Products and Branding
Products and Branding
Product
“A bundle of tangible and intangible benefits that a customer receives in exchange for money and other considerations”
- Tuckwell, Marketing in Action, 2004
Product & its Strategies
ProductsGoods, services, ideas, persons or places capable of offeringtangible and intangible attributes
ExampleTangible goods: salt, teabags, pencilIntangible goods: hairdressing, psychological advicesIdeas: public health messages, management advicesPlaces: Holiday resorts, Royal Palace
IInput
PProcess
OOutput
ConsumersB2C
ProducersB2B
How to classifyGoods ?(B2B or B2B)?
Rubber, MetalCar Chassis
Volvo, BMWFord Fiesta
What is a Product?What is a Product?
Generic Product
CORE BENEFIT
Expected Product
Augmented Product
Potential Product
What is a Product?What is a Product?
CORE BENEFIT
Generic Product
Expected Product
Augmented Product
Potential Product
The Fundamental Need or Want that consumers satisfy by consuming the product or service
What is a Product?What is a Product?
CORE BENEFIT
Expected Product
Augmented Product
Potential Product
Generic Product
Basic Version of the product containing only those elements absolutely necessary to function. No distinguishing features.
What is a Product?What is a Product?
CORE BENEFIT
Augmented Product
Potential Product
Generic Product
Expected Product
Attributes and Characteristics that buyers normally expect and agree to when they purchase a product
What is a Product?What is a Product?
CORE BENEFIT
Potential Product
Generic Product
Expected Product
Augmented Product
Additional product attributes, benefits, or related services that distinguish the product from competitors
What is a Product?What is a Product?
CORE BENEFIT
Generic Product
Expected Product
Augmented Product
Potential Product All the augmentations and transformations that a product might ultimately undergo in the future
What is a Product?What is a Product?
Generic Product
CORE BENEFIT
Expected Product
Augmented Product
Potential Product
The Fundamental Need or Want that consumers satisfy by consuming the product or service
Generic ProductBasic Version of the product containing only those elements absolutely necessary to function. No distinguishing features.
Expected ProductAttributes and Characteristics that buyers normally expect and agree to when they purchase a product
Augmented ProductAdditional product attributes, benefits, or related services that distinguish the product from competitors
Potential ProductAll the augmentations and transformations that a product might ultimately undergo in the future
Durable GoodsLast for many usesEx. Cars, television, computer
Non-Durable GoodsCan be used once before theyhave to be replacedEx. Food, Ink CartridgesSoft Drinks
Service GoodsIntangible productsEx. Secretarial serviceslegal advices
Convenience GoodsRoutine, inexpensive, frequent purchaseEx. staples, groceries, gilletes
Shopping GoodsRiskier & adventure purchaseEx. Stereo, clothing, dress
Specialty GoodsExtensive adventure, expensive, infrequent purchaseEx. house / mortgage, marriage
Unsought GoodsEmergency, “not normal” purchaseEx. umbrella, life insurance, private GP
Consumer goods
Convenience Goods
Shopping Goods Speciality Goods
Unsought
Goods
Buying
Behavior
Low Involvement
Frequent
Little Planning
High Involvement
Less Frequent
Compare Shopping
Brand Loyalty
Special purchase
No Comparison
Little Awareness
Negative
Interests
Examples Toothpaste
Magazines
Detergent
Staples
Clothing
Television
Furniture
Car
Patek-Phillips and Rolex
Watch
Rolls Royce
Life Insurance
Private
GP
Price
Strategies
Low Price
Elastic Demand
High/Medium Price
Elastic Demand
High Price
Inelastic Demand
High Price
Very Inelastic D.
Promotion
Strategies
Mass
Promotion
undifferentiated
Differentiated
Segmented Ad.
Personal Selling
Differentiated
Segmented Ad.
Aggressive Advert.
