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Product Management

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Product Management
Basic things about Product Management Department of Pharmaceutical Sales and Branding.

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Product Management

  1. 1. Product Management 5
  2. 2. Brand Business  Business Strategy  New Product Development Process  Growth Strategies  Competitive Strategies  Marketing Strategies in different situations
  3. 3. For New Product Development BUSINESS STRATEGY MARKETING STRATEGY MARKETING PLAN
  4. 4. For Existing Product/ Brand BUSINESS STRATEGY BRAND STRATEGY/ BRAND PLAN MARKETING PLAN
  5. 5. Business Strategy Document New Product Proposal: Existing Brand/ New Brand Business Analysis – Consumer NEED Analysis:Trends & Practices, Habits & Attitudes, Need gap assessment – Competitive Analysis: Positions, Strategies…. SWOT – Corporate Analysis: Mission, Policy, …Portfolio Analysis…SWOT
  6. 6. Business Strategy Document  Business Objective: – Competition Focus- Reactive- Market Threat – Self Driven- Proactive- Market Growth/ Leadership  Business Strategy: – Market Penetration, – Market Development, – Product Development – Diversification  Business Potential: Volume Projection, Demand Estimation… User-Usage-Frequency  Business Plan: 3 year financial projection ( Turnover, Investment details, Profits)
  7. 7. NPD: Process  Stage 1: Formulation of Business Strategy  Stage 2: Product Development Stage  Stage 3: Testing & Developing the Marketing Strategy  Stage 4: Commercialization  Stage 5: Market Rollout
  8. 8. Stage 1: Ideation to Business Strategy
  9. 9. Idea Generation Process  Objective: To identify categories of interest for the next 3 years  Internal ( multifunctional) Brainstorming session from time to time  Various techniques used to Capture the Needs / Voice of the Consumers  Rule: Quantity over Quality… To generate multiple ideas without applying “judgment”
  10. 10. Idea Generation Triggers : Case Illustration  Brand : Parachute, Product : Coconut Hair Oil  Triggers : (mental map) – Hair Needs: Wash to dry-clean, Natural style to Colouring, Split ends to Dandruff. – Oil Needs: Non oily oil, Non Smelly oil… single use oil, Ayurvedic oil, massage oil – Coconut needs: Haircare to skincare…..soaps to shampoos
  11. 11. Idea Screening Process: Innovation Funnel  Assessment of Ideas generated so as to PRIORITIZE the same  Application of “ Judgment”: rationalization, quantification techniques,feasibility studies  Key Inputs : – Business Direction of the Organization – Consumer Trends: Usage & Attitude Studies – Environment / Market Scan: segment size & growth – Competitive Analysis
  12. 12. Screening : Case Illustration  Process of Rationalization: – Skincare , Hair Colourants: Low priority – Split ends & Dry Clean: Niche Markets – Shampoos : Extremely Competitive  Process of Prioritization: – Hair Problems that can be addressed by a hair oil ( dandruff , hair growth etc) – Modern forms of Hair oils ( light , perfumed etc)
  13. 13. Concept Development & Testing  Conversion of Ideation to Product Ideas  Formulation of Product Concepts from Product ideas  Product Concept captures the product benefit, product usage details….image details  Concept Testing : Projective techniques amongst target consumer segments or end user segments
  14. 14. Product Idea To Product Concept : Case Illustration  Product Idea: Hair oil to fight hair problems…dandruff, greying, hairfall etc  Product Concept 1: Herbal hair oil for strong hair  Product Concept 2: Hair oil + Anti dandruff agents for Dandruff  Product Concept 3:Hair oil + sunscreens for greying  Product Concept Test : amongst hair oil users
  15. 15. Product Concept vs Positioning Concept  Product positioning Idea: A specialized hair oil to fight dandruff  Pdt Positioning Concept 1 : A herbal hair oil containing ingredients which also fight dandruff  Pdt Positioning 2 : An effective dandruff treatment oil, which is better than other dandruff treatment products  TARGET SEGMENT  Concept Test 1 : Hair oil users having dandruff  Concept Test 2: Anti Dandruff Product users also using hair oil
