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CHAPTER 11 STUDY GUIDE

CHAPTER OVERVIEW (SUMMING UP)


Describe the components of a product.
The product itself is important, but so are its associated services, such as support or financing. Other elements combine to produce the core
customer value of a product: the brand name, quality level, packaging, and additional features.
Identify the types of consumer products.
These products tend to be classified into four groups: specialty, shopping, convenience, and unsought products. Each classification involves a
different purchase situation and consumer goal.
Explain the difference between a product mixs breadth and a product lines depth.
Breadth, or variety, entails the number of product lines that a company offers. Depth involves the number of products within one specific product
line.
Identify the advantages that brands provide firms and consumers.
Brands play important roles in enabling people to make purchase decisions more easily and encouraging customer loyalty. For firms specifically,
brands also constitute valuable assets and improve a companys bottom line and help protect against competition.
Explain the various components of brand equity.
Brand equity summarizes the value that a brand adds, or subtracts, from the offerings value. It comprises brand awareness, or how many
consumers in the market are familiar with the brand; brand associations, which are the links consumers make between the brand and its image;
and brand loyalty, which occurs when a consumer will only buy that brands offer. Brand equity also encompasses the concept of perceived value,
which is a subjective measure that consumers develop to assess the costs of obtaining the brand.
Determine the various types of branding strategies used by firms.
Firms use a variety of strategies to manage their brands. First, they decide whether to offer manufacturer and/or private-label brands. Second,
they have a choice of using an overall corporate brand or a collection of product line or individual brands. Third, to reach new markets or extend
their current market, they can extend their current brands to new products. Fourth, firms can co-brand with another brand to create sales and
profit synergies for both. Fifth, firms with strong brands have the opportunity to license their brands to other firms. Finally, as the marketplace
changes, it is often necessary to reposition a brand.
Distinguish between brand extension and line extension.
Whereas a brand extension uses the same brand name for a new product that gets introduced into new or the same markets, a line extension is
simply an increase of an existing product line by the brand.
Indicate the advantages of a products packaging and labeling strategy.
Similar to brands, packaging and labels help sell the product and facilitate its use. The primary package holds the product, and its label provides
product information. The secondary package provides additional consumer information on its label and facilitates transportation and storage for
both retailers and their customers. Labels have become increasingly important to consumers because they supply important safety, nutritional,
and product usage information.

A
B

EXTENDED CHAPTER OUTLINE


I
COMPLEXITY OF PRODUCTS AND TYPES OF PRODUCTS
Complexity of Products (PPT slide 11-4)
Types of Products (PPT slide 11-5)
Explain the three components of a product.
Answer: Core customer value (the basic problem solving benefits that consumers are seeking), actual product (includes attributes such
as brand name, features, quality and packaging), and associated services (includes the non-physical aspects of the product).

What are the four types of consumer products?


Answer: Specialty, shopping, convenience, and unsought.

II PRODUCT MIX AND PRODUCT LINE DECISIONS (PPT slide 11-7, 8)


Change Product Mix Breadth (PPT slide 11-9)
1
Increase Breadth
2
Decrease Breadth

Change Product Mix Depth (PPT slide 11-10)


1
Increase Depth
2
Decrease Depth

Product Line Decisions (PPT slide 11-11)

Product Line Decisions for Services (PPT slide 11-11)


Check Yourself: Several questions are offered for students to check their understanding of core concepts. (PPT slide 11-12)
What is the difference between product line breadth versus depth?
Answer: A firms product line breadth (sometimes also referred to as variety) represents the number of product lines offered by the
firm. Product line depth, in contrast, is the number of products within a product line.

Why change product line breadth?


Answer: Firms often add new product categories to capture new or evolving markets, increase sales, and compete in new venues.
Sometimes it is necessary to delete entire product lines to address changing market conditions or meet internal strategic priorities.

Why change product line depth?


Answer: Firms may add items or SKUS to address changing consumer preferences or preempt competitors while boosting sales. From
time to time it is also necessary to delete SKUs to realign resources. The decision to delete SKUs is never taken lightly. Generally,
substantial investments have been made to develop and manufacture the products. Consumer goods firms make pruning decisions
regularly to eliminate unprofitable items and refocus their marketing efforts on more profitable items.

