CHAPTER 5 Product and Service Strategy and Brand Management AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1. Explain the offering concept and offering mix portfolio. 2. Describe how the marketing manager modifies the offering mix. 3. Identify and describe the stages in the new-offering development process. 4. Identify and describe the stages in the product life cycle. © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-2 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 5. Explain the types of positioning strategies. 6. Define the concepts of brand and brand equity. 7. Describe how brand equity is created as well as its value to organizations. 8. Explain the types of branding and brand growth strategies. © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-3 OFFERING STRATEGY DECISIONS  An organization’s profitability depends on its product or service offering(s) and the strength of its brand(s)  Marketers face three offeringrelated strategy decisions: Modifying the Offering Mix Positioning Offerings © 2013 Pearson Education, Inc. publishing as Prentice Hall Branding Offerings Slide 1-4 CHAPTER 5: PRODUCT AND SERVICE STRATEGY AND BRAND MANAGEMENT THE OFFERING PORTFOLIO © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-5 THE OFFERING PORTFOLIO The Offering Concept  An offering consists of the benefits or satisfaction provided to target markets by an organization  It contains the following elements: Tangible Product/Service Related Services Brand Name(s) Warranties/ Guarantees Packaging Other Features © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-6 THE OFFERING PORTFOLIO The Offering Concept  Focusing on an offering’s benefits or satisfaction establishes a conceptual framework for marketers  This framework is useful in: • Analyzing competing offerings • Identifying target market unmet needs and wants • Developing new products or services © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-7 THE OFFERING PORTFOLIO Offering Mix/ Portfolio The totality of an organization’s offerings Offering Lines Groups of offerings similar in terms of usage, buyers marketed to, or technical characteristics Offering Items © 2013 Pearson Education, Inc. publishing as Prentice Hall A specific product or service noted by a brand, size, or price Slide 1-8 THE OFFERING PORTFOLIO Offering Mix/Portfolio Decisions Width (Breadth) Depth Consistency The number of offering lines The number of items in each line The extent to which offerings satisfy similar needs, appeal to similar buyer groups, or use similar technologies © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-9 THE OFFERING PORTFOLIO Offering Mix/Portfolio Decisions Based on: Organizational Resources Competitive Situation Marketing Strategy One Offering High-Profit or High-Volume Offerings © 2013 Pearson Education, Inc. publishing as Prentice Hall Complete Lines Slide 1-10 THE OFFERING PORTFOLIO Bundling Is the marketing of two or more items in a single “package” that creates a new offering  Is valued by consumers more than the individual items sold separately  Has the following benefits: • Don’t have to make separate purchases • Satisfaction from one item given the presence of another  Provides a lower total cost to buyers and lower marketing costs to sellers © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-11 CHAPTER 5: PRODUCT AND SERVICE STRATEGY AND BRAND MANAGEMENT MODIFYING THE OFFERING MIX © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-12 MODIFYING THE OFFERING MIX Offering Mix Decisions Adding to the Offering Mix Modifying the Offering New Offering Development Single Offering Entire Line Trading Up Trading Down Harvesting the Offering Eliminating the Offering © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-13 ADDITIONS TO THE OFFERING MIX Additions to the Offering Mix  Additions take the form of: Single Offering Entire Line  Questions to ask: Consistency Resources Market How consistent is the new offering with existing offerings? Does the organization have the resources to introduce and sustain the offering? Is there a viable market for the offering? © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-14 ADDITIONS TO THE OFFERING MIX Consistency  Consider demand interrelationships (offering substitutes or complements) —the cannibalization effect  Consider the degree to which the new offering fits the organization’s existing selling and distribution strategies © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-15 ADDITIONS TO THE OFFERING MIX Resources  Consider the firm’s financial strength  Consider the large initial cash outlays for a new offering’s R&D and marketing program  Consider the speed and magnitude of the competitive response  Consider the market growth rate © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-16 ADDITIONS TO THE OFFERING MIX Market  Consider whether a market exists (consumer willingness and ability to buy)  Consider whether the new offering has a competitive advantage  Consider if there is a distinct market segment for which no present offering is satisfactory © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-17 STAGES IN THE NEW-OFFERING DEVELOPMENT PROCESS Idea Generation Idea Screening Business Analysis Market Testing Commercialization © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-18 STAGES