Personal Selling
Place
Strategies
Convenient
Location
Selective
Distribution
Exclusive
Distribution
Not
Important
Organizational goods
Capital Goods (fixed eqpmnt in production process)Ex. Buildings, FactoryStrategy for: High Involvement Products,high risk, very expensive
Accessory Goods (supporting production process)Ex. Light equipment, fork-lift trucks, filling cabinetsStrategy for: Less High Involvement, high risk, expensive
Raw-Material Goods (Input in production process)Ex. Rubber, Plastic, Metal, Glass (for Car production)Strategy for: service handling, LR trust, terms of payments
Semi-Finished Goods (Input in production process)Ex. Car Chassis, car Stereo (for Car production)Strategy for: service handling, LR trust, terms of payments
Component-Part Goods (Input in production process)Ex. Bolt, Screw (for Car production)Strategy for: service handling, LR trust, terms of payments
ProductRange
ProductMix
ProductLine
ProductItem
Beecham Healthcare Products
Analgesics
PanadolAnadinHedexSolpadeine
Vitamins
Scott’s OilVita AVit CMinerals
Oral Healthcare
AquafreshMacleansAnti OdorDr. Best
Product Mix, all products offered by Beecham
Product Line, a group / classified products
Product Item, individual products (inside product line)
Product Strategies
BREADTH OF PRODUCTS OFFERINGS
NUMBER OF MARKETS SERVED
Narrow
Many
Few
Wide
ProductsFocused
Unfocused (Everything
for everyone)
Market Focused
Fully Focused Products and
market focused)
Detergents Toothpaste Soap Deodorant
Fruit
Juice
Lotions
Tide Crest Ivory Secret Sunny
Delight
Tropic Tan
Dash Glim Zest Sure Citrus Camay
Bold 3 Denquest Oil of
Ulay
Economy Speas
Farm
Raintree
Dreft Camay
Proctor & GambleProduct Line Length PLL – Product Mix Width PMW
PLL
PMW
PossibleBrandingStrategies
BrandName
ProductCategory
LineExtension
BrandExtension
Multibrand New Brands
Existing
Existing New
New
Line Extension StrategiesAdditional items (size, form, flavour) in a given productIce Cream:Vanilla + Strawberry, Chocolate, NapolitanCereal: for Children, for Teenagers, for AdultsCoca Cola: Cherry Coke, Diet Coke, Classic Coke
Brand Extension (Stretching) StrategiesLaunching new products in a given brand image Adidas (Shoes) + cologne, deodorant, clothing etcVirgin (Trains) + airlines, internet, music entertainment
Multi-Brands StrategiesCreating individual brand identities for each products (efficient segm.)Proctor & Gambles: nine brands of laundry products
New-Brands StrategiesNew Brands for new positioning & segmentation v RivalsToyota (car) + Lexus (executive cars)Mercedes (car) + Smart Car (high-tech efficient car)
Product Lifecycle
• A key concept
• Applies to all products … including industrial goods
• Usually used to describe a specific product, e.g. “tooth powder”, “mini-van”
• Length of cycle varies
• Why does it matter?
Product Life Cycle
TimeProduct
DevelopmentStage
Introduction
Profits
Sales
Growth Maturity Decline
Losses/Investments ($)
($)
Sales and Profits Overthe Product’s Life FromInception to Demise
Sales
Profit
Key Success Factors: Introduction
• Product line is narrow• Decision: Keep prices high (skim)
or launch “cheap” (penetration)• Distribution is selective• Target “early adopters”—experts• Promotional budget very high
– heavy for ads (narrow media) and personal selling
– attempt to get PR coverage
• Examples: Home networking, hybrid cars
Key Success Factors: Growth
• Add more channels - broader distribution• Still getting new customers• Watch for “me too” new entrants• Advertise in mass media …• Compete on features• Price for market share• Examples: Digital cameras (a year ago),
MP3 players
Key Success Factors: Maturity
• Defend market share against competition• Early: Peak profits, then begin to price
aggressively for market share … to be a survivor• Competition depends on
“stealing customers”• Consider “freshening” brand (new claims)• Production and distribution efficiencies to lower
costs as competitive edge• Examples: Most consumer packaged goods
Key Success Factors: Decline
• Above all: cut costs, – No development– Simplify Product Line– Limited distribution– Minimal advertising
• Example: Wonder Bread
• Consider exiting with grace– Examples: IBM typewriters, GE lightbulbs
Isn’t PLC Just Theoretical?
• We don’t know where we are until the future and look back …
• Not true … we can be diagnostic
What would tell us we are in
1. Introduction?
• We have a defensible patent
• We don’t see any other providers in the market
• Our chief problem is meeting demand
What would tell us we are in
2. Growth?
• We see “new entrants” into our turf
• We observe a lot of advertising based on features
What would tell us we are in
3. Maturity?
• The industry players are well-known
• We observe a lot of competition on price and sales promotion deals
What would tell us we are in
4. Decline?
• Competing technologies have been announced
• Pricing is brutal, with “irrational players”
What is a Brand?
