Module 1: Introduction to IBM

Module 1: Introduction to IBM

• Concept of category and product

• Concept of Brand & Evolution of Brand

• Category attractiveness and competitor analysis

• Product strategy over life cycle

• New product development

A Product Manager’s Potential Interactions

Sales

Designers Researchers

Premium suppliers Premium screening Store testing Sampling Couponing

Media

Advertis-ing

agency

Packaging

Promotion services

Purchasing

Publicity

Legal

Fiscal

Market research

Manufactur-ing and

distribution

Research and

development

ProductProduct managermanager

Suppliers

Trade

Suppliers

TradeResearch suppliers

Suppliers

Agency media department Company media department Media sales reps

Product-Focused StructureHead of

company/division

Corporate communications

FinanceMarketingManufacturing

Manager of product A

Manager of product C

Manager of product B

Marketing Research

SupportProduct

management

Brand: The beginning

• Searing of flesh with a hot iron to produce a scar or mark with an easily recognizable pattern for identification purpose

• Livestock were branded by the Egyptians as early as 2000BCE.

• The practice was brought to North America in the sixteenth century by the Spanish conqueror Hernan Cortes (1485-1547)

Brand: The evolution

• 1882: Harley Procter named his generically named ‘white soap’ as ‘Ivory Soap’: an idea that apparently came to him while reading a psalm in church

• In December of that year, ‘Ivory’ got a slogan ‘’99 and 44/100% pure’

• 1888, in Janesville, Wisconsin, George Safford Parker named each pen produced by his company a ‘Parker Pen’

• In Europe, food industry provided the first brand names such as Nestle, Cadbury, Kellogg

Best Global Brands 2009

Summary of INTERBRAND top 100 Global Brands 2008

Country of ORIGIN No. of Brands

US 52

Finland 1

Japan 7

Germany 10

France 8

South Korea 2

Sweden 2

UK 3

Switzerland 5

Netherlands 3

Canada 2

Italy 4

Spain 1

http://www.superbrandsindia.com/sb07_brands.htm

:: Superbrands India ::

What is a brand?

A brand is a name, term, sign, symbol, or design,A brand is a name, term, sign, symbol, or design,

or a combination of them,or a combination of them,

intended to identity the goods or servicesintended to identity the goods or services

of one seller or group of sellersof one seller or group of sellers

andand toto differentiate them from those of competitorsdifferentiate them from those of competitors

- American Marketing Association- American Marketing Association

“A product is an object or service that’s available.

A brand is a complex set of satisfactions delivered.”

Jeremy Bullmore, WPP

“Branding is a natural, instinctive human creation. A way of making a complicated world simpler. With a

brand, you get a symbol, a cue - you know what you’re getting, you know what to expect.”

Niall Fitzgerald, Unilever

How others define a brand

Or put another way

Personality

User imagery

Symbols

Brand/customer relationships

Emotional benefits

Self-expressive benefits

Corporate associations

Country of origin and history

Functional benefits

Attributes

Uses

Quality

Value

Brand/flesh

Product/stone

Brands can reduce risk in product decisions. There are many different types of risks that consumers may perceive in buying and consuming a product:

1. Functional Risk

2. Physical Risk

3. Financial Risk

4. Social Risk

5. Psychological Risk

6. Time Risk

SO,

Defining the Competitive Set

Bases of CompetitionI. Customer-oriented

Who they are – competition for same budgetWhen they use itWhy they use it- benefits sought

II. Marketing-oriented: advertising and promotion

Theme/copy strategyMediaDistributionPrice

Bases of Competition cont.

III. Resource-orientedRaw materialsEmployeesFinancial resources

IV. Geographic

Levels of Competition

Diet lemon limes

Baseball cards

Fruit flavored colas

Coffee

DietCoke

DietPepsi

Diet-Rite cola

Bottled water

Lemon limes

Regularcolas

Beers

Juices

Wine

Fast food

Tea

Video rentals

Icecream

Product form competition: Diet colas

Product category competition: Soft drinks

Generic competition: Beverages

Budget competition: Food and entertainment

Levels of Competition: Implications for Product Strategy

Budget

Generic

Product Category

Product Form

Competitive Level

Convince Customers that the Brand is Better than Others

Convince Customers that the Product Form is Best in the

Category

Convince Customers that the Product Category is the Best

Way to Satisfy Needs

Convince Customers that the Generic Benefits are the Most

Appropriate Way to Spend their Money

Product Management Task

Category Attractiveness Analysis

Aggregate Category Factors

• Category size

• Category growth

• Stage in product life cycle

• Sales cyclicity

• Seasonality

• Profits

Category Attractiveness over the Product Life Cycle

Stage of product life cycle

Category size

Category growth

Category attractiveness

Introduction

Small

Low

Low

Growth

Moderate

High

High

Maturity

Large

Low

Low/high

Decline

Moderate

Negative

Low

Sales

Time

Category Factors

• Threat of new entrants

• Bargaining power of buyers

• Bargaining power of suppliers

• Current category rivalry

• Pressure from substitutes

• Category capacity

Customer Analysis: What We Need to Know about Current and Potential Customers

• Who buys and uses the product• What customers buy and how they use it• Where customers buy• When customers buy• How customers choose• Why they prefer a product• How they respond to marketing programs• Will they buy it (again)?