IN THE NEW-OFFERING DEVELOPMENT PROCESS Idea Generation  Sources of new offering ideas include: Employees Suppliers Buyers Competitors  Ideas are obtained through marketing research (formal) and informal means © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-19 STAGES IN THE NEW-OFFERING DEVELOPMENT PROCESS Idea Screening  Ideas are screened based on: Organizational Definition Organizational Capability Prospective Buyers  Ideas deemed incompatible with organizational definition and capability are quickly eliminated © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-20 STAGES IN THE NEW-OFFERING DEVELOPMENT PROCESS Idea Screening  Assess the match between prospective buyers and the proposed offering: • Does it have a relative advantage over existing offerings? • Is it compatible with buyers’ use or consumption? • Is it simple enough for buyers to understand and use? • Can it be tested prior to actual purchase? • Are there immediate benefits from it once consumed?  If “yes” and the offering satisfies a felt need, then go to the business analysis stage © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-21 STAGES IN THE NEW-OFFERING DEVELOPMENT PROCESS Business Analysis  Assess financial viability based on estimated: Sales Costs Profits  Forecasting sales is difficult for new offerings  Profitability analyses relate to: Investment Break-even © 2013 Pearson Education, Inc. publishing as Prentice Hall Payback Period Slide 1-22 STAGES IN THE NEW-OFFERING DEVELOPMENT PROCESS Business Analysis Payback Period Payback Period = The number of years required for an organization to recapture its initial offering investment Total Fixed Costs = Cash Flows © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-23 STAGES IN THE NEW-OFFERING DEVELOPMENT PROCESS Business Analysis Return on Investment (ROI) Return on Investment (ROI) = The ratio of average annual net earnings (return) divided by average annual investment, discounted to the present time Annual Net Earnings = × Discount Factor Annual Investment © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-24 STAGES IN THE NEW-OFFERING DEVELOPMENT PROCESS Market Testing  May include product concept or buyer preference tests in a laboratory situation or field test market  A test market is a scaled-down implementation of one or more alternative marketing strategies for a new offering  Ideas that pass through this stage are then commercialized © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-25 STAGES IN THE NEW-OFFERING DEVELOPMENT PROCESS Market Testing  Generates benchmark data to assess sales volume  Examines the relative impacts of alternative marketing strategies and programs under actual market conditions  Assesses the incidence of trial, repeat-purchase, and quantities purchased by potential buyers  Informs competitors of the organization’s activities © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-26 STAGES IN THE NEW-OFFERING DEVELOPMENT PROCESS Commercialization  3,000 raw ideas are needed to produce a single commercially successful new offering  New offering success depends on a fit with: • Market needs • Organizational strengths and resources © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-27 LIFE-CYCLE CONCEPT  A life cycle plots the sales curve of an offering or a product class over a period of time  Life cycles are divided into 4 stages: Introduction Growth MaturitySaturation © 2013 Pearson Education, Inc. publishing as Prentice Hall Decline Slide 1-28 EXHIBIT 5.1: GENERAL FORM OF A PRODUCT LIFE CYCLE Sales Introduction Growth Maturity-Saturation Decline Time © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-29 LIFE-CYCLE CONCEPT The sales curve is the result of offering trial and repeat purchasing behavior. Sales Repeater Volume Trier Volume Time Sales volume = (Number of triers × average purchase amount × price) + (number of repeaters × average purchase amount × price) © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-30 LIFE-CYCLE CONCEPT Introduction Stage  Focus on stimulating trial of the offering by: • Advertising • Giving out free samples • Obtaining adequate distribution  The vast majority of sales volume is due to trial purchases © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-31 LIFE-CYCLE CONCEPT Growth Stage  An increasing share of volume is due to repeat purchases  Marketers focus on retaining existing buyers of the offering through offering: • Modifications • Enhanced brand image • Competitive pricing © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-32 LIFE-CYCLE CONCEPT Maturity-Saturation Stage There is an increase in the:  Proportion of buyers who are repeat purchasers  Standardization of production operations and product-service offerings  Incidence of aggressive pricing activities by competitors © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-33 LIFE-CYCLE CONCEPT Maturity-Saturation Stage Marketers:  Find new buyers for the offering  Significantly improve the offering  Increase usage frequency among current buyers Decline Stage Marketers decide to harvest or eliminate the offering © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-34 MODIFYING, HARVESTING, AND ELIMINATING OFFERINGS Trading Up Modifying the Offering Trading Down Involves adding new features and higherquality materials or augmenting the offering