Topic 9: Innovation and
markets
9.1 Corporate strategies
9.1 Corporate strategies
Essential idea: Companies and businesses can
utilize a range of different strategies to develop
products, services and systems.
Nature of design:
The success of a company relies heavily on the
strategies it adopts. The evaluation of products,
services and systems can inform the selection of the
most appropriate strategies to follow that will enable
a company to achieve its objectives.
9.1 Corporate strategies
Concepts and principles:
• Pioneering strategy
• Imitative strategy
• Market development
• Product development
• Market penetration
• Product diversification
• Hybrid approaches
• The relative success of pioneering and
innovative strategies
• Corporate social responsibility
9.1 Corporate strategies
Concepts and principles:
• Pioneering strategy
The overall plan that integrates the strategies of
all the businesses within the corporation. It
usually describes the overall mission, the
financial and human resource strategies and
policies that affect all businesses within the
corporation, the organization structure, the
management of the interdependencies among
businesses, and major initiatives to change ...
9.1 Corporate strategies
Concepts and principles:
• Pioneering strategy
Pioneering means being ahead of the competitors by
introducing a new product first. It is the most risky (costly)
strategy but one with the potential for the largest gains
A pioneering company requires a strong research and
development (R&D) capability, which is expensive
A pioneering company needs to be financially secure
and requires product champions to push new ideas
Consider the Sony or Apple companies and their various
pioneering developments
Good market research can offset some risk, but is
problematic for novel products.
9.1 Corporate strategies
Concepts and principles:
• Pioneering strategy
New products:
The mini
Walkman
Ipod
Blackberry
9.1 Corporate strategies
Concepts and principles:
• Imitative strategy
An imitative strategy relies on the designs of other
companies in creating its designs
The imitative company also may base its
accompanying product marketing strategy on the
strategy of the market leader or pioneer
Imitative strategies frequently are used in the
fashion goods, furniture, entertainment, and food
products industries.
9.1 Corporate strategies
Concepts and principles:
• Imitative strategy
Any product released by a competitor:
I-phone
Clone IBM pc’s
Mp3 players
A Class Mercedez Benz
9.1 Corporate strategies
Class assignment:
Compare between the success of the
pioneering and imitative strategies.
You have to support your arguments with
examples of products for the two strategies.
9.1 Corporate strategies
Concepts and principles:
• Market development
Finding new applications for existing products,
thereby opening up new markets.
The expansion of the total market served by a
business, achieved by
1. Opening up new markets by finding new applications for existing
products.
2. Changing the product specifications e.g. color , complexity , cost
3. Responding to the characteristics and tastes of the new markets.
4. The identification of new markets for products, for example, nylon
was originally developed for parachutes.
9.1 Corporate strategies
Concepts and principles:
• Market development
9.1 Corporate strategies
Concepts and principles:
• Product development
The creation of new, modified
or updated products aimed
mainly at a company's
existing customers.
How many variations can
you find on the basic Kit
Kat chocolate bar?
9.1 Corporate strategies
Concepts and principles:
• Product development
An example of how a company undertakes product
development.
Consider adding variations to a product to develop a range
of products building on an established brand, for example,
ice cream, snack food products, chocolate products (Kit
Kat, Mars bars).
Product development involves the development of a
product to meet the needs of the company’s existing
customs.
The modifications to the design must add value to
modified product and make it in way so that the product
will be replaced
9.1 Corporate strategies
Concepts and principles:
• Market penetration
These are either proactive moves designed to identify and
target changing customer requirements, or reactive
moves for market defense triggered by competitive
actions
A move by management to increase its market share held
by current products in currently serviced markets.
Market share may be increased by some combination of
1. attracting users of competitive brands
2. persuading current users to increase usage
3. attracting nonusers of the product category
9.1 Corporate strategies
Concepts and principles:
• Product diversification
Involves a company both in the development
of new products and in the selling of those
products to new companies
For example: A company manufacturing threepin electrical plugs may consider producing
them in a range of colours or from materials of
different textures and/or material properties
9.1 Corporate strategies
Concepts and principles:
• Product
diversification
9.1 Corporate strategies
Concepts and principles:
• Hybrid approaches
Companies that use a mixture of pioneering and
imitative strategies in order to:
1. maximize profit and sales and
2. provides for a quick turn around
3. reduces R&D spending
4. reduces the risk of employing only a pioneering
strategy.
9.1 Corporate strategies
Concepts and principles:
• The relative success of pioneering and
innovative strategies
Pioneering means being ahead of the competitors by
introducing a new product first . It is the most risky (costly)
strategy but one with the potential for the largest gains/profits.
- A pioneering company requires a strong research and
development (R&D) capability, which is expensive to market.
-A pioneering company needs to be financially secure and
requires product champions to push new ideas.
-Good market research can offset some risk, but is
problematic for novel products.
9.1 Corporate strategies
Concepts and principles:
• The relative success of pioneering and
innovative strategies
Pioneering means being ahead of the competitors by
introducing a new product first. It is the most risky (costly)
strategy but one with the potential for the largest gains.
A pioneering company requires a strong research and
development (R&D) capability, which is expensive. A
pioneering company needs to be financially secure and
requires product champions to push new ideas.
Consider the Sony or Apple companies and their various
pioneering developments. Good market research can
offset some risk, but is problematic for novel products.
9.1 Corporate strategies
Concepts and principles:
• The relative success of pioneering and
innovative strategies
Apple: In an interview the CEO was asked if he was concerned that so many
companies produced very similar products after Apple's releases. His reply
was, no as it shows that we are pioneering and ahead of the rest.
Pioneering, a corporate strategy, is the process of introducing new areas of
thought or development in the design process. To be successful while using
this type of corporate strategy, the firm must learn more about the consumer
market by extensive market research. This is recommended because the
pioneering strategy is very risky due to the fact the firm is introducing a totally
new, unknown, and unexpected product or service to the market. The risk of
failure is considerably high because this product or service has never
entered the market, thus making it is impossible to determine that the
product will be a success or failure since the product/service’s lack of
experience in the market. Although pioneering is risky and costly, the profits
that can be earned from this strategy balances with the risks.
9.1 Corporate strategies
Concepts and principles:
• Corporate social responsibility
Corporate social responsibility is a form of corporate self-regulation integrated into a
business model. CSR policy functions as a built-in, self-regulating mechanism whereby
a business monitors and ensures its active compliance with the spirit of the law,
ethical standards, and international norms. In some models, a firm's implementation
of CSR goes beyond compliance and engages in "actions that appear to further
some social good, beyond the interests of the firm and that which is required by law."
CSR is a process with the aim to embrace responsibility for the company's actions
and encourage a positive impact through its activities on the environment,
consumers, employees, communities, stakeholders and all other members of the
public sphere who may also be considered stakeholders.
The term "corporate social responsibility" became popular in the 1960s and has
remained a term used indiscriminately by many to cover legal and moral
responsibility more narrowly construed.
http://en.wikipedia.org/wiki/Corporate_social_responsibility
9.1 Corporate strategies
Concepts and principles:
• Corporate social responsibility
How corporate social responsibility may be
a particular goal of a company whereby the
aim is to manage the economic, social and
environmental impacts of their operation
to maximize the benefits and minimize the
Disadvantages.
9.1 Corporate strategies
• Corporate social responsibility
Arguments For and Against CSR
FOR
The rise of the modern
corporation created and
continues to create many
social problems. Therefore,
the corporate world should
assume responsibility for
addressing these problems.
AGAINST
Taking on social and moral
issues is not economically
feasible. Corporations
should focus on earning a
profit for their shareholders
and leave social issues to
others.
