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 DevelopmentMost new product development is an improvement on existing productsLess than 10% of new products are totally new concepts.

Success rate of new productsThe success rate of new products is very low less than 5%. Product obsolescence is rapid with improvements in technologyShorter PLCs

Product Development StagesIdea generationIdea screeningConcept development and testingConcept testingConjoint analysis to find out the best valued attributes by consumers

Business analysisThe most customer appealing offer is not always the most profitable to makeEstimate on costs, sales volumes,pricing and profit levels are made to find out the optimal price volume mix.Breakeven and paybacksDiscounted cash flow projections

Product LaunchA few years ago,Airtel introduced an unknown product o the Delhi public.There were banners across road announcing there is something new in the air-AirtelPeople felt,may be it is anew TV channel.Others opined that it is a new airline.The debate went on till it was resolved with launch of Airtel cell phone service in Delhi.

Market testingTest marketsTest periodsWhat information to gather?What action to take?

CommercializationWhen? (Timing)Where? (Which geographical markets)To whom? (Target markets)How? (Introductory Marketing strategy)

Product Levels Customer value hierarchyCore benefitBasic productExpected productAugmented productPotential product

Customer DelightWhen you exceed customer expectations

Product HierarchyNeedProduct familyProduct classProduct LineProduct typeBrandItem

Product classificationDurableNon durableServices

Consumer goods classificationConvenience goodsShopping goodsSpecialty goodsUnsought goods

Industrial goods classificationMaterials and Parts

- raw materials - manufactured materials and partsCapital itemsSupplies and business services

Product MixThe assortment of products that a company offers to a marketWidth how many different product lines?Length the number of items in the product mixDepth The no. of variants offered in a product lineConsistency how closely the product lines are related in usage

Product Line decisionsProduct rationalizationMarket rationalizationProduct 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 lineLine pruning capacity restrictions to decide

BrandA name becomes a brand when consumers associate it with a set of tangible and intangible benefits that they obtain from the product or serviceIt is the sellers promise to deliver the same bundle of benefits/services consistently to buyers

Brand EquityWhen a commodity becomes a brand, it is said to have equity.The premium a brand can command in the marketThe difference between the perceived value and the intrinsic value

Levels of meaningAttributesBenefitsValuesCulturePersonalityUsers

Brand PowerCustomer will change brands for price reasonsCustomer is satisfied. No reason to change.Customer is satisfied and would take pains to get the brandCustomer values the brand and sees it as a friendCustomer is devoted to the brand

Brand Equity Competitive AdvantagesReduced marketing costsTrade leverageCan charge a higher priceCan easily launch brand extensionsCan take some price competition

Managing Brand EquityBrand Equity needs to be nourished and replenished. We must not flog the brand for equity to be diluted or dissipatedStore brands

Advantages of brandingEasy for the seller to track down problems and process ordersProvide legal protection of unique product featuresBranding gives an opportunity to attract loyal and profitable set of customersIt helps to give a product category at different segments, having separate bundle of benefitsIt helps build corporate imageIt minimises harm to company reputation if the brand fails

Brand parityConsumers buy from a set of acceptable/ preferred brands

Umbrella BrandProducts from different categories under one brandDangerous to the brand if the principal brand failsSometimes the company name is prefixed to the brand. In such cases the company name gives it legitimacy. The product name individualises it.

Naming the BrandProduct benefitsProduct qualitiesEasy to pronounceShould be distinctiveShould not have poor meanings in other languages and countries

Brand strategyLine extension existing brand name extended to new sizes in the existing product categoryBrand extension brand name extended to new product categoriesMultibrands new brands in the same product categoryNew brands new product in a different product categoryCobrands brands bearing two or more well known brand names

Brand RepositioningThis may be required after a few years to face new competition and changing customer preferences

PackagingIncludes the activities of designing and producing the container for a productPackaging is done at three levels

- primary - secondary - shipping

Packaging as a marketing toolSelf serviceConsumer affluenceCompany and brand imageinnovation

Designing packagingPackaging conceptsTechnical specificationsEngineering testsVisual testsDealer testsConsumer testsPackaging innovationsEnvironmental considerations

LabelsIdentificationGrade classificationDescription of productManufacturer identityDate of mfg., batch no.Instructions for usePromotion

Labels as a marketing toolLabels need to change with time or packaging changes to give it a contemporary and fresh look