Product and Brand Management

1. Product and Brand Management

2. What is a product? • A product is any offering by a company to a market that serves to satisfy customer needs and wants. • It can be an object, service, idea,etc.

3. New Product Development • Most new product development is an improvement on existing products • Less than 10% of new products are totally new concepts.

4. Success rate of new products • The success rate of new products is very low – less than 5%. ‘You have to kiss a lot of frogs to find a prince.” • Product obsolescence is rapid with improvements in technology • Shorter PLCs

5. Product Development Stages • Idea generation • Idea screening • Concept development and testing • Concept testing • Conjoint analysis – to find out the best valued attributes by consumers

6. Business analysis • The most customer appealing offer is not always the most profitable to make • Estimate on costs, sales volumes,pricing and profit levels are made to find out the optimal price – volume mix. • Breakeven and paybacks • Discounted cash flow projections

7. Market testing • Test markets • Test periods • What information to gather? • What action to take?

8. Commercialization • When? (Timing) • Where? (Which geographical markets) • To whom? (Target markets) • How? (Introductory Marketing strategy)

9. Product Levels Customer value hierarchy • Core benefit • Basic product • Expected product • Augmented product • Potential product

10. Customer Delight • When you exceed customer expectations

11. Product Hierarchy • Need • Product family • Product class • Product Line • Product type • Brand • Item

12. Product classification • Durable • Non – durable • Services

13. Consumer goods classification • Convenience goods • Shopping goods • Specialty goods • Unsought goods

14. Industrial goods classification • Materials and Parts - raw materials - manufactured materials and parts • Capital items • Supplies and business services

15. Product Mix • The assortment of products that a company offers to a market • Width – how many different product lines? • Length – the number of items in the product mix • Depth – The no. of variants offered in a product line • Consistency – how closely the product lines are related in usage

16. Product Line decisions • Product rationalization • Market rationalization • Product line length too long – when profits increase by dropping a product in the line too short – when profits increase by adding products to the product line • Line pruning – capacity restrictions to decide

17. Brand • 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 • It is the seller’s promise to deliver the same bundle of benefits/services consistently to buyers

18. Brand Equity • When a commodity becomes a brand, it is said to have equity. • The premium a brand can command in the market • The difference between the perceived value and the intrinsic value

19. Levels of meaning • Attributes • Benefits • Values • Culture • Personality • Users

20. Brand Power • Customer will change brands for price reasons • Customer is satisfied. No reason to change. • Customer is satisfied and would take pains to get the brand • Customer values the brand and sees it as a friend • Customer is devoted to the brand

21. Brand Equity – Competitive Advantages • Reduced marketing costs • Trade leverage • Can charge a higher price • Can easily launch brand extensions • Can take some price competition

22. Managing Brand Equity • Brand Equity needs to be nourished and replenished. We must not flog the brand for equity to be diluted or dissipated • Store brands

23. Advantages of branding • Easy for the seller to track down problems and process orders • Provide legal protection of unique product features • Branding gives an opportunity to attract loyal and profitable set of customers • It helps to give a product category at different segments, having separate bundle of benefits • It helps build corporate image • It minimises harm to company reputation if the brand fails

24. Brand parity • Consumers buy from a set of acceptable/ preferred brands

25. Umbrella Brand • Products from different categories under one brand • Dangerous to the brand if the principal brand fails • Sometimes the company name is prefixed to the brand. In such cases the company name gives it legitimacy. The product name individualises it.

26. Naming the Brand • Product benefits • Product qualities • Easy to pronounce • Should be distinctive • Should not have poor meanings in other languages and countries

27. Brand strategy • Line extension – existing brand name extended to new sizes in the existing product category • Brand extension – brand name extended to new product categories • Multibrands – new brands in the same product category • New brands – new product in a different product category • Cobrands –brands bearing two or more well known brand names

28. Brand Repositioning • This may be required after a few years to face new competition and changing customer preferences

29. Packaging • Includes the activities of designing and producing the container for a product • Packaging is done at three levels - primary - secondary - shipping

30. Packaging as a marketing tool • Self service • Consumer affluence • Company and brand image • innovation

31. Designing packaging • Packaging concepts • Technical specifications • Engineering tests • Visual tests • Dealer tests • Consumer tests • Packaging innovations • Environmental considerations

32. Labels • Identification • Grade classification • Description of product • Manufacturer identity • Date of mfg., batch no. • Instructions for use • Promotion

33. Labels as a marketing tool • Labels need to change with time or packaging changes to give it a contemporary and fresh look