9.1 Corporate strategies
• Corporate social responsibility
Arguments For and Against CSR
FOR
In the long run, it is in
corporations' best interest to
assume social responsibilities.
It will increase the chances
that they will have a future
and reduce the chances of
increased governmental
regulation.
AGAINST
Assuming social
responsibilities places those
corporations doing so at a
competitive disadvantage
relative to those who do not.
9.1 Corporate strategies
• Corporate social responsibility
Arguments For and Against CSR
FOR
Large corporations have
huge reserves of human
and financial capital. They
should devote at least some
of their resources to
addressing social issues.
AGAINST
Those who are most
capable should address
social issues. Those in the
corporate world are not
equipped to deal with
social problems.
9.1 Corporate strategies
• Corporate social responsibility
Examples of evidence of effective corporate
social responsibility for a major multinational
Company.
http://www.highbrowmagazine.com/4185general-motors-and-breakdown-corporatesocial-responsibility
9.2 Market sectors and
segments
9.2 Market sectors and segments
Essential idea: Designers must research and
consider the target market sectors and segments
in the design of their products.
Nature of design:
Designers must consider the market when targeting
their product, service or system. The smaller the
sector, the more the target audience will have in
common. Companies may decide to compete in the
whole market or only in segments that are attractive
and/or familiar. A designer’s understanding of the
identified market is essential.
9.2 Market sectors and segments
Concepts and principles:
• Categories of market sectors
• The influence of market sectors
• Classifications of consumer market segments:
income, profession, age, family, values,
behaviour
• The development of a product family
9.2 Market sectors and segments
• Categories of market sectors
Market sector
A broad way of categorising the kinds of market
the company is aiming for.
Market segmentation
Markets divide up into smaller segments where
the purchasers have similar characteristics and
tastes.
9.2 Market sectors and segments
• Categories of market sectors
Broad categories of market sectors include
geographical sectors focusing on values,
culture
and characteristics of purchasers in a particular
region and purchasing power; client-based
sectors focusing on consumers, industrial, public
sector and commercial
9.2 Market sectors and segments
• The influence
Of market sectors
How companies take into account market
sectors in the design and manufacture of
products
9.2 Market sectors and segments
• The influence
Of market sectors
Classifications of consumer market segments:
income, profession, age, family, values, behaviour,
is key to the success of a global company such as
IKEA.
Broad categories of market sectors include
geographical sectors focusing on values, culture
and characteristics of purchasers in a particular
region and purchasing power; client-based sectors
focusing on consumers, industrial, public sector
and commercial.
9.2 Market sectors and segments
• The influence
Of market sectors
Gaining information on market sectors
often employs many of the methods of
gaining knowledge most closely
associated with the human sciences.
Perhaps no one is more guilty of this
than IKEA, whose catalog shots of
nicely-organized, all-Ikea-furnished
homes have the added twist that
many of the images aren’t even real
photographs, but are pure CG.
9.2 Market sectors and segments
• The influence
Of market sectors
But to the company’s credit,
they recently conducted a
massive and global study to
see how people actually
behave in their own homes,
and have released the study
for public consumption. Called
the “Life at Home” report, it
features data (focused on
morning activities) from roughly
1,000 respondents from each
of eight world cities: Berlin,
London, Moscow, Mumbai,
New York, Paris, Shanghai and
Stockholm.
9.2 Market sectors and segments
Designers must research and consider the target
market sectors and segments in the design of their
products.
Designers must consider the market when targeting
their product, service or system. The smaller the sector,
the more the target audience will have in common.
Companies may decide to compete in the whole market
or only in segments that are attractive and/or familiar. A
designer’s understanding of the identified market is
essential.
FastCo tells us about a product designed for a market
sector students may be familiar with …. worried
parents.
9.2 Market sectors and segments
An estimated 60% of parents in the United States get their
pre-teens cell phones, for reasons like peace of mind and
safety. The catch, however, is that those smartphones come
loaded with tools that kids can abuse. It’s hard to pin down
real numbers, but in recent years smartphones have been at
the center of controversy surrounding the rise in cyberbullying.
FiLIP is a smartwatch for kids that navigates around that
problem. The wrist-worn gadget comes with a chip carrying
three radios, three tiny antennas, Wi-Fi, and GPS. It operates
a bit like a fancy Walkie Talkie, in that kids get five preprogrammed numbers they can call, and can only receive
calls from adults with an authorized app on their phone.
9.2 Market sectors and segments
Filip
http://www.fastcodesign.com/3027291/a-smart-watch-for-kids-designed-for-worried-parents?partner=rss#1
Class assignment:
How the manufacturing
company takes into
account the market
sector
in the design and
manufacture of FILIP.
9.2 Market sectors and segments
Age
• Classifications
of consumer market
segments:
Use of a
product
income, profession,
Market
segmentation
age, family, values,
behavior
Gender
Income/
Social
group
Region
Behavioral/
lifetstyle
9.2 Market sectors and segments
• The development of a product family
Product family
A group of products having common classification
criteria. Members normally have many common
parts and assemblies.
9.2 Market sectors and segments
• The development of a product family
Product family
A group of related goods that are manufactured by a
single company. Companies benefit from creating
product families in that they can leverage the loyalty their
existing customers feel toward an existing product to get
them to buy additional, related products. Product families
also allow companies to attract new customers to their
brand by providing an array of products that are similar
but meet slightly different needs. Customers benefit from
product families because they can rely on their positive
experience with an existing brand when choosing a new
product.
http://www.investopedia.com/terms/p/product-family.asp
9.2 Market sectors and segments
• The development of a product family
Product family
Examples of product families:
HP
http://www8.hp.com/in/en/ads/eliteproducts/products.html
Jeep
http://www.bing.com/images/search?q=jeep+product
+family&qpvt=Jeep+product+family&FORM=IGRE
Can you think of more examples of product families!
9.3 Marketing mix
9.3 Marketing mix
Essential idea: The marketing mix is often crucial when
determining a product or brand’s offering.
Nature of design:
Empathy for, and understanding of the target audience is
developed through thorough analysis of
the market chosen. This informs several factors: the
standards that end users demand; how and where to
distribute and sell the product; how much they are willing to
pay for a certain product and its quality; and how to
communicate the launch of a product. Correct analysis of
these factors could determine the successor despite its
9.3 Marketing mix
Concepts and principles:
• Marketing mix—the 4Ps: product, place, price,
promotion
• Product: standardization of products
• Place: implications of internet selling for a company in
relation to its supply chain and distribution network
• Strategies of setting price: cost-plus, demand pricing,
competitor-based pricing, product line
pricing, psychological pricing
• Promotion: advertising, publicity, personal selling
9.3 Marketing mix
• Marketing mix—the 4Ps: product, place, price,
promotion
What is marketing?
The definition that many marketers learn as they start out in
the industry is:
Putting the right product in the right place, at the right price,
at the right time.
http://www.mindtools.com/pages/article/newSTR_94.htm
9.3 Marketing mix
• Marketing mix—the 4Ps: product, place, price,
promotion
• Product/Service
• What does the customer want from the product/service? What
needs does it satisfy?
• What features does it have to meet these needs?
• Are there any features you've missed out?
• Are you including costly features that the customer won't actually
use?
9.3 Marketing mix
• Marketing mix—the 4Ps: product, place, price,
promotion
• Product/Service
• How and where will the customer use it?
• What does it look like? How will customers
• experience it?
• What size(s), color(s), and so on, should it be?
• What is it to be called?
• How is it branded?
• How is it differentiated versus your competitors?
• What is the most it can cost to provide, and still be sold sufficiently
9.3 Marketing
mix
• Marketing mix—
the 4Ps: product
, place, price,
promotion
9.3 Marketing mix
• Marketing mix—the 4Ps: product, place, price,
promotion
Place
• Where do buyers look for your product or service?