  16. 16. Product Approval Process: GATE BUSINESS STRATEGY PRESENTATION  Presentation of the Product Concept to the Top Management Team for Approval  Presentation to include the Marketing Strategy : – Market size, structure.Consumer analysis (why?) – Product Opportunity…volumes, profitability, resources,time frames (what?) – Long term strategy,projected financials ( how?)  Business analysis:Estimating Sales, Costs & profits, financial paybacks GO or NO GO
  17. 17. Stage 2 : Product Development
  18. 18. Technology Brief  Project handover to the Research & Development Team to develop a “Technical solution” to the Product Need..within specified time frame & cost considerations  The Technical Task : Example: – “Effective Dandruff Hair oil”: A coconut hair oil which reduces the dandruff flakes, & does not freeze during the winter months – “Fairness Soap” : A wash off product ( soap) which provides UV protection for a minimum of 5 hours post bath
  19. 19. Product Development  Product Brief:For the completion of the actual product & packaging development  Quality Function Deployment ( QFD): a technique to translate consumer needs & wants into a technical concept or design – Marketing & R&D work towards a joint solution – Translation of marketing inputs ( consumer needs, wants & perceptions) & R&D factors ( design attributes & specs) via a relationship matrix
  20. 20. Product Tests & Concept Tests ( Concept Use Test)  To finetune the product attributes according to consumer needs  Product form tests: product attributes, delivery system, colour, shape, perfume etc – Example: “playtime” & absorbency of a lotion and foam & after wash perfume of a detergent : important parameters of Quality  Packaging options: size , colour, design , finish etc – Example: Shampoos in sachets and Lip Balms in tubes : deliver Convenience
  21. 21. Clinical Tests  To quantify the product performance  Product usage amongst the target consumer  Technical calibration of before & after use  Often used in communications as “ Product Claims”  Example: Fair skin over 6 weeks or Twice as effective as other washing powders  Expensive & time consuming  Competitive attack : High Legal sensitivity
  22. 22. Completion of a Benched Product  Preparation of a product & packaging prototype  Quality checks to test stability & other parameters  Issue product Raw Material & Packaging Material specifications to the Manufacturing Department for the Commercialization stage.
  23. 23. Stage 3: Market Testing of Brand Strategy
  24. 24. Brand Strategy  Brand Positioning : Benefits, competitive advantage  Target Segment Definition  Marketing mix elements ( product , branding, packaging,price, promotion, distribution)  Communication development  Marketing Plan  Brand financials
  25. 25. Market Testing Methods  Test Market launch: – Select markets ( Strong & weak) – Launch prototype product with complete support – Expensive, time consuming but reliable – Issues on Confidentiality  Simulated Test Market – Simulate a test market situation – Sample consumers exposed to advertising – Map responses before & after product placement
  26. 26. Testing Parameters  Volume Validation  Key measures: awareness,trial, repeat, adoption, purchase frequency  Communication Effectiveness  Pricing Test  Priority Markets  Finetune product / packaging  Image Indicators
  27. 27. Stage 4 : Commercialization
  28. 28. Project Management : Manufacturing Interface  Plan project Schedules  Allocate responsibilities  Control Brand Decisions  Co ordinate inter functional activities  Manage changes
  29. 29. Sales Target Setting : Sales Interface  Market Prioritization  Seasonal Skews  Distribution Plan  Selling Strategy
  30. 30. Stage 5 : Market Rollout
  31. 31. Product Launch : Front Stage  Sales Launch Conference: Product background ,market analysis,product support, selling tools  Product placement: Retail briefing, displays, incentives…below the line activities  Media Break
  32. 32. Important Tracks : Back Stage  Monitor stock distribution, movement, inventory control  Monitor sales- areawise, outletwise, SKU wise  Monitor effectiveness of inputs – displays, promotions  Monitor advertising effectiveness  Monitor media effectiveness  Take corrective action : where ever & when ever required
  33. 33. BRAND-WAGON Mktg Obj Mktg Obj Sales Obj Business Potential Brand Values Segment Target Position Marketing Mix: Product/Pkg Price Place Promo Mktg Plan Sales Plan Busi. Obj. BUSINESS STRATEGY MARKETING STRATEGY SALES STRATEG Analysis
