The Marketing Mix: Products and Branding Strategies

Questions/Tasks
What is the relative importance of the following marketing factors in driving product choice: brand, quality, distribution, price? Defend your position
In order to answer this question, you are required to select ONE brand from each of the following three product categories:
(1) Good & Service – e.g. Cell phone service (e.g. brands such as Verizon, Sprint, AT&T) or Store (e.g. brands such as CostCo, Macy’s, Amazon.com)
(2) Good Only – e.g. Hand gun (e.g. brands such as Colt, Beretta, Smith & Wesson, Glock); Motorcycle (e.g. brands such as Honda, Harley Davidson, Yamaha); or Newsmagazine (e.g. brands such as Business Week, Forbes, and Fortune) and
(3) Service Only – e.g. Movie (e.g. brands such as Brad Pitt or Angela Jolie) or Movie studios (e.g. brands such as Paramount, 20th Century Fox, or Disney).
The brands shown above are only examples. You can select others not shown if you prefer, but the products must be a Good only, a Service Only, and a Good & Service.
The Situation
Some authors argue that consumers have relationships with brands. People are brand loyal. Others argue that a relationship with a brand is not possible because a relationship has to be 2-way. In other words, brands can’t respond to consumers. Others argue that the relative importance of the brand, quality of the product, distribution intensity, and price vary by product.
Susan Fournier (1998) argues that customers have relationships with brands. Either way, if they have relationships (people are loyal) or do not have relationships with brands (people are not loyal), so what? When you explore the idea that consumers have relationships with products, pay particular attention to the implications of whether or not having a relationship might have for marketing managers in the management of and the development of marketing strategies for those brands, (the "So what?" in the above question).
The Task
Thus, in response to Fournier (1998), using the information you gather using the three product categories; you are to answer the question: "What is the relative importance of the following marketing factors in driving product choice: brand, quality, distribution, price?" Defend your position. Either way, if they have relationships or do not have relationships with brands, so what?
Submit your 3-4 page paper to Coursenet.

Expectations
Note that it is not assumed that you will agree with Dr. Fournier that people have relationships with brands, (nor is it assumed that you will necessarily disagree). Clearly marketing scholars disagree about this so you can too! You might choose two brands, examine them, examine what it means to "have a relationship with a brand" and conclude that this idea does not hold water and has no benefits for marketers, in the process explaining why Dr. Fournier is wrong in your opinion. On the other hand you might conclude that her idea holds for one of the brands you have examined and not for the other, or perhaps holds for some people and not for others. In that instance, contrasting the two is very important. Or you might conclude that it holds for both.
Note how the case you will make in favor or against the issue of people relating to brands takes you beyond the basics of product management to thinking about branding, product meanings, the roles brands play in customer choice, the views customers have of brands developed through marketing and non-marketing influences, and the implications of these for marketing managers relative to the other attributes of the product such as its quality, location, and price.
Note also that the materials describing the situation introduce you to three of the major journals in marketing, the Journal of Marketing, the Journal of Brand Management, and the Journal of Consumer Behavior. In that regard, I believe it important that you be introduced to some "academic" research which you should find both interesting and easy to understand. The topics covered in these articles (brand relationships and brand communities) are important and relatively new ones in Marketing and I hope you’ll find them stimulating enough to feel that at some point in the future you might try reading more articles in these journals. There are other sources which present new ideas in Marketing in a more "managerially friendly" form, such as the Harvard Business Review, Sloan Management Review, and California Management Review, to name but three. Now that you know these sources exist try to use them as you build your case and continue to use them, even after graduating.
The resources describing the situation include Susan Fournier (1998) in which, among other things, she argues that consumers have relationships with brands. Others have stated that they don’t, (e.g. Vargo and Lusch (2004) state that "inanimate items of exchange cannot have relationships"). Perhaps they have relationships, but only under certain circumstances. I leave that for you to consider.
