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  1. 1. Name of InstitutionAmity Business School Product Strategy Strategic vision where why how Roadmap
  2. 2. Name of InstitutionAmity Business School Product Line Length Number of Items in the Product Line Stretching Lengthen beyond current range Filling Lengthen within current range Downward Upward (A) Product line decisions
  3. 3. Name of InstitutionAmity Business School (B) Product-Position Strategies  Our product is unique  e.g. Taj Hotels(oldest in 5 star hotels); Radisson Hotel (pocket friendly 5 star hotel)  Our product is different  e.g. Saffola(low in cholesterol)  Listerine (kills germs)  Our product is similar  e.g. Harpic vs Sani-fresh vs Lizol  Dove vs Pears vs Camay For [a target segment brand], the [concept from individual product features] is the [primary claim / attributes positioned for customers against competitors] because [it is the single most important factor to keep buying or core benefit]
  4. 4. Name of InstitutionAmity Business School  By attributes  e.g. Singapore Airlines (first class comfort)  By benefits  e.g. Citibank Credit Card (24/7 availability)  By price/quality e.g. Tata Photon plus  By usage or application e.g.Red Bull (fluid replenishment in sports)  By users e.g. Johnson Baby Shampoo; J&J Affinity Shampoo & hair conditioner for women)  By product class e.g. Camay soap (with bath oils—not just soap)  By competitors e.g. Dettol against Lifeboy
  5. 5. Name of InstitutionAmity Business School(C ) Product Repositioning Strategy • Repositioning among existing customers – Dabur repositioned its Brands from a traditional therapeutic remedies to one for preventive health maintenance – Bagpiper repositioned as ―Khoob jamega rang…‖ • Repositioning among new users • Repositioning for new uses – Repositioning of Maggi Tomato Ketchup ―It’s different‖
  6. 6. Name of InstitutionAmity Business School (D)Product-Overlap Strategy Company decides to compete against its own brand by using: • Competing brands – e.g. Gillette Atra, Sensor, Mach 3 • Private labeling – e.g. Spencer’s Chilli Sauce, Watson Vitamins • OEM – e.g. IBM selling magneto-resistance (MR) heads to OEM disk drive developers/manufacturers
  7. 7. Name of InstitutionAmity Business School (E) Product-Elimination Strategy • Or Cannibilization • How?  Harvesting benefits  Line-simplification  Total-line divestment
  8. 8. Name of InstitutionAmity Business School (F) Value-Marketing Strategy • Delivering real product performance with promises:  Quality  Customer-service  Time • Example: – Dell cuts the duration from order to delivery of most of its products to the minimum
  9. 9. Name of InstitutionAmity Business School (G) ANSOFF STRATEGY EXISTING NEW NEW EXISTING PRODUCT MARKET
  10. 10. Name of InstitutionAmity Business School (H) EXTENSION STRATEGIES 1. Product line extension: add an item to the existing product line – FMCG companies introduced various sizes of the same product e.g. mini-packs for travelers, extra-large size for hospital 2. Product category extension: add a new item or line of items for a company e.g. – P&G have Head & Shoulders, Rejoice, and Pantene in the same category
  11. 11. Name of InstitutionAmity Business School 3. Brand extension: Product category extension that uses an existing brand name e.g. – Nestle extended its Bear Brand condensed milk by introducing Bear Brand with Honey
  12. 12. Name of InstitutionAmity Business School • Downward stretch by introducing lower range of the products e.g. – Shangri-La, a chain of deluxe hotels and resorts in Asia established the Traders Hotels, a sister brand to deliver high value, mid-range, quality accommodation to the business traveler – Mercedes introduced the ―Baby Merz‖ to cater to the upper class mid-sized range of the market • Upward stretch by entering the high end of the market e.g. – Toyota introduced the Lexus and Nissan introduced the Infiniti
  13. 13. Name of InstitutionAmity Business School • Two-way stretch by filling the whole line e.g. – Toyota has the Starlet at the lower end; the Corolla in the executive range; the Camry in the upper-management range and the Lexus in the luxury range
  14. 14. Name of InstitutionAmity Business School COST USP (I) Generic Strategies
  15. 15. Name of InstitutionAmity Business School Low Cost (price) Broad Narrow Uniqueness Source of P&B Advantage Strategic Target Segment Differentiation strategy Cost leadership strategy Focus strategy (I) Generic Strategies
  16. 16. Name of InstitutionAmity Business School
  17. 17. Name of InstitutionAmity Business School Strategy - FOCUS Focus  Careful identification of target market (niche)  Cost leadership emphasis or differentiation emphasis  Constant review of customer demand in niche Raymond elite retailing Polo RL clothing Rolex watches Nirma washing powder
  18. 18. Name of InstitutionAmity Business School Strategy - Differentiation  Premium Quality  Brand image  Technological  leadership  Customer service Apple - PCs Gillette – razors Nike - shoes
  19. 19. Name of InstitutionAmity Business School Strategy - Cost leadership  Tight cost controls  Efficient service, sales force, and advertising  Competitive pricing  Discount Tyres - Tyre replacement  Wal-Mart – retailing  UPS - package
