Marketing Exam II Ch 11

  1. Product Life Cycle (4 Stages and their Marketing Objectives)
    • Introduction: Promote awareness & gain product trial
    • Growth: Differentiate brand from competition
    • Maturity: Maintain brand loyalty
    • Decline: Deletion/harvesting
  2. Typical Marketing Strategies Used by Manufacturers during various stages of the product life cycle.
    Name the 4 different types
    • 1. Product Strategy
    • 2. Distribution Strategy
    • 3. Promotion Strategy
    • & 4. Pricing Strategy
  3. The Product Strategy
    • Introduction: Limited number of models; frequent product modifications
    • Growth: Expanded number of products; frequent product modifications
    • Maturity: Large number of models
    • Decline: Elimination of unprofitable models and brands
  4. The (Place) Distribution Strategy
    • Introduction: Distribution usually limited (depending on product); intensive efforts and high margins often needed to attract wholesalers and retailers
    • Growth: Expand number of dealers; intensive efforts to establish long-term relationships with wholesalers and retailers
    • Maturity: Extensive number of dealers; margins declining; intensive effort to retain distributors and shelf space
    • Decline: Unprofitable outlets phased out
  5. The Promotion Strategy
    • Introduction: Develop product awareness; stimulate primary demand; intensive personal selling to distributors needed; sampling and couponing for consumers
    • Growth: Stimulate selective demand; aggressive brand advertising
    • Maturity: Stimulate selective demand; aggressive brand advertising; heavy promotion to retain dealers and customers
    • Decline: Most, if not all, promotion phased out
  6. The Pricing Strategy
    • Introduction: Usually high to recover development costs (Primary demand; Becomes selective demand when competitors enter market)
    • Growth: Prices begin to fall toward end of growth stage as a result of competitive pressure (selective demand)
    • Maturity: Prices continue to fall; shakeout begins
    • Decline: Prices stabilize at relatively low level; possible small price increase if competition is negligible
  7. Primary v. Selective Demand
    • Primary Demand: The desire for the product class rather than a specific brand, as there are few competitors with the same product
    • Selective Demand: When there is ample competition, the company desires to advertise in hope of creating the consumer's preference for their specific brand
  8. Name the 5 Different Branding Strategies
    • 1. Multi-Product Branding Strategy
    • 2. Multi-Branding Strategy
    • 3. Private Branding Strategy
    • 4. Mixed Branding Strategy
    • 5. Generic Branding Strategy
  9. The Multi-Product Branding Strategy
    • Advantages:
    • - Promotion of one item promotes the firm's other products
    • - Facilitates acceptance of new products by retailer and consumer
    • - Efficiency of advertising dollars

    • Disadvantages:
    • - Poor performance of one item may negatively impact others in a line
    • - Dilute image of product line

    eg. Sunbeam(Sb) makes Sb Irons, Sb Toasters, & Sb Crockware
  10. The Multi-Branding Strategy (Individual Branding)
    • Advantages:
    • - Each brand is unique to each market
    • - No risk that product failure will affect others in line
    • Disadvantages:
    • - No advertising/promotion efficiency
    • - Scattering of resources over several brands instead of building a few brands to highly profitable levels.
    • eg. Anheuser-Busch makes: Budweiser, Busch, Michelob, Wurtburger, & Hofbrau
  11. Private Branding Strategy
    When a company manufactures products but sells them under the brand name of a wholesaler or retailer

    eg. Sears has both Kenmore appliances and Craftsman Tools
  12. Mixed Branding Strategy
    • When a firm markets products under its own name(s) and that of a reseller because the segment attracted to the reseller is different from its own market
    • eg. Michelin makes Michelin tires and Sears Tires
    • Chip Company makes its own brand and Jimmy Johns Chips
  13. Generic Branding Strategy
    • Dog food
    • Peanut Butter
    • Green Beans
    • Paper Towels
    • Aspirin
    • Cola
  14. Line Extension
    • Using the same brand name to enter a new market segment within its product class;
    • Worry of Cannibalization = How would the market change/be effected with the introduction of this product?
    • Eg. Cheerios - Honey Nut Cheerios - Frosted Cheerios
  15. Brand Extension
    • Using the same brand name to enter a new market segment within its product class
    • eg. Ralph Lauren Clothes then introduces RL paint (signifying quality)
  16. Sub-branding
    • Combining a family name with a new brand name
    • eg. Ford + Taurus
    • + Mustang
    • + GTO
  17. Co-branding
    • Using two manufacturers's names on a product
    • eg. Blue Bell ice cream with Hershey Kisses!
  18. Brand Personality (Most Valuable to a Company)
    Brand Personality: A set of human characteristics associated with a brand name; Brand Personality creates expectations about performance, benefits, and key characteristics
  19. Brand Equity
    The added value a given brand name gives to a product beyond the functional benefits provided

    • eg. Cadbury Schweppes acquires Hires and Crush soda lines from P&G for $220 million
    • - $20 million physical assets
    • - $200 million "Brand Value"
  20. Market Modification
    • A strategy we can utilize to prolong product's time in maturity --> There is no change in the actual product
    • Sales Vol. = (# of brand users) x (Usage rate per user)

    • Expand # of Brand users:
    • - Convert non-users of category
    • - Enter new market segments
    • - Win competitor's customers
    • - Repositioning (placing brand name in consumers minds)
    • Usage Strategies:
    • - Encourage more frequent use (drink coke in the morning)
    • - More usage per occasion (Shampoo twice)
    • - New and more varied uses for product
  21. Product Modification
    Change the actual product/its characteristics associated with that brand name

    • Strategies:
    • - Product Quality (NEW AND IMPROVED FORMULA!!)
    • - Feature Improvement (It now does this!)
    • - Style Improvement (Product aesthetics)
Card Set
Marketing Exam II Ch 11
Chapter 11 note cards