
    it might get attention/recognition

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Producers Strategies
  • 3) Marketing under middlemens brands
  • -hedging your bets by broadening your market
  • -the risk you are depending on the marketing
    skill of the middlemen

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Middlemens Strategies
  • Carry only producers brands The most common
    strategy. Why? Lack of resources to promote your
    own
  • Carry both producer and middlemen (store) brand
  • Control
  • Differentiation

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The Battle of the Brands
  • What is it?
  • Producer brands vs Middlemen Brands
  • Who is winning?
  • Middlemen are showing significant gains
  • There is lots of fighting yet to be done

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Strategies Common To Both
  • Branding Within A Product Mix
  • Family branding All your products carry your
    family name sometimes alone and sometimes
    combined with a product name.
  • Well-known family names Heinz, Campbells,
    Kellogg, Libby, Armor All

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Strategies Common To Both
  • Branding for Market Saturation
  • 1) Multiple-brand strategy
  • Ex PG Tide, Dreft, etc
  • Ex GM Chevy, Olds, Pontiac, Cadillac
  • 2) Cobranding dual branding
  • Ex Betty Crockers Sunkist Lemon Bars mix
  • Ex Pizza Hut and Taco Bell
  • A big decision Costs vs. Benefits

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Brand Equity
  • A critical issue
  • The value a brand adds to a product
  • The present value of the future earnings that
    can be attributed to the brand itself.
  • Ex Coke estimated at 60B
  • Negative brand equity is possible
  • Ex. Firestone

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Brand Equity
  • 1) Can provide critical differential advantage
  • 2) Can provide a protective barrier to entry
  • 3) Can facilitate international expansion
  • 4) Can help a product survive changes in the
    operating environment i.e. economic cycles,
    changing consumer tastes, etc.
  • 5) Can be overused at no gain Harley Davidson
    cigarettes!!! Dunkin Donuts cereal!!

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Trademark Licensing
  • Also known as brand licensing
  • Licensor charges a fee of 5-10 of wholesale
    price
  • Very big in toys but the biggest is in apparel.
  • Ex Calvin Klein, Ralph Lauren

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Other Related Topics
  • Packaging and Labeling
  • Purposes and Importance of Packaging
  • Protect primary historic purpose
  • Promote (persuade) an increasing differentiator
  • Packaging Strategies
  • Family packaging (the entire product line)
  • Multiple packaging (several units/container)
  • Changing the package (to fix problems or improve
    promotion)

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Session Four
  • The CMO, CIO,
  • and
  • Strategic IT Initiatives
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