Product and Brand Management

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.

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.

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 technology y Shorter PLCs

Product Development Stages

y Idea generation y Idea screening y Concept development and testing y Concept testing y Conjoint analysis to find out the best valued attributes by

consumers

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

Market testing
y Test markets y Test periods y What information to gather? y What action to take?

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

Product Levels
In 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. Connection.

y Augmented product Other add on features. Eg: Hotels with TV Sets, Remote & Satellite 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.

Customer Delight
y When you exceed customer expectations

Product classification
y Durable y Non durable y Services

Consumer goods classification

y Convenience goods y Shopping goods y Specialty goods y Unsought goods

Industrial goods classification

y Materials and Parts

- raw materials - manufactured materials and parts y Capital items y Supplies and business services

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 mix y Depth The no. of variants offered in a product line y Consistency how closely the product lines are related in usage

Product Line decisions

y Product rationalization y Market rationalization y 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 y Line pruning capacity restrictions to decide

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 of benefits/services consistently to buyers

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 y The difference between the perceived value and the intrinsic value

Levels of meaning
y Attributes y Benefits y Values y Culture y Personality y Users

Brand Power
y 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 friend y Customer is devoted to the brand

Brand Equity Competitive Advantages

y Reduced marketing costs y Trade leverage y Can charge a higher price y Can easily launch brand extensions y Can take some price competition

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

Advantages of branding
y Easy for the seller to track down problems and process

orders y Provide legal protection of unique product features y Branding gives an opportunity to attract loyal and profitable set of customers y It helps to give a product category at different segments, having separate bundle of benefits y It helps build corporate image y It minimises harm to company reputation if the brand fails

Brand parity
y Consumers buy from a set of acceptable/ preferred brands

Umbrella Brand
y 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. In

such cases the company name gives it legitimacy. The product name individualises it.

Naming the Brand

y Product benefits y Product qualities y Easy to pronounce y Should be distinctive y Should not have poor meanings in other languages and

countries

Brand strategy
y Line extension existing brand name extended to new

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

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

competition and changing customer preferences

Packaging
y Includes the activities of designing and producing the

container for a product y Packaging is done at three levels - primary - secondary - shipping

Packaging as a marketing tool

y Self service y Consumer affluence y Company and brand image y innovation

Designing packaging
y Packaging concepts y Technical specifications y Engineering tests y Visual tests y Dealer tests y Consumer tests y Packaging innovations y Environmental considerations

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

Labels as a marketing tool

y Labels need to change with time or packaging changes to

give it a contemporary and fresh look