• If they look in a store, what kind? A specialist boutique or in a
supermarket, or both? Or online? Or direct, via a catalogue?
• How can you access the right distribution channels?
• Do you need to use a sales force? Or attend trade fairs? Or make
online submissions? Or send samples to catalogue companies?
• What do you competitors do, and how can you learn from that
and/or differentiate?
9.3 Marketing mix
• Marketing mix—the 4Ps: product, place, price,
promotion
Price
• What is the value of the product or service to the buyer?
• Are there established price points for products or services in this
area?
• Is the customer price sensitive? Will a small decrease in price gain
you extra market share? Or will a small increase be indiscernible,
and so gain you extra profit margin?
• What discounts should be offered to trade customers, or to other
specific segments of your market?
• How will your price compare with your competitors
9.3 Marketing mix
• Marketing mix—the 4Ps: product, place, price,
Promotion (pages 188-190 Business book)
Promotion Where and when can you get across your marketing
messages to your target market?
Will you reach your audience by advertising in the press, or on TV, or
radio, or on billboards? By using direct marketing mailshot? Through
PR? On the Internet?
When is the best time to promote? Is there seasonality in the market?
Are there any wider environmental issues that suggest or dictate the
timing of your market launch, or the timing of subsequent
promotions?
How do your competitors do their promotions? And how does that
influence your choice of promotional activity?
9.3 Marketing mix
• Product: standardization of products
Product standardization is the homogenization of items
available to consumers that reduces the variety of products
that fall under similar descriptors. This process is intended to
help shoppers make up their minds more easily and create
informed decisions. Product standardization also is meant to
make consumers safer by creating technical standards and
guidelines for what manufacturers must create in order to
qualify for sale.
9.3 Marketing mix
• Product: standardization of products
Product standardization creates general practices and
standards that all similar items on the market must meet. It
helps lower prices by encouraging a broad range of
different resources for shoppers that all offer somewhat
different benefits but still meet a generally accepted idea of
what a specific product is meant to be. This reduces
confusion or mislabeling of specific items that actually
qualify as other types of resources. In this way, consumers
are guaranteed protection from manufacturers and that
these businesses are accountable for their actions.
9.3 Marketing mix
• Product: standardization of products
Product standardization ensures specific measures of
cleanliness, consistency and quality with every shipment of a
product. Creating a set form for all items in a class expedites
manufacturing and provides a greater degree of control
over testing and management of these assets. It gives
inspectors and auditors an easy means of determining
whether a company is in compliance with product
standardization.
http://www.ask.com/question/what-is-productstandardization
9.3 Marketing mix
• Product: standardization of products
People around the world rely on product standards to
ensure that the products they use will perform the way they
are intended. Safety product standards are no different,
and millions of employers, workers and health & safety
professionals in North America count on standards to help
make sure the products they use in the workplace will
provide proper, reliable protection for workers exposed to
an ever-changing range of workplace hazards.
http://www.ussafety.com/full_content.php?article_id=1061&
full=yes&pbr=1
9.3 Marketing mix
• Product: standardization of products
People around the world rely on product standards to
ensure that the products they use will perform the way they
are intended. Safety product standards are no different,
and millions of employers, workers and health & safety
professionals in North America count on standards to help
make sure the products they use in the workplace will
provide proper, reliable protection for workers exposed to
an ever-changing range of workplace hazards.
http://www.ussafety.com/full_content.php?article_id=1061&
full=yes&pbr=1
9.3 Marketing mix
• Product: standardization of products
Consider government standards for a particular
market segment, component standardization
and industry-wide standards
http://www.cpsc.gov/en/Business--Manufacturing/BusinessEducation/childrens-products/
9.3 Marketing mix
• Product: standardization of products
What is a Children's Product?
The law defines a "children's product" as a consumer
product designed or intended primarily for children 12 years
of age or younger. In determining whether a consumer
product is primarily intended for a child 12 years of age or
younger, the following factors will be considered:
- A statement by the manufacturer about the intended use
of the product, including a label on the product, if such
statement is reasonable.
9.3 Marketing mix
• Product: standardization of products
What is a Children's Product?
- Whether the product is represented in its packaging,
display, promotion, or advertising as appropriate for use by
children 12 years of age or younger.
- Whether the product is commonly recognized by
consumers as being intended for use by a child 12 years of
age or younger.
- The Age Determination Guidelines issued by the
Commission staff in September 2002, and any successor to
such guidelines.
9.3 Marketing mix
• Place: implications of internet selling for a company in
relation to its supply chain and distribution network
A supply chain is a system of organizations, people,
activities, information, and resources involved in moving a
product or service from supplier to customer. Supply chain
activities transform natural resources, raw materials, and
components into a finished product that is delivered to the
end customer. In sophisticated supply chain systems, used
products may re-enter the supply chain at any point where
residual value is recyclable. Supply chains link value chains.
http://www.youtube.com/watch?v=ZUO2EaJnb-w
9.3 Marketing mix
• Place: implications of internet selling for a company in
relation to its supply chain and distribution network
(Page 219 business book)
Distribution network :An interrelated arrangement of people,
storage facilities and transportation systems that moves
goods and services from producers to consumers. A
distribution network is the system a company uses to get
products from the manufacturer to the retailer. A fast and
reliable distribution network is essential to a successful
business because customers must be able to get products
and services when they want them.
9.3 Marketing mix
• Class work:
Discuss three implications of internet selling for a company in
relation to its supply chain and distribution network.
(Page 222-223 Business book)
9.3 Marketing mix
Examples of trigger products and incremental
Products.
Incremental Products
A series of small improvements to an existing product or product line
that usually helps maintain or improve its competitive position over
time. Incremental innovation is regularly used within the high
technology business by companies that need to continue to improve
their products to include new features increasingly desired by
consumers.
http://www.businessdictionary.com/definition/incrementalinnovation.html
9.3 Marketing mix
Examples of trigger products and incremental
Products.
Examples of incremental innovation - bicycles and soccer balls
Incremental innovation is all around us. The piece of technology that
you are reading this on was improved and honed in a multitude of
steps, incorporating research and ideas from employees and
researchers over years. The humble bicycle has evolved over time with
new materials (particularly in the frames) new components (no gears
back in the old days), and accessories such as lights. A soccer ball (a
‘football’ to me) is another product that has evolved from the humble
beginnings of a pig bladder to the light, extremely fast and a
nightmare for goalkeepers, balls that we see today.
9.3 Marketing mix
Examples of
incremental
innovation –
bicycles and
soccer balls
9.3 Marketing mix
Examples of trigger products and incremental
Products.
Incremental product innovation concerns an existing product whose
performance has been significantly enhanced or upgraded. This
again can take two forms. A simple product may be improved (in
terms of improved performance or lower cost) through use of higher
performance components or materials, or a complex product which
consists of a number of integrated technical subsystems may be
improved by partial changes to one of the subsystems.
http://stats.oecd.org/glossary/detail.asp?ID=1322
9.3 Marketing mix
Examples of trigger products and incremental
Products.
What are marketing triggers?
Each day, the average American says something positive or
negative about an organization, brand, product or service
in 16 conversations.
“This kind of social talk is almost like breathing,” Jonah writes.
“It’s so basic and frequent that we don’t even realize we’re
doing it.”
9.3 Marketing mix
Examples of trigger products and incremental
Products. http://www.vocus.com/blog/marketing-triggers-how-to-inspire-thoughts-of-your-brand/
What are marketing triggers?
So why do people buzz about certain products more than
others? The most talked about brands are consistently at the
top of people’s minds.