I stress, that I want you to address the implications that brand relationships might have for marketing managers in the management of brands. Hint: you are to consider THREE brands (a service only, a good and good with service). I am forcing this issue to give you the opportunity to see if a relationship is formed based on the product category therefore allowing you to compare the results in your analysis between brands in differing product categories. I stress that it is not sufficient simply to write about customers and their relationships with the brands. That’s relatively easy. You need to do that to set the stage for your thinking about how marketers might use such insights. Feel free to be creative.
In terms of sources of information for this case, I want you to use the Internet a the popular business press. With that in mind, I have provided links many products/brands/labels. I do not want you to rely on anecdotal evidence (e.g. Introspection and Questioning friends and colleagues). In other words, without proper sampling, extrapolation from the few to the many is not acceptable. Thus, while you may be tempted to simply rely on anecdotal information and write about your own relationship (or non-relationship) with a chosen brand, you will learn a lot more by broadening your horizons and thinking like a marketer, which means setting aside your own perceptions and understanding the way others perceive products. If you are in an Internet-constrained environment simply say so in your assignment and focus on Fournier S. (1998)) and Vargo, S. L. & Lusch, R. F. (2004)
In preparing your CASE2, ensure that you demonstrate your learning of the marketing concepts and frameworks for analysis outlined in the modular learning objectives by using and referencing the background and case material.
1. Explain fundamental marketing concepts related to products, both goods and services, including what each of these are, as well as brands, and the Product Life Cycle.
2. Analyze whether customers develop relationships with brands and the implications of this for brand management.
3. Identify and research top Marketing Journals and explain some the cutting edge marketing issues of brand relationships and brand communities.
You should also bear in mind that a fundamental goal, as with all the cases you build in MKT501, is to stimulate your learning. Your answers should therefore demonstrate that learning.
Note that this assignment does NOT require you to prepare a detailed essay. Instead use section headings for each of the topics you address in your paper followed by a discussion of that topic. For example, make sure that for each of the brans you examine that you talk about the attributes of that product/brand/label including quality, meaning to its buyers/users, distribution, and price.
If you wish to include supportive or illustrative materials, feel free to include these in an appendix (e.g. uploaded as an additional file) of no more than three pages. Make sure that you refer to this material in the body of the paper.
Case-related articles in the popular business press
Tschorn, Adam (2010, April 11) TRENDS; Really? $200 Dockers?; The ubiquitous brand is hardly casual about its bid for high-end business, hoping to wean consumers away from denim. Los Angeles Times. Los Angeles, Calif. 5. Available vai ProQuest on 11 May 2010 at
http://proquest.umi.com/pqdweb?did=2006750431&sid=2&Fmt=3&client &RQT=309&VName=PQD
Dockers aims to right its course with upscale efforts
During the casual Friday khaki craze in the ’90s, Dockers® diluted its brand when it moved beyond men’s pants. Now the company hopes to revitalize the brand and re-create its image with upscale offerings selling for up to $200 at trendy Los Angeles boutiques. "There’s a negative perception out there that we have to overcome," said marketing director Karen Riley-Grant. "It’s the idea of the pleated-pant cube-dweller with the blue Oxford and the brown shoe."
Dodes, Rachel (2010 April 14). Levi Aims for High-End Halo. Wall Street Journal (Eastern edition). New York, N.Y 7. Available via ProQuest on 11 May 2010 at
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Levi’s reinvents itself as high fashion
High-priced jeans are a small part of Levi Strauss & Co.’s overall business but a key component in the company’s plan to take its brand upscale, The Wall Street Journal reports. Recent moves include the launch of upscale boutiques and the hiring of talent from high-end competitors such as Ralph Lauren.
Mahoney, Sarah (2010 April 20). Luxury Lives: Coach, Burberry Post Stronger Sales. Marketing Daily, MediaPost News, MediaPost Communications. Available on 12 May 2010 at
http://www.fastcompany.com/1627908/a-6-step-guide-to-brand-transformation
Latest luxury-retail reports illustrate spending upswing
Coach and Burberry reported solid sales growth, bearing out predictions that luxury-retail spending is recovering. "During the recession, it was not considered ‘cool’ to shop. So right now, people with money are spending because of that pent-up demand," says consultant Patricia Pao. "And interestingly, so are people with less money, not just because of pent-up demand, but also due to the new merchandising direction of prints and bright colors."
