Products and Brands

What is a Product?
Anything that can be offered to the
market that might satisfy a need or want.
Products include:
– physical goods
– services
– persons
– places
– events
– organizations
– ideas
Example:
 Example - Lenscrafters
• Peace of mind that
your eyes are OK
• Glasses to help you
see better

• Free eye exams

• Eyeglasses
• Fashionable glasses
• Lenscrafters well-known
name

• 30-day money-back guarantee

• Education on potential health
problems with the eyes
• Eyeglass fashion- consulting services
• Services tailored to specific cities – in
line with the tastes and customs of
local consumers
Nissan Xterra Case
Written Report Due Next
Week
• Describe the decision-making process a
consumer might go through in deciding to
purchase a Nissan Xterra. (Consumer
Decision-Making Process)
• Describe the market segment Nissan has
identified for the Xterra (i.e., lifestyle,
psychographics, etc.)
• How is this different from the market
segment of the Pathfinder? What is the
market segment for the Pathfinder?
• How is Mario trying to “help” the target
consumer decide to purchase a Nissan
Xterra? (look at the PPT)
• What positioning strategies did Mario use
for the Xterra? (go back and look at the
PPT for the different positioning strategies)
• How would you turn these positioning
strategies into marketing messages and
activities to appeal to the target
consumer?
• What type of introductory marketing
messages and activities would appeal to
the type of target consumer you described
in number 2? (Hint: Introductory Stage
 What is a brand?
A name, term, design, symbol, or any other
unique element of a product that identifies
one firm’s good or service and sets them
apart from those of other sellers. Legal term
Why are brands
is trademark.

•
important?
Help maintain customer loyalty
• Keep customers buying your product
• Brand equity or value helps firm attract new
customers
 BRANDZ Top Brand
Ranking• | 2008
• Google Toyota
• GE (General • Wal-Mart
Electric) • Bank of America
• Microsoft • HP
• Coca-Cola • BMW
• China Mobile • ICBC
• IBM • Louis Vuitton
• Apple • American Express
• McDonald’s
• Nokia • Disney
• Marlboro • UPS
 How do brands impact
business performance?
• Strong brands guarantee revenue growth by
ensuring higher levels of demand and greater
market share.
• Brands can improve margins by commanding
premium prices and better supplier terms.
• Successful brands create differentiation that
allows companies to overcome commoditization.
• Strong brands reduce overall business risk.
• Brands have the power to create real and
sustainable competitive advantage for
businesses.
 How do brands impact
business performance?
• Companies are beginning to
recognize that brands are among
their most valuable assets.
• Brands account for about one-third
of the value of Fortune 500
companies.
• Companies that own brands in the
BrandZ Top 100 have significantly
outperformed the stock market
when compared to the S&P 500.
 What is a Trademark?
• A trademark is anything that is
used, or intended to be used, to
identify the goods of one
manufacturer from the goods of
others. Trademarks protect words,
names, symbols, sounds, or colors
that distinguish goods and services.
Anything that distinctly identifies
your company can be a trademark,
provided that it is for goods.
Which of these are trademarks?
 Other Examples of
Trademarks
• The roar of the MGM
lion
• The pink of the
insulation made by
Owens-Corning (who
uses the Pink Panther
in advertising by
permission from its
owner!)
• The shape of a Coca-
 What is the value of a
trademark?
• Trademarks allow companies to establish
their product's reputation without
having to worry that an inferior product
will diminish their reputation or profit by
deceiving the consumer.
• They are essentially limited monopolies
over the use of symbols in business.
• When a company has a trademarked
name or logo, no other business can
use a similar mark on related goods or
services.
 Trademark Litigation
Languiren: general name or TM?