  20. 20. Name of InstitutionAmity Business School 1 Low price/low added value Likely to be segment specific 2 Low price Risk of price war and low margins/need to be cost leader 3 Hybrid Low cost base and reinvestment in low price and differentiation 4 Differentiation 5 Focused differentiation Perceived added value to a particular segment, price premium 6 Increased price/standard Higher margins if competitors do not value follow/risk of losing market share 7 Increased price/low value Only feasible in monopoly situation 8 Low value/standard price
  21. 21. Name of InstitutionAmity Business School Product adaptation - communications extension Product adaptation - communicati ons adaptation Product communications extension Extended product - communications adaptation ExistingProductNewProduct Existing IMC New IMC (K) Communication-Adaptation Based Strategies
  22. 22. Name of InstitutionAmity Business School Product communications extension very low cost takes the same product and communication strategy into other markets Extended product - communications adaptation adjustment in marketing communications only low cost strategy, but different product functions have to be identified and communications mix developed Product adaptation - communications extension product adapted to fit usage conditions but the communication stays the same Product adaptation - communications adaptation Both product and communication strategies need attention to fit the peculiar need of the market Product invention needs a totally new idea to fit the exclusive conditions of the market. development costs may be high, but the advantages are also very high. (K) Communication-Adaptation Based Strategies
  23. 23. Name of InstitutionAmity Business School (L) Price/Quality Based Strategies
  24. 24. Name of InstitutionAmity Business School  Price skimming: Introductory price set relatively high, thereby attracting buyers at top of product’s demand curve.  Market penetration pricing: Low price is used as an entering wedge.
  25. 25. Name of InstitutionAmity Business School (M) Price-Leadership Strategy • Price-leadership strategy: One or a very few firms initiate price changes, with most or all the other firms in the industry following suit. • When price leadership prevails, price competition does not exist. The burden of making critical pricing decisions is placed on leading firm(s) and other simply follow the leader.
  26. 26. Name of InstitutionAmity Business School (N) Competitive Bidding  Competitive bidding: Buyer sends inquiries (requests for quotations) to firms able to produce in conformity with requested requirements  Requests for proposals (RFPs) involve the same process, but here buyer is signaling that everything is preliminary and that a future RFQ will be sent once specifics are determined from the best proposals.
  27. 27. Name of InstitutionAmity Business School (O) BCG SBU Portfolio Strategy Low High High Low Industry attractiveness, Market share, Cash generation Nurture to feed cash to? Use cash to make into star Defend position Fix or abandon Business strength, Growth rate, Cash use
  28. 28. Name of InstitutionAmity Business School Bottom line: Repositioning by Redefining Axes
  29. 29. Name of InstitutionAmity Business School (Q) New- Product Development Strategy • New product strategy • Idea generation • Idea screening • Concept development and testing • Marketing strategy • Business analysis • Product development • Test Marketing • Commercialisation
  30. 30. Name of InstitutionAmity Business School  New products are critical to survival  New-product development (NPD) is essential for companies seeking growth  It should be an on-going, well organized NPD process having top-management support  What is a new product?  From a firm's perspective, a new product is a product that it is unfamiliar in any way
  31. 31. Name of InstitutionAmity Business School 1. Products new to the world: usually revolutionary products resulting from product innovation  When Creative Technology first introduced the Sound-blaster  When disposable cameras were first introduced  When Seiko introduced the Seiko Kinetic Relay, a watch that can go into suspended animation
  32. 32. Name of InstitutionAmity Business School 2. Products new to the firm • Improvements to existing products e.g. – Clinic Plus --------Clinic All Clear • Additions to existing lines e.g. – Clinic all clear hair oil • Costs reductions and re-positioning
  33. 33. Name of InstitutionAmity Business School Example--Logitech “Logitech, the world's biggest maker of computer mouse, has come up with a mouse that allows the user to feel what is seen on the screen. This mouse is called the iFreeMouseMan‖
  34. 34. Name of InstitutionAmity Business School (S) Strategies for PLC INTRODUCTION GROWTH MATURITY DECLINE Product Strategy Limited models, frequent changes More models, frequent changes Large number of models Eliminate unprofitable models Awareness, stimulate demand, sales promotion Aggressive ads, Reduce SP Advertise, promote heavily Phase out promotion Basic Product Product Extension, service, warranty Brand Extensions, USP, Brand switching Target Laggards
  35. 35. Name of InstitutionAmity Business School 1.Introduction - 3D TVs 2.Growth - Blueray discs/DVR 3.Maturity - DVD 4.Decline - Video cassette
