1. Money spinner- a product (or business) generating a lot of profit.
2. Cash cow - a profitable product (or business) with a well-known brand name commanding a high market share in a low-growth market, or any profitable product or business generating a steady flowofsalesrevenue and cash.
3. Loss leader - a product offered below cost and sold unprofitably to attract customers who will then, to buy profitableones.
On the basis of a product’ quality and price:
1. Upmarket products - commercial products, services that are relatively expensive and of superior quality compared to others of the same type.
2. Mid-priced products are described as mid-market.
3. Downmarket products - low-priced commercial products, services, etc., that have little prestige or are poor in quality, and this term usually shows disapproval.
Two ways of differentiating a product:
II. Brand and branding
1) abrand is a name (or sometimes a sign, symbol or design) a company gives to its products so they can be easily recognized and that is used to identify the goods or services of a particular manufacturer, seller or supplier, and to differentiate them from the goods or services of competitors. A brand of a product is a version of it made by one particular manufacturer. A brand should have a clear brand identity so that people think of it in a particular way in relation to other brands. Brand name- is any word design, shape, colour, sound or combination of them used to distinguish a product or a service.Trade name- a commercial legal name under which a company does business.
The consumer adoption process consists of five stages:
1) Awareness
2) Interest
3) Evaluation
4) Trial
5) Adoption.
The spread of a new product throughout the market is called the diffusion process. The categories of adopters for a new product are innovators, early adopters, early-majority, late-majority, and laggards. The rate of speed with which a new product is adopted is affected by its relative advantage, compatibility, complexity, divisibility, and communicability.
Branding - creating brands and keeping them in customers' minds through advertising, packaging, etc. Branding strategies:
1) Manufacturer Branding. With manufacturer branding, the producer dictates the brand name using either a multiproduct or multibrand approach.
1.1 Multiproduct branding is when a company uses one name for all its products. (Safeguard, P&G)
Advantages:
- Brand equity; consumers who have had a good experience with the product will carry this favorable attitude to other items with the same name
- Line extensions (adding new products in the product line). This strategy helps to attract more consumers owing to a wide range of choice.
- Low advertising costs
- Raising the level of brand awareness.
Risks:
- Poor performance of one item may have a negative impact on similarly named items in the line
- Too many uses for one brand name can dilute the image of a product line.
1.2 An alternative manufacturer’s branding strategy is multibranding, which involves giving each product a distinct name.
Advantages:
- each brand is unique to each market segment;
- no risk that a product failure will effect other products in the line.
Disadvantages:
- Promotional costs tend to be higher
- The company must generate awareness among consumers and retailers for each new brand name without the benefit for any previous impressions.
2) Private Branding (private labeling or retailer branding). A company manufactures products but sells them under the brand name of a wholesaler or retailer.
The advantage to the manufacturer is that promotional costs are shifted to the retailer or other company, and the manufacturer can often sell more units through others then by themselves.
Risk – the manufacturer’s sales depend heavily on the efforts of others.
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