msca- product and brand mba 2011-13
TRANSCRIPT
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MBA 2011-13PRODUCT AND BRAND STRATEGIES
Dr. R.VENKATESHALLIANCE UNIVERSITY
MMBA
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Three basic elements of the product
product attributes
product benefits
marketing support services
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Characteristics of PLC and the implications for strategy
PLC and product policy
Product mix and product line Product as a strategic variable
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Life cycle of an industry
o Introduction
o Growth
o Maturityo Decline
Emphasis on strategies, functional areas, value-creating activities, and overall objectives variesover the course of an industry life cycle
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Adapted from Exhibit 5.8 Stages of the Industry Life Cycle
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Genericstrategies
Differentiation Differentiation Differentiation Overall costOverall cost leadershipleadership Focus
Market
growth rate
Low Very large Low to Negative
moderate
Number ofsegments
Very few Some Many Few
Intensity ofcompetition
Low Increasing Very intense Changing
Emphasison productdesign
Very high High Low to Lowmoderate
StageIntroduction Growth Maturity Decline
Factor
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Emphasison processdesign
Low Low to High Lowmoderate
Major
functionalarea(s) ofconcern
Research and Sales and Production General
Development marketing managementand finance
Overallobjective
Increase Create Defend Consolidate,market share consumer market share maintain,
awareness demand and extend harvest, or product life exitcycles
Stage
Factor
Introduction Growth Maturity Decline
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Products are unfamiliar to consumers
Market segments not well defined
Product features not clearly specified
Competition tends to be limited
Strategies
Develop product and get users to try it Generate exposure so product becomes
standard
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Characterized by strong increases in sales
Attractive to potential competitors
Primary key to success is to build consumer
preferences for specific brands
Strategies
Brand recognition
Differentiated products
Financial resources to support value-chain
activities
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Aggregate industry demand slows
Market becomes saturated, few new adopters
Direct competition becomes predominant
Marginal competitors begin to exit
Strategies
Efficient manufacturing operations and processengineering
Low costs (customers become price sensitive)
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Industry sales and profits begin to fall
Strategic options become dependent on theactions of rivals
Strategies
Maintaining
Exiting the market
Harvesting
Consolidation
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Asset and cost surgery
Selective product and market pruning
Piecemeal productivity improvements
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Dalr ymple & Parsons/Marketing Management 7th edition: C hapter 7 3
A Brand is a ..A Brand is a ..
Name,
Term,
Sign,
Symbol, or
Design .
intended to
distinguish the
goods and services
from one another
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Brand equity: The goodwill (equity) that anestablished brand has built up over itsexistence.
DREK -- differentiation, relevance (strength)
-- esteem, knowledge (stature)
Brand concept: specific meaning that brand
managers create and communicate to thetarget market.
Brand concept management: the analysis,planning, implementation, and control of a
brand concept throughout the life of the
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Brand naming criteria
Commonly used research approaches
to determine brand meaning:o Word associations
o Personifying thebrand
o
Laddering up thebrand essence Brand essence
Laddering up
o Brand bonding (through experience)
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o Brand building tools
Public relations andpress releases
Sponsorships Clubs and consumer
communities
Factory visits
Trade shows
Event marketing
Public facilities
Social causemarketing
High value for
the money
Founders or acelebrity personality
Mobile phone
marketing
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Nikes arrangement with Michael Jordan
has provided an excellent example of a
celebrity endorsement. Can you think of
an endorsement campaign that backfired?
What did it cost the company
in the short term? What,if any, have been the
lasting effects?
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Advantages of Branding Consumers viewpoint
1. Product quality
2. Increased shopper efficiency
3. Calls attention to new products4. Reduces psychological risk
Sellers viewpoint1. Handling orders, tracking down problems
2. Trademarklegal protection
3. Brand loyalty
4. Reduces need for in-store contact
5. Facilitates segmentation, promotion, and pricing
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Branding Challengeso Branding Decision: To Brand or Not to Brand?
Branding Decisions
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Issues in the battle of the brands: (1) howprices are set? (2) turnover, and (3) grossmargin.