III BRANDING (PPT slide 11-13, 14)


Value of Branding for the Customer and the Marketer (PPT slide 11-15)
Brands Facilitate Purchasing
1
Brands Establish Loyalty
2
Brands Protect from Competition and Price Competition
3
Brands Reduce Marketing Costs
4
Brands Are Assets
5
Brands Impact Market Value
Brand Equity (PPT slide 11-17)
1
Brand Awareness (PPT slide 11-17)
2
Perceived Value (PPT slide 11-18)
3
Brand Associations (PPT slide 11-19)
4
Brand Loyalty (PPT slide 11-20)
Check Yourself: Several questions are offered for students to check their understanding of core concepts. (PPT slide 11-21)
How do brands create value for the customer and the firm?
Answer: Branding provides a way for a firm to differentiate its product offerings from those of its competitors and can be used to
represent the name of a firm and its entire product assortment, one product line, or a single item. Brand names, logos, symbols,
characters, slogans, jingles, and even distinctive packages constitute the various brand elements firms use, which they usually choose to
be easy for consumers to recognize and remember.

C
D
E
F
G

What are the components of brand equity?


Answer: The components of brand equity are brand awareness, perceived value, brand associations, and brand loyalty.

IV BRANDING STRATEGIES
Brand Ownership (PPT slide 11-22)
1
Manufacturer Brands (PPT slide 11-22)
2
Private-Label Brands (PPT slide 11-23)
3
Exclusive Co-brands (PPT slide 11-24)
Naming Brands and Product Lines (PPT slide 11-25)
1
Corporate or Family Brands
2
Corporate and Product Line Brands
3
Individual Brands
4
Choosing a Name
Brand Extension (PPT slide 11-26)
Brand Dilution (PPT slide 11-27)
Cobranding (PPT slide 11-28)
Brand Licensing (PPT slide 11-29)
Brand Repositioning (PPT slide 11-30)
Check Yourself: Several questions are offered for students to check their understanding of core concepts. (PPT slide 11-31)
What is the difference between manufacturer, private/label, and generic brands?
Answer: Manufacturer brands, also known as national brands, are owned and managed by the manufacturer, some famous
manufacturer brands are Nike, Coca-Cola, KitchenAid, and Marriott. Private-label brands, also called store brands, house brands, or
own brands, are products developed by retailers. Some manufacturers prefer to make only private-label merchandise because the cost
of developing and marketing a manufacturers brand is prohibitive. Generic brands target a price-sensitive segment by offering a nofrills product at a discount price. These products are used for commodities like milk and eggs in grocery stores and underwear in
discount stores. However, even in these markets, the popularity and acceptance of generic products has declined.

What is co-branding?
Answer: Co-branding is the practice of marketing two or more brands together, on the same package or promotion. Primarily due to
credit card companies, such as Visa and MasterCard, the practice has greatly increased in the past decade. Airlines were among the first
to co-brand with credit card companies (such as the United Airlines Visa Card), but recently, firms in other industries, such as banking,
retail, and restaurants, have begun forming similar alliances. Starbucks was the first in the quick-service restaurant industry to offer its
own Starbucks credit card in alliance with Visa. Co-branding can enhance consumers perceptions of product quality 70 by signaling
unobservable product quality through links between the firms brand and a well-known quality brand. For example, NutraSweets
claim to be a sugar substitute that was safe and left no aftertaste got a boost after both Coca-Cola and Pepsi started offering products

that contained it, was included on its labels and in its promotions. Co-branding may fail if the brands owners cannot resolve financial
disputes about revenue or royalty sharing.
What is the difference between brand extension and line extension?
Answer: Whereas a brand extension uses the same brand name for a new product that gets introduced into new or the same markets, a
line extension is simply an increase of an existing product line by the brand.
What is brand repositioning?
Answer: Brand repositioning refers to a strategy in which marketers change a brands focus to target new markets or realign the
brands core emphasis with changing market preferences.

V PACKAGING (PPT slide 11-32)


Product Labeling (PPT slide 11-33)