Product and Brand Management

(Most Goods) ATL Activities

Product = Idea Service Goods

(Most Services)BTL Activities

100

10

20

30

40

50

60

70

80

90

Perfumes

FMCG

Consumer Electronics

White Goods

Financial Services

Mobile

Utilities

Brand Value Added BVA varies by sector

Source :Brand Financ

Bulk Chemicals

Basics of Brand Score Card

Add Volume Add Revenue BVA driver 1 Add Pricing Defined The White Space for the brand BVA driver 2 STEP 3 BVA driver 3

Base
STEP 1

STEP 2

Size of the Prize BBV

Branded Business Value BBV

Fundamentals
Branding is NOT advertising It is a wrong concept that : More you advertise more you would get response Add a differentiating that could be from Price, Service or Image perspective Do not ignore the power of PR, Promotion,Publicity and Sales

"... if the circus is coming to town and you paint a sign saying 'Circus Coming to the Fairground Saturday', that's advertising. If you put the sign on the back of an elephant and walk it into town, that's promotion. If the elephant walks through the mayor's flower bed, that's publicity. And if you get the mayor to laugh about it, that's public relations." If the town's citizens go the circus, you show them the many entertainment booths, explain how much fun they'll have spending money at the booths, answer their questions and ultimately, they spend a lot at the circus, that's sales.

Identifying your key constituencies for brand building

1)Consumers (Average purchase, Frequency of purchase, Micro localization Index) Irrespective of the business, customers are most influential audience. If the brand is not strong and positive in the eyes of current or prospective consumers, they will not be purchasing your products or services.

Identifying your key constituencies for brand building

2) Employees (Brand Understanding, Pride of association ,Referral willingness, Behaviour) Their perspectives are particularly important in service and retail industries as associates are increasingly asked to play ambassadorial roles. Many companies consider the entire associate population to be "brand managers" as they define the ultimate customer brand experience in their attitudes and actions

Identifying your key constituencies for brand building

3) Society (CSR, Contribution) Is the brand considered to be a good corporate citizen? Is it known as an active, contributing member of the community?

Identifying your key constituencies for brand building

4) Investors (Perception) It is related to the short-term cost of borrowing and also built into the investor's perspective is the quality of management. Assist in premier company valuation

Illustration of valuation approach (Brand Finance)

1. Segmentation
= Total
Business Value Trademark Value

+ Segment B + Segment A

Discounted to present value

2. Due diligence of forecasts

Yr 1

Yr 2

Yr 3

Yr 4

Yr 5

Future Value

Future Cash Flows 4. Risk attached to future earnings

3. Brand contribution to earnings

What is driving consumer value?

and understand how we perform against competition

Size
Features Functional delivery Availability Design Exclusivity Image Leadership
10 20 30 40 50 60

Importance Performance Competitors

randetaScoring Template
Attribute Time in market Distribution Market share Market position Sales growth rate Price premium Elasticity of price Marketing spend/support Advertising awareness Brand awareness
TOTAL

Score 0 -10 0 -10 0 -10 0 -10 0 -10 0 -10 0 -10 0 -10 0 -10 0 -10
max 100

Inter Techs 5 year performance

Performance (million) Sales Revenue - Cost of goods sold Gross Contribution - Manufacturing overhead - Marketing & Sales - Research & Development Net Profit Return on Sales (%) Assets Assets (% of sales) Return on Assets (%) Base Year 254 135 119 48 18 22 16 6.3% 141 56% 11.3% 1 293 152 141 58 23 23 22 7.5% 162 55% 2 318 167 151 63 24 23 26 8.2% 167 53% 3 387 201 186 82 26 25 37 9.6% 194 50% 4 431 224 207 90 27 24 50 205 48% 5 454 236 218 95 28 24 55 206 45%

11.6% 12.1%

13.5% 15.6% 19.1% 24.4% 26.7%

Why Market Growth Rates Are Important

InterTechs 5 Year Market-Based Performance
Performance (million) Market Growth InterTech Sales Growth (%) Market Share(%) Customer Retention (%) New Customers (%) % Dissatisfied Customers Relative Product Quality Relative Service Quality Relative New Product Sales Base Year 18.3% 12.8% 20.3% 88.2% 11.7% 13.6% +10% +0% +8% 1 2 3 4 5 23.4% 17.6% 34.4% 24.0% 17.9% 17.4% 11.2% 27.1% 16.5% 10.9% 19.1% 18.4% 17.1% 16.3% 14.9% 87.1% 85.0% 82.2% 80.9% 80.0% 12.9% 14.9% 24.1% 22.5% 29.2% 14.3% 16.1% 17.3% 18.9% 19.6% +8% +0% +8% +5% -20% +7% +3% -3% +5% +1% -5% +1% 0% -8% -4%

A quick glance at Table 2, however shows that most market indicators are negative. It is obvious that, when market conditions are less benign, this company will not last long.