with attendant services and then raising the price Is the process of reducing the number of features or quality of an offering and lowering the price © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-35 MODIFYING, HARVESTING, AND ELIMINATING OFFERINGS Harvesting the Offering  Harvesting is the strategic decision to reduce the investment in a business entity in the hope of cutting costs and/or improving cash flow  The decision is not to abandon the offering outright but to minimize the human and financial resources allocated to it © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-36 MODIFYING, HARVESTING, AND ELIMINATING OFFERINGS Harvesting the Offering Should be considered when:  The market for the offering is stable  The offering is not producing good profits  Market share becomes increasingly costly to defend from competitors  The offering enhances the firm’s image  The offering provides a full product line despite a poor future © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-37 MODIFYING, HARVESTING, AND ELIMINATING OFFERINGS Eliminating the Offering An offering may be dropped from the offering mix if the answers to these questions are “very little” or “none.”  What is the offering’s future sales potential?  How much is the offering contributing to offering mix profitability?  How much is the offering contributing to the sale of other offerings in the mix?  How much could be gained by modifying the offering?  What would be the effect on channel members and buyers? © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-38 CHAPTER 5: PRODUCT AND SERVICE STRATEGY AND BRAND MANAGEMENT POSITIONING OFFERINGS © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-39 POSITIONING OFFERINGS Positioning is the act of designing an organization’s offering and image so that it occupies a distinct and valued place in the target customer’s mind relative to competitive offerings. © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-40 POSITIONING OFFERINGS Positioning Approaches  Strategies include positioning by: Attribute or Benefit Use or Application Product or Brand User Product or Service Class Competitors Price and Quality  Marketers often combine two or more of these strategies when positioning a product, service, or brand © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-41 POSITIONING OFFERINGS Positioning by Attribute or Benefit  Is the strategy most frequently used  Requires determining: • Which attributes are important to target markets • Which attributes competitors emphasize • How the offering can be fitted into this offeringtarget market environment  Accomplished by designing an offering that contains or stresses the appropriate attributes © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-42 POSITIONING OFFERINGS Positioning Matrix  Develop a matrix relating attributes of the offering to market segments (see Exhibit 5.2)  Benefits of the positioning matrix: • Can spot potential opportunities for new offerings and determine if a market niche exists • Can estimate the extent to which a new offering might cannibalize existing offerings • Can judge the competitive response to a new offering more effectively © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-43 EXHIBIT 5.2: ATTRIBUTES AND MARKETING SEGMENT POSITIONING Toothpaste Attributes Flavor Color Market Segments Children Teens; Young Adults Family     Whiteness of Teeth Fresh Breath   Decay Prevention Price   Plaque Prevention Stain Prevention Principal Brands for Each Segment Adults Aim; Stripe Ultra Brite; McCleans Colgate; Crest Topol; Rembrandt NOTE: A check () indicates principal benefits sought by each market segment. © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-44 POSITIONING OFFERINGS Positioning Statement Identifies:  The target market and needs satisfied  The product (service) class or category in which the organization’s offering competes  The offering’s unique attributes or benefits © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-45 POSITIONING OFFERINGS Positioning Statement Takes this form: “For (target market and need), the (product, service, brand name) is a (product/service class or category) that (statement of unique attributes or benefits provided).” © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-46 POSITIONING OFFERINGS Repositioning  Is necessary when: • The initial positioning of an offering, brand, or organization is no longer competitively sustainable or profitable • Better positioning opportunities arise  It takes time and is costly to establish a new position, so study this carefully © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-47 POSITIONING OFFERINGS Making the Positioning Decision The choice of which positioning strategy to use can be made by answering the following:  Who are the likely competitors, what are their marketplace positions, and how strong are they?  What are the preferences of the target consumers and how do they perceive competitors’ offerings?  What position, if any, does the organization already have in the target consumers’ mind? © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-48 POSITIONING OFFERINGS Making the Positioning Decision Positioning strategy implementation decisions can be made by answering the following:  What position do we want to own?  