Product and Brand Management

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What is a product?:

What is a product? A product is any offering by a company to a market that serves to satisfy customer needs and wants. It can be an object, service, idea,etc.

New Product Development:

New Product Development Most new product development is an improvement on existing products Less than 10% of new products are totally new concepts.

Success rate of new products:

Success rate of new products The success rate of new products is very low – less than 5%. ‘You have to kiss a lot of frogs to find a prince.” Product obsolescence is rapid with improvements in technology Shorter PLCs

Product Development Stages:

Product Development Stages Idea generation Idea screening Concept development and testing Concept testing Conjoint analysis – to find out the best valued attributes by consumers

Business analysis:

Business analysis The most customer appealing offer is not always the most profitable to make Estimate on costs, sales volumes,pricing and profit levels are made to find out the optimal price – volume mix. Breakeven and paybacks Discounted cash flow projections

Market testing:

Market testing Test markets Test periods What information to gather? What action to take?

Commercialization:

Commercialization When? (Timing) Where? (Which geographical markets) To whom? (Target markets) How? (Introductory Marketing strategy)

Product Levels:

Product Levels Customer value hierarchy Core benefit Basic product Expected product Augmented product Potential product

Customer Delight:

Customer Delight When you exceed customer expectations

Product Hierarchy:

Product Hierarchy Need Product family Product class Product Line Product type Brand Item

Product classification:

Product classification Durable Non – durable Services

Consumer goods classification:

Consumer goods classification Convenience goods Shopping goods Specialty goods Unsought goods

Industrial goods classification:

Industrial goods classification Materials and Parts - raw materials - manufactured materials and parts Capital items Supplies and business services

Product Mix:

Product Mix The assortment of products that a company offers to a market Width – how many different product lines? Length – the number of items in the product mix Depth – The no. of variants offered in a product line Consistency – how closely the product lines are related in usage

Product Line decisions:

Product Line decisions Product rationalization Market rationalization Product line length too long – when profits increase by dropping a product in the line too short – when profits increase by adding products to the product line Line pruning – capacity restrictions to decide

Brand:

Brand A name becomes a brand when consumers associate it with a set of tangible and intangible benefits that they obtain from the product or service It is the seller’s promise to deliver the same bundle of benefits/services consistently to buyers

Brand Equity:

Brand Equity When a commodity becomes a brand, it is said to have equity. The premium a brand can command in the market The difference between the perceived value and the intrinsic value

Levels of meaning:

Levels of meaning Attributes Benefits Values Culture Personality Users

Brand Power:

Brand Power Customer will change brands for price reasons Customer is satisfied. No reason to change. Customer is satisfied and would take pains to get the brand Customer values the brand and sees it as a friend Customer is devoted to the brand

Brand Equity – Competitive Advantages:

Brand Equity – Competitive Advantages Reduced marketing costs Trade leverage Can charge a higher price Can easily launch brand extensions Can take some price competition

Managing Brand Equity:

Managing Brand Equity Brand Equity needs to be nourished and replenished. We must not flog the brand for equity to be diluted or dissipated Store brands

Advantages of branding:

Advantages of branding Easy for the seller to track down problems and process orders Provide legal protection of unique product features Branding gives an opportunity to attract loyal and profitable set of customers It helps to give a product category at different segments, having separate bundle of benefits It helps build corporate image It minimises harm to company reputation if the brand fails

Brand parity:

Brand parity Consumers buy from a set of acceptable/ preferred brands

Umbrella Brand:

Umbrella Brand Products from different categories under one brand Dangerous to the brand if the principal brand fails Sometimes the company name is prefixed to the brand. In such cases the company name gives it legitimacy. The product name individualises it.

Naming the Brand:

Naming the Brand Product benefits Product qualities Easy to pronounce Should be distinctive Should not have poor meanings in other languages and countries

Brand strategy:

Brand strategy Line extension – existing brand name extended to new sizes in the existing product category Brand extension – brand name extended to new product categories Multibrands – new brands in the same product category New brands – new product in a different product category Cobrands –brands bearing two or more well known brand names

Brand Repositioning:

Brand Repositioning This may be required after a few years to face new competition and changing customer preferences

Packaging:

Packaging Includes the activities of designing and producing the container for a product Packaging is done at three levels - primary - secondary - shipping

Packaging as a marketing tool:

Packaging as a marketing tool Self service Consumer affluence Company and brand image innovation

Designing packaging:

Designing packaging Packaging concepts Technical specifications Engineering tests Visual tests Dealer tests Consumer tests Packaging innovations Environmental considerations

Labels:

Labels Identification Grade classification Description of product Manufacturer identity Date of mfg., batch no. Instructions for use Promotion

Labels as a marketing tool:

Labels as a marketing tool Labels need to change with time or packaging changes to give it a contemporary and fresh look

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