Brand Scorecard Framework

Marketing Actions Perceptions Behaviour Market & Financial Performance

Awareness
Familiarity Salience

Quality perceptions
Value perceptions Image perceptions Preference

Trial
Frequency Loyalty

Marketing Investment & Performance Scorecard

Activity measures Brand equity measures Behavioural measures Performance & Financial measures

16

Brand Value Added ($ million)

$15 $20 $25 $10 $5 $0 -$5 -$10 -$15 -$20 -$25

Brand Equity Index

100 80 90 70 60 50 40 30 20 10 0

Brand Performance Score

80 70 60 50 40 30 20 10 0 90 100

Note: Measures have to be customised to each business model. Those shown above are for illustrative purposes. (Brand Finance) 17

Marketing
Marketing is a social and managerial process through which individuals and groups obtain what they need or want through creating, offering and exchanging product of value with others Needs- A human need is a state of deprivation of basic satisfaction. Wants-They are desires for specific satisfiers of needs. Demands They are wants for specific product backed by willingness and ability to pay. Product-A product is anything that can be offered to satisfy a need or want.

 Product- A product can consist of as many as three components: physical good (s),service (s), and idea (s).
Goods Fast food Hamburger Restaurant fries,drinks Computer Church/Temple Product is anything that can be offered to a market to satisfy a want or need. Services purchasing cooking,seating Idea saves time

Monitor,printer delivery,installation training

computation power

Five Competing Concept

The Production Concept It Holds that consumers will favour those products that are widely available and low in cost.Manager of production oriented organisation concentrate on achieving high production efficiency and wide distribution. The Product Concept It holds that consumers will favour those products that offers the most quality ,performance, or innovative features: Managers in product oriented organisations focus their energy on makinghg superior products and improving them over time.

Five Competing Concept

The Selling Concept It holds that consumers , if left alone , will ordinarily not buy enough of the organisations products.The organisation must therefore undertake an aggressive selling and promotion effort. The Marketing Concept It holds that the key to achieving organisational goals consist of being more effective than competitors in integrating marketing activities towards determining and satisfying the needs and wants of target markets.

Five Competing Concept

The Societal Marketing ConceptIt holds that the organisation task is to determine the needs, wants , and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumers and the societys well being.

Five Product Level

Core benefit (Rest and Sleep) Basic product (Bed,bathroom,towels,desk etc) Expected product (Clean bed,Fresh towels,working lamps,quietness. Augmented product (Remote control tv Sets,fresh flowers,rapid check ins) Potential product (Delighting customer, all suites hotel, all women hotels etc)

Product Hierarchy

Need family:The core need that underlies the existence of a product family.eg-Security. Product family:All the product classes that can satisfy a core need with reasonable effectiveness.eg-savings and income Product class:A group of products within the product family recognised as having a certain functional coherence. eg financial instruments Product line: A group of items within a product class that are closely related because they perform a similar function, are sold to the same consumer groups, are marketed through the same channels , or fall within given price ranges.eg life insurance. Product type: A group of items within a product linethat share one of several possible forms of the product. Eg:term life. Brand: The name , associated with one or more items in the product line, that is used to identify the source or character of the item(s)eg Prudential. Item:A distinct unit within a brand or product line that is distinguishable by size, price appearance, or some other attribute. Eg Prudential renewable term life insurance

Product Classification
Durability and Tangibility (Nondurable,durable,services) Consumer Goods Classification (Convenience goods- Staple,Impulse and Emergency goods,Shopping Goods,Speciality goods,unsought goods) Industrial Goods Classification (Materials and parts,Capital items, and supplies and business services)

Product Mix Decision

A product Mix is the set of all products and items that a particular seller offers for sale to buyers. Product Mix Width Product Line length Depth Consistency