Transcript Chapter 3 Effects of IT on Strategy and Competition

Part 4
PRODUCT AND PRICE
DECISIONS
Dr. Chen, Principle of Marketing
10: Product, Branding, and
Packing Concepts
11: Business Markets and Buying
Behavior
12: Developing and Managing
Prices
13: Marketing Channels and
Supply-Chain Management
14: Retailing, Direct Marketing,
and Wholesaling
Dr. Chen, Principle of Marketing
Chapter 10
Product, Branding, and
Packaging Concepts
Professor Jason C. H. Chen, Ph.D.
School of Business Administration
Gonzaga University
Spokane, WA 99258
[email protected]
Dr. Chen, Principle of Marketing
Marketing Applications
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 2. Tabasco pepper sauce is a product that has entered the
maturity stage of the product life cycle. Name products that
would fit into each of the four stages: introduction, growth,
maturity, and decline. Describe each product and explain why
it fits in that stage.

 A sample answer should include the following explanations for
product life cycles:
 Introduction—a product’s first appearance in the market, when
sales start at zero and profits are negative
 Growth—sales rise rapidly, profits reach a peak, and then they
start to decline
 Maturity—sales curve peaks and starts to decline and profits
continue to fall
 Decline—sales fall rapidly
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 3. Generally buyers go through a product adoption process before
becoming loyal customers. Describe your experience in adopting a
product you now use consistently. Did you go through all the stages of
the process?

 Students’ answers will vary based on their experiences, but they should
go through some of the following stages of the product adoption
process.
 Awareness—the buyer becomes aware of the product.
 Interest—the buyer seeks information and is receptive to learning about
the product.
 Evaluation—the buyer considers the product’s benefits and decides
whether to try it.
 Trial—the buyer examines, tests, or tries the product to determine if it
meets his or her needs.
 Adoption—the buyer purchases the product and can be expected to use it
again
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 8. It is helpful to think of a total product offering as having a
combination of three interdependent elements:
 the core product itself,
 its supplemental features, and
 its symbolic or experiential value.
 For example, Southwest Airlines does not just offer safe
passage to your destination (core product). It also offers two
free checked bags (supplemental product offerings) and tries
to create a fun environment to emphasize its culture of “luv”
(experiential product offerings).
 Use the following matrix to list the core products,
supplemental benefits, and experiential benefits for the four
different companies.
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Core Products
BMW
Automobiles
Supplemental
Benefits
Experiential
Benefits
BMW car care products The status associated
with driving a BMW
Starbucks
High-quality
coffee beverages
McDonald’s
Fast food
Whole Foods
Organic foods
Privileges associated with
Standardized service
using a Starbucks card
and stylish, inviting
stores
Happy Meals, free Wi-Fi,
Speed of delivery,
drive-through facilities
consistent quality
Catering and holiday orders
Feelings of health
and wellness
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Internet Exercise
 Goodyear
 In addition to providing information about
the company’s products, Goodyear’s
website helps consumers find the exact
products they want and will even direct
them to the nearest Goodyear retailer.
 Visit the Goodyear site at
www.goodyear.com.
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 1. How does Goodyear use its website to
communicate information about the quality of its
tires?

 The Goodyear website provides information on the
features and benefits of each tire and allows for sideby-side comparisons for each vehicle.
 Goodyear also includes a section on every tire page
entitled “Why Goodyear is the right choice” that
explains the company’s legacy and how tires are
manufactured. The company also provides general
information including checklists for how to purchase
quality tires.
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 2. How does Goodyear’s website demonstrate
product design and features?

 Each tire page lists its features and benefits as well
as the benefits of buying tires from Goodyear.
 Goodyear has developed symbols for tire features
such as sport performance, fuel-efficiency, or allweather tires so that consumers know important
information at a glance. The website also indicates
which tires are recommended for particular
vehicles.
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 3. Based on what you learned at the website,
describe what Goodyear has done to position its
tires.

 In general, Goodyear has positioned itself as a
brand that is knowledgeable, cares about
consumers, and wants them to buy the best quality
tires, and those quality tires are made by Goodyear.
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Video Case 10.1
 NEW BELGIUM BREWS UP STRONG
BRAND EQUITY
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 Summary

 New Belgium Brewing Company started on a bike trip
through Belgium and has become one of the most successful
craft breweries in the United States. New Belgium has built
its remarkable success on great products, a fun brand image,
and a strong commitment to sustainability and quality. This
case should help students recognize that even relatively
small businesses can build strong brands by staying focused
on the firm’s values and philosophies.
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 1. What has New Belgium Brewing done to increase brand
recognition and brand preference?

 New Belgium Brewing has used a variety of methods to
increase brand recognition and preference. For example, its
specially-designed watercolor labels and packaging
showcase the brand with a touch of nostalgia and instant
recognition.
 Its sponsorships and philanthropy also increase brand
recognition and, through association with causes, help to
build brand preference on the basis of a company that cares
about people and the planet. In addition, New Belgium
Brewing’s advertising and social media activities
communicate the brand and what it stands for.
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 2. How is New Belgium Brewing using packaging to
support its brand image?

 New Belgium essentially uses a family branding policy in
that each beer carries the New Belgium brand name in
addition to the product item name.
 The beer labels are each different (different product name,
ingredients, graphic art), but are all similar in appearance
and overall design, making it relatively easy to recognize a
New Belgium label on a cooler shelf. The nostalgic
watercolor images help reinforce the New Belgium brand’s
image, reputation for quality, and sense of joy and fun in
making and enjoying the product.
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 3. Assess New Belgium’s brand equity in terms of awareness,
quality, associations, and loyalty.

 New Belgium Brewing has high brand awareness, thanks to years
of word-of-mouth communications by satisfied customers and its
various communications campaigns. The company works hard to
communicate the high quality of its craft-brewed beers, available
only in selected areas. This sets the brand apart from beers that
are mass-produced and available in wide distribution.
 New Belgium Brewing also uses packaging, labeling,
communications, and sponsorships to reinforce brand associations
with old-fashioned goodness and with good causes, which
strengthens the brand. Finally, the company enjoys high brand
loyalty and has been able to use this strength to spread the brand
message to new customers through new media.
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