Introduction to Product Management

1. Professor Carl Mela BA 460 Product Management Fuqua School of Business Brand Management System On Building A Brand Managing Across Brands Introduction to Product Management

2. Agenda • Course Overview • What is a Brand? • Brand Equity • Brand Management

3. Course Overview • Objective • Structure • Brand Management System • On Building A Brand • Managing Across Brands • Requirements • 2 case write-ups, class participation, marketing plan, and final exam.

4. Structure • Part I - The Brand Management System • Class 1: Class Overview, The Nature of a Brand, Brand/Product Management. An application to the Pepsi syringe scare. • Class 2: P&G Case. Live commentary from P&G.

5. Structure • Part II - Building Brands • Class 3: Branding and Price. The case is Kodak. Then, Red Hat discusses how its branding strategy leads to a price advantage. • Class 4: Distribution and forecasting. The Goodyear case. Video regarding the effect of channel on brand.

6. Structure • Part II - Building Brands (Cont.) • Class 5: Craig Stacey (VP from IRI) discusses the use of information to build brands. • Class 6: Promotions and Brands: Marketing in the NHL with live commentary from the Hurricanes Director of Communications, Ken Lehrner

7. Structure • Part II - Building Brands (Cont.) • Class 7: Advertising and Brands with Intel Inside Interactive CDROM. Live Commentary and Discussion with Michael J. Ganey, Director, Howard, Merrell & Partners,Inc.

8. Structure • Part III - Across Brands and Markets • Class 8: The Marketing Plan & Pharmasim. Tom O’Guinn, Visiting Professor discusses Brand Communities. • Class 9: Product Extensions: The Black and Decker Case and Video • Class 10: Global Branding: The Heineken Case, MTV Worldwide, and The Fuqua MBA with Jim Gray, Associate Dean, Fuqua.

9. Structure • Part III - Across Brands and Markets • Class 11: Branding on the Internet. Deborah Kania (Lens Express and author of branding.com) and Beth Yakel (Sciquest) • Class 12: Wrap-up and PharmaSim Summary.

10. Agenda • Course Overview • What is a Brand? • Brand Equity • Brand Management

11. What is a Brand? • Name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or groups of sellers and to differentiate them from those of competition.” - AMA • Not all products are brands. • Focus of Court et al. reading

12. Why Brand? • Identify product • Reduce risk • Reduce consumer search cost • Signal quality • Legal protection • Create product associations • Differentiate product

13. Agenda • Course Overview • What is a Brand? • Brand Equity • Brand Management

14. Brand Equity • The marketing effects uniquely attributable to the brand - Keller • Positive brand equity leads to: • Loyalty • Margins • Reduced vulnerability to competition • Enhanced marketing effectiveness • Brand extensions

15. Brand Equity • Sources of Brand Knowledge • Brand Awareness • Brand Image • Strength of Brand Associations • Favorability of Brand Associations • Uniqueness of Brand Associations

16. Brand Equity • Benefits • Loyalty • Larger Margins • Greater Trade Support • More Efficient Communications • Licensing Opportunities • Brand Extension Opportunities • Coke name worth $39BB, Kodak $11BB (Brand Valuation Reading)

17. Best Corporate Reputations in America Source: Wall Street Journal / Harris Poll

18. Brand Equity • But how does one develop brand equity? • The goal of this course is to learn how to manage brands (via marketing programs) in order to create brand equity - that is, create an enduring advantage for your brands.

19. Figure 2-9 Building Customer-Based Brand Equity TOOLS AND OBJECTIVES KNOWLEDGE EFFECTS BENEFITS Choosing Brand Elements (4) Brand Awareness (3) Possible Outcome Depth Recall Recognition Breadth Purchase Consumption Brand name Logo Memorability Symbol Meaningfulness Character Transferability Packaging Adaptability Slogan Protectability } Greater loyalty Less vulnerability to competitive marketing actions and crises Larger margins More elastic response to price increases More inelastic response to price increases Increased marketing communica- tion efficiency and effectiveness Possible licensing opportunities More favorable brand extension evaluations Developing Marketing Programs (5 & 6) Product Functional & symbolic benefits Price Value perceptions Distribution channels Integrate “Push” & “Pull” Communications Mix and match options Brand Associations (3) Strong Relevance Consistency Favorable Desirable Deliverable Unique Point of parity Point of difference Leverage of Secondary Associations (7) } Company Country of origin Channel of distribution Awareness Other brands Meaningfulness Endorsor Transferability Event