What competitors must be outperformed if we are to establish the position?  Do we have the marketing resources to occupy and hold the position? © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-49 POSITIONING OFFERINGS Making the Positioning Decision The success depends on the following factors:  The position must be clearly communicated to and valued by targeted customers  Frequent changes should be avoided since positioning development is lengthy and expensive  The position taken in the marketplace should be sustainable and profitable © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-50 CHAPTER 5: PRODUCT AND SERVICE STRATEGY AND BRAND MANAGEMENT BRAND EQUITY AND BRAND MANAGEMENT © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-51 BRAND EQUITY AND BRAND MANAGEMENT Brand Brand Equity A brand name is any word, “device” (design, sound, shape, or color), or combination of these that are used to identify an offering and set it apart from competing offerings. Brand equity is the added value a brand name bestows on a product or service beyond the functional benefits provided. © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-52 BRAND EQUITY AND BRAND MANAGEMENT Brand Equity Has two marketing advantages:  Provides a competitive advantage, such as signifying quality  Can charge a higher price since consumers are often willing to pay for the brand’s equity premium © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-53 BRAND EQUITY AND BRAND MANAGEMENT Brand Equity Arises from a four-step process: 1. Develop positive brand awareness and link it with a product class or create brand identity 2. Establish a brand’s meaning in the minds of consumers, consisting of: • Brand functional performance • Brand imagery © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-54 BRAND EQUITY AND BRAND MANAGEMENT Brand Equity Arises from a four-step process: 3. Elicit the proper consumer responses to a brand’s identity and meaning—how they think and feel 4. Create an intense, active loyalty relationship between consumers and the brand © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-55 EXHIBIT 5.3: CUSTOMER-BASED BRAND EQUITY PYRAMID 4. Relationships = What about you and me? Intense, active loyalty Consumer brand resonance 3. Response = What about you? 2. Meaning = What are you? 1. Identity = Who are you? Consumer Consumer judgments feelings Brand performance Brand imagery Brand salience © 2013 Pearson Education, Inc. publishing as Prentice Hall Positive, accessible reactions Strong, favorable, and unique brand associations Deep, broad brand awareness Slide 1-56 BRAND EQUITY AND BRAND MANAGEMENT Brand Equity Successful brand names provide organizations with financial benefits because they:  Have economic value as intangible assets  Enjoy a competitive advantage  Create earnings and cash flow in excess of the return on its tangible assets © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-57 BRAND EQUITY AND BRAND MANAGEMENT Brand Equity Successful brand names provide organizations with financial benefits because they:  Achieve a high rate of return relative to competitors  Can be bought and sold, generating earnings  Can appreciate in value, not depreciate as tangible assets do with time and use © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-58 BRAND EQUITY AND BRAND MANAGEMENT Branding Strategy Multiproduct Branding Multibranding Private Branding A firm uses one name for all its products in a product class A firm gives each product or product line a distinct name A firm supplies a reseller with a product bearing a brand name chosen by the reseller © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-59 BRAND EQUITY AND BRAND MANAGEMENT Multiproduct Branding  Also called family branding/corporate branding  Establishes dominance in an offering class  Allows buyers to transfer the good brand equity of one offering to others with the same name  Lowers promotion costs and raises brand awareness since the same name is used © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-60 BRAND EQUITY AND BRAND MANAGEMENT Multiproduct Branding  Builds a global brand, which: • Is a brand marketed under the same name in many countries with similar and centrally coordinated marketing programs • Requires a large investment to create a global message  Dilutes the meaning of a brand for consumers if there are too many uses for one brand name © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-61 BRAND EQUITY AND BRAND MANAGEMENT Multiproduct Branding Sub-branding:  Combines a corporate/family brand with a new brand name  Builds on favorable associations consumers have toward the corporate/family brand while differentiating the new offering  Differentiates offerings along a price-quality continuum by adding high-end, midlevel, and low-end offerings © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-62 BRAND EQUITY AND BRAND MANAGEMENT Multibranding  Is a useful strategy when each brand is intended for a different market segment or uniquely positioned in the marketplace  Often arises from company acquisitions  Increases promotional costs since consumers and distributors must accept each new brand of the firm © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-63 BRAND EQUITY AND BRAND MANAGEMENT Multibranding Advantage Reduced risk that one brand’s failure