Product = Commodity
A product is a produced item always possessing these characteristics:• Tangibility•Attributes and Features
Brand = “Mind Set”
The sum of all communications and experiences received by the consumer and customer resulting in a distinctive image in their “mind set” based on perceived emotional and functional benefits.
Timothy D. Ennis, Ennis Associates, Inc
What is a Brand?
• Derivation– Old Norse “brandr” = to burn – branding livestock
• Heritage– A means to distinguish goods from one producer vs
another.
• AMA (technical definition)– “Name, term, sign, symbol, or design, or a
combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition”
What is a Brand?
• Keller’s Definition:– A product, but one that adds other dimensions that
differentiate it in some way from other products designed to satisfy the same need.
• Rational and tangible• Symbolic, emotional and intangible
• The psychological response to a brand can be as important as the physiological response.
MANUFACTURERS• ID to simplify handling
or tracing• Legal protection of
unique features• Signal of quality level to
satisfied customers• Means of endowing
products w/unique associations
• Competitive Advantage• Financial Returns
CONSUMERS• ID Product Source• Assignment of
responsibility to maker• Risk reducer• Search cost reducer• Promise, bond, or pact
w/make of product• Symbolic Device• Signal of Quality
Why Does A Brand Matter?
What is a Brand?
• Products don’t exist in a void…
• They are bought because consumers have found something they relate to in them, something which they value
• Brand = Credible Guarantee
What is a Brand?
• Relative Brand Distinction– The more distinctive or different a brand is in
the consumers “mind set”, the stronger brand preference becomes. This is critical to keeping competition from the consumer’s consideration.
Strong Brand
Perceived by theConsumer as
Unique
Products(Commodities)
No DifferenceExcept Price
BrandName
Well KnownBut Similar
Brand
Distinctive
Timothy D. Ennis, Ennis Associates, Inc
What is a Brand?
• Relative Brand Distinction– A brand’s preference is primarily built through
differentiation and relevance– Insulate product from competition– OWN Something
Products(Commodities)
No DifferenceExcept Price
BrandName
Well KnownBut Similar
Brand
Distinctive
Strong Brand
Perceived by theConsumer as
Unique
Timothy D. Ennis, Ennis Associates, Inc
Generic Product
CORE BENEFIT
Expected Product
Augmented Product
Potential ProductKotler’s Five Levels
of A Product
What is a Brand?
Products(Commodities)
No DifferenceExcept Price
BrandName
Well KnownBut Similar
Brand
Distinctive
Strong Brand
Perceived by the
Consumer as Unique
BRAND DISTINCTION by Timothy D. Ennis
What is a Brand?
• What Makes the Best Brands?– Source of company wealth for generations– Improves with Age– Develop clearly defined personalities– Develop affection & loyalty of the public– Become parents to sub-brands and brand
extension
• Brands = Powerful emotional tools
What Is a Brand?
• Truly understood brands are the things which patrol the boundary between people and the world outside them.
• A brand with an emotional difference can potentially command a premium forever.
Alternative Branding Models
Company dominates
Brands
Company is equal to Brands
Brands dominate the
CompanyAmerican Express (cards)
BMW (Motorcycles)
Colgate (Total toothpaste)
Disney (Films)
General Electric (appliances)
IBM (Technology)
L’Oreal (Cosmetics)
Sony (Electronics)
Holiday Inn (Crowne Plaza)
Anheuser Busch =
Budweiser
Campbell Soup = Godiva
Chrsyler = Jeep
Estee Lauder = Clinique
Kraft = Maxwell House
PepsiCo = Mountain Dew
Time Warner = Warner
Bros
3M = Scotch Tape
Marriott = Courtyard
Skol (Am Bev)
Claridge Hotel (Savoy)
Crest (P&G)
Healthy Choice (Con-Agra)
Hidden Valley Ranch (Clorox)
Kleenix (Kimberly-Clark)
Marlboro (Philip Morris)
MCA Records (Universal Studios)
Wranlger (VF Jeans)
• The Successful Brands
– Don’t JUST sell products
– Communicate Clear Values
– Stretch Across a Number of Products
– Attached to Consumers/ NOT Products
– Individualized Relationships
POWER BRANDS
• Allow Consumers to clearly identify and specify products which genuinely offer added value.
