Chapter Overview (“Summing Up”)
LO1 Describe the components of a product.
The product itself is important, but so are its associated services, such as support or financing.
Other elements combine to produce the core ¬customer value of a product: the brand name,
quality level, packaging, and additional features.
LO2 Identify the types of consumer products.
These products tend to be classified into four groups: specialty, shopping, convenience, and
unsought products. Each classification involves a different purchase situation and consumer goal.
LO3 Explain the difference between a product mix’s breadth and a product line’s depth.
Breadth, or variety, entails the number of product lines that a company offers. Depth involves the
number of categories within one specific product line.
LO4 Identify the advantages that brands provide firms and consumers.
Brands play important roles in enabling people to make purchase decisions more easily and
encouraging customer loyalty. For firms specifically, they also constitute valuable assets and
improve a company’s bottom line and help protect against competition.
LO5 Explain the various components of brand equity.
Brand equity summarizes the value that a brand adds, or subtracts, from the offering’s value. It
comprises brand awareness, or how many consumers in the market are familiar with the brand;
brand associations, which are the links consumers make be-tween the brand and its image; and
brand loyalty, which occurs when a consumer will only buy that brand’s offer. Brand equity also
encompasses the concept of perceived value, which is a subjective measure that consumers
develop to assess the costs of obtaining the brand.
LO6 Determine the various types of branding strategies used by firms.
Firms use a variety of strategies to manage their brands. First, they decide whether to ¬offer
manufacturer and/or private-label brands. Second, they have a choice of using an overall
corporate brand or a collection of product line or individual brands. Third, to reach new markets
or extend their current market, they can extend their current brands to new products. Fourth,
firms can co-brand with another brand to create sales and profit synergies for both. Fifth, firms
with strong brands have the opportunity to license their brands to other firms. Finally, as the
marketplace changes, it is often necessary to reposition a brand.
LO7 Distinguish between brand extension and line extension.