  34. 34. Business Strategy Powering the Engine  Business/ Growth Potential: Analyse Company- Competition- Consumer  Brand Fit: Image- Identity- Proposition-Position G r o w t h C h a r t N o n - U s e r s O t h e r B r a n d s S W I T C H O w n B r a n d C A N N I B A L I Z A T I O N E x is t in g U s e r s N e w U s e r s I n c r e a s e U s a g e Q u a n t i t y I n c r e a s e U s a g e F r e q u e n c y
  35. 35. Growth Strategies  Intensive Growth Opportunities 1. Market Penetration Strategy 2. Market Development Strategy 3. Product Development Strategy  Integrative Growth Opportunities Backward( Supplier), Forward( Distribution), Horizontal( Competition)  Diversification Growth Opportunities Current MktCurrent Mkt New MarketNew Market Current PdtCurrent Pdt New PdtNew Pdt 1 3 2 Diversify
  36. 36. Market Penetration Strategy: Increase Mkt Share G r o w t h C h a r t N o n - U s e r s O t h e r B r a n d s S W I T C H O w n B r a n d C A N N I B A L I Z A T I O N E x is t in g U s e r s N e w U s e r s I n c r e a s e U s a g e Q u a n t i t y I n c r e a s e U s a g e F r e q u e n c y
  37. 37. Market Development Strategy: Increase Availability  New User Groups / Consumer Markets  New Distribution Channel  New Location/ Region
  38. 38. Product Development Strategy  Additional/ New Features  Improved Quality
  39. 39. Growth Strategies G r o w t h C h a r t C o n v e r t N o n - U s e r s o f t h e P d t C a t e g o r y M a r k e t P e n e t r a t i o n S t a r t e g y E g : U p g r a d e T o o t h p o w d e r u s e r s t o t o o t h p a s t e E n t e r N e w M a r k e t S e g m e n t s M a r k e t D e v e l o p m e n t S t r a t e g y E g : C o m p u t e r s fr o m O ffic e t o H o m e U s e S w it c h C o m p e t it o r 's U s e r s t o y o u r B r a n d B r a n d S w i t c h i n g E g : F a ir & L o v e ly u s e r s s w it c h in g t o F a ir e v e r A t t r a c t N e w U s e r s t o t h e B r a n d I n c r e a s in g t h e o c c a s io n s fo r u s e U s a g e F r e q u e n c y o r R a t e E g : B r u s h in g T e e t h T w ic e a D a y M o r e U s a g e p e r O c c a s io n U s a g e A m o u n t o r Q u a n t i t y E g : A p p ly s h a m p o o t w ic e & r in s e o ff fo r b e t t e r c le a n in g N e w / D iffe r e n t U s e s fo r t h e s a m e P r o d u c t N e w U s e s E g : M ilk m a id fo r D e s s e r t R e c ip e s M o r e U s a g e
  40. 40. Growth Path  Britannia Cheese: Major player in Niche market  Cadbury’s Dairy milk: Leading the Chocolates market.  Nestle Frugurt: First Mover of the Flavoured yoghurt market.  Pepsi Cola: Less than 30 % share in a Competitive market, dominated by Thums Up & Coke  Bisleri : First mover of the Mineral water market. Lost its position to Kinley.  Onida TV: Erstwhile Market Leader in a competitive Market.
  41. 41. Competitive Analysis- Porter’s Model Five Competitive Forces determine Industry Profitability – Threat of New Entrants/ Entry of New Competitors  Entry Barriers: Market Leadership, Brand identity,Distribution, Capital Reqt, Technology, Govt. Policy, Switching Cost – Threat of Substitutes….Mobiles to Telephones, Shampoos to hairoils  Price- Value equation, Switching cost – Bargaining Power of Buyers….Instore Labels  Buyer concentration/ information/ volumes/ switching costs, Ability to backward integrate, substitute products, relative switching costs, price sensitivity
  42. 42. Porter’s Model – Bargaining Power of Suppliers…Godrej Real Good Chicken, Diamonds  Differentiation of inputs, Importance of volume, Forward Integration ability, Relative switching Costs – Rivalry amongst existing competitors  Product Differentiation, Brand identity, Industry growth, Market penetration, Operating Costs, Exit Barriers
  43. 43. Competitive Strategies Based on Level/ Nature of Competition  Cost Leadership Strategy – Lower Cost of Production than its Competitors – May or May NOT be at the Lowest price – Ensures Higher returns which it can use advantageously against the Competitor  Differentiation Strategy …. Competitive Advantage – Differentiating the Product/ the Offering in the minds of the Consumer – From Product Innovation to Brand Building , all aim to create a sustainable competitive advantage  Focus Strategy – Selecting only a certain segment/ group in the entire market… & then ensure a cost advantage over the competitors or a point of differentiation to attract the consumers.
