UNIT II MARKETING MANAGEMENT

BY

IBADAT SINGH SETHI

HARVINDER SINGH

SAHIL SHARMA

PRODUCT

A product is anything that can be offered to a market to satisfy a want or need

Physical goods

Services

Experiences

Events

Persons

Places

Properties

Organizations

Information

Ideas

CUSTOMER VALUE HIERARCY

A product can also be defined as the end result of the manufacturing process, to be offered to the marketplace to satisfy a need or want.

CHARACTERISTICS OF PRODUCTS

Tangible in nature.

Products have a physical evidence

Products are something that are manufactured for its marketing and selling purposes.

Products can be physically shifted from one place to another place i.e. a product is something that a customer can buy and take with him.

CLASSIFICATION OF PRODUCTS

PRODUCT

CONSUMER PRODUCT

INDUSTRIAL PRODUCT

CONSUMER GOODS

CONVENIENCEPRODUCT

SHOPPING PRODUCT

SPECIALTY PRODUCT

INDUSTRIAL GOODS

MATERIAL AND PARTS

CAPITAL ITEMS

SUPPLIERS AND SERVICES

PRODUCT DIFFERENTIATION

FORM

PRODUCT DIFFERENTIATION

FEATURES

CUSTOMIZATION

PRODUCT DIFFERENTIATION

CONFORMANCE QUALITY

DURABILITY

PRODUCT DIFFERENTIATION

RELAIBILTY

REPAIRABILITY

STYLE

SERVICE DIFFERENTIATIONORDERING EASE

DELIVERY

INSTALLATION

CUSTOMER TRAINING

CUSTOMER CONSULTING

MAINTAINANCE & REPAIR

RETURNS

SERVICE DIFFERENTIATION

PRODUCT MIX

Product mix is defined as the total composite offered by a particular organization.

The product mix includes four elements

Width,

Length,

Depth,

Consistency

Width: The Width of the assortment refers to how many product lines the company markets i.e. the number of product line the company carries

Length: The Length signifies how many products a given line includes i.e. the total number of items the company carries within its product line.

Depth: The term Depth touches on how many versions of a given product line offers.

Consistency:  Finally, Consistency denotes the uniformity relative to how products are used by consumers, or by how they are produced or distributed.

E.G. HINDUSTAN UNILEVER LTD. (HUL).

Product Mix Width:

Deo, Personal Wash, Laundry, Skin Care, Hair Care, Oral Care, Colour Cosmetics, Coffee, Foods.

Product line length:

Deo: Axe, Rexona

Personal wash: Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears, Rexona

Laundry: Surf Excel, Rim, Wheel

Skin care: Fair & Lovely, Ponds

Hair care: Sun Silk, Clinic

Oral care: Pepsodent

Colours cosmetic: Lakme

Coffee: Bru

Food: Kissan, Annpurna, Knors

PRODUCT LINE ANALYSIS

SALES & PROFITS

Core products

Staples

Specialties

Convenience items

MARKET EVOLUTION

PRODUCT LINE LENGHT

LINE STRETCHING

Down-Market Stretch

Up-Market Stretch

Two-Way Stretch

PRODUCT LINE LENGHT

LINE FILLING

LINE MODERNISATION, FEATURING & PRUNING

PRODUCT LINE ANALYSIS

Product line analysis applies established modeling techniques to engineer the requirements for a product line for software intensive system.

PRODUCT LINE LENGTH

Product line length may be defined as the number or variety of different products in a product line.

The length of a product line can be extended. Product line extension is a favorite method used by many manufacturers as a means of deepening brand loyalty and increasing revenue.

Product line extensions BMW 3 Series through 7 Series automobiles, with each series appealing to different types of clients. 

Product line extensions may also be horizontal in which a product’s attributes, and not cost differentiators, changes the variety – such as Coke, Diet Coke, Cherry Coke, and Caffeine-free Coke .

PRODUCT LINE FILLING

A business strategy that involves increasing the number of products in an existing product line to take advantage of market place gaps and reduce competition. Many businesses use line filling to round out an already well established product line and to help increase the market success of new related products.

PACKAGING

NEED FOR PACKAGING

1. Self-Service

2. Consumer affluence

3. Company and brand image

4. Innovation opportunity

IMPORTANCE OF PACKAGING

1. To protect a product from damage or contamination by micro-organisms and air, moisture and toxins. 

2. To keep the product together, to contain it (i.e. So that it does not spill). 

3. To identify the product. 

4. Protection during Transport and Ease of Transport.

5. Stacking and Storage.

6. Printed Information.

LABELING

The label may be a simple tag attached to the product or an elaborately designed graphic that is part of the package. It might carry only the brand name, or a great deal of information. Even if the seller prefers a simple label, the law may require more.

IMPORTANCE OF LABELING

Identifies the product or brand

Grade the product according to its quality

Describe the product

Promote the product through attractive graphics.

KEY CHARACTERISTICS OF GOOD PRODUCT LABELING

Provide basic information

Details of the contents or ingredients

Warnings and contra indication

Instructions for use

Visible & easy to read

HHA

NEW PRODUCT DEVELOPMENT

NEW PRODUCT………………………?

A new product is one which is really innovative, which is significantly different from existing and imitative products that are new to the company.

There are two ways to make new product viz.

a) modify the existing product.

b) formation of entire new product.

EXAMPLES……………………………………..

