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.

New 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 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
Product Development Stages

• Idea generation

• Idea screening

• Concept development and testing

• Concept testing

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

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

Market testing

• Test markets
 • Test periods

• What information to gather?

• What action to take?

Commercialization

• When? (Timing)

• Where? (Which geographical markets)

• To whom? (Target markets)

• How? (Introductory Marketing strategy)

Product Levels
Customer value hierarchy

• Core benefit

• Basic product

• Expected product

• Augmented product

• Potential product

Customer Delight

• When you exceed customer expectations

Product Hierarchy

• Need

• Product family

• Product class

• Product Line

• Product type

• Brand

• Item
Product classification

• Durable

• Non – durable

• Services
Consumer goods classification

• Convenience goods

• Shopping goods

• Specialty goods
Unsought goods
Industrial goods classification

• Materials and Parts

- raw materials
- manufactured materials and parts

• Capital items

• Supplies and business services

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
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

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
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
Levels of meaning

• Attributes

• Benefits

• Values

• Culture

• Personality

• Users
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

Brand Equity – Competitive Advantages

• Reduced marketing costs

• Trade leverage
 • Can charge a higher price

• Can easily launch brand extensions

• Can take some price competition

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
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

Brand parity

• Consumers buy from a set of acceptable/ preferred brands

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.
Naming the Brand

• Product benefits

• Product qualities

• Easy to pronounce

• Should be distinctive
 • Should not have poor meanings in other languages and countries
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

Brand Repositioning

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

• 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 tool

• Self service

• Consumer affluence

• Company and brand image

• innovation
Designing packaging

• Packaging concepts

• Technical specifications

• Engineering tests

• Visual tests
 • Dealer tests

• Consumer tests

• Packaging innovations

• Environmental considerations
Labels

• Identification

• Grade classification

• Description of product

• Manufacturer identity

• Date of mfg., batch no.

• Instructions for use

• Promotion
Labels as a marketing tool

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

and fresh look
=============================================================
===========

Part 4: Product Decisions

• Product and Service Strategies

• Category and Brand Management, Product Identification, and New-Product

Development
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.
Chapter 12
Category and Brand Management, Product Identification, and New-Product
Development
12-3
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.
Chapter Objectives

• Explain the benefits of category and brand management.

• Identify the different types of brands.

• Explain the strategic value of brand equity.

• Discuss how companies develop strong identities for their products and brands.

• Identify and briefly describe each of the four strategies for new-product
development.

• Describe the consumer adoption process.

• List the stages in the process for developing new products.

• Explain the relationship between product safety and product liability.

12-4
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.
Managing Brands for Competitive Advantage

• Branding is the process of creating that identity.

• Buyers respond to branding by making repeat purchases because they identify the
item with the name of its producer.

• Brand: name, term, sign, symbol, design, or some combination that identifies the
products of a firm while differentiating them from the competition’s
12-5
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Brand Loyalty

• Brand recognition: Consumer awareness and identification of a brand.

• Brand preference: Consumer reliance on previous experiences with a

product to choose that product again.

• Brand insistence: Consumer refusals of alternatives and extensive search

for desired merchandise.
12-6
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.
Types of Brands

• Generic product: item characterized by plain label, with no advertising and no

brand name

• Manufacturers’ brand or National Brand: brand name owned by a manufacturer

or other producer

• Private brands: brand name placed on products marketed by wholesalers and

retailers
12-7
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Captive brands: national brands that are sold exclusively by a retail chain

• Family brand: brand name that identifies several related products

• Individual brand: unique brand name that identifies a specific offering within a
firm’s product line and that is not grouped under a family brand
12-8
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Brand equity: added value that a respected, well-known brand name gives to a
product in the marketplace.

• Brand equity increases the likelihood that consumers will recognize the
firm’s product when they make purchase decisions

• A strong brand equity can contribute to buyers’ perceptions of product

quality

• Branding can also reinforce customer loyalty and repeat purchases

12-9
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Brand Equity

• The Young & Rubicam Model:

 • Brand Asset Valuator
12-10
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• The Role of Category and Brand Managers

• Brand manager: Marketing professional charged with planning and

implementing marketing strategies and tactics for a brand

• Category management: Product management system in which a category

manager—with profit and loss responsibility—oversees a product line.
12-11
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.
Product Identification

• Brand name: part of a brand consisting of words or letters that form a name that
identifies and distinguishes a firm’s offering from those of its competitors

