G high tech marketers try to avoid or minimize

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-in many categories some cannibalization is expected (e.g. high tech) -marketers try to avoid or minimize cannibalization when making new product decisions Line extensions and brand extensions -line extension: putting an established brand on a new product and adding it to an existing product line. E.g. a low fat version of lay’s potato chips -brand extension: putting an established brand on a new product in a different category for a new customer segment. E.g. snicker’s brand ice cream Product line and mix decisions Planning branding -giving a distinct identity using: words, designs, and symbols -in terms of branding, a product may carry: - Company name and individual brand - Individual name - Private label brand - Multiple brands (co-branding, ingredient branding) Brands should be: -recognizable and memorable -meaningful and appealing -Capable of being legally protected -suitable for international markets Branding and positioning -branding not only identifies a particular product but it sets it apart from the competition (both direct and indirect) -can make the product both distinctive and competitively superior -positioning: what the target group perceives about the brand relative to how they perceive the competition The power of brand equity Brand equity: the extra value customers perceive that enhances their long term loyalty to a brand -boosts customer lifetime value -can insulate a company against competitive threats -can help new products achieve acceptance -the value of strong brands: -encourages greater customer trust and brand loyalty -ability to set prices higher and enjoy better margins -boosts customer lifetime value -the total amount that a customer spends on a brand or with a company during the life of their relationship: lifetime value Chapter 8: developing channel and logistics strategy The value chain -a series of interrelated, value added functions - inbound: inputs needed for creating the goods and services - outbound: making the product or service available Major links in the value chain
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Flows in the value chain - products: physical items such as raw materials and finished goods - data: information such as the number of items ordered, customer requirements and feedback - money: refers to payments for supplies, reseller, or customer payments for finished goods and other money movements between participants Adding value through the chain -each participant adds value to satisfy the needs of the next link -price paid reflects the value added by the previous link -customers ultimately pay for the combined value added by all participants Planning channel strategy -each organization must make the following decisions: - Which channel functions must be covered by someone other than the organization? - Who will handle each function? - How many channel levels to use? - How many and what type of channel members to choose? Channel levels -each channel level adds value in some way -basic channel level configurations: - Zero-level: direct linking of the seller to the buyer - One-level: the seller works with a single type of intermediary - Multiple level: the seller works with two or three levels of distribution partners Channel levels illustrated Multichannel marketing -puts the emphasis on providing a range of choices for customers who buy through
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