Often what keeps these brands top of mind are “triggers,”
everyday sights, smells, sounds or activities that elicit
thoughts of your brand, product or service.
The best part for marketers? These thoughts do more than
create conversation, they lead to action, Jonah writes.
9.3 Marketing mix
• Strategies of setting price: cost-plus, demand pricing,
competitor-based pricing, product line pricing,
psychological pricing
(Pages 212-214 Business book)
9.3 Marketing mix
• Strategies of setting price: Pricing is the process of
determining what a company will receive in exchange for its
product or service. Pricing factors are manufacturing cost,
market place, competition, market condition, brand, and
quality of product. Pricing is also a key variable in
microeconomic price allocation theory. Pricing is a
fundamental aspect of financial modeling and is one of the
four Ps of the marketing mix. (The other three aspects are
product, promotion, and place.) Price is the only revenue
generating element amongst the four Ps, the rest being cost
centers. However, the other Ps of marketing will contribute
to decreasing price elasticity and so enable price increases
to drive greater revenue and profits.
9.3 Marketing mix
• Strategies of setting price: Pricing is the manual or
automatic process of applying prices to purchase and sales
orders, based on factors such as: a fixed amount, quantity
break, promotion or sales campaign, specific vendor quote,
price prevailing on entry, shipment or invoice date,
combination of multiple orders or lines, and many others.
Automated systems require more setup and maintenance
but may prevent pricing errors. The needs of the consumer
can be converted into demand only if the consumer has
the willingness and capacity to buy the product. Thus
pricing is very important in marketing
9.3 Marketing mix
• Strategies of setting price: product line pricing
Pricing is one of the most important elements of the
marketing mix and has the greatest effect on whether the
strategy is successful. Product line pricing is a pricing
strategy used to sell different products in the same range at
different price points based on features or benefits.
Read more : http://www.ehow.com/facts_6003881_productline-pricing-strategy_.html
9.3 Marketing mix
• Strategies of setting price: product line pricing
When to Use Product Line Pricing
Product line pricing is used when a primary product is
offered with differing features or benefits, essentially
creating multiple different products or services. For example,
a car could be the primary product. It could come
standard, with a sunroof and navigation system or fully
stocked with all the features and add-ons. Each product
would then be priced accordingly.
9.3 Marketing mix
• Strategies of setting price: product line pricing
Common Examples of Product Line Pricing
Product line pricing is seen from gas pumps to car
dealerships and from ice cream shops to fast food
restaurants. A basic car wash may be shown as one price, a
super wash with wash and wax will cost a little more, and a
full-service premium wash will be the most expensive.
Read more : http://www.ehow.com/facts_6003881_productline-pricing-strategy_.html
9.3 Marketing mix
• Strategies of setting price: competitor-based pricing
A pricing method in which a seller uses prices of competing
products as a benchmark instead of considering own costs
or the customer demand.
Read more:
http://www.businessdictionary.com/definition/competitionbased-pricing.html#ixzz39LNLbl7B
9.3 Marketing mix
• Strategies of setting price: competitor-based pricing
Competitor-based pricing involves the setting of prices
based on what rivals are charging.
If there is strong competition in a market, customers are
faced with a wide choice of who to buy from. They may buy
from the cheapest provider or perhaps from the one which
offers the best customer service. But customers will certainly
be mindful of what is a reasonable or normal price in the
market.
9.3 Marketing mix
• Strategies of setting price: competitor-based pricing
Most firms in a competitive market do not have sufficient
power to be able to set prices above their competitors. They
tend to use “going-rate” pricing – i.e. setting a price that is in
line with the prices charged by direct competitors. In effect
such businesses are “price-takers” – they must accept the
going market price as determined by the forces of demand
and supply.
9.3 Marketing mix
• Strategies of setting price: competitor-based pricing
An advantage of using competitive pricing is that selling
prices should be line with rivals, so price should not be a
competitive disadvantage.
The main disadvantage is that the business needs some
other way to attract customers. It has to use non-price
methods to compete – e.g. providing distinct customer
service or better availability
9.3 Marketing mix
Psychological Pricing is a marketing practice based on the
theory that certain prices have a psychological impact. The
retail prices are often expressed as "odd prices": a little less
than a round number, e.g. $19.99. The theory is this drives
demand greater than would be expected if consumers
were perfectly rational. Bundle pricing is a marketing
strategy that involves offering several products for sale as
one combined product. This strategy is very common in the
software business, in the cable television industry, and in the
fast food industry in which multiple items are combined into
a complete meal. A bundle of products is sometimes
referred to as a package deal, a compilation, or an
anthology. https://www.boundless.com/marketing/pricing/general-pricing-strategies/demand-based-pricing/
9.3 Marketing mix
• Strategies of setting price: cost-plus
Setting the right price is a big part of the marketing of any
product or service. Setting a price too high or too low for
your target market can lead to lower sales and loss of profit.
The exact strategy used depends on your company's
marketing and profit objectives. Cost-plus pricing is useful
when the production costs of a product, or the costs of
providing a service, are not clear in advance
http://smallbusiness.chron.com/cost-plus-pricing-strategy1110.html
9.3 Marketing mix
• Strategies of setting price: cost-plus
In cost-plus pricing, a company first determines its breakeven price for the product. This is done by calculating all the
costs involved in the production, marketing and distribution
of the product. Then a markup is set for each unit, based on
the profit the company needs to make, its sales objectives
and the price it believes customers will pay.
9.3 Marketing mix
• Strategies of setting price: cost-plus
Drawbacks
One problem with cost-plus pricing is that it does not take
into account the price of competing products. If a
competing product is selling for less, cost-plus may not be a
good strategy. Cost-plus pricing also ignores what the
product is worth to the buyer. Buyers may be willing to pay
more for some products. A cost-plus strategy may not be
responsive to changes in the market and can be an
obstacle to long-term success.
9.3 Marketing mix
• Strategies of setting price: Demand pricing Method in
which consumer response to various price points in a range
of prices is analyzed to arrive at the highest acceptable
price. Also called value oriented pricing
Method in which price of a product is changed according
to its demand higher price when the demand is strong,
lower price when it is weak
Read more:
http://www.businessdictionary.com/definition/demandoriented-pricing.html#ixzz39LCEQuPC
9.3 Marketing mix
• Promotion: advertising, publicity, personal selling
Promotion refers to raising customer awareness of a product
or brand, generating sales, and creating brand loyalty.
Promotion is also found in the specification of five
promotional mix or promotional plan. These elements are
personal selling, advertising, sales promotion, direct
marketing, and publicity A promotional mix specifies how
much attention to pay to each of the five subcategories,
and how much money to budget for each.
9.3 Marketing mix
• Promotion: advertising, publicity, personal selling
A promotional plan can have a wide range of objectives,
including: sales increases, new product acceptance,
creation of brand equity, positioning, competitive
retaliations, or creation of a corporate image.
Fundamentally, there are three basic objectives of
promotion. These are:
• To present information to consumers as well as others.
• To increase demand.
• To differentiate a product.
9.3 Marketing mix
• Promotion: advertising, publicity, personal selling
There are different ways to promote a product in different
areas of media. Promoters use internet advertisements,
special events, endorsements, and newspapers to advertise
their product. Many times with the purchase of a product
there is an incentive like discounts (i.e., coupons), free items,
or a contest. This method is used to increase the sales of a
given product.
9.3 Marketing mix
• Promotion: advertising
Advertising in business is a form of marketing
communication used to encourage, persuade, or
manipulate an audience (viewers, readers or listeners;
sometimes a specific group) to take or continue to take
some action. Most commonly, the desired result is to drive
consumer behavior with respect to a commercial offering,
although political and ideological advertising is also
common
9.3 Marketing mix
• Promotion: advertising
You will often find that many people confuse marketing with
advertising or vice versa. While both components are
important they are very different.