• Deep respect for the way products fit into consumer’s lives = “core” of success
• Consumer Relationship = Loyalty
• Social Changes in their favor
POWER BRANDS
• Assessing BRAND POWER
POWER BRANDS
Interbrand
BRAND DEPTH
BRAND WEIGHT
BRAND LENGTH BRAND BREADTHPOWER
The influence or dominance that a brand has over its category or market (more than just market share)
• Assessing BRAND POWER
POWER BRANDS
Interbrand
BRAND WEIGHT
The stretch or extension that the brand has achieved in the past or is likely to achieve in the future (especially outside its original category)
• Assessing BRAND POWER
POWER BRANDS
Interbrand
BRAND LENGTH
The breadth of franchise that the brand has achieved both in terms of age spread, consumer types and international appeal
• Assessing BRAND POWER
POWER BRANDS
Interbrand
BRAND BREADTH
• Assessing BRAND POWER
POWER BRANDS
Interbrand
BRAND DEPTH
The degree of commitment that the brand has achieved among its customer base and beyond. The proximity, the intimacy and the loyalty felt for the brand.
• Assessing BRAND POWER
POWER BRANDS
Interbrand
BRAND DEPTH
BRAND WEIGHT
BRAND LENGTH BRAND BREADTHPOWER
Brand Equity
• Brand Ingredients: – Brand Name & heritage– Packaging (structure & graphics) & signage– Brand symbols, properties and logos– Perceived quality, reliability & convenience– Defined level of satisfaction– Meaningful (premium) price/value relationship– Purchase & usage experiences– Consumer perceptions, attitude & behaviors– Emotional associations with the product/services
Timothy D. Ennis, Ennis Associates, Inc
BRAND GESTALT
Brand Equity
Physical Product
AttributesQualityUses
Brand Personality
LogoVisualAppearance
Country ofOrigin
User Imagery
Tangible
Benefits
Emotional
Benefits
Brand Customer
Relationship
Kevin Clancy, Copernicus modified by Soni Simpson
The Coca-Cola Brand Is…
• 1800’s Heritage The Real Thing
• Americana Red & White Striped Can
• Vanilla Coke Sold Everywhere
• Authenticity Battles with Pepsi
Brand Equity
The Mc Donald’s Brand Is…
• The Big Mac Happy Meals
• French Fries Red and White Restaurants
• Fun For Children Ronald Mc Donald
• Golden Arches Value for Your Money
Brand Equity
• A synthesis of all elements, physical, aesthetic, rational AND emotional.
• End result =
– appropriate
– differentiated
– relevant
Brand Equity
Brand Equity
• A set of stored values that consumers associated with a Product/Service.
• These associations add value beyond the basic product functions due to past investments in marketing the Brand.
Brand Value Breakdown
0
20
40
60
80
100
120
Coca-Cola
J&J P&G Unilever Amazon
INTANGIBLE &Goodwill
Net TANGIBLEAssets
$US Billions
• Measurable Financial Value
• Legal Systems recognize brand value
– Most countries now recognize intellectual property is REAL property w/rights of ownership
• Trademarks, Patents, Designs, Copyright
• Consumer Value
Brand Value
Brand Value
• Multiple values for a brand• Communicated through every medium from
shelf to advertising to editorial to word-of-mouth.• Coca-cola
– Bottle shape– Can color– Logo type face– Taste– Youthful messages – FORMULA
• Are Brand Values Equal?
Brand Value
• Three Tiers of Brand Value– Functional Values– Expressive Values– Central Values
Interbrand; The World’s Greatest Brands.
Central
Expressive
Functional
Brand Value Corresponding to Brand Hierarchy Pyramid
Brand Value
• Functional Values: – Govern product performance
• Coke refreshes its drinker• Volvo gives its driver a safe ride• IBM PC provides quick computing
– Don’t differentiate products• Pepsi refreshes• Mercedes is as safe as Volvo • Apple is as quick as IBM
– Brand Owner’s “bright ideas” can be instantly copied in every continent
Interbrand; The World’s Greatest Brands.
Brand Value
• Expressive Values: – Say less about the product & more about the
consumer– Reflect and enhance the consumer’s sense of
him/herself– Provide a key source of brand differentiation
• Marlboro’s - masculine values• Armani’s - status and fashionable values• Apple - creative and human values
Interbrand; The World’s Greatest Brands.
Brand Value
• Central Values: – Most Enduring– Right to the Core of the Consumer’s Belief System– At their purest = embodied in religious, national or
political persuasions– Comparable power = embody mass movements or
cultural trends• 1960’s Coke “I Like to teach the world to sing”• Today= Nike “Just Do It”, Richard Branson’s Irreverent Virgin
Interbrand; The World’s Greatest Brands.