will transfer to the firm itself or to its other brands • The strategy is complex to implement Disadvantages • Promotional costs are higher than with multiproduct branding © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-64 BRAND EQUITY AND BRAND MANAGEMENT Private Branding Private branding (or private labeling) involves a manufacturer supplying a reseller (retailer, wholesaler, or distributor) with an offering bearing a brand name chosen by the reseller. © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-65 BRAND EQUITY AND BRAND MANAGEMENT Private Branding If a reseller carries its own private brands:  Avoids price competition with other resellers since they don’t carry an identical brand  Accrues brand goodwill attributed to the offering to the reseller, not the manufacturer  Must locate a willing manufacturer © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-66 BRAND EQUITY AND BRAND MANAGEMENT Private Branding If a manufacturer offers its own private brands:  Can generate profits that contribute to overhead if it has excess production capacity  Thwarts competitors who may want to obtain the rights to produce competing private label brands © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-67 BRAND EQUITY AND BRAND MANAGEMENT Private Branding Dangers in producing private brands:  Revenues may be curtailed if a reseller switches suppliers or produces its own  May adversely affect the relationship between a producer and reseller © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-68 BRAND EQUITY AND BRAND MANAGEMENT Brand Growth Strategies Line Extension Introducing additional offerings with the same brand in a product class that it currently serves Brand Extension Using a current brand name to enter a completely different product class New Brand Fighting/ Flanker Brand Developing of a new brand and often a new offering for a product class not yet served by the firm Creating a new brand to attract specific consumer segments not served by a firm’s existing brands to counteract competitors’ brands © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-69 EXHIBIT 5.4: BRAND GROWTH STRATEGIES Product/Service Class Served by the Organization New Brand New Product Class Existing Product Class New Brand Strategy Fighting/ Flanker Brand Strategy Brand Extension Strategy Line Extension Strategy Brand Name Existing Brand © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-70 BRAND EQUITY AND BRAND MANAGEMENT Line Extension Strategy Consists of new or different flavors, forms, colors, ingredients, features, and package sizes. This strategy:  Responds to customers’ desire for variety  Eliminates gaps in a product line  Lowers advertising and promotion costs  Risks product cannibalism  Can create production and distribution problems © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-71 BRAND EQUITY AND BRAND MANAGEMENT Brand Extension Strategy  Provides consumers with the familiarity of an established brand when introducing it in a new market  Requires that the perceptual fit and core product benefit of the brand transfers to the new product class  Dilutes the meaning of a brand for buyers if the brand name has too many uses © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-72 BRAND EQUITY AND BRAND MANAGEMENT Brand Extension Strategy Allows for co-branding, which:  Pairs the two brand names of two manufacturers (General Mills and Hershey’s) on a single product (Reese’s Puffs)  Permits firms to enter a new product class (Hershey’s—cereal) and capitalize on an already established brand name (Hershey’s—Reese’s) © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-73 BRAND EQUITY AND BRAND MANAGEMENT New Brand Strategy  Used when existing brand names are not extendable to a new product class for which it is targeted  May be the most challenging to successfully implement and the most costly: $50 to $100 million for a new brand  This strategy is akin to diversification © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-74 BRAND EQUITY AND BRAND MANAGEMENT Flanker/Fighting Brand Strategy Flanker Brand Adding new brands on the high or low end of a product line based on a price-quality continuum Fighting Brand Adding a new brand whose sole purpose is to confront competitive brands in a product class being served by an organization © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-75 BRAND EQUITY AND BRAND MANAGEMENT Fighting Brand Strategy Introduced when:  An organization has a high relative market share of the sales in a product class  Its dominant brand is susceptible to having its high market share reduced by competitors through aggressive pricing or promotion  The organization wishes to preserve its profit margins on its existing brand © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-76 BRAND EQUITY AND BRAND MANAGEMENT Flanker/Fighting Brand Strategy  Fighting and flanker brand strategies risk cannibalizing other lower-priced brands in a product line  A preemptive cannibalism strategy is the practice of stealing sales from a firm’s existing products or brands to keep buyers from switching to competitors’ offerings so as to not lose sales © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-77 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 1-78
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