Advertising: The paid, public, non-personal announcement
of a persuasive message by an identified sponsor; the nonpersonal presentation or promotion by a firm of its products
to its existing and potential customers.
Marketing: The systematic planning, implementation and
control of a mix of business activities intended to bring
together buyers and sellers for the mutually advantageous
exchange or transfer of products.
9.3 Marketing mix
• Promotion: advertising
Advertising is a single component of the marketing process.
It's the part that involves getting the word out concerning
your business, product, or the services you are offering. It
involves the process of developing strategies such as ad
placement, frequency, etc
9.3 Marketing mix
• Promotion: publicity
From a marketing perspective, publicity is one component
of promotion which is one component of marketing.
Publicity is mention in the media. Organizations usually have
little control over the message in the media, at least, not as
they do in advertising. Regarding publicity, reporters and
writers decide what will be said.
.
9.3 Marketing mix
• Promotion: publicity
http://www.directcontactpr.com/free-articles/article.src?ID=51
Publicity is perhaps on of the most important marketing tools
an inventor can use. A simple article can inform the people
in your target market area that you’ve created a product
that can renovate their lives.
Even one single small feature story or article placed in he
right publication can drive prospective buyers to your door
and bestow national and even international credibility upon
you in a way that will enhance your marketing and sales for
years to come.
or entertainment value.
9.3 Marketing mix
• Promotion: publicity
Done right, product publicity is an effective way to grow a business
and gain highly favorable recognition in your industry or community.
However, getting publicity for inventions and products is a gauntlet
filled with landmines. It takes some special skills, specialized knowledge
carefully deployed writing and communications tactics to navigate
through the pathway to success. You want to learn what the risk-laden
issues are and steer clear of the danger zones.
In general, there are media taboos against giving inventors and
products free advertising. They will give products publicity but only if
the “news” has some tangible and verifiable educational content or
entertainment value.
9.3 Marketing mix
• Promotion: personal selling
Delivery of a specially designed message to a prospect by a
seller, usually in the form of face-to-face communication,
personal correspondence, or a personal telephone
conversation. Unlike advertising, a personal sales message
can be more specifically targeted to individual prospects
and easily altered if the desired behavior does not occur.
Personal selling, however, is far more costly than advertising
and is generally used only when its high expenditure can be
justified.
9.3 Marketing mix
• Promotion: personal selling
. For example, the marketing of a sophisticated computer
system may require the use of personal selling, while the
introduction of a new product to millions of consumers
would not. Two other forms of personal selling that are not
used with high-end products are door-to-door selling and
home demonstration parties. These two personal selling
methods are primarily used for personal care products,
cosmetics, cookware, encyclopedias, books, toys, food,
and other items of special interest to homemakers. Ideally,
personal selling should be supported by advertising to
strengthen its impact. Read more: http://www.answers.com/topic/personal-selling#ixzz39LaxIa2s
9.3 Marketing mix
"... if the circus is coming to town and you paint a sign saying
'Circus Coming to the Fairground Saturday', that's
advertising. If you put the sign on the back of an elephant
and walk it into town, that's promotion. If the elephant walks
through the mayor's flower bed, that's publicity. And if you
get the mayor to laugh about it, that's public relations." If the
town's citizens go the circus, you show them the many
entertainment booths, explain how much fun they'll have
spending money at the booths, answer their questions and
ultimately, they spend a lot at the circus, that's sales.
9.3 Marketing mix
Examples of promotion campaigns for different
products .
What is promotional campagn?
A series of advertisements using various marketing tools that
share the same message and ideas to promote a business
or event to a target audience. The typical campaign uses
different media resources including internet, newspapers,
television, radio, and print advertising.
Read more: http://www.businessdictionary.com/definition/promotional-campaign.html#ixzz39LbifFiQ
9.3 Marketing mix
Examples of promotion campaigns for different
products .
Nike: Just Do It
Did you know that there was a time Nike's product catered
almost exclusively to the marathon runner? But they saw a
fitness craze emerge, and knew they needed to get past
their main competitor, Reebok. And yes, there was a time in
our history when Reebok sold more shoes than Nike. But to
succeed, they needed a new campaign -- they needed the
"Just Do It." campaign
9.3
Marketing
mix
Examples of promotion campaigns for different
products .
Nike: Just Do It
The campaign was a hit. In 1988, Nike sales were at a measly (hah)
$800 million; by 1998, sales exceeded $9.2 billion. "Just Do It." was short
and sweet, yet encapsulated everything people felt when they were
exercising -- and that feeling remains the same today. Don’t want to
run 5 miles? Just Do It. Don’t want walk up 4 flights of stairs? Just Do It.
It's a human truth we all could relate to, that drive to push yourself
further. So when you're trying to decide the best way to present your
brand, ask yourself what problem are you solving for your customers.
What solution does your product or service provide? By hitting on that
core issue in all of your marketing messaging, you will connect with
consumers on an emotional level that is hard to ignore.
9.3
Marketing
mix
Examples of promotion campaigns for different
products .
Class work:
Research a product promotional campaign and discuss
what promotional tools were used to support the campagn.
9.4 Market research
9.4 Market research
Essential idea: Market research is any organized effort
to gather information about markets or customers.
9.4
Market
research
.
Nature of design:
Market research often identifies how to improve the
product, service or system and increase its chance
of success within a particular sector or segment. The
price a user is prepared to pay is usually determined
through market research. This in turn sets an upper
limit of cost to the design and production of a
potential product, service or system. Market research
has a crucial role in determining the constraints a
designer has to work within.
9.4
Market
research
.
Concepts and principles:
• Purpose of market research
• Consumers’ reaction to technology and green
design, and subsequent impact on design
development and market segmentation
• Market research strategies
9.4
Market
research
.
Marketing research is "the process or set of processes that links
the consumers, customers, and end users to the marketer
through information — information used to identify and define
marketing opportunities and problems; generate, refine, and
evaluate marketing actions; monitor marketing performance;
and improve understanding of marketing as a process.
Marketing research specifies the information required to
address these issues, designs the method for collecting
information, manages and implements the data collection
process, analyzes the results, and communicates the findings
and their implications.
9.4 Market research
• Purpose of market research
The purpose of market research includes idea
generation and development; evaluating market
potential and economic trends; collecting
data relating to demographics, family roles,
consumers; identifying suitable promotional
strategies; considering technological trends and
scientific advances.
9.4 Market research
• Purpose of market research;
Idea generation and development
Improving and updating products is an ongoing
task as consumer needs and wants continuously
change. A failure to develop products could result
in a reduction in sales if consumers decide to buy
competitor products.
9.4 Market research
• Purpose of market research;
Idea generation and development
New product ideas have to come from somewhere. But
where do organisations get their ideas for NPD? Sources
include:
Market Research, Employees, Consultants, Competitors,
Customers, Distributors and Suppliers.
There are two parallel paths involved in the NPD process:
one involves the idea generation, product design and
detail engineering; the other involves market research and
marketing analysis
9.4 Market research
• Purpose of market research
evaluating market
potential QUICK MARKET EVALUATION
1. Are you selling to individuals, households or
businesses?
2. What is the population of these customers in your
target geographical location?
3. How much, in an average year, do customers
spend on your product/service?
9.4 Market research
• Purpose of market research
evaluating market
potential QUICK MARKET EVALUATION
4. Find the total potential sales for the region by
mulitplying (2) x (3).
