product
TRANSCRIPT
Product and Brand Product and Brand ManagementManagement
What is a product?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.
New Product DevelopmentNew Product Development
Most new product development is an improvement on existing products
Less than 10% of new products are totally new concepts.
Success rate of new Success rate of new productsproducts
The success rate of new products is very low – less than 5%.
Product obsolescence is rapid with improvements in technology
Product Development StagesProduct Development Stages
Business analysisBusiness 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 paybacksDiscounted cash flow projections
Market testingMarket testing
CommercializationCommercialization
Product LevelsProduct Levels
Customer value hierarchy
Customer DelightCustomer Delight
When you exceed customer’s expectations
Product HierarchyProduct Hierarchy
Product classificationProduct classification
Consumer goods Consumer goods classificationclassification
Convenience goodsShopping goodsSpecialty goodsUnsought goods
Industrial goods Industrial goods classificationclassification
Materials and Parts - raw materials - manufactured materials and partsCapital itemsSupplies and business services
Product MixProduct 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
Product Line decisionsProduct 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
BrandBrand
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
Brand EquityBrand 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
Levels of meaningLevels of meaning
AttributesBenefitsValuesCulturePersonalityUsers
Brand PowerBrand 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
Brand Equity – Competitive Brand Equity – Competitive AdvantagesAdvantages
Reduced marketing costsTrade leverageCan charge a higher priceCan easily launch brand extensionsCan take some price competition
Managing Brand EquityManaging 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
Advantages of brandingAdvantages 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
Brand parityBrand parity
Consumers buy from a set of acceptable/ preferred brands
Umbrella BrandUmbrella 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.
Naming the BrandNaming the Brand
Product benefitsProduct qualitiesEasy to pronounceShould be distinctiveShould not have poor meanings in
other languages and countries
Brand strategyBrand 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
Brand RepositioningBrand Repositioning
This may be required after a few years to face new competition and changing customer preferences
PackagingPackaging
Includes the activities of designing and producing the container for a product
Packaging is done at three levels - primary - secondary - shipping
Packaging as a marketing Packaging as a marketing tooltool
Self serviceConsumer affluenceCompany and brand image innovation
Designing packagingDesigning packaging
Packaging concepts Technical specifications Engineering tests Visual tests Dealer tests Consumer tests Packaging innovations Environmental considerations
LabelsLabels
IdentificationGrade classificationDescription of productManufacturer identityDate of mfg., batch no.Instructions for usePromotion
