Product and Brand Management (2)

8/3/2019 Product and Brand Management (2)

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Product and Brand Management


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What is a product?

y A product is any offering by a company to a market that

serves to satisfy customer needs and wants.

y It can be an object, service, idea,etc.


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New Product Development

y Most new product development is an improvement on

existing products

y Less than 10% of new products are totally new concepts.


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Success rate of new products

y The success rate of new products is very low less than 5%.

You have to kiss a lot of frogs to find a prince.

y Product obsolescence is rapid with improvements in

technologyy Shorter PLCs


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Product Development Stages

y Idea generation

y Idea screening

y Concept development and testing

y Concept testingy Conjoint analysis to find out the best valued attributes by

consumers


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Business analysis

y The most customer appealing offer is not always the most

profitable to make

y Estimate on costs, sales volumes,pricing and profit levels are

made to find out the optimal price volume mix.y Breakeven and paybacks

y Discounted cash flow projections


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Market testing

y Test markets

y Test periods

y What information to gather?

y What action to take?


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Commercialization

y When? (Timing)

y Where? (Which geographical markets)

y To whom? (Target markets)

y How? (Introductory Marketing strategy)


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Product LevelsIn planning its market offering, the marketer needs to address five product levels in any product

or service. Each level adds more customer value, and the five constitute a customer value

hierarchy.

y Core benefit Eg:A hotel guest is buying rest and sleep.The purchaser of a drilling machine is

buying holes.

y Basic product: the marketer prepares an expected product, a set of attributes and conditions

buyers normally expect when they purchase this product. Eg: a hotel room includes a bed,

bathroom, towels desk and a closet.

y Expected product : the marketer prepares an expected product, a set of attributes and

conditions buyers normally expect when they purchase this product. Eg: Hotel guests expect a

clean bed, fresh towels, working lamps, and a relative degree of calm.y Augmented product Other add on features. Eg: Hotels withTV Sets, Remote & Satellite

Connection.

y Potential product - encompasses all the possible augmentations and transformation the product

or offering might undergo in the future. Eg:Tata Sky Plus Special recording feature to the DTH

Service.


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Customer Delight

y When you exceed customer expectations


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Product classification

y Durable

y Non durable

y Services


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Consumer goods classification

y Convenience goods

y Shopping goods

y Specialty goods

y Unsought goods


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Industrial goods classification

y Materials and Parts

- raw materials

- manufactured materials and parts

y Capital itemsy Supplies and business services


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Product Mix

y The assortment of products that a company offers to a

market

y Width how many different product lines?

y Length the number of items in the product mixy Depth The no. of variants offered in a product line

y Consistency how closely the product lines are related

in usage


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Product Line decisions

y Product rationalization

y Market rationalization

y Product line length

too long when profits increase by dropping a productin the line

too short when profits increase by adding products to

the product line

y Line pruning capacity restrictions to decide


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Brand

y 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

y

It is the sellers promise to deliver the same bundle ofbenefits/services consistently to buyers


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Brand Equity

y When a commodity becomes a brand, it is said to have

equity.

y The premium a brand can command in the market

yThe difference between the perceived value and the intrinsicvalue


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Levels of meaning

y Attributes

y Benefits

y Values

y Culturey Personality

y Users


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Brand Powery Customer will change brands for price reasons

y Customer is satisfied. No reason to change.

y Customer is satisfied and would take pains to get the brand

y

Customer values the brand and sees it as a friendy Customer is devoted to the brand


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Brand Equity Competitive

Advantages

y Reduced marketing costs

y Trade leverage

y Can charge a higher price

y Can easily launch brand extensionsy Can take some price competition


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Managing Brand Equity

y Brand Equity needs to be nourished and replenished. We

must not flog the brand for equity to be diluted or dissipated

y Store brands


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Advantages of branding

y Easy for the seller to track down problems and processorders

y Provide legal protection of unique product features

y

Branding gives an opportunity to attract loyal andprofitable set of customers

y It helps to give a product category at different segments,having separate bundle of benefits

y

It helps build corporate imagey It minimises harm to company reputation if the brand

fails


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Brand parity

y Consumers buy from a set of acceptable/ preferred brands


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Umbrella Brandy Products from different categories under one brand

y Dangerous to the brand if the principal brand fails

y Sometimes the company name is prefixed to the brand. Insuch cases the company name gives it legitimacy.Theproduct name individualises it.


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Naming the Brand

y Product benefits

y Product qualities

y Easy to pronounce

y Should be distinctivey Should not have poor meanings in other languages and

countries


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Brand strategy

y Line extension existing brand name extended to newsizes in the existing product category

y Brand extension brand name extended to new productcategories

y Multibrands new brands in the same product category

y New brands new product in a different productcategory

y

Cobrands brands bearing two or more well knownbrand names


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Brand Repositioning

y This may be required after a few years to face new

competition and changing customer preferences


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Packaging

y Includes the activities of designing and producing the

container for a product

y Packaging is done at three levels

- primary- secondary

- shipping


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Packaging as a marketing tool

y Self service

y Consumer affluence

y Company and brand image

y innovation


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Designing packaging

y Packaging concepts

y Technical specifications

y Engineering tests

y Visual tests

y Dealer tests

y Consumer tests

y

Packaging innovationsy Environmental considerations


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Labels

y Identification

y Grade classification

y Description of product

yManufacturer identity

y Date of mfg., batch no.

y Instructions for use

y Promotion


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Labels as a marketing tool

y Labels need to change with time or packaging changes to

give it a contemporary and fresh look

Product and Brand Management (2)

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