Brand Value Corresponding to Brand Hierarchy Pyramid
Central
Expressive
Functional
Very meaningful in differentiating our Brand but very difficult to deliver consistently to our consumers
Easy to deliver and explain to consumers but also easy to imitate
Interbrand; The World’s Greatest Brands.
Central
Expressive
Functional
Very meaningful in differentiating our Brand but very difficult to deliver consistently to our consumers
Easy to deliver and explain to consumers but also easy to imitate
Beliefs & Core Values
Benefits
Features & Attributes
Brand Value Corresponding to Brand Hierarchy Pyramid
Hierarchy : Timothy D. Ennis, Ennis Associates, Inc
Brand Value: Brand Hierarchy Pyramid
Beliefs & Core Values
Benefits
Features & Attributes
The emotional beliefs and values that consumers feel are being addressed by our brand (CENTRAL)
The functional and emotional benefits that our product/services provides to the consumer (EXPRESSIVE)
Product/Service features and/or attributes that must be addressed (FUNCTIONAL)
Very meaningful in differentiating our Brand but very difficult to deliver consistently to our consumers
Easy to deliver and explain to consumers but also easy to imitate
Mc Cormick: The Taste You Trust
Brand Value: Brand Hierarchy Pyramid
CENTRAL VALUE
Beliefs and Core Values
EXPRESSIVE
Benefits
FUNCTIONAL
Features & Attributes
I take pleasure in
how the family enjoys the meals I
prepare
Brand I Trust / Taste You Trust
Part of making food my way Makes a meal/dish an eating
pleasure Makes prepared meals taste better Brings out the best in
foods
Let me adjust to make it my own * Can be used with any dish * Adds flavor, Spicy * For everyday use * Has a lot
of products I use * Easy to find when shopping * Largest variety of spices, extracts, dry seasonings, and
mixes
Brand Hierarchy Pyramid vs Product Level
Beliefs & Core Values
Benefits
Features & Attributes
Very meaningful in differentiating our Brand but very difficult to deliver consistently to our consumers
Easy to deliver and explain to consumers but also easy to imitate
Generic Product
CORE BENEFIT
Expected Product
Augmented Product
Potential Product
The Brand Identity Prism
• We can also look at the brand as a prism that reflects two issues that concern a brand– Brand Culture: The How of a Brand– Brand Associations: The What of a Brand
Brand Culture
• Just as people, brands also have a pedigree, a culture, a way of life……
• Culture is the way a brand is bought & consumed.
• Just as culture decides both what we do as well as the way we do it, Brands also have this aspect—which brands we buy for what purpose. Gilli versus Tanishq
Brand Associations
• The “image” of the brand in our minds– Nirma is for the middle class housewife “Jaya,
Sushma, Hema, Rekha” –it is not meant for “Nilofer, Pamela, Adya”
• The place, price and promotion that we associate the product with.
Brand Identity
• Brand Identity is the combination of Brand Culture and Brand Association that forms a distinct structure in consumers’ minds.
• This can be represented as a prism having 6 sides.
Physique
Picture of Sender
Personality
CultureRelationship
Reflection Self-image
Picture of Recipient
Down to earth, tough, Indian,not young, son of the soil(Dharmendra -filmstar)
1. Institutional- police, army2. Rural guy, middle class
Prudent,macho, tough
Laid back, family
Tough, economical,
jeep looks, all-terrain,
diesel,noisy
Dependable
Mahindra » brand identity prism
Physique
Relationship
User Image Self Image
Culture
Persona
Successful, new economy businessman,
Self made, Evolved taste
Powerful, in control, Sophisticated
A cut above, Expects the best from life
Nothing Else Will Do
Living life at ones own terms
Styling, International looks, Power,
Car-like comfort
Extension of his lifestyle
Physique
Relationship
User Image Self Image
Culture
Persona
Scorpio » brand identity prism
• House of Brands
• Endorsed Brands
• Sub Brands
• Branded House
• Sunsilk, Dalda, Close-up Pepsodent
• Servo- Indian Oil Nestea, Nescafe
• Lifebuoy Plus
HP Laserjet, HP Inkjet
Maruti 800
Maruti Esteem • Siemens
Virgin
The Brand ArchitectureThe Brand Architecture