  36. 36. Name of InstitutionAmity Business School INTRODUCTION GROWTH MATURITY DECLINE Third generation mobile phones Portable DVD Players Personal Computers Typewriters E-conferencing Email Faxes Handwritten letters All-in-one racing skin-suits Breathable synthetic fabrics Cotton t-shirts Shell Suits Iris-based personal identity cards Smart cards Credit cards Cheque books
  37. 37. Name of InstitutionAmity Business School 1. Product Platform Strategy & Open Interface 2. Product Line Strategy 3. Leveraged Expansion 4. Sustained Differentiation 5. First-to-Market vs. Fast-Follower Strategy (T) Types of Platform Strategies:
  38. 38. Name of InstitutionAmity Business School 1. Product Platform Strategy • Platform is an architecture of the common elements implemented across a range of products • One element in the platform represents a defining technology – Dictates life cycle, capabilities, limitations – The choice of defining technology is the most critical strategic decision that a hi-tech company makes
  39. 39. Name of InstitutionAmity Business School Product Platforms Product 1 Product 2 Product 3 Product 1A Product 1B Product 1C Feature A Feature B Feature C Segment A Segment B Segment C Common Platform Elements Unique product elements and common channel elements of product line Product 5
  40. 40. Name of InstitutionAmity Business School Benefits of Platform Strategy • Focuses management on key decisions at the right time • Enables rapid & consistent product development • Encourages a long-term view on product strategy • Can leverage operational efficiencies – Manufacturing costs – Design costs – Marketing support easier
  41. 41. Name of InstitutionAmity Business School Example of Product Platforms: • Apple Computer Platform: – Mac OS – Motorola processors – Easy-to-use GUI Supporting and Defining Technologies?
  42. 42. Name of InstitutionAmity Business School Open Interface in Product Platforms • A product portfolio based on open interface allows other manufacturers to participate • Gives the company a smaller portion of the entire market, but… …makes the market significantly bigger To enlarge a market where you are a rather strong player yourself A piece of a big cake may well be a lot bigger than the small cake!
  43. 43. Name of InstitutionAmity Business School 2. Product Line Strategy A time-phased plan for developing products from a common platform, each product targeting a specific market segment. • The true potential of a platform strategy is extracted with an effective product line strategy
  44. 44. Name of InstitutionAmity Business School Product Line Strategy (contd.)  Covers all targeted market segments  Each product offering should be sufficiently focused  Time-phased scheduling / sequencing  All products cannot be released simultaneously  Prioritization  Similar product lines are coordinated  To avoid rework and confusion in marketing and among customers
  45. 45. Name of InstitutionAmity Business School Product Line Examples
  46. 46. Name of InstitutionAmity Business School 3. Leveraged Expansion The success of expansions to new product markets depends highly on ability to leverage: • Existing market knowledge • Technical Product skills
  47. 47. Name of InstitutionAmity Business School Examples of Leveraged Expansion • Adobe: Acrobat • Microsoft – DOS  Windows – Windows + Internet  Internet Explorer & MSN
  48. 48. Name of InstitutionAmity Business School 4. Sustained Differentiation …is achieved with vectors of differentiation that are significant to the customer • One very prominent unique feature or • An appealing combination • Eg- Technolgy
  49. 49. Name of InstitutionAmity Business School High-Tech Differentiation 1. Unique features 2. Measurable benefits 3. Ease of use 4. Improved productivity 5. Unique fundamental characteristics 6. Design
  50. 50. Name of InstitutionAmity Business School 1. Unique features • Most commonly used • An ‖easy‖ strategy • Endlessly adding new features does not give sustained differentiation • Can contradict ease of use
  51. 51. Name of InstitutionAmity Business School 2. Measurable benefits • Reduced eletricity bill • Longer recording time • Faster Internet access
  52. 52. Name of InstitutionAmity Business School 3. Ease of use • A very important vector of differentiation • Sometimes technology advances do not deliver enhanced productivity, because of usability problems • A big challenge in an era when everything is integrated in a single device (mobile phone)
  53. 53. Name of InstitutionAmity Business School 4. Improved Productivity • Longer battery life • Better quality (of voice communications) • More responsive UI • Technology advances complemented with good usability • Often a crucial factor in buyer’s decision making process
  54. 54. Name of InstitutionAmity Business School 5. Unique Fundamental Characteristics • Example: The imaging method of Polaroid cameras • Often protected by patents – If based on a special technology
  55. 55. Name of InstitutionAmity Business School 6. Design • More and more important in maturing markets… …such as mobile phones! • Hardware Design & User Interface Design
  56. 56. Name of InstitutionAmity Business School 4. First-to-Market Strategy • Market share advantage • Earlier market & customer experience • Influence on markets and standards • Possibility to build entry barriers • Image benefits, a glamorous strategy • Big risks!