5. How much is currently purchased in the region?
6. Subtract current local spend from total potential
sales to discover if there is room in the market for
new players?
9.4 Market research
• Purpose of market research
evaluating economic trends
Monitoring the status of current economic trends is an
important part of planning your business, your
investments, and your overall financial goals. Data is
often compiled by government sources like the
Department of Commerce, the Department of Labor,
the Bureau of Economic Analysis, and a number of
regional and local economic agencies.
9.4 Market research
• Purpose of market research
evaluating economic trends
Many of these economic indicators are routinely
reported in the news as good identifiers of current
economic trends and are used to track the general
direction of the economy from financial quarter to
financial quarter.
9.4 Market research
• Purpose of market research
Collecting data relating to demographics, family
roles, consumers
Market Research provides reports with information in
World Demographics trends. This demographic market
analysis can assist with two main objectives: first, to
discover which sectors or subgroups live in the
population; and, second, to generate a
comprehensive image of the traits that a typical
member of each of these sectors possesses.
9.4 Market research
• Purpose of market research
Collecting data relating to demographics, family
roles, consumers
The available demographic reports have outlined
effective strategies for attracting targeted groups of
people for certain products worldwide. Reports
include global data to help marketers access
information about any potential target market.
9.4 Market research
• Purpose of market research
Collecting data relating to demographics, family
roles, consumers
You can also use demographic market RESEARCH
reports to assist in characterizing a specific
demographic profile. Creating a profile will provide
information about a typical member for a certain
group to aid in creating a visual of a hypothetical
target market.
9.4 Market research
• Purpose of market research
Collecting data relating to demographics, family
roles, consumers
As an example, a marketer may focus on members of a
population that are male, single, between the ages of 17-24,
and college educated.
Demographics are the traits of a selected human population.
Demographic trends can be determined through data
consisting of age, disability, race, gender, income, mobility,
home ownership, location, employment status, and/or
EDUCATION level.
9.4 Market research
• Purpose of market research
Collecting data relating to demographics, family
roles, consumers
By utilizing this trends data, you can analyze changes
in a particular population over a specified period of
time. You can use this data to assist with economic
and marketing decisions in industries such as public
policy or sociology.
9.4 Market research
• Purpose of market research
identifying suitable promotional
strategies;
Market strategies are the result of a meticulous market
analysis. A market analysis forces the entrepreneur to
become familiar with all aspects of the market so that
the target market can be defined and the company
can be positioned in order to garner its share of sales.
A market analysis also enables the entrepreneur to
establish pricing, distribution,
9.4 Market research
• Purpose of market research
identifying suitable promotional
strategies;
and promotional strategies that will allow the
company to become profitable within a competitive
environment. In addition, it provides an indication of
the growth potential within the industry, and this will
allow you to develop your own estimates for the future
of your business.
9.4 Market research
• Purpose of market research
considering technological trends and
scientific advances
Class discussion!
9.4 Market research
Consumers’ reaction to technology and green
design, and subsequent impact on design
development and market segmentation
9.4 Market research
Consumers’ reaction to technology:
People’s reactions to technological change
vary depending on their values and personal
circumstances. First-order effects and secondorder effects should be taken into account, for
example, personal gain in owning a car versus
social and environmental considerations.
9.4 Market research
Consumers’ reaction to technology:
Technophile: Someone who immediately
welcomes a technological change.
Techno cautious – someone who needs some
convincing before embracing technological
change.
Technophobes: Someone who resists all
technological changes.
9.4 Market research
Consumers’ reaction to green Design
People’s attitudes to green issues vary
Eco-warriors actively demonstrate on environmental issues.
Eco-warriors protest anything that is damaging to the environment
(such as animal cruelty and pollution). Greenpeace is an
environmental organization that actively supports those protests and
usually organizes or join them. Examples of protests are members
chaining themselves to trees and throwing red paint on fur coats.
9.4 Market research
Consumers’ reaction to green Design
People’s attitudes to green issues vary
Eco-champions champion environmental issues within
organizations.
The Eco Champion will lead a Taskforce', a team of councilors from
all parties, and the local community to listen to ideas and work
together to tackle these problems. The group will look into areas such
as what we consume, what energy we produce and use up, how we
get around and how we can reduce and dispose of our waste.
http://www.cf.ac.uk/news/articles/ecochampions-already-cuttingcarbon.html
9.4 Market research
Consumers’ reaction to green Design
People’s attitudes to green issues vary
Eco-fans enthusiastically adopt environmentally
friendly practices as consumers.
An Eco-fan is someone who accepts all new
technological advancements for green design on the
current market. An eco-fan will buy almost anything that is
environmentally friendly and will never buy a harmful
product.
9.4 Market research
Consumers’ reaction to green Design
People’s attitudes to green issues vary
Eco-phoebes actively resent talk of environmental
protection.
Eco-phoebes are people who are against helping the
environment and purposely go against the ecological
movements. They believe that the environmental problems
are irrelevant to their lives, and some even believe that it is a
scam. An example of an eco-phoebe is George Bush, who
refused to sign the Kyoto agreement which is based on
controlling the CO2 output in a country to a limit in order to
decrease global warming.
9.4 Market research
According to your understanding of constumer
reaction discuss the subsequent impact on
design development and market
segmentation.
9.4 Market research
Market research strategies include:
1. literature search
2. expert appraisal
3. user trial
4. user research
5. perceptual mapping
6. Environmental scanning
9.4 Market research
Market research strategies include:
literature search:
The use of consumer reports and newspaper
items to follow historical
development. Useful sources of information
could include CD-Roms, such
as encyclopedias and newspapers, or more
specific disks, subject-specific
magazines and manufacturers’ information.
9.4 Market research
Market research strategies include:
expert appraisal:
The reliance on the knowledge and skills of an
expert in the operation of
the product.
9.4 Market research
Market research strategies include:
user trial:
The observation of people using a product
and collection of comments from people who
have used a product.
9.4 Market research
Market research strategies include:
user research
Obtaining users’ responses.
9.4 Market research
Market research strategies include:
perceptual mapping:
Marketing research technique in which consumer's views
about a product are traced or plotted (mapped) on a
chart. Respondents are asked questions about their
experience with the product in terms of its performance,
packaging, price, size, etc. Theses qualitative answers are
transferred to a chart (called a perceptual map) using a
suitable scale (such as the Likert scale), and the results are
employed in improving the product or in developing a new
one.
http://www.businessdictionary.com/definition/perceptual-mapping.html#ixzz39ifYqjYt
9.4 Market research
Market research strategies include:
Environmental scanning
Careful monitoring of an organization's internal and external
environments for detecting early signs of opportunities and
threats that may influence its current and future plans. In
comparison, surveillance is confined to a specific objective
or a narrow sector
http://www.businessdictionary.com/definition/environmental-scanning.html#ixzz39ifyT4hd
9.4 Market research
Market research strategies include:
Market strategy
literature search
expert appraisal
user trial
user research
Perceptual
mapping
Environmental
scanning
nature
reliability
cost
Importance to design
development
9.5 Branding
9.5 Branding
Essential idea: Branding creates an identity for a
product or company, which makes it distinct from
another and can provide added value.
9.5 Branding
Nature of design:
In order to diffuse products into the marketplace,
the identity of a company is typically embodied
in a brand. The brand is communicated to the
consumer through a value proposition. Designers
help to communicate this by: building a strong user
experience around the brand identity; determining
content design; establishing the tone of message
through advertisements; promotion.
