Lektion 6: Value through Products and Brands

The problem-solving service or core benefit that consumers are really buying when they obtain a product.

A woman buying lipstick is buying "hope" or "beauty."

A product's parts, styling, features, brand name, packaging, and other attributes that combine to deliver core product benefits.

The physical iPhone device, its design, and iOS.

Additional consumer services and benefits built around the core and actual products.

Warranty, installation, after-sales support.

The positive differential effect that knowing the brand name has on customer response to the product or its marketing.

Paying more for Tylenol than generic acetaminophen.

The course of a product’s sales and profits over its lifetime.

Introduction -> Growth -> Maturity -> Decline.

A portfolio-planning method that evaluates a company’s SBUs in terms of market growth rate and relative market share.

Classifies products as Stars, Cash Cows, Question Marks, or Dogs.

A product with high market share in a low-growth market. Produces a lot of cash for the company.

Coca-Cola Classic.

A product with high market share in a high-growth market. Needs heavy investment to finance rapid growth.

Products in the BCG matrix with low market share in a high-growth market. They require significant investment to increase share, or they may fail.

A new app launched by Google that hasn't gained traction yet.

Products in the BCG matrix with low market share in a low-growth market. They often barely break even and are candidates for divestment.

A discontinued car model or an outdated software version.

A branding strategy where a single brand name is used for a range of related products.

Heinz (Ketchup, Beans, Soup) or Virgin (Media, Active, Atlantic).

Extending an existing brand name to new product categories.

Virgin (Music) -> Virgin (Airlines) -> Virgin (Trains).

Extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category.

A branding strategy that combines both family and individual brand names to provide the reassurance of the company name with the distinctiveness of the individual product.

Kellogg’s Rice Krispies, Microsoft Windows.

A branding strategy where each product is given a unique brand name, allowing the company to target different segments without risk to other brands.

Procter & Gamble (Pampers, Ariel, Gillette, Pantene).

The practice of using the established brand names of two different companies on the same product.

Nike+ iPod Sport Kit.

The development of original products, product improvements, product modifications, and new brands through the firm’s own R&D efforts.

Includes Idea Generation, Screening, Concept Testing, etc.

The stage of new product development in which the product and its proposed marketing program are tested in realistic market settings.

Launching a new burger in just one city before going national.