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Chapter Seven Product Positioning, Branding, and Product Line Strategies Product Positioning, Branding, and Product Line Strategies • Product positioning • Product positioning and differentiation • Branding and brand management strategies • Brand equity • Brand and product line strategies Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-2 Branding A BRAND is a name or symbol used to identify the source of a product. • Benefits of branding: – High brand awareness – Emotional connection – Brand loyalty – Price premiums – Product line extensions Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-3 Product Positioning • What is product positioning? • Why is it important to determine a product positioning strategy? • What is the goal of a positioning strategy? • How does the positioning strategy affect market share? Market Share = Product Position X Marketing Efforts Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-4 Product Positioning and Market Share Figure 7-5 Product-Price Position, Marketing Efforts, and Market Share Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-5 Product Positioning Strategies Figure 7-7 Product Positioning Strategies Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-6 Product Positioning Strategies • Price Leadership vs. Product Differentiation • When is price leadership appropriate? • When is differentiation appropriate? • Types of differentiation Product Differentiation Service Differentiation Product Benefits Customer Value Service Benefits Price Brand Benefits Transaction Costs Brand Differentiation Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-7 Brand Differentiation • What is brand identity? • How do firms develop brand identity? • What is brand encoding? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-8 Brand Assets and Liabilities • Brand Assets – – – – Brand awareness Emotional connection Brand loyalty Product line extensions – Price premium • Brand Liabilities – Customer dissatisfaction – Product or service failures – Questionable practices – Poor record on social issues – Negative associations Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-9 Brand Equity Figure 7-15 Brand Balance Sheet and Brand Equity Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-10 Broad vs. Narrow Product Line Figure 7-16 Breadth of Product Line and Return on Invested Assets Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-11 Product Line Development • How do firms expand their product line? – Flanker brands – Umbrella brands – New brands • How do flanker brands benefit from umbrella brands? – Brand awareness – Known quality – Market reach – Product mix Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-12 Product Line Extensions and Enhancements • • • • Vertical brand-line extensions Horizontal brand-line extensions New product-market brand extensions Co-branding Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-13 Bundling and Unbundling Strategies • Product bundling – Pure product bundling – Mixed bundling • Product unbundling • Effects of all product-line enhancements –Scale –Substitution Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-14 Review • Product positioning • Product positioning and differentiation • Branding and brand management strategies • Brand equity • Brand and product line strategies Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-15 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-16