Beijing Snow-Lotus
Cashmere Co Ltd, the first
cashmere sweater producer
in China, recently prosecuted
Shanghai Yagewei Knitted
Garment Co Ltd and Beijing
New Century Clothing Trade
Market Co Ltd for trademark
infringement.
• HONG KONG: The elite Pui Ching Middle
School has triumphed in its decade-long
legal battle over the school's name and
trademark with Guangdong Pei Zheng
College. The four-year mainland university
unlawfully adopted Pui Ching's school
name and trademark insignia, the
chairman of Hong Kong Pui Ching Middle
School's Board said yesterday.
• A beautiful scenic spot
brings not only
pleasure to travelers,
but also huge profits to
local service
businesses. But, be
careful! Some interests
located far away from Gao Fei, a resident
the scenic spot may in Harbin, used the
have already names of six well-
registered the place's known scenic spots
name as a trademark in Southwest
to claim the rights of China's Yunnan
its future commercial province to register
 Product Lines and
Product Mix
Width - number of
different product
lines
Consistency

Length - total Product Mix -

number of items all the product
within the lines lines offered

Depth - number of
versions of each
product
Product Lines and Product Mix
at Gillette
 Product Lines and
Product Mix
What are the benefits of offering a
wide variety and deep assortment of
products?
• Economies of Scale
• Package Uniformity
• Standardization
• Sales and Distribution Efficiency
• Equivalent Quality Beliefs
Wuliangye pads up for
new innings
Wuliangye has always had a strong
presence in all market segments through its
various sub-brands. It has nine national and
eight regional sub-brands that target the
middle- and lower-end of the baijiu, or white
liquor, market.
In addition to
restructuring its
product mix, the group
is diversifying into
other lines of business,
including health drinks China Daily 2009-03-13
 Wuliangye pads up for
new innings
• Which strategy is Wuliangye pursuing -
product width or product depth?

China Daily 2009-03-13

• "It's obvious that the economic downturn
has affected the sales of premium 'baijiu'
business, while the sales of mid- to low-
end liquor is getting stronger," said Shi
Jiangang, consuming products analysts of
TX Investment Consulting Co Ltd.
"Wuliangye is apparently adjusting its
product mix and market strategy to
flow with the market trend," he said.
• BUT – are health drinks and garments a
good strategy?
 Where do companies get
ideas for new products?
New products can involve a number of
different decisions –
• New features
• Brand extensions
• New packaging
• Totally new products
Product Innovation
 Ten Most Memorable
New Products of 2008
1. Nintendo Wii Fit 1. MacBook Air
2. iPod Touch 9. Rock Band
3. Bud Light Lime 9. Burger King Apple Fries
4. McDonald’s Southern9. Neosporin Neo To Go!
Style Chicken Biscuit
9. Kraft Bagel-fuls
& Sandwich
5. Kraft Mac & Cheese
Crackers
6. KY Yours + Mine
Couples LubricantWhich kind of
7. Gatorade G2 innovation are most of
7. Yoplait Fiber Onethese new products?
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 New Product
Development Process
• Sources of new ideas
– customers
– salespeople
– service providers
– anyone with direct
customer contact
 New Product
Development Process
• Idea Screening
– Strategic risk - does this new product
fit with the role or purpose of the
company? Is it too much of a switch?
– Market risk - the new product won’t
meet the need in a value-added,
differentiated way.
– Internal risk - new product won’t be
developed within the desired time and
budget. What level of commitment does
management have to this new product?
 New Product
Development Process
• Business Analysis
– Assess how the new product will fit into
the firm’s total product mix
– Evaluate whether the product can be a
profitable contribution for the
organization’s product mix
 What New Product
Attributes Are Most
Important to Consumers? All Male Female
% of respondents, summary of top 2 box n = 1,000 n = 490 n =510
#1 Trusted brand name 70 69 71
Food or beverage products have no trans fats 50 44 56
Made in the US labeling 48 47 50
Food or beverage products have functional benefits, e.g. digestive
health benefits, anti-aging beauty benefits, or cardiovascular health benefits 48 46 50
Product is environmentally friendly 47 45 50
Product is made locally 44 42 45
Food and beverage products are enriched with added vitamins and minerals 41 39 42
Food or beverage product offers weight management benefits 38 34 42
Country of origin 33 35 32
Product is socially responsible, e.g. ethically-sourced, profits donated to charity 32 32 33
Type of packaging, e.g. child-resistant, easy-to-open 30 29 32
Organic ingredients 30 30 29
In-store television ads and programming 20 19 21

