Marketing Management - session 6-Product management and brand.pptx

product management and branding

1. Marketing Management Prepared by Shahin Rasoulian 1 Session 6: Chapter 5 Product management

2. Objectives Product definition, Brand, Product life cycle session 6 2

3. products session 6 3

4. The definition of a product A product is a basket of attributes (features, functions, benefits and uses) that generally combine tangible and intangible forms It is subject to exchange or use * This chapter covers both service and good together . session 6 4 Idea Product Service Product+Service

5. In your book: Dimensions of a product (layers) session 6 5 Main advantage Normal expectations, such as warranty Generous warranty, particular design

6. In most of other books: Dimensions of a product (layers) session 6 6 Warranty, delivery … Features, package, brand, quality Basic benefits

7. Dimensions of a product (layers) 7 Examples session 6

8. Product line A product line is a set of products in the same category marketed by a company to a given market (satisfies one need) Product line depth refers to the number of products in a specific product line. Line extension refers to when a new product is launched within an existing product category (new size, new model, new version) session 6 8

9. Product Mix A product mix refers to all the product lines offered by a company (entire range of products) Product mix width refers to the numbers of different product lines the company carries. session 6 9

10. SOURCE For people who want to stay active Fruit-filled, fat-free, aspartame-free, no sugar added Yoptimal For getting into the habit of eating healthy everyday Source of calcium and vitamin D with active probiotic cultures YOP Nourishing, energizing, velvety smooth drinkable yogurt MINIGO Snack for kids Tasty blend of fresh cheese and real fruit puree TUBES For kids on the go Explosive flavours. No spoon required! session 6

11. session 6 11

12. For more information session 6 12

13. Value added sources for products Product design (aesthetic) To protect their investments and differentiate their products, a growing number of manufacturers are turning to aesthetic design to customize their offering and give it a distinctive advantage. session 6 13

14. Value added sources for products Product packaging Defined as the container used to protect, promote, transport and/or identify a product Plays a key role in product promotion and in communicating the product’s benefits to consumers session 6 14

15. Value added sources for products Product quality Consumer perceive quality based on whether the product can meet their expectation. Planned obsolescence Country of origin effect: such as, French sounding name for wine session 6 15

16. Brands session 6 16

17. Definition of Brand A brand is a name, a term, a design, a symbol or any other feature that identifies a seller’s goods or services and distinguishes them from those of other sellers Helps differentiate one product from another In some cases, the brand is the only way to identify a product that is often unique and has no generic name (Lego, Kleenex) session 6 17

18. Types of Brands Product brand One brand, one product Line brand One brand, some similar products Range brand ( individual brand) One brand, different products session 6 18 L’oreal

19. Types of Brands Family brand ( umbrella brand) One brands, some sub-brands Private brand (store brand) Retailers offer their own version of product. Brands that a retailer or distributor owns and sells. Designer brand session 6 19

20. session 6 20

21. Purposes of Brands Identify a product and distinguish it from competitors’. Symbol of belonging Promise to meet specific expectations Convenience session 6 21

22. Brand equity Can be defined as the various assets and liabilities related to a brand It can add to or detract from the value of a product or service Two sources of brand equity: Brand awareness Image and brand associations session 6 22 Brand equity Brand awareness Image and Brand associations

23. Brand equity Brand awareness Is consumers’ ability to recognize and identify the brand (name, logo, or other symbols) in various circumstances. Or: Is Defined as the probability that a brand will come to mind in specific circumstances, and how easily it is remembered. Awareness may be of two types: Assisted , which is consumers’ ability to recognize a brand when presented with it or when they see it. Spontaneous , which is consumers’ ability to spontaneously recall a brand based on an indicator such as a product category or a need. session 6 23

24. Brand equity Image and brand associations Brand image is the perception of the brand in people’s minds. It is the reflection (accurate or not) of the personality and positioning of the brand with consumers Brand associations encompass everything associated with the brand in consumers’ minds and memory (not necessarily image) Product category (Microsoft is associated with software) Country of origin (Toshiba is associated with japan) Benefits to consumers or product attributes Relative price (McDonalds with low price) Type of use Etc , … session 6 24 Refer to page 146

25. Brand equity Brands are generally much stronger when their associations are: Strong Favourable Unique session 6 25 Refer to page 146

26. Strategic branding decisions When introducing a new product, company have to determine the name (brand) under which the product will be launched. session 6 26 Product category Existing New Brand name Existing 1-Line extension 2-Brand extension New 3-Multi-brand 4-New Brand

27. Strategic branding decisions 5. Co-branding: launching a new product under two brand names 6. P rivate brands and distributor brands: Retailers can develop their own brands session 6 27 **It is not house of brands, it is similar to house of brands.