Manufacturer brands: (1) prices are set tomaximize profit for the brandand are influencedby competitive forces, (2) they have a higherturnover than distributor brands. (Why??)
Distributor brands: (1) prices are set to maximizeprofit for the storeand (2) they have a highergross margin than manufacturer brands.
(Why??)
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Dalr ymple & Pa rs ons/Marke ting Management 7 th edi tion : Chap te r 7 31
Adding An Item: Four BrandAdding An Item: Four Brand
TypesTypes
Product Category
Existing New
Existing LineExtension
BrandExtensionBrand
Name
New Flanker
Brand
New
Product
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Dal rymple & Parsons /Marke ting Management 7th ed it ion: Chapter 7 49
Strategies for Brand RevivalStrategies for Brand Revival
Underlying cause? Reformulate the product/package
Move the product into new foreignor domestic markets
Discover and promote new usesfor the product
New promotion campaign/agency
Cost reduction
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Dalrymple & Parsons/Marke ting Management 7th edi ti on: Chapter 7 50
Options for droppingOptions for droppingproductsproducts
Revive if justified in believing brand canbe saved
Drop promotional activities (reducingcosts) and rely on repeat purchases(which will be more profitable as theycontinue)
Contract or license to another companyfor manufacturing
Sell off/dispose of brand
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Dalrymple & Parsons/Marke ting Management 7th edi ti on: Chapter 7 51
Selling/ Removing a ProductSelling/ Removing a Product
Involves Involves
Minimizing inconvenience to customers
and channel partners Notify dealers in advance
Help dealers clear out old stock
Offer dealer discounts on discontinued brands
Buy back unsold merchandise
Information on replacement brands should be easily
available
Arrange to provide service and parts for recent buyers(customer goodwill)
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They cant stand out in the marketplace and they are
struggling to connect with people. Here are six reasonswhy.
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Michael Eisner of Disney has called the word
brand over-used, sterile, and unimaginative.
Hes right. As the brand manual grows heavier
and more detailed you know youre in trouble.Making sure the flowers in reception conform to
the brand guidelines just shows you are looking
in the wrong direction. Consumers are who you
should be paying attention to. What matters tothem. Otherwise, youre hiding, and youre in
trouble.
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There is a new anti-brand sensibility. There ismuch more consumer awareness, moreconsumers who understand how brands workand, more importantly, how they are intended towork on them! For most brands there is nowhereleft to hide. The information age means thatbrands are part of the public domain. Hiddenagendas, subliminal messages, tricky moves
forget it. For most brands it is a new age ofconsumer savvy.
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The new consumer is better informed, more critical, less
loyal, and harder to read. The white suburban housewife
who for decades seemed to buy all the soap powder no
longer exists. She has been joined by a new population
of multi-generational, multi-ethnic, multi-nationalconsumers
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The more brands we invent the less we notice them as
individuals. If youre not Number One or Two, you might
as well forget it. And the greater the number of brands,
the thinner the resources promoting them. You get a
treadmill of novelty, production value, incrementalchange, tactical promotions, and events
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The definitions, charts, diagrams, and tables. There aretoo many people following the same rule book. Wheneverybody tries to beat differentiation in the same waynobody gets anywhere. Formulae cant deal with human
emotion. Formulae have no imagination or empathy
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The story of brands has gone from daring and inspiration
to caution and aversion to risk. Once the darling of the
bold and the brave, brands are relying on the
accumulation of past experiences rather than the
potential of future ones.
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The Lovemarks of this new century will be the brandsand businesses that create genuine emotionalconnections with the communities and networks they livein. This means getting up close and personal. And no
one is going to let you get close enough to touch themunless they respect what you do and who you are.
Love needs Respect right from the start. Without it, Lovewill not last. It will fade like all passions and infatuations.Respect is what you need when you are in for the long
haul. Respect is one of the founding principles of Lovemarks
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Lovemarks are the future beyond brands.
Lovemarks inspire loyalty beyond reason.
Lovemarks are built on Love and Respect.
