Brand Name: the written or spoken part of a trademark. One of the most valued assets of a company. 1/3-1/2 of value comes from the brand name. Brands represent attitudes and feelings about products. Familiarity is enhanced by emphasizing consumer benefits
Brand Extension: As new companies enter the global marketplace, the brand will take on even more importance as a competitive tool to differentiate one product from another. New product introductions under an existing brand to take advantage of brand equity. As opposed to brand innovation. Advantages: Saving money by not needing to build awareness for a new and unknown brand name, Adding equity to an existing brand name (upon success). Disadvantages: Damaging a core brand in the minds of loyal consumers with a failed introduction, Losing marketing focus on your existing brand and/or diluting marketing efforts and budget across several brands, Brand identity is crucial to a product’s success
Fulfilling Perceived Needs: Successful products are those that solve a consumer problem better an/or more economically than an available alternative. The marketer’s fundamental task is not so much to understand the customer as it is to understand what jobs the customers need to do and build products that serve those specific purposes. For example, consumers didn’t say they wanted a microwave oven, they said they were tired/hungry and didn’t want to cook dinner for 45 minutes.
Assessing Needs: A key ingredient in determining product success is reliable research.
Conjoint Analysis: a research technique designed to determine what consumers perceive as a product’s most important benefits. it can prevent costly analysis mistakes when companies emphasize product characteristics that are of little value to the consumer.
Sales, Revenues, and Profit Potential have 4 major approaches used by established companies to achieve long-term revenues and profits. Emphasizing and expanding new-product niches to reach current customers. For example, Walmart attempting to increase customer base by advertising and trying to win over a more fashion based customer. Emphasizing profits over sales volume. Ex: Henry Ford deciding to produce cars to satisfy customer base, not just to fill a factory and thus prevented bankruptcy. Emphasizing short-term market share rather than profitability. Customer tracking—are all customers created equal? Ex: rewarding most profitable customers (with coupons free gifts) and discouraging less-valuable buyers (buy the use of restrictive return policies). Advertisers are focusing on the role of advertising in maintaining sales and market share as a goal of equal importance to increasing sales.
Product Timing: Advertising timing involves the interaction between stages of product development and the probability of marketplace acceptance.
Product Life Cycle: the process of a brand moving from the introduction to maturity, and eventually, to either adaptation or demise. Product Introduction and the advertising that accompanies it are among the most important decisions that determine the long-term success of a company. Key is not to spot new trends but to creatively develop new products/services to take advantage of them. No matter how good a product is, it can rarely be forced on consumers before they are ready to accept it. Market timing may be a matter of doing something first rather than doing something different. Timing is often strategic, involving long-term decisions by both customers and marketers. It can also be tactical, involving sales related to specific events or occasions. It is also a major factor in the everyday function of advertising. Placing TV commercials in primetime/daytime/late-nite, 30 seconds/1min etc.
Product Differentiation: is the circumstance in which a target audience regards a product as different from others in a category. Differences may result from the tangible attribute of a physical product or intangible element of the product’s brand image. Meaningful product differentiation exists only if consumers perceive it as an important distinction. If there are no real perceived differences among brands, products are viewed as interchangeable. Brands built on exclusive product attribute have an advantage. One of the most important elements of differentiation is keeping an open mind about how to achieve it. Often involves minor changes in either a product or the position communicated by the advertising. Problems arise when companies strictly focus on function. Product differentiation is also a mean of target marketing. Advertisers have an obligation to promote meaningful differences. Price is dictated by favorable consumer perceptions of the value of a product. Closely related to product differentiation.
Value Gap: a positive gap between the price of a product and the value the average consumer assigns to the product. The greater the gap the more insulated the product is from price competition. Price defines who a company’s competitors are. Yield Management: a product pricing strategy used to control (or even out) supply and demand. The goal is to neither lose sales by offering price-sensitive customers merchandise at too high a cost nor lose profits by selling goods below what premium buyers would pay. Pricing strategy can be both a means of market entry for new products and a means of product differentiation for mature products. The pricing strategy for a brand determines to a significant degree the type of marketing strategy that can be used and the success that advertising will have in promoting and selling a specific brand
Variations in the Importance of Advertising
The role that advertising plays in a company’s promotional strategy depends on a number of factors. Each Corporate preference for various segments of marketing communication channels will differ in especially taking advantage of the Internet. High sales volume tends to lower advertising-to-sales ratios. Consumers need to be reminded of the brand, not “sold” on it. There are industries with a number of competing firms and extensive competition. Product categories with widespread competition and little-perceived product differentiation. Reversing sales or market share declines. Smaller companies have to spend more money on advertising to compete with larger companies.