Product And Brand Management

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Product And Brand Management

  1. 1. Product and Brand Management
  2. 2. What is a product? <ul><li>A product is any offering by a company to a market that serves to satisfy customer needs and wants. </li></ul><ul><li>It can be an object, service, idea,etc. </li></ul>
  3. 3. New Product Development <ul><li>Most new product development is an improvement on existing products </li></ul><ul><li>Less than 10% of new products are totally new concepts. </li></ul>
  4. 4. Success rate of new products <ul><li>The success rate of new products is very low – less than 5%. ‘You have to kiss a lot of frogs to find a prince.” </li></ul><ul><li>Product obsolescence is rapid with improvements in technology </li></ul><ul><li>Shorter PLCs </li></ul>
  5. 5. Product Development Stages <ul><li>Idea generation </li></ul><ul><li>Idea screening </li></ul><ul><li>Concept development and testing </li></ul><ul><li>Concept testing </li></ul><ul><li>Conjoint analysis – to find out the best valued attributes by consumers </li></ul>
  6. 6. Business analysis <ul><li>The most customer appealing offer is not always the most profitable to make </li></ul><ul><li>Estimate on costs, sales volumes,pricing and profit levels are made to find out the optimal price – volume mix. </li></ul><ul><li>Breakeven and paybacks </li></ul><ul><li>Discounted cash flow projections </li></ul>
  7. 7. Market testing <ul><li>Test markets </li></ul><ul><li>Test periods </li></ul><ul><li>What information to gather? </li></ul><ul><li>What action to take? </li></ul>
  8. 8. Commercialization <ul><li>When? (Timing) </li></ul><ul><li>Where? (Which geographical markets) </li></ul><ul><li>To whom? (Target markets) </li></ul><ul><li>How? (Introductory Marketing strategy) </li></ul>
  9. 9. Product Levels <ul><li>Customer value hierarchy </li></ul><ul><li>Core benefit </li></ul><ul><li>Basic product </li></ul><ul><li>Expected product </li></ul><ul><li>Augmented product </li></ul><ul><li>Potential product </li></ul>
  10. 10. Customer Delight <ul><li>When you exceed customer expectations </li></ul>
  11. 11. Product Hierarchy <ul><li>Need </li></ul><ul><li>Product family </li></ul><ul><li>Product class </li></ul><ul><li>Product Line </li></ul><ul><li>Product type </li></ul><ul><li>Brand </li></ul><ul><li>Item </li></ul>
  12. 12. Product classification <ul><li>Durable </li></ul><ul><li>Non – durable </li></ul><ul><li>Services </li></ul>
  13. 13. Consumer goods classification <ul><li>Convenience goods </li></ul><ul><li>Shopping goods </li></ul><ul><li>Specialty goods </li></ul><ul><li>Unsought goods </li></ul>
  14. 14. Industrial goods classification <ul><li>Materials and Parts </li></ul><ul><li>- raw materials </li></ul><ul><li>- manufactured materials and parts </li></ul><ul><li>Capital items </li></ul><ul><li>Supplies and business services </li></ul>
  15. 15. Product Mix <ul><li>The assortment of products that a company offers to a market </li></ul><ul><li>Width – how many different product lines? </li></ul><ul><li>Length – the number of items in the product mix </li></ul><ul><li>Depth – The no. of variants offered in a product line </li></ul><ul><li>Consistency – how closely the product lines are related in usage </li></ul>
  16. 16. Product Line decisions <ul><li>Product rationalization </li></ul><ul><li>Market rationalization </li></ul><ul><li>Product line length </li></ul><ul><li>too long – when profits increase by dropping a product in the line </li></ul><ul><li>too short – when profits increase by adding products to the product line </li></ul><ul><li>Line pruning – capacity restrictions to decide </li></ul>
  17. 17. Brand <ul><li>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 </li></ul><ul><li>It is the seller’s promise to deliver the same bundle of benefits/services consistently to buyers </li></ul>
  18. 18. Brand Equity <ul><li>When a commodity becomes a brand, it is said to have equity. </li></ul><ul><li>The premium a brand can command in the market </li></ul><ul><li>The difference between the perceived value and the intrinsic value </li></ul>