Lovemarks are owned by the people who lovethem - consumers not companies.
Lovemarks can be everything that people care
deeply about
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Lovemarks read ROI as Return on Involvement.
Lovemarks are more than irreplaceable. Theyare Irresistible
Kung Fu guys are Irreplaceable. Bruce Lee isIrresistible - 32 years on from his death.
The classic T-shirt is Irreplaceable.
Local or global. you recognize Lovemarks
instantly.
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IDEA #1 DRIP WITH EMOTION
Differentiation is beyond reason , beyond efficiency,benefit, performance, functionality. Table stakes all!!
Fact: Emotion, intuition, long-term memories and
unconscious motivations control as much as 85% of ourdecision-making process.
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Consumers are saying: Youve got three
seconds to change my life or you are gone.
From Information Economy, Knowledge
Economy, Interruption Marketing (aka the MassMarket), Permission Marketing, the ExperienceEconomy, the Attention Economy to the
ATTRACTION ECONOMY.
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Low Respect. Low Love. Commodities, utilities, rawmaterial. No names with no claims. The world ofdiscounts, price wars, crushing competition.
High Love. Low Respect. Hero today zero tomorrow.Fads and infatuations, promotions and competitions.
Reality shows , J Lo jeans, Paris Hilton, the President ofthe US.
High Respect. Low love. Brand to bland. Where thoseer words leach you dead: faster, bigger, brighter,cheaper.
High Love and High Respect. Lovemarks. Enchantinginnovation. Irresistible appeal.
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MysteryThe beguiling power of the unknown.Metaphors and dreams, symbols and stories.The flow of past, present and future. When weknow everything, there is nothing left to delight
us. Sensuality- Sight, sound, smell, touch and
taste are portals to the emotions. never pay apremium for anything that doesn't excite most ofyour senses.
Intimacyis knowing the consumer better thanshe knows herself.
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The energy field is sight, sound and motion.Saatchi & Saatchi invented sisomo for theScreen Age, the everywhere world beyond TV.
89% of major brands are planning to market viamobile phones by 2008, and more than half ofbrands plan to spend between 5% and 25% oftheir marketing budget in the medium in the next
five years. (Airwide Solutions)
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sisomobrings technology, marketing and creativity together. Thisintersection is the future of advertising.
sisomois where art meets science. sisomoputs ideas and potent connections ahead of technology. sisomobrings screens to life in emotional and compelling ways.
sisomoattracts consumers with engaging, compelling stories. Thestory is an ancient, mysterious, timeless art. Marketers are caughtup in technology and methodology. An engaging story well told ispriceless.
sisomoinspires new formats, characters and ways for consumersto participate on screen. Multi-layered, multi-purpose stories thatconsumers can be absorbed by, play with, add to, recreate, andspread virally.
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Boundaries are collapsing. Categories are blurring. Convergenceand divergence are imploding. Entire new industries are emerging.
The Screen Age is about being a creative connector. Creative Connectors across media, advertising, marketing, design,
entertainment, games, phones, ringtones, activations, instore TV,sound logos, animation, sisomo packaging, you name it.
Lovemarks is about Creative Connectors inspiring loyalty beyondreason across the family of screens.
The key connect is the Inspirational Consumer, the ones who loveyour brand, get there first, tell your story and improve it for free.Inspire and connect them!! They turn brands into Lovemarks.
Lovemarks is about lives taking over brands.
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Either / Or compromises. You stay static. .And / And explodesthrough to the next level of possibility.
STARBUCKs: home and work. Coffee and music and movies APPLE: Business modelling ($1 a song) and networking (music
companies) and branding (white buds and wires) TOYOTA: gas and electric. Short and long term. Competitive and
Open. Cost reduction and innovation. Lovemarks build complex opposites together with equal passion so
they enhance each other and take you to a place neither dreamedpossible.
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The role of business is to make the world a better placefor everyone. Its a powerful, provocative, inescapablestatement. Its plain business sense you can beloathed, liked or loved.
Lovemarks make the consumers love you
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THE END