MKTG 5850- Week 14

Product Strategy Promotion Strategy

Brand Strategies
Product Category
Existing New

Brand Name

Existing

Line Extension Multibrands

Brand Extension New Brands

New

2 Brand Leveraging Strategies

LINE EXTENSION BRAND EXTENSION
Minor variants of a single product are marketed under the same brand name

Extensions of the brand name to other product categories

--Similar
--Dissimilar

HOW MANY BRANDS?

1. 2. 3. 4.

Is it different enough to merit a new name? Will the brand identity add value? Are there risks in using an existing brand name? Is the new brand a viable business venture?

Branding Strategy Options

Company Brand

+ Brand Name

Ford Escape, Ford Explorer

+ Sub-Brand Name + Product Name

Kodak Gold, Kodak Advantix

Company

GE Plastics, GE Lighting
Company

Name

+ Brand + Product

Intel Pentium4 Processor

Branding Strategy Options (2)

Company

Name + Brand Name + Number

Microsoft Windows 2000

Brand

Name + Benefit

Oral B Excel Pulsating Toothbrush

Brand

Name Only

Tide

Good Brand Names:

Lack Poor Foreign Language Meanings Easy to: Pronounce Recognize Remember

Distinctive

Suggest Product Qualities

Suggest Product Benefits

MKTG 5850 Week 14

Promotion Strategy

Promotion, and Advertising, Strategies

Promotion Strategy Advertising Strategy

Promotion Strategy is Initiating and maintaining a flow of communications

between a company (brand)

and its market targets.

Role of Promotion
Make

Contact Create Interest Create Preference Deliver Proposal Make Sale Keep Customer

5 Factors Guiding the Role Assigned to Each Promotional Component

Market Target(s)

Desired Positioning
Role of Promotion in Positioning

Product Characteristics
Stage of Life Cycle

Advertising
Major

expense for marketing managers worldwide. %age budget spent on advertising has declined as more money devoted to promotion, particularly promotion oriented toward trade channels, possibly due to advtg. drawbacks

Role of Advertising
Corporate Image Create Right Climate Reach Inaccessibles Reach Unknowns Generate Leads Aid Communication Stimulate Primary Demand

Advertising Drawbacks
Difficult

to evaluate effectiveness Wonder what you are getting for your money. Advertising can be expensive. Much advertising in mass media is wasted. Advertising can be ignored. Customers are bombarded with ads.

4 Key Factors in Effective Ads

Source Factors
Source

Credibility

expertise trustworthiness
Attractiveness

physical empathic prestige

Effective Ads (cont.)

Media

Factors Immediacy Longevity Message Factors What is said (1-sided vs 2-sided) How it is said (humor, emotion) Receiver Factors Persuasability Fear

4 Basic Advertising Objectives

Have a Specific Communication Task Aim at a Specific Target Audience During a Specific Period of Time

Informative Advertising
Build Primary Demand

Persuasive Advertising
Build Selective Demand

Comparison Advertising
Compares One Brand to Another

Reminder Advertising
Keeps Consumers Thinking About a Product.

Determining Advertising Objectives

1. Does the advertising aim at helping increase sales?

2. Does the advertising aim at immediate sales?

3. Does the advertising aim at near-term sales?

4. Does the advertising aim at building a long-range consumer franchise?

5. Does the advertising aim at some specific step that leads to a sale?
6. How important are supplementary benefits of advertising? 7. Should the advertising impart information needed to consummate sales and build customer satisfaction?

8. What kind of image do we wish to build?

Illustrative Advertising Objectives

Expose communication to target audience Create awareness

Change attitude(s)

Increase Sales

Generate profits

4 Advertising Appeals

Cognitive Appeals (Thinking)

Influence

attributes used by customers in evaluating competitive offerings. Change perceptions of some of products attributes. Change perceptions of some of competitors products attributes. Increase or decrease importance weight of product attributes.

Rational Appeals
Focus

on the functional or practical aspects of the product. Emphasize facts, learning, persuasion. Persuade audience the brand being advertised satisfies needs better than competition.

Informational Appeals
Features

appeals. Competitive advantage appeals. Favorable price appeal. News appeal. Product or service popularity appeals.

Emotional Appeals
Intended

to tap an underlying psychological aspect of the purchase decision. Use humor, fear, and sex to try to achieve their objectives. May stimulate greater memory of ad and more liking the brand.

Relationship of Market Share to Key Operating Ratios

Financial/Operating Ratios, % Capital Structure:: Investment/Sales Receivable/Sales Inventory/Sales Operating Results: Pre-Tax Profits/Sales Purchases/Sales Manufacturing/Sales Under 10% 10% to 20% 20% to 30% 30% to 40% Over 40%

68.66 15.52 9.30

67.74 14.00 8.97

61.08 13.96 8.68

64.66 15.13 8.68

63.93 14.48 8.16

-0.16 45.40 29.64

3.42 39.90 32.61

4.34 39.40 32.11

7.60 32.60 32.95

13.16 33.00 31.76

Marketing/Sales
R&D/Sales Capacity Utilization Product Quality: % Superior Minus % Inferior

10.60
2.60 74.70

9.88
2.40 77.10

9.06
2.83 78.10

10.45
3.18 75.40

8.57
3.55 78.00

14.50

20.40

20.40

20.10

43.00

3 Budgeting Methods
Features
Percent of Sales Fixed percent of sales, often based on past expenditure patterns.

Limitations
Percent of Sales The method is very arbitrary. Budget may be too high when sales are high and too low when sales are low.
Comparative Parity Differences in marketing strategy may require different budget levels.

Comparative Parity Budget is based largely upon what competition is doing. Objective and Task Set objectives and then determine tasks (and costs) necessary to meet the objectives.

Objective and Task The major issue in using this method is deciding the right objectives so measurement of results is important.