Product and brand management

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Product and Brand Management

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Transcript of Product and brand management

Page 1: Product and brand management

Product and Brand Management

Page 2: Product and brand management

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.

Page 3: Product and brand management

New Product Development

• Most new product development is an improvement on existing products

• Less than 10% of new products are totally new concepts.

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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

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Product Development Stages

• Idea generation

• Idea screening

• Concept development and testing

• Concept testing

• Conjoint analysis – to find out the best valued attributes by consumers

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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

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Market testing

• Test markets

• Test periods

• What information to gather?

• What action to take?

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Commercialization

• When? (Timing)

• Where? (Which geographical markets)

• To whom? (Target markets)

• How? (Introductory Marketing strategy)

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Product Levels

Customer value hierarchy

• Core benefit

• Basic product

• Expected product

• Augmented product

• Potential product

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Customer Delight

• When you exceed customer expectations

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Product Hierarchy

• Need

• Product family

• Product class

• Product Line

• Product type

• Brand

• Item

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Product classification

• Durable

• Non – durable

• Services

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Consumer goods classification

• Convenience goods

• Shopping goods

• Specialty goods

• Unsought goods

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Industrial goods classification

• Materials and Parts

- raw materials

- manufactured materials and parts

• Capital items

• Supplies and business services

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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

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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

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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

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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

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Levels of meaning

• Attributes

• Benefits

• Values

• Culture

• Personality

• Users

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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

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Brand Equity – Competitive Advantages

• Reduced marketing costs

• Trade leverage

• Can charge a higher price

• Can easily launch brand extensions

• Can take some price competition

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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

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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

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Brand parity

• Consumers buy from a set of acceptable/ preferred brands

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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.

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Naming the Brand

• Product benefits

• Product qualities

• Easy to pronounce

• Should be distinctive

• Should not have poor meanings in other languages and countries

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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

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Brand Repositioning

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

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Packaging

• Includes the activities of designing and producing the container for a product

• Packaging is done at three levels

- primary

- secondary

- shipping

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Packaging as a marketing tool

• Self service

• Consumer affluence

• Company and brand image

• innovation

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Designing packaging

• Packaging concepts

• Technical specifications

• Engineering tests

• Visual tests

• Dealer tests

• Consumer tests

• Packaging innovations

• Environmental considerations

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Labels

• Identification

• Grade classification

• Description of product

• Manufacturer identity

• Date of mfg., batch no.

• Instructions for use

• Promotion

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Labels as a marketing tool

• Labels need to change with time or packaging changes to give it a contemporary and fresh look