9.5 Branding
Concepts and principles:
• Brand loyalty
• How brands appeal to different market
segments
• The difference between a trademark and
registered design
• The implications for a company of positive and
negative publicity on brand image
• Contribution of packaging to brand identity
• Effects of product branding
• Evaluating the global impact of branding
9.5 Branding
• Brand loyalty
When consumers become committed to your brand and
make repeat purchases over time. Brand loyalty is a result
of consumer behavior and is affected by a person's
preferences. Loyal customers will consistently purchase
products from their preferred brands, regardless of
convenience or price. Companies will often use different
marketing strategies to cultivate loyal customers, be it is
through loyalty programs (i.e. rewards programs) or trials
and incentives (ex. samples and free gifts).
http://www.investopedia.com/terms/b/brand-loyalty.asp
9.5
Branding
• How brands appeal to different market
Segments
People do things with brands to say things about
themselves. This means brand and target market segment
personalities need to be aligned (to some extent). If they’re
not they’ll be like ships passing in the night as the brand will
hold little self expressive value for the target market. It’s also
crucial the brand’s personality acts as an emotional
common denominator that appeals to all the target
segments. However, facets of the brand personality need to
be emphasised in certain contexts and at certain moments
in time. This helps ‘fine tune’ the brand’s appeal to certain
segments. So how does this work in reality?
http://wavelengthmarketing.wordpress.com/2013/05/17/how-can-one-brand-appeal-to-different-segments/
9.5
Branding
• How brands appeal to different market
Segments
For example, if you decide to buy a new car, VW would hope that you
will consider it first, among the dozens of great car makes that
dealerships have to offer. Volkswagen's "da-da-da" campaign
achieved exactly that among young buyers. The brand was perceived
as being cool, inclusive and reliable, which was relevant for the
audience that Volkswagen wanted to appeal to. Consequently, the
results jumped off the chart.
As such, branding is more than just a promise of what the product or
service will provide. It is a dialog between two trading groups who
need to communicate effectively in a highly noisy environment
9.5
Branding
• How brands appeal to different market
Segments
brand is the visual, emotional, rational, and cultural image that you
associate with a company or a product. Here are some well-known
branding examples.
When you think Volvo, you might think safety. When you think Nike, you
might think of Tiger Woods or "Just Do It." When you think IBM, you
might think "Big Blue." The fact that you remember the brand name
and have positive associations with that brand makes your product
selection easier and enhances the value and satisfaction you get from
the product or service.
http://www.how-to-branding.com/Branding-Examples.html
9.5
Branding
• How brands appeal to different market
Segments
Classwork activity
Watch this video:
http://understandingteenagers.com.au/blog/2010/07/how-brandingis-shaping-teenagers/
Examples of positive and negative effects of
product branding on different market segments
9.5 Branding
• The difference between a
trademark and
registered design
A trademark, trade mark, or
trade-mark[1] is a recognizable sign, design or expression
which identifies products or services of a particular source
from those of others.[2][3][4][5] The trademark owner can be
an individual, business organization, or any legal entity. A
trademark may be located on a package, a label, a
voucher or on the product itself. For the sake of corporate
identity trademarks are also being displayed on company
buildings
9.5 Branding
• The difference between a trademark and
registered design
A trademark, trade mark, or trade-mark[1] is a
recognizable sign, design or expression which
identifies products or services of a particular source
from those of others. The trademark owner can be
an individual, business organization, or any legal
entity. A trademark may be located on a package,
a label, a voucher or on the product itself. For the
sake of corporate identity trademarks are also being
displayed on company buildings
9.5 Branding
• The difference between a trademark and
registered design
Trademarks are for words, symbols, devices or
names that are used to distinguish the goods of one
manufacturer or seller from that of another. Any
distinctive name, symbol, or word is designated as
trademarked with the symbol ™. The trademark
designation notifies others that the product’s name
and design are the company’s property..
9.5 Branding
• The difference between a trademark and
registered design
However, this trademark does not protect the
company from another company that produces a
similar product or uses a similar name. If such a thing
were to happen, the original company would have
to prove that it produced the name or design first,
but still may not have a legal defense without a
registration.
9.5 Branding
• The difference between a
trademark and
registered design
A design refers to the features
of a shape, configuration,
pattern or ornament applied to an article by any
industrial process. If you register a design, you will be
protecting the external appearance of the article.
Registered Designs are used primarily to protect
designs for industrial use.
9.5 Branding
• The difference between a trademark and
registered design
The benefits of registering a design
By registering a design, you obtain a right to
ownership and the right to prevent others from using
the design without your permission. You can
exploit your design in many ways. You may use it to
better protect your market share by barring copying
by others, license it to third parties for commercial
returns or sell the design for a sum of money
http://www.ipos.gov.sg/AboutIP/TypesofIPWhatisIntellectualProperty/Whatisaregiste
reddesign.aspx
9.5 Branding
• The difference between a trademark and
registered design
A registered trademark is designated with the
symbol ®. With a registration, a trademark is
protected against another company’s use of the
name or image. A registered trademark is a federal
and legal registration of the mark. Any future
companies wishing to register its own
design/name/image has to check to be sure that it
is not like any registered trademarks.
9.5 Branding
• The difference between a trademark and
registered design
If the image is too similar and is still produced, the
company is guilty of trademark infringement.
Trademarks can be registered through the U.S.
Patent and Trademark Office. First, you search the
online database (Trademark Electronic Search
System or TESS) to determine that your mark is not
claimed.
9.5 Branding
• The difference between a trademark and
registered design
Once you have determined that your mark is
unique, fill out a trademark application and present
a representation of the mark. The registration
process can be lengthy, taking about four months
to receive a response to your application. The
registration lasts 10 years, but must be verified
between years five and six to confirm that the
trademark is still in use.
9.5 Branding
• The implications for a company
of positive and
negative publicity on brand image
Earning and maintaining a good reputation is
challenging for new and established businesses.
When bad publicity emerges, businesses could be
portrayed as irresponsible, dishonest or appear to
be only looking out for their best interests. Although
it is possible to make a good name for your business
on a local or national scale, doing so can be an
uphill battle, especially in the face of bad publicity
9.5 Branding
• The implications for a company of positive and
negative publicity on brand image
Loss of Trust
Bad publicity can come in the wake of an exposed
lie or inaccuracy. Sometimes advertising is used to
pump up businesses' capabilities and consumers'
expectations. Expectations can be carelessly
overblown, revealed as false in the form of bad
publicity and lead to disappointment and a loss of
trust..
9.5 Branding
• The implications for a company of positive and
negative publicity on brand image
Loss of Trust
When an organization fails to follow through with
promises, customers, employees and partners are
more likely to question the truthfulness of all the
organization's current and future messages.
Regaining trust can be difficult and time-consuming.
Mistrust expressed by word of mouth and through
social media can take years to repair and often can
only be remedied by the number of vocal
supporters eventually outnumbering the critics.
9.5 Branding
• The implications for a company of positive and
negative publicity on brand image
Effects on Sales
In general, bad publicity negatively affects sales.
Companies that are virtually unknown can at times
experience a boom in business after bad publicity, but they
are the exception. In general, bad publicity damages the
long-term success of larger established businesses. Product
accessibility can also decrease with bad publicity, and
potential consumers might have fewer opportunities to
purchase products. When buyers and store owners have
negative opinions, their choices ultimately affect their
customers' options
9.5 Branding
• The implications for a company of positive and
negative publicity on brand image
Damaged Brand Equity
Brand equity can suffer long-term damage as a result of
bad publicity. This is especially evident for companies that
must recall their products because of safety or health
hazards. In such cases, even if only a portion of a product's
supply is recalled, buyers are likely to avoid the brand
altogether for a period. Rumors, even those with no merit,
can affect sales just as strongly
9.5 Branding
• The implications for a company of positive and
negative publicity on brand image
Damaged Brand Equity
Brand equity can suffer long-term damage as a result of
bad publicity. This is especially evident for companies that
must recall their products because of safety or health
hazards. In such cases, even if only a portion of a product's
supply is recalled, buyers are likely to avoid the brand
altogether for a period. Rumors, even those with no merit,
can affect sales just as strongly
9.5 Branding
• The implications for a company of positive and
negative publicity on brand image
Damaged Brand Association
Brand association refers to the deep-seeded attitudes and
feelings a customer has toward a product or company.