• Brand mark: symbol or pictorial design that identifies a product

• Generic name: branded name that has become a generically descriptive term for
a class of products (e.g., nylon, aspirin, kerosene, and zipper)
12-12
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Trademark: legal protection which confers the exclusive right to user brand
name, trade mark, and any slogan or product name abbreviation

• Trade Dress: visual cues used in branding to create an overall look

• The distinctive shape of Philips light bulbs and the McDonald’s arches
provide an example of trade dress
12-13
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Developing Global Brand Names and Trademarks

• Potentially an acute problem for international marketers

 • An excellent brand name or symbol in one country may prove disastrous
in another

• Trademarks that are effective in their home countries may fare less well in
other cultures
12-14
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.
Packaging

• A package serves three major objectives:

• Protection against damage, spoilage, and pilferage

• Assistance in marketing the product

• Cost effectiveness

• Labeling

• Label

• Universal Product Code (UPC)

12-15
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Brand extension: application of a popular brand name to a new product in an

unrelated product category

• Line extensions refers to new sizes, styles, or related products

• Brand licensing: practice allowing other companies to use a brand name in

exchange for a payment
12-16
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.
New Product Planning

• As a firm’s offerings enter the maturity and decline stages of the product life
cycle, it must add new items to continue to prosper

• Alternative Product Development Strategies

12-17
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Product Development Strategies

• Product positioning: consumers’ perceptions of a product’s attributes,

uses, quality, and advantages and disadvantages in relation to those of
competing brands

• Cannibalization: a loss of sales of the current product due to competition

from a new product in the same line
12-18
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.
The Consumer Adoption Process

• Adoption process: Stages that consumers go through in learning about a new

product, trying it, and deciding whether to purchase it again.

• Awareness

• Interest

• Evaluation

• Trial

• Adoption or rejection
12-19
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Consumer innovator: People who purchase new products almost as soon as the
products reach the market

• Diffusion process: Process by which new goods or services are accepted in the
marketplace
12-20
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Figure 12.8
 • Categories of Adopters Based on Relative Times of Adoption
12-21
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Identifying Early Adopters

• Substantial benefits may be obtained by locating the likely first buyers of

new products (innovators and early adopters)

• Suggestions for modifying the product may be obtained from these

individuals

• Acceptance or rejection of the innovation by innovators and early adopters

can help forecast sales
12-22
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Rate of Adoption Determinants

• Characteristics of a product innovation that influence its adoption rate

include:

• Relative advantage

• Compatibility

• Complexity

• Possibility of trial use

• Observability
12-23
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Organizing for New Product Development

• New-Product Committees

• New-Product Departments

• Product Managers
 • Venture Teams

• Task forces
12-24
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.
New Product Development Process

• New product development process: six stages through which new product ideas
progress before being introduced to the overall market
12-25
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Idea Generation
New product ideas come from many sources including:

• Sales force, Customers, Employees, R&D specialists, The competition,

Suppliers, Retailers, Independent inventors

• Screening
Screening separates ideas with commercial potential from those that cannot meet
company objectives

• Checklists of development standards can be helpful at this stage

12-26
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Business Analysis
The business analysis consists of assessing the new product’s market potential,
growth rate, likely competitive strengths, and compatibility of the proposed
product with organizational resources

• Concept testing

• Development
Converting an idea into a physical product

• Requires interaction among many of the firm’s departments

• Prototypes may go through many changes

12-27
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.

• Test Marketing
Test marketing: Introduction of a trial version of a new product supported by a
complete marketing campaign to a selected city of television coverage area

• Some firms skip this stage, moving directly to full-scale

commercialization

• Commercialization
In this stage, the firm establishes marketing strategies, and funds outlays for
production and marketing

• The sales force, marketing intermediaries and potential customers are

acquainted with the new product
12-28
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights
reserved.
Product Safety and Liability

• Product Liability: responsibility of manufacturers and marketers for injuries and

damages caused by their products
===============================================================
===================

brand management
Hide links within definitionsShow links within definitions

Definition
The process of maintaining, improving, and upholding a brand so that the name is
associated with positive results. Brand management involves a number of important
aspects such as cost, customer satisfaction, in-store presentation, and competition. Brand
management is built on a marketing foundation, but focuses directly on the brand and
how that brand can remain favorable to customers. Proper brand management can result
in higher sales of not only one product, but on other products associated with that brand.
For example, if a customer loves Pillsbury biscuits and trust the brand, he or she is more
likely to try other products offered by the company such as chocolate chip cookies.
===============================================================
====================
Exploring Careers in Jobs in Marketing
Brand Management : Is it the Right Marketing Career for You?

see jpgss