  57. 57. Name of InstitutionAmity Business School 5. Fast-Follower Strategy • Wait until market is clarified • Avoid market education costs • Nearer in time to eventual market, easier to predict • Ability to use newer technology • Fast means fast! • Advantages of being fast: Jump ahead and stay ahead
  58. 58. Name of InstitutionAmity Business School (U) Other Global Strategies 1. A Global Strategy It treats the world as a single market Eg: Matsushita has performed better than GE and Philips in consumer electronics market 2. A Multinational Strategy It treats the world as a portfolio of national opportunities Eg: In food & cleaning products, Unilever as a better performer than P&G as Unilever grants more decision-making autonomy 3. A “Glocal” Strategy It standardizes certain core elements and localizes other elements. Eg: Erricsson (Telecommunications) - each nation requires some adaptation but the company can also standardize some core components Most successful “Glocal” – ABB
  59. 59. Name of InstitutionAmity Business School
  60. 60. Name of InstitutionAmity Business School BRANDS
  61. 61. Name of InstitutionAmity Business School • “A rose by any name smells as sweet.” True or false? • Would you go vacationing on Disney Island? • Why are Coca-Cola, McDonald’s and Kentucky Fried Chicken (KFC) successful?
  62. 62. Name of InstitutionAmity Business School “Buildings age and become dilapidated. Machines wear out. Cars rust. But what lives on are brands.” Source: The Economist, 2010
  63. 63. Name of InstitutionAmity Business SchoolThe Branding Process • From commodity to product – e.g. air travel • From product to brand – e.g. Singapore Airlines • From brand to experience – e.g. Romance in the air • From experience to the heart – e.g. A Great Way to Fly
  64. 64. Name of InstitutionAmity Business School brand hierarchy—from top to bottom—might be as follows: 1.Corporate (or company) brand (e.g., General Motors) 2.Range brand (e.g., Chevrolet) 3.Individual brand (e.g.. Lumina) 4.Modifier (designating item or model) (e.g., Ultra)
  65. 65. Name of InstitutionAmity Business School
  66. 66. Name of InstitutionAmity Business School What is a brand? Six levels of meaning: • Attributes e.g. High resale value • Benefits e.g. Safety • Values e.g. Brand loyalty • Culture e.g. Organized and Efficient • Personality e.g. Serious • Type of users e.g. by occupation
  67. 67. Name of InstitutionAmity Business SchoolBrand Strategies 1. No brand identity – Small firms with unknown brands e.g. small tailoring outfits 2. Private brands – Retailers with established brand names e.g. Fairprice 3. Corporate brands – Family name e.g. Tata
  68. 68. Name of InstitutionAmity Business School 4. Product line extension – Create cost advantage e.g. Jagdish Store collection of an extensive range of furniture at reasonable price 5. Specific product – Individual brand e.g In addition to the JS brand, it also carry the Stanlay brand of Italian designed furniture 6. Combination – e.g. JS Collection, JS&S Beach Collection and the White Collection
  69. 69. Name of InstitutionAmity Business School Old Brands Strategy • Old brands survive due to emotional bond with the consumer • For slow moving brands either revive it with marketing money or kill it • Growing interest in old brands because brand names carry value that is getting more expensive and risky to create • When re-promoting old brands, do not ignore younger consumers
  70. 70. Name of InstitutionAmity Business School Differentiation Satisfaction Loyalty Perceived Quality Leadership or Popularity Perceived Value Brand Personality Organizational Associations Brand Awareness Market Share Market Price Distribution Coverage BRAND VALUE
  71. 71. Name of InstitutionAmity Business SchoolBranding on the Web • Profile of ―Gen-N‖ • How to harness the Internet for brand-building? – By rewarding brand loyalty and updating your site etc. • Decision-influence factor – Conventional branding => image – Online branding => customer experience • The issue of trust in a brand
  72. 72. Name of InstitutionAmity Business School Product Strategy Process ReviewTask 2: Assess threats and opportunities Task 3: Assess strengths and weaknesses Task 4: Formulate strategies Task 1: Develop mission and goals Task 5: Develop strategic plan Task 8: Repeat planning process Task 7: Control and assess results Task 6: Develop tactical plans

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