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Chapter 5: Developing Product and Brand Strategy

Content
Strategy?! Marketing?! Introduction to Marketing planning Chapter 1: analysing the current situation Chapter 2: understanding markets & customers Chapter 3: planning segmentation, targeting, positioning Chapter 4: planning direction, objectives & marketing support Chapter 5: developing product & brand strategy Chapter 6: planning pricing strategy Chapter 7: developing channel & logistics strategy Chapter 8: developing marketing communication & influence strategy Chapter 9: planning metrics & implementation control

Research & analyse the current situation

Plan metrics & implementation control

Understand markets & customers

Develop marketing strategies & programmes

Plan segmentation, targeting, positioning

Plan direction, objectives, mark. support

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Content
1. Planning product strategy
Goods, services & other products Features, benefits and services Quality & design Packaging & labeling

2. Product development and management

New product development Product lines and the product mix

3. Planning branding
Branding and positioning The power of brand equity

Introduction
Product strategy is critical to the success of the overall marketing strategy.

Value is captured in two key areas:

Product Strategy

Existing and proposed products.

Branding

Value enhancement through awareness and image.

Content
1. Planning product strategy
Goods, services & other products Features, benefits and services Quality & design Packaging & labeling

2. Product development and management

New product development Product lines and the product mix

3. Planning branding
Branding and positioning The power of brand equity

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1. Planning product strategy

Products can be:
Tangible Goods. Services. Places. Ideas. Organizations. People.

Designing a Service

Features and Benefits

Features: Specific attributes that enable a product or service to perform its function.

Benefits: Need-satisfaction outcomes.

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Mass Customization: Creating products, on a large scale, with features tailored to the needs of individual customers.

Sample Needs, Features, and Benefits

Product Targeted Segment
Do it yourselfers

Need

Feature

Benefit

Cordless drill

Drill holes without electricity Obtain money to buy a home

Extra battery pack included

Drill can be used for long periods of time Less money needed up front to buy a home

Mortgage loan

First-time home buyers

Low down payment

Laser printer

Small business owners

Print documents economically

Draft-quality printing mode uses less toner

Toner cartridge lasts longer, saving money

Quality & Design

Quality: How well the product satisfies customers.
Basic functionality is only the price of entry. Superior quality attracts business. Poor quality can lead to negative word-of-mouth.

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Design: Quality comes from design,

components/ingredients and processes. includes emotional quality the impact of design on how it makes the customer feel.

Packaging
Keeps products safe. Helps companies enhance their brand imagery and highlight points of differentiation.

Labeling
Communicates product contents, uses and warnings. Conforms to national, regional and local laws. Helps attract attention, stand out from retail clutter.

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Content
1. Planning product strategy
Goods, services & other products Features, benefits and services Quality & design Packaging & labeling

2. Product development and management

New product development Product lines and the product mix

3. Planning branding
Branding and positioning The power of brand equity

2. Product development & mgt

The Product Life Cycle

Steps in the Product Development Process: Idea generation. Screening of new ideas. Initial concept testing. Business analysis. Prototype design. Market testing. Commercialization. Monitoring customer reaction.

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Product Mix and Product Lines

Product Mix: The overall assortment of all product or services offered. Product Lines: A group of products that are all similar in some way. Product Mix Width: Number of lines offered. Product Line Depth: Number of products in a line.

Line Extensions & Brand Extensions

Line Extension: Putting an established brand on a new product and adding it to an existing product line. Example: A low fat version of Lays potato chips.

Brand Extension: Putting an established brand on a new product in a different category for a new customer segment. Example: Snickers brand ice cream Example : Pampers Kandoo

Product Line and Mix Decisions

DECISION
New product Line extension New line Brand extension Product deletion Line deletion

RESULT
Lengthens product line Lengthens product line Widens product mix Widens product mix Shortens product line Narrows product mix

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Content
1. Planning product strategy
Goods, services & other products Features, benefits and services Quality & design Packaging & labeling

2. Product development and management

New product development Product lines and the product mix

3. Planning branding
Branding and positioning The power of brand equity

Planning Branding
Giving a distinct identity using: words, designs, and symbols. In terms of branding, a product may carry: Company name and individual brand. Individual name. Private-label brand. Multiple brands (co-branding, ingredient branding).

Brands Should Be.

Meaningful. Recognizable and memorable. Capable of being legally protected. Suitable for international markets.

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Branding and Positioning

Branding not only identifies a particular product, but also sets it apart from the competition (both direct and indirect).

Positioning
Positioning: What the target group perceives about your brand relative to how they perceive the competition.

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The Power of Brand Equity

Brand Equity: the extra value customers perceive that enhances their long-term loyalty to a brand.
Can insulate a company against competitive threats. Can help new products achieve acceptance.

The Power of Brand Equity

The Value of Strong Brands:
Encourages brand loyalty. Boosts customer lifetime value.
The total amount that a customer spends on a brand or with a company during the life of their relationship.

Pyramid of Brand Equity

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