Susan Berfield. (2009, June 29). Coach’s New Bag. Business Week. New York: 40. Available via ProQuest on 12 May 2010
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In July 2008, amid the spreading gloom, the senior executives of Coach gathered in the empty second floor of their 4,000-square-foot store at 69 Main St. in East Hampton for a private annual meeting. At the end of the first day they made an important decision. The brand had emerged from its modest origins in the 1940s to become an emblem of the working woman and then, remarkably, a favorite among the fashion-conscious. Now that sense of expansiveness, opportunity, even desire, was diminished. Coach had to adapt. So began a nearly yearlong quest to design a line of purses and accessories that could be priced to fit the times without cheapening, or otherwise damaging, Coach’s image. For Coach this shift is a social experiment, a managerial challenge, and a financial necessity. The company might handle this comedown just fine. But when women, fashion, and money are involved, the results aren’t always predictable.
Mahoney, Sarah (2010, May 6). Gens X/Y, Rich Households Hike Private-Label Sales. Marketing Daily. MediaPost News. MediaPost Communications. Available on 6 May 2010 at
http://www.mediapost.com/publications/
?fa=Articles.showArticle&art_a
Younger shoppers and families earning more than $100,000 are leading the shift to private label products, says Nielsen. The senior vice president of Consumer & Shopper Insights says Target, Costco and other retailers are introducing products that appeal to these demographics.
Irwin, Tanya (2010, May 5). Among Gen Y Affluents: Chanel, BMW Top Brands. Marketing Daily. Media Post News. MediaPost Communications. Available on 12 May 2010 at
http://www.mediapost.com/publications/
?fa=Articles.showArticle&art_a
Survey: Wealthy Gen Y consumers like traditional luxury brands
Luxury consumers born between 1977 and 1994 are drawn to traditional high-end brands, with Chanel and BMW topping the list in the first L2 Gen Y Prestige Brand Rankings. The largest consumer group in U.S. history, Generation Y is expected to surpass baby boomer purchasing power before the end of the decade. "Gen Y good will is arguably the closest thing to a crystal ball for predicting a brand’s long-term prospects," says Scott Galloway, founder of L2.
Silverman, Aarthi (2009 Octoer 9). Kiss deep holiday discounts goodbye: Saks CEO. Reuters. Available on 12 May 2010 at
http://www.reuters.com/article/idUSTRE5984V620091009
Saks CEO: Don’t bank on deep discounts
Saks Fifth Avenue won’t be discounting as steeply as it did last holiday season, CEO Steve Sadove said. The luxury retailer is stocking less inventory this season, keeping in line with its strategy to keep luxury exclusive. "That’s what luxury retailing is about. It is about limited distribution (and) limited availability," Sadove said.
Thorton, Emily (2009, October 19). Toys ‘R’ Us Gets Wound Up Again. BusinessWeek, 4151, 60. Available via EBSCOhost on 12 May 2010 at
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Toys R Us to promote its wide selection
Toys R Us intends to start competing more on its wide selection rather than on price. The company has expanded its market share via acquisitions of FAO Schwarz and KB Toys, among others.
Edgecliffe-Johnson, Andrew (2009, June 22). Brands left to ponder price of loyalty. Financial Times. Available via ProQuest on 13 May 2010.
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Study: Even loyal customers are leaving big-name brands
A study that used grocery-store loyalty cards to track purchases found that in 2008 the average big-name brand lost a third of customers that once were highly loyal to it. Loyal customers were defined as ones who purchase the same brand in a category about 70% of the time or more
Big brands’ best customers have been defecting in droves since the beginning of the US recession, according to a study. By this year, more than half of a typical US brand’s most loyal shoppers in 2007 had switched to rival products.
"Defection is top of mind for brand managers now because they’re the most profitable customers," said Eric Anderson, associate professor of marketing at Kellogg School of Management, Northwestern University.