  19. 19. Levels of meaning <ul><li>Attributes </li></ul><ul><li>Benefits </li></ul><ul><li>Values </li></ul><ul><li>Culture </li></ul><ul><li>Personality </li></ul><ul><li>Users </li></ul>
  20. 20. Brand Power <ul><li>Customer will change brands for price reasons </li></ul><ul><li>Customer is satisfied. No reason to change. </li></ul><ul><li>Customer is satisfied and would take pains to get the brand </li></ul><ul><li>Customer values the brand and sees it as a friend </li></ul><ul><li>Customer is devoted to the brand </li></ul>
  21. 21. Brand Equity – Competitive Advantages <ul><li>Reduced marketing costs </li></ul><ul><li>Trade leverage </li></ul><ul><li>Can charge a higher price </li></ul><ul><li>Can easily launch brand extensions </li></ul><ul><li>Can take some price competition </li></ul>
  22. 22. Managing Brand Equity <ul><li>Brand Equity needs to be nourished and replenished. We must not flog the brand for equity to be diluted or dissipated </li></ul><ul><li>Store brands </li></ul>
  23. 23. Advantages of branding <ul><li>Easy for the seller to track down problems and process orders </li></ul><ul><li>Provide legal protection of unique product features </li></ul><ul><li>Branding gives an opportunity to attract loyal and profitable set of customers </li></ul><ul><li>It helps to give a product category at different segments, having separate bundle of benefits </li></ul><ul><li>It helps build corporate image </li></ul><ul><li>It minimises harm to company reputation if the brand fails </li></ul>
  24. 24. Brand parity <ul><li>Consumers buy from a set of acceptable/ preferred brands </li></ul>
  25. 25. Umbrella Brand <ul><li>Products from different categories under one brand </li></ul><ul><li>Dangerous to the brand if the principal brand fails </li></ul><ul><li>Sometimes the company name is prefixed to the brand. In such cases the company name gives it legitimacy. The product name individualises it. </li></ul>
  26. 26. Naming the Brand <ul><li>Product benefits </li></ul><ul><li>Product qualities </li></ul><ul><li>Easy to pronounce </li></ul><ul><li>Should be distinctive </li></ul><ul><li>Should not have poor meanings in other languages and countries </li></ul>
  27. 27. Brand strategy <ul><li>Line extension – existing brand name extended to new sizes in the existing product category </li></ul><ul><li>Brand extension – brand name extended to new product categories </li></ul><ul><li>Multibrands – new brands in the same product category </li></ul><ul><li>New brands – new product in a different product category </li></ul><ul><li>Cobrands –brands bearing two or more well known brand names </li></ul>
  28. 28. Brand Repositioning <ul><li>This may be required after a few years to face new competition and changing customer preferences </li></ul>
  29. 29. Packaging <ul><li>Includes the activities of designing and producing the container for a product </li></ul><ul><li>Packaging is done at three levels </li></ul><ul><li>- primary </li></ul><ul><li>- secondary </li></ul><ul><li>- shipping </li></ul>
  30. 30. Packaging as a marketing tool <ul><li>Self service </li></ul><ul><li>Consumer affluence </li></ul><ul><li>Company and brand image </li></ul><ul><li>innovation </li></ul>
  31. 31. Designing packaging <ul><li>Packaging concepts </li></ul><ul><li>Technical specifications </li></ul><ul><li>Engineering tests </li></ul><ul><li>Visual tests </li></ul><ul><li>Dealer tests </li></ul><ul><li>Consumer tests </li></ul><ul><li>Packaging innovations </li></ul><ul><li>Environmental considerations </li></ul>
  32. 32. Labels <ul><li>Identification </li></ul><ul><li>Grade classification </li></ul><ul><li>Description of product </li></ul><ul><li>Manufacturer identity </li></ul><ul><li>Date of mfg., batch no. </li></ul><ul><li>Instructions for use </li></ul><ul><li>Promotion </li></ul>
  33. 33. Labels as a marketing tool <ul><li>Labels need to change with time or packaging changes to give it a contemporary and fresh look </li></ul>

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