When brand association is negative, negative attitudes are
more likely to come into a consumer's mind before positive
ones. Bad publicity can contribute to negative brand
association, which can in turn reduce sales over time.
9.5 Branding
• The implications for a company of positive and
negative publicity on brand image
Damaged Brand Association
Changing attitudes and brand associations can take a
great deal of time and can also be costly, as a company
might be forced to invest in additional advertising and
campaigns to correct negative attitudes. Damaged brand
association also leaves room for competition to move in on
a customer base, which can also reduce sales.
http://yourbusiness.azcentral.com/disadvantages-badpublicity-3495.html
9.5 Branding
• The implications for a
company of positive and
negative publicity on brand
image
The McAfrika was a burger sold
by McDonald's in Norway and
traded as a Limited Edition
Olympic Games Burger. It attracted significant public
attention as a result of its name and the timing of its launch.
The McAfrika sandwich contained beef, cheese, and
tomatoes wrapped in pita bread. McDonald's claimed it
was based upon an authentic African recipe. The McAfrika
was released in 2002,
9.5 Branding
• The implications for a
company of positive and
negative publicity on brand
image
, just as a major famine was
occurring in southern Africa.
The name of the burger was
immediately criticized for being grossly insensitive,
especially since it was released in Norway, one of the rich...
9.5 Branding
• The implications for a
company of positive and
negative publicity on brand
image
one of the richest nations in the world.
Norwegian Church Aid and the Norwegian Red Cross, which were
both conducting humanitarian operations in southern Africa at the
time, said that McDonald's decision was insensitive, crass and illconsidered. CARE Norway demanded that McDonald's withdraw
the burger.In particular, Norwegian Church Aid protested the
McAfrika burgers by giving out "catastrophe crackers" to customers
entering Norwegian McDonald's outlets. Support for McDonald's
came from the organization African Youth in Norway who
appreciated Africa name being used in a positive manner instead
9.5 Branding
• The implications for a company of positive and
negative publicity on brand image
Generating positive publicity for your business is an
area of marketing that is often forgotten or not
even considered. Yet using the media to tell
people about your business can be a very
effective way of spreading the word, enhancing
your credibility and generating sales. What’s more,
other than the time you spend arranging your
publicity… it’s free!
9.5 Branding
• The implications for a company of positive and
negative publicity on brand image
Being published in the press or featuring in an
industry magazine can add weight to all your other
marketing and shouldn’t be seen as something
only the big companies go after. New Zealand is a
nation of small business owners like you, and
people are interested in your story.
Generating free publicity for your business is easier
than you think especially if you know how to look
for opportunities and make the most of them when
they arise.
9.5 Branding
• The implications for a company of positive and
negative publicity on brand image
Class work
Look for one brand that benefitted from positive
publicity. Discuss the implications on the brand
image.
9.5 Branding
• Contribution of packaging to brand identity
Brand identity and package design are an
increasingly important component of corporate
branding strategies as they contribute significantly
to marketing or branding successes. While
marketing and advertising efforts seek to create
“need” or demand for a product, only the
package can tangibly deliver that product and
brand to the consumer. The package must meet
the consumer where he or she is, and it must deliver
just the right brand message to promote a
purchasing decision.
9.5 Branding
• Contribution of packaging to brand identity
All of the corporate marketing, advertising and
promotional efforts in the world go for naught if the
consumer standing before the retail shelf, passes
over the product. When this happens, the huge
cost of research and development, marketing and
positioning the product in the marketplace has
been a waste.
9.5 Branding
Since a brand’s packaging is its most
enduring and accessible brand
communication vehicle, it’s important
that it conveys the brand experience
Through an innovative structure and package
design system. The brand’s packaging must be a
synergistic part of the overall brand expression
continuum.
Sometimes the objective is to develop a logo and
a package design system for line extensions by
leveraging existing brand equities while creating
distinctive imagery for a new category segment.
9.5 Branding
A great example of this is Procter &
Gamble’s Pringles Snack Stacks
products. Snack Stacks offer
consumers the same Pringles in an
eight-pack configuration of small
plastic tubs that are yoked together
in a paperboard sleeve. Ideal for lunchboxes and for those
who wish to control portions, this structural package
extends the Pringles line, and its recognizable brand
attributes. The iconic Mr. Pringles character has been
contemporized for new generations of potato chip fans
and is now a global player in the crowded snack market in
140 countries.
9.5 Branding
Effects of product branding
Brand name products are those products that are
identifiable not just by their function but also by their
manufacturer. In some cases, brand names are so
recognizable, they come to stand for the products
themselves, as with Kleenex, Tylenol and Post-It. Brand
names are so pervasive, it is no wonder that they have
been argued to have potentially deleterious effects on
children.
Read more : http://www.ehow.com/info_8075672_effectsbrand-names-kids.html
9.5 Branding
Effects of product branding
Brand names are words, images, slogans or symbols used
to distinguish a product from its competitors in the market.
The legally protected brands (those that can't be copied
without the explicit permission of the owner) are called
trademarks and are one of the most important elements of
modern marketing. This is because, according to the "The
Socio-Cultural Meaning of Brands" research published by
the Oxford University Press, "the power of a brand to
influence perceptions can transform the experience of
using the product."
Read more :
9.5 Branding
Evaluating The global impact of branding
Global branding and advertising can help you market
your product or service in many different countries around
the world. Although global branding and advertising have
historically required large budgets, emerging
communication techniques such as social media can
make global campaigns affordable for companies of all
sizes.
9.5 Branding
Evaluating The global impact of branding
Though branding came about during the industrial
revolution to create distinction and individuality, branding
in today’s global society takes on a different role for
consumers, often having a negative impact on workers
many consumers aren’t aware of.
9.5 Branding
Evaluating The global impact of branding
most people feel better when they choose brand names
because they equate recognition and established
reputation with a quality product. In her book Naomi Klein
uncovers the underbelly of branding and explains that
companies manufacturing outside the U.S. often do so in
Export Contracting Zones. These zones often utilize “Work
Camps” which regularly subject workers to inhumane
conditions.
9.5 Branding
Evaluating The global impact of branding
The Institute for Global Labor and Human Rights released a
report alleging that workers producing clothing for Classic
Brands like Walmart, Target, Macy's, and Hanes at a
factory in Jordan have been routinely beaten, underpaid
and forced to work excessive hours. The report added that
workers have been forced to live in bed bug-infested
dormitories that lack heat and hot water. The companies
named in the report have yet to take any action. Charles
Kernaghan, author of the report says these companies
have become global networks that design, make, buy,
and sell things wherever around the world it’s most
profitable for shareholders and believes nothing
9.5 Branding
Evaluating The global impact of branding
change until we get a law that keeps goods produced
under these conditions out of U.S. consumers' shopping
carts. As long as consumers stay in the dark about these
practices, retailers will continue to pressure manufactures
& suppliers to keep producing as cheaply as they can.
Would you be willing to pay more to ensure humane work
conditions for all?
9.5 Branding
Examples of products affected by branding on a
global scale
Nescafe
http://wn.com/global_branding
Global brands
http://www.youtube.com/watch?v=IddQGjBKxYs
Class work:
Choose one product and discuss how was it affected by
branding.