  44. 44. Understanding Business Strategies Underlying Factors of a Business Strategy Market Attractiveness:  Market Potential of the Category…. Market Size & Market Growth Competitive Position:  Level of Competition in the Category …Market Share & Relative Market share of the players i.e. Market Share Relative to the largest competitor. Where the “Market” or the Potential User Segment ( those who will use the pdt) is first defined by the Marketer, & then quantified. While the competition is accordingly determined.
  45. 45. The Strategy Matrix MarketCompetitivenessMarketCompetitiveness LoHiLoHi LoLo HiHi Market AttractivenessMarket Attractiveness Innovation DifferentiationInnovation Differentiation Focus ExpansionFocus Expansion
  46. 46. Business Strategies of Brands  Growth / Market Expansion….Market Leader Strategies – When the Market Potential is high, & the level of competition is minimal – Objective to build a User base. – High Investment Required over a period of time Eg : Creation of the Deodorants category in India by Rexona.  Differentiation/ Competitive Advantage…Market Challenger Strategies – When the Market Size is high, but there are strong existing competitors one has to deal with. – Objective to gain market share through Brand switches. – Medium- High Investments Eg: Introduction of Britannia Milkman, in the dairy pdts mkt dominated by Amul & Nestle.
  47. 47. Business Strategies of Brands  Focus/ Specialization….Market Nicher stategies – When Market Size is limited, no major competitors – Objective to focus on & gain ownership of a particular target segment Eg: Launch of Loreal Hair Colour in India…focused on Beauty Parlour distribution  Innovation+ Significant Cost advantage…Frontal/ Encirclement Attack strategy – Need a lot of consideration before entering such a market – Objective to displace competition Eg: Launch of Pond’s Body Lotion at a Low Price Point in the Skincare Market..threatening the leadership of Lakme Maximum Moisturiser.
  48. 48. Marketing Strategies Based on Market Position  Market Leader: – Market Expansion Strategy…Market Growth strategies  Developing New Users- convert non-users to users of the Product Category Eg: Airlines flexible fares to attract Rail Passengers.  Developing New Uses for the Product …New applications, new markets. Eg: Maggi noodles … from choice cuisine to commonplace easy to make snack food/ tiffin.  More Usage – Increase amount used or frequency of use of the Product Eg: Toothpastes promoting twice a day brushing – Defense Strategy…Through continuous innovation ( Brand Revitalization Strategy)
  49. 49. Marketing Strategies Based on Market Position  Market Challenger: – Attack Strategy- Competitive  Frontal attack- Pitched against Competitor’s Strength – Eg: Pepsodent- Fights germs Better than Colgate  Flank attack- Bring to light Competitor’s Weakness – Eg Anchor Toothpaste as 100% Vegetarian, unlike others  Encirclement Attack- Close in on Competitor with Multiple Attacks on all fronts – Eg: Airtel  Bypass Attack – Deviate to unrelated products/areas – Eg: Reliance Mobiles with Technology, Nirma with Price  Guerilla attack- Harass Competitor with small frequent attacks – Eg: Nihar Coconut Hair Oil
  50. 50. Marketing Strategies Based on Market Position  Market Follower: Me- Too Strategy- Following or copying the moves of the Key Competitor – Eg: Detergents…Ghari, Coconut Hair oil…Cococare, CocoRaj  Market Nichers: – Specialist/ Focus Strategy- Building Customer goodwill where competition is weak or not present or not interested. – Eg: Gillete in men’s pdts – Low volumes, but high growth & high margins. – Eg: Loreal Hair Colour
  51. 51. Legal Aspects of Brand Management  New Product Development: Product classification/ Excise classification, Trademark registration, copyright, patent, FDA regulations on Brand name, formulation & packaging  Advertising & promotions: Claim substantiation, ASCI rulings, MRTP regulations  Sales & Distribution: Distributor relationship, region specific issues  Manufacturing:Manufacturer relationship, product specific issues

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