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So - Are health drinks and
garments a good strategy
for Wuliangye?
• Idea Screening - What are the
– Strategic risks?
– Market risks?
– Internal risks?
• Business Analysis
– How will the new products will fit into
the firm’s total product mix?
– Can these products be a profitable
contribution for the organization’s
product mix?
So - are health drinks and
garments a good strategy
for Wuliangye?
• Do they have experience in these
products?
• Do their customers expect these kinds of
products from this company?
• Will the customers who pay hundreds of
yuan for a bottle of baijiu purchase a
health drink? Or will they need to develop
a whole new group of customers?
• Can they distribute them using their
existing channels of distribution?
• Can they reach the new consumers
 New Product Failures
• Not all products successful – between
1/3 and 1/2 of new products fail
• Why? Consumers did not perceive
that the new product satisfied a need
better than competitive products on
the market. Can be the result of any
of the 4 Ps
69% of survey
respondents could not
remember a single new 69%

product
70.00% launched in 2008.
60.00% 41%
50.00% 35%

40.00%
30.00%
20.00%
10.00%
0.00%
2006 2007 2008

Did not recall any new product

35
 New Product Failures
• “Funky Fries -- weird chocolate-
flavored and blue-colored fries –
from H. J. Heintz. Consumers never
warmed up to these odd fries.
(Product)
• Crystal Pepsi (Folks expect colas to
be dark) (Product)
• Yogurt Shampoo. Clairol tested it for
about three years in the south.
Unfortunately people just didn't feel
 New Product Failures
• Aerosol toothpaste, which turned
out to be a bust when kids started
spraying the bathroom with it.
(Packaging)
• Bottled water for pets - Thirsty Cat.
The whole idea is that if you drink
bottled water you'll want to give
bottled water to your pets. But -will
consumers really want to spend
$1.49 for a quart bottle of water for
Six Stages of Adoption
 Adopter Categories

Innovators
(2.5%)
Early Early Late
Adopters Majority Majority Laggards
(13.5%) (34%) (34%) (16%)
 Adopter Categories
Based on how ready they are to try a new
product.
•Innovators -
– venturesome people and risk-takers who are
the very first users
– about 2.5% of the target market
•Early Adopters -
– prestige oriented opinion leaders
– about 13.5% of the target market
 Adopter Categories

• Early Majority –
– first part of the mass market to
purchase
– although rarely leaders, these
consumers usually adopt new ideas
before the average person
– about 34% of the target market
• Late Majority –
– usually skeptical of change and will
adopt an innovation only after a
 Adopter Categories
• Laggards –
– last to purchase. They are usually price
conscious, suspicious of change,
tradition bound, and conservative by
nature.
– about 14% of the target market.
 New Product Early
Adopters
• The new product category plays a role in what
percentage of consumers are early adopters.
• Age and gender clearly play a role in the
likelihood of a consumer being an early adopter.
– Women are more likely to be early adopters in
the grocery and personal and beauty care
product categories.
– Men and consumers under 45 are more likely
to be technology
% of respondents Totalearly adopters.
Male Female 18-24 25-34 35-44 45-54 55-64 65+
Grocery early adopter 27 23 32 22 32 29 30 29 21
Technology early adopters 22 32 13 36 35 28 18 12 5
Personal & beauty care early adopters 16 10 21 14 22 22 12 14 9
Toy product early adopters 10 11 9 11 14 16 9 4 4

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