28. Product Management session 6 28

29. New product development session 6 29 Finding the idea that underpins the product or service that will be developed. Customers Employees Brainstorming Focus groups Observation Ethnography Netnography Because of high cost of developing and launching new product, the company usually first tries to evaluate the market potential of the ideas. Prototype Once the product has been developed, it is time to bring it to market. But, still it is risky. So, by pre-launch we launch the product to a limited number of markets for understanding the reaction of customers. Then, we launch it. WOM Advertising

30. Innovation Innovation is defined a bringing a product, idea or service to market that is perceived as being substantially different from any product, ideas or services already on the market. session 6 30 Discontinuous innovation Relatively continuous Offering new characteristics that do not necessarily call for redefining the product category, such as, new flavor toothpaste or beer. Disrupts established habits or creates entirely new product category, such as computer or jet engine.

31. Diffusion of innovation It is the process by which an innovation spreads throughout a market overtime and among the different categories of adopters. It is primarily a communication phenomenon. Diffusion depends on three factors: the potential market, the coefficient of innovation, the coefficient of imitation. session 6 31 Refer to page 155.

32. Diffusion of innovations Bass model 32 Period Cumulative number of adopters session 6 Potential market: 100,000/ coefficient of innovation 0.03/ coefficient of imitation 0.38

33. Diffusion of innovation Types of adopters (buyers) of innovation by their sequence. session 6 33 2-5% 10-15% 35% 35% 5-10% Innovators Early adopters Early majority Late majority Laggards Number of units sold per period Opinion leaders/visionaries

34. Adoption factors Factor facilitating adoption: Product’s relative advantage: Offering tangible benefits to the user, not just something new, or not benefits for the society. Compatibility: With the usual way of doing things. Similar to habits and traditions. Triability : How easily the innovation can be tried put (free trial, sampling) Observability: Observable, sensible and considerable advantages and benefits. Shouldn't be hidden. Complexity: It is a barrier. A product that seems complicated to use discourages users. session 6 34 Refer to page 157,158

35. Product Portfolio management Strategic portfolio management creates synergies in terms of marketing, production and corporate image. Such as: Easy access to distribution channels Production cost cut and economy of scale Complementarity and promotion among products Brand visibility … session 6 35

36. Product life cycle session 6 36 Launch Maturity Decline Number of units sold per period Growth Sales Profits Refer to page 160,161 for understanding the proper marketing strategy in each phase.

37. Marketing strategy in each phase Launch (introduction): promotion to innovative customers and the development of a preliminary distribution network to reach them; handing out samples; a free trial period; professional exhibitions; Growth: boost customer loyalty; CRM; offering complementary products; expanding distribution network; Maturity: withdraw the market; target laggards Decline: competitive actions, stop efforts; session 6 37 Refer to page 160,161 for more information.

38. Product life cycle Market situation and Marketing plan per period session 6 38 Characteristics Introduction Growth Maturity Decline Product Single company produces single product Line extension Differentiation; new features added Number of variations reduced Technical innovation Price Usually h igh (but depends on the strategy selected) May need to reduce because of increased competition Price promotion, rebate Reduced Communication Novelty, innovation Objective = increase notoriety Intensive Objective = persuade Sales promotion Decreased to maintain profitability Distribution Building a network Extensive : extend network Intensive: stimulate network Reduced : to cut on cost

39. Life cycle example session 6 39

40. More concepts Global brand International brand Cultural differences in using products Consumer animosity session 6 40 Refer to pages 162 to 165

41. Positioning Statement “For the ( target market ), ( brand ) is the ( product ) that ( differentiator ) thanks to ( competitive advantage ).” For sophisticated vodka consumers , Grey Goose is the vodka with the smoothest taste thanks to the fact that it is made from grapes .