Martin, Timothy W. (2009, May 7). Corporate News: Corporate News: Safeway Cultivates Its Private Labels as Brands to Be Sold By Other Chains. Wall Street Journal (Eastern edition). New York, N.Y. B3. Available via ProQuest on 13 May 2010.
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Grocers are investing more resources in improving their private-label brands at a time when cash-strapped customers are trimming food budgets. Safeway is working to make its private-label O Organics and Eating Right lines available for other retailers to sell. The company also plans aggressive advertising of the lines
Martin, Timothy W. (2009, February 27). Corporate News: Safeway Says It Will Push Its Labels If Brands Fail to Cut Prices for Foods. Wall Street Journal (Eastern edition). New York, N.Y. B3. Available via ProQuest on 13 May 2010.
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Safeway Inc.’s top executive warned branded-food makers that his grocery chain will push its private-label brands harder if the companies don’t start lowering prices on their products
Neissser, Drew (2010, April 26). A 7-step guide to brand transformation. Fast Company. Available on 13 May 2010 at
http://www.fastcompany.com/1627908/
a-6-step-guide-to-brand-transformation?partner=rss
7 ways to turn around a failing brand
Turning around a struggling company is like trying to steer a battleship with a broken rudder, writes Drew Neisser. These seven tips, based on Samsung Life Insurance’s successful turnaround, cover the basic things executives need to address to save a sinking brand.
Athavaley, Anjali (2009, April 2). What Do Labels Really Tell You? — Household Products Start To Come Clean on Ingredients. Wall Street Journal (Eastern edition). New York, N.Y. D1. Available via ProQuest on 13 May 2010
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Federal law generally doesn’t require manufacturers to disclose which chemicals are used in household cleaning products, though companies must include on labels any emergency warnings and instructions for first aid. The developments come at a time when consumer demand for cleaning products marketed as eco-friendly is on the rise, partly because consumers assume green products are safer, according to a recent report by Mintel International, a market-research firm.
Bounds, Gwendolyn (2009, April 2). What Do Labels Really Tell You? — As Eco-Seals Proliferate, So Do Doubts. Wall Street Journal (Eastern edition). New York, N.Y. D1. Available via ProQuest on 13 May 2010.
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According to the Web site ecolabelling.org, there are more than 300 such labels putting a green stamp on everything from cosmetics and seafood to bird-friendly coffee
Case-related articles in the academic press
Fournier, S. (1998, March). Consumers and their brands: Developing relationship theory in consumer research. Journal of Consumer Research. 24(4). PDF available via EBSCOhost on 5 November 2009.
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Vargo, Stephen L & Lusch, Robert F (2004, January). Evolving to a New Dominant Logic for Marketing. Journal of Marketing. 68(1) 1-17. PDF available via EBSCOhost on 5 November 2009.
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Albert, Noël; Merunka, Dwight; & Valette-Florence, Pierre (2008). When consumers love their brands: Exploring the concept and its dimensions. Journal of Business Research 61 1062–1075. PDF available via Science Direct on 29 April 2010.
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Chaudhuri, Arjun & Holbrook, Morris B. (2002, September). Product-class effects on brand commitment and brand outcomes: The role of brand trust and brand affect . Journal of Brand Management, 10(1). 33-59 PDF version available in EBSCOhost on 29 April 2009.
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Grubb, Edward L & Grathwohl, Harrison L (1967, October 1). Consumer Self-Concept, Symbolism and Marketing Behavior: A Theoretical Approach. Journal of Marketing. 31(4). 22-28. PDF available via EBSCOhost on 5 November 2009
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Quick Links to RESOURCES on TD2
Keller, Kevin Lane (1993, January). Conceptualizing, Measuring, Managing Customer-Based Brand Equity. Journal of Marketing. 57(1). 1-22. PDF available in EBSCOhost on 5 November 2009
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Ries, Al (2009, September 7). Slowly But Surely, Line Extensions Will Take Your Brand Off Course: Beer Category Shows Cannibalization of Core Brands. Advertising Age. Crain Communications.