Basic Customer Strategies

1. Customer acquisition

2. Customer retention

3. Customer expansion

4. Customer deletion

New-Product Development

Categories of New Products

New-To-The-WorldNew-To-The-World

New Product LinesNew Product Lines

Product Line AdditionsProduct Line Additions

Improvements/RevisionsImprovements/Revisions

Repositioned ProductsRepositioned Products

Lower-Priced ProductsLower-Priced Products

SixCategories

ofNew

Products

SixCategories

ofNew

Products

New-Product Development ProcessNew-Product Development Process

IdeaGeneration

IdeaScreening

ConceptDevelopmentand Testing

MarketingStrategy

BusinessAnalysis

ProductDevelopment

TestMarketing

Commercialization

Idea Generation

CustomersCustomers

EmployeesEmployees

DistributorsDistributors

CompetitorsCompetitors

R & DR & D

ConsultantsConsultants

Creative ThinkingCreative Thinking

Sources ofSources ofNew-ProductNew-Product

IdeasIdeas

Sources ofSources ofNew-ProductNew-Product

IdeasIdeas

“you could not help but notice that there were three or four family members on a scooter, the kid standing in the front, the guy driving the scooter and the wife sitting side saddle holding a little kid. And when you're driving a car, you certainly say, Oh my god, be careful, they may slip. Add to that slippery roads and night time too.”

Idea ScreeningThe first filter in the product development process, which

eliminates ideas that are inconsistent with the organization’s new-

product strategy or are inappropriate for some other reason.•Many companies have systems for rating and screening ideas which estimate:

– Market Size– Product Price– Development Time & Costs– Manufacturing Costs– Rate of Return– Strange New Products

1. Develop New Product Ideas into Alternative Detailed

Product Concepts

1. Develop New Product Ideas into Alternative Detailed

Product Concepts

2. Concept Testing - Test theNew Product Concepts with Groups of Target Customers

2. Concept Testing - Test theNew Product Concepts with Groups of Target Customers

3. Choose the One That Has theStrongest Appeal to Target

Customers

3. Choose the One That Has theStrongest Appeal to Target

Customers

New Product Development ProcessStep 3. Concept Development & Testing

New Product Development ProcessStep 3. Concept Development & Testing

Part Two Describes Short-Term:Product’s Planned Price

DistributionMarketing Budget

Part Two Describes Short-Term:Product’s Planned Price

DistributionMarketing Budget

Part Three Describes Long-Term:Sales & Profit Goals

Marketing Mix Strategy

Part Three Describes Long-Term:Sales & Profit Goals

Marketing Mix Strategy

Marketing Strategy Statement Formulation

Part One Describes Overall:Target Market

Planned Product PositioningSales & Profit Goals

Market Share

Part One Describes Overall:Target Market

Planned Product PositioningSales & Profit Goals

Market Share

New Product Development ProcessStep 4. Marketing Strategy Development

New Product Development ProcessStep 4. Marketing Strategy Development

Step 5. Business Analysis

Considerations Considerations in in

Business Business Analysis StageAnalysis Stage

Considerations Considerations in in

Business Business Analysis StageAnalysis Stage

Demand

Cost

Sales

Profitability

apple-history.com :: iPod

Step 6. Development

Creation of prototype

Marketing strategy

Packaging, branding, labeling

Manufacturing feasibility

Final government approvals if needed

New Product Development ProcessStep 7. Test Marketing

New Product Development ProcessStep 7. Test Marketing

AdvertisingAdvertising

PackagingPackaging

ProductProductBudget LevelsBudget Levels

Positioning Strategy

Positioning Strategy

DistributionDistributionPricingPricing

BrandingBranding

Elements that May be Test

Marketed by a Company

Test Marketing is the Stage Where the Product and Marketing Program are Introduced into More Realistic

Market Settings.

When?When? Where?Where?

Commercialization is the Introduction of the New Product into the Marketplace.

New Product Development ProcessStep 8. Commercialization

New Product Development ProcessStep 8. Commercialization

Whom?Whom?How?How?

Why New Products Fail

• No discernible benefits

• Poor match between features and customer desires

• Overestimation of market size

• Incorrect positioning

• Price too high or too low

• Inadequate distribution

• Poor promotion

• Inferior product

From Product to Brand

Why do Brands matter?

For Consumers

• Identification of Product Source

• Risk reducer• Reduces search costs• Symbolic of self

image• Signal of Quality• Assignment of

responsibility

For Manufacturers

• Identification to simplify handling or tracing

• Legal Protection• Signal of Quality

Level• Competitive

Advantage• Financial Returns

Contracting with a Brand

• A Brand is a contract, carved in stone and long (ever ?) lasting contrat

with the final consumer

with her own environment

• This is a two ways contract (return contract ?)

Historical / Memory Future / Project

Battle Field

Utility(Functions/Values)

Existence(Identity)

Target Acceptance

The Moral Contract of a Brand

MENTAL MAPS

• Portrays salient brand associations and responses for a particular target market

• Reflect how brand is perceived by consumers– Beliefs– Attitudes– Opinion– Feelings– Images – Experiences

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