20. Agenda • Course Overview • What is a Brand? • Brand Equity • Brand Management

21. Brand Management • Brand management is the act of designing and implementing marketing programs to build and maintain brand equity. • Product • Price • Distribution • Communications

22. The Role of a Brand or Product Manager • Prepare Marketing Plan • Develop Copy, Programs, and Campaigns • Stimulate Sales and Distribution • Market Intelligence • Product Improvements

23. The Role of a Brand or Product Manager • Pluses - Cost effective mix, quick market reaction, attention for small brands, good training for executives • Minuses - Conflict and frustration (responsibility and no authority), administrative work with executive expectations, learns products not functions, short horizon, costs of associates and assistants

24. A Product Manager - Computer Software Firm • Background • Undergrad in architecture, became director of marketing for architecture firm • Received MBA • International marketing manager for sporting goods company • Founded a toy company

25. A Product Manager -Computer Software Firm • Typical day • Meetings - new product line, marketing mix, marketing staff, organizational design and integration • E-mail/Phone - 3rd party developers, sales force, product support • Marketing planning - drafting the marketing plan

26. A Product ManagerComputer Software Firm • Marketing mix - recommends price to corporate committee, manages advertising, conducts focus groups for product positioning and development, decides on channels

27. A Product Manager - Consumer Packaged Goods Firm • Background • Medical equipment sales after undergraduate • Received MBA • Assistant Brand Manager at large CPG Company • Switched firms, promoted several times to product manager. • Switched firms again to as senior product manager

28. A Product Manager -Consumer Packaged Goods Firm • Typical day • 75% fighting fires, 25% planning • Marketing planning - key is volume forecasting since unsold inventory is perishable • Mix - 1/3 on pricing issues (list & trade), 20% on consumer promotions, president handles ads, 15% on distribution, little on sales and service

29. A Product ManagerComputer Software Firm • Marketing mix - recommends price to corporate committee, manages advertising, conducts focus groups for product positioning and development, decides on channels.

30. The Marketing Department VP Marketing Marketing Administration New Products Advertising & Promotion Existing Products Sales Market Research Design the Department!!! Matrix or Tree?

31. Brand Management Issues Media Purchasing Packaging Promotion Services Salesforce Product Manager Distribution R&D Fiscal Manufacturing Legal Publicity Market Research Advertising Agency

32. The Nature of the Job • Department Their Emphasis Marketing’s Emphasis • R&DBasic Research, Intrinsic Quality, Applied Research, Perceived • Functional Features Quality, Sales Features • EngineeringLong Design Lead Times, Few Short Lead Times, Many Models, • Models, Standard Components Custom Components • PurchasingNarrow Lines, Standard Parts, Price Broad Lines, Nonstandard Parts, • of Material, Large & Infrequent Lots Quality of Material, Small Lots • ManufacturingLong Lead Times, Long Runs, Few Short Lead Times, Short Runs, • Models & Revisions, Standard Orders, Many Models, Custom Orders, • Ease of Fabrication, Average Quality Fine Appearance, Tight Quality • FinanceStrict Rationale for Spending, Hard Intuitive Arguments for Spending, • and Fast Budgets, Pricing Covers Flexible Budgets, Pricing to • Costs Market Developments • AccountingStandard Transactions, Few Reports Special Terms/Discounts • CreditFull Disclosures, No Risk, Tough Minimum Disclosure, Some Risk, • Terms, Tough Collection Easy Credit, Easy Collection

33. A Key Trend in Product/Brand Management • Salaries and bonus for product marketers are up 65% in the last two years (Marketing News, Nov. 99)

34. Brand Management Prognostications • Future of brand management • Customer management vs. product management • Cuts across brands and products • Managers organized by portfolios of customers

35. Summary • Brand Equity • Awareness • Associations • Created by the mix • It is the role of a product manager to manage the mix to create equity • The brand management system