PRODUCT AND BRANDING STRATEGY

1. PRODUCT AND BRANDING STRATEGY Prepared for: IBM Program – UC

2. Marketing Process

3. Component of Marketing Offering Value-based price Attractiveness of the market offering Product features & quality Services mix & quality

4. PRODUCT

5. Prod. Characteristic & Classification • Product levels: Customer value hierarchy All possible augmentation and transformation the prod offering might undergo in the future Exceeding customers’ expectation On a specific product Customers’ expectation for a specific product Turn the core benefit into the basic product Service/benefit customers are really buying

6. Prod. Characteristic & Classification • Product classifications • Durability • Tangibility • User • Consumer-Good • Industrial-Good

7. Product Classification [1] • Durability & Tangibility Classification: • Nondurable goods • Tangible goods normally consumed in one or a few uses. • Ex. Beverage • Durable goods • Tangible goods normally survive many uses, and require more personal selling and service. • Ex. Clothe • Services (intangible) • Intangible, variable, and perishable products. • Ex. Hair dresser

8. Product Classification [2] • User • Consumer-Goods Classification • Convenience goods Purchase frequently, immediately, with a minimum of effort (e.g. beverage) • Shopping goods Comparing the alternatives based on suitability, quality, price, and style (e.g. clothe) • Specialty goods Unique characteristics or brand identification for which many buyers is willing to make a special purchasing effort (e.g. car – Mercedez) • Unsought goods Buyers don’t know about or don’t normally think of buying (e.g. coffin)

9. Differentiation • Being different to attract people’s attention • Product • Design • Service Form: size, shape (e.g. cleo) Feature Performance quality Durability Reliability Reparability Ordering (e.g. online) Delivery (e.g. domino pizza) Installation (e.g. IKEA) Customer training (e.g. GE) Customer consulting Maintenance & repair Product return (e.g. US and European market)

10. Product System & Mix • Product mix has a certain: • Width • How many different product lines the firm carries • Length • Total number of items in the mix • Depth • How many variants are offered of each product in the line • Consistency • How closely related the various product lines are in end use, production requirements, distribution channels, or some other ways

11. Table 14.1: Product-Mix Width and Product-Line Length for Procter& Gamble Products Width = 5 Product Line Depth = 2

12. Product-Line Length • Line Stretching • Downmarket Stretch • Strong growth opportunities as mass retailers attract a growing number of shoppers • Tie up lower-end competitors who might otherwise try to move upmarket • Find that the middle market is stagnating or declining • Upmarket Stretch • Enter the high end of the market for more growth, higher margins, or position themselves as full-line manufacturers. • Two-Way Stretch • Serving the middle market might decide to stretch their line in both directions • e.g. Loreal  Maybelline; Teh Botol Sosro  Ice Tea)

13. service

14. Categories of Service Mix • Pure tangible good • Tooth paste, soap • Tangible good with accompanying service • Toyota • Hybrid • Café / restaurant • Major service with accompanying minor goods and services • Singapore airlines • Pure service • Massage, beauty salon

15. Characteristic of Service • Intangibility • Inseparability • Variability • Perishability

16. Determination of Service Quality • Reliability • Firm’s consistency and dependability in service performance • Responsiveness • Firm’s commitment to provide its services in a timely manner • Assurance • Firm’s competence, courtesy to its customers, and security of its operations • Empathy • Firm’s ability to put itself in its customer’s place • Tangibles • Firm’s ability to manage its tangibles

17. brand

18. BRAND • The benefit??? • Control people’s mind  easily to attract  charging higher price • Easy to penetrate the market for new product (under the same brand) • To identify our self from others • Property Right (intellectual property)

19. Brand Decisions • Building brand identity • Building brand identity requires additional decisions on the brand’s name, logo, colors, tagline, and symbol • Brand equity • The positive differential effect that knowing the brand name has on customer response to the product or service • Customer shows a preference for one product over another when they’re basically identical

20. Value of Brand Equity • Competitive advantages of high brand equity: • The company will have more leverage in bargaining with distributors and retailers because customers expect them to carry the brand. • The company can charge a higher price than its competitors because the brand has higher perceived quality. • The company can more easily launch extensions because the brand name carries high credibility. • The brand offers some defense against price competition.

21. Branding Challenges • Branding Decision: To Brand or Not to Brand?

22. Advantages • Brand name makes it easier for the seller to process orders and track down problems • Seller’s brand name and trademark provide legal protection of unique product features • Branding gives the seller the opportunity to attract a loyal and profitable set of customers • Branding helps the seller segment markets • Strong brands help build corporate image, making it easier to launch new brands and gain acceptance by distributors and consumers

23. Brand Element Choice Criteria • Memorable • Meaningful • Likable • Transferable • not carry poor meanings in other countries and languages • e.g. SBY berBoedi (Javanese sees it not wise enough; Sumatera Selatanese means liar) • Adaptable • Protectable

24. Branding Strategy • Develop new brand elements for the new product • Apply some of its existing brand elements • Combine the new brand with existing brand elements

25. Brand-Sponsor Decisions • Manufacturer brand e.g. BASF • Distributor brand e.g. Acer • Licensed brand name e.g. Stationery Mickey Mouse, Barbie; Apparel Playboy

26. Branding Decisions • Four available strategies • Individual names • The firm doesn’t tie its reputation to the product (e.g. Paperline, Mirage, Big Boss, Sinar Dunia manufactured by Tjiwi Kimia) • Blanket family names • No need for “name” research or large advertising cost to create brand-name recognition (e.g. Heinz, ABC) • Separate family names for all products • When a firm produces quite different products (e.g. Ace Hardware, Krisbow, Index) • Corporate name combined with individual product names • e.g.,Honda Jazz, Honda CRV

27. From STP • Segment-by-segment invasion plan • Intersegment cooperation

28. Selecting & Evaluating Market Segment Single-segment concentration Selective specialization Product specialization Market specialization Full-market Coverage

29. GAP Inc. • Upscale: • Banana Republic • Mid-market: GAP • Budget-priced: • Old Navy and • Forth & Towne

30. Telkomsel VS Indosat • Pasca bayar: Halo • Pra bayar: • AS • Simpati • Internet: • Telkom Flash • Pasca bayar: Matrix • Pra bayar: • IM3 • Mentari • Internet: • IM2

31. Coca-Cola Co. VS Pepsi Co. • Coca Cola • Diet Coke • Cherry Coke • Coca Cola Zero • Sprite • Fanta • (strawberry, orange) • Pepsi Cola • Diet Pepsi • Pepsi Wild Cherry • Pepsi One • 7 UP • Miranda • (strawberry, orange)