Saturday, April 21, 2007

Product and Brand Strategies

Product is the first and most important element of the marketing mix. A product is anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need. Products can be physical objects, services, people, places, organizations, and ideas. Product strategy calls for making coordinated decisions on product mixes, product lines, brands, packaging, and labeling.

Companies should develop brand policies for the individual product items in their lines. They must decide on product attributes (quality, features, design), whether to brand at all, whether to do producer or distributor branding, whether to use family brand names or individual brand names, whether to extend the brand name to new products, whether to create multiple brands, and whether to reposition any of them.

Sometimes, companies will start with a very good brand that they have invested very large sums of money into and try to “stretch” the brand to cover additional, similar or related products and/or services (also called line extension). Sometimes it can be a good idea, but sometimes it can be a very bad idea. There are no rules. When Hunt Foods, Inc. (now Conagra, Inc.) added chopped onions to their flagship brand, Hunt’s Tomato Sauce, it was a great success. But when they added tomato bits to another product, Hunt’s Tomato Sauce with Tomato Bits, they stretched the brand too far, and the product failed. Probably the best insight into this example is that housewives saw adding onions as a real benefit to themselves, but tomato bits made no difference whatsoever.