New product -modified existing

Maruti Suzuki Swift(diesel)

New product-entire new formation

LML Freedom(bike)

8 STAGES ARE THERE

Idea generation

Idea screening

Concept development and testing

Marketing strategy development

Business Analysis

Product development

Market testing

Commercialization

STAGE: 1

HOW TO GENERATE IDEA………?1.Interacting with others

STAGE 1 ……CONTD.

2. Creativity generation

a) Attribute listing

b) Forced relationships

c) Morphological analysis

d) Reverse assumptions

analysis

e) New contexts

f) Mind mapping

2. IDEA SCREENING

Must avoid two errors

1.Drop error-the idea is good but we reject it.

SCREENING………CONTD.

2. Go error-when company permits a poor idea

3.CONCEPT DEVELOPMENT & TESTING

Concept is devised on three basic questions:

1. Who will use the product?

2. What primary benefit should this product provide?

3. When will the people consume this product?

Example,a nutritive powder to add to milk…..

CONSUMERS DON’T BUY PRODUCT IDEAS, THEY BUY

PRODUCT CONCEPTS

Concept 1: An instant breakfast drink for adults who want a quick nutritious breakfast without preparation.

C-2: A tasty snack for children to drink as a midday refreshment.

C-3: A health supplement for older adult to drink in the late evenings before going to bed.

CONCEPT TESTINGMeans presenting the product concept, symbolically or physically to target consumers.

Type of information collected :

1. Communicability and believability.

2. Need level & Gap level

3. Perceived value & purchase intention.

4. User targets, purchase occasions & purchasing frequency.

4. MARKETING STRATEGY DEVELOPMENT

It’s a three part strategy…..

Ist part : target market, size & structure, market share and behavior.

2nd part : price & distribution strategy and marketing budget for first year.

3rd part : long run or futuristic marketing-mix strategy .

5. BUSINESS ANALYSIS

Sales, costs and profit projections are prepared to determine whether they satisfy company objectives.

6.PRODUCT DEVELOPMENT

Consists of two sub stages:

1. Physical prototypes

2. Consumer tests

a) Alpha testing-within the firm

b) Beta testing-outside the firm

7.MARKETING TESTING

The product is ready to be dressed up with a brand name and packaging and put into market .

Small quantity of product is introduced in market to know the performance of product.

8. COMMERCIALIZATION

Four words to keep in mind while commercialization viz.

1. When(timing)

2. Where(geographic strategy)

3. To whom(target market)

4. How(introductory market strategy)

CHALLENGES TO NEW PRODUCT DEVELOPMENT

Globalization

Time

Market potential

Technological change

Distribution

New features

Critical unmet needs

Market size

Price

Promotion

Resistance to change

Government policies

CHALLENGES TO NEW PRODUCT DEVELOPMENT

GLOBAL COMPETITION

MAHINDRA &

MAHINDRA

CHALLENGES TO NEW PRODUCT DEVELOPMENT

TIME

ZARA

CHALLENGES TO NEW PRODUCT DEVELOPMENT

MARKET POTENTIAL

FACEBOOK AND INSTRAGRAM

CHALLENGES TO NEW PRODUCT DEVELOPMENT

TECHNOLOGICAL CHANGE

APPLE

CHALLENGES TO NEW PRODUCT DEVELOPMENT

DISTRIBUTION

STARBUCKS

CHALLENGES TO NEW PRODUCT DEVELOPMENT

NEW FEATURES

GOOGLE

CHALLENGES TO NEW PRODUCT DEVELOPMENT

CRITICAL UNMET NEEDS

EMAMI

FAIR & HANDSOME

CHALLENGES TO NEW PRODUCT DEVELOPMENT

MARKET SIZE

SEGWAY

CHALLENGES TO NEW PRODUCT DEVELOPMENT

PRICE

MICROMAX CANVAS

CHALLENGES TO NEW PRODUCT DEVELOPMENT

PROMOTION

RAONE

CHALLENGES TO NEW PRODUCT DEVELOPMENT

RESISTANCE TO CHANGE

COCA-COLA

CHALLENGES TO NEW PRODUCT DEVELOPMENT

Government Policies

New drug

CONSUMER ADAPTATION PROCESS

ORINNOVATION DIFFUSION

PROCESS

ADOPTION??????

Adoption is an individual’s decision to become a regular user of a product.

Consumer adoption process was first described by Bourne (1959).

It describes the behavior of consumers as they purchase new products and services.

ACCORDING TO EVERETT ROGERS:

INNOVATION DIFFUSION PROCESS IS DEFINED AS,“SPREAD OF A NEW IDEA FROM ITS SOURCE OF CREATION TO ITS ULTIMATE USERS”

STAGES INCONSUMER ADOPTION PROCESS

ADOPTION PROCESS

ADOPTION

TRIAL

EVALUATION

INTEREST

AWARENWSS

No way!

If I have to buy it I will.

OK, we will

buy X.

THE CONSUMER BECOMES AWARE OF THE INNOVATION BUT LACKS INFORMATION ABOUT IT.

THIS IS THE AREA WHERE MAJOR MARKETERS SPEND BILLIONS OF DOLLARS.

AWARENESS

(1) THE CONSUMER IS STIMULATED TO SEEK INFORMATION ABOUT THE INNOVATION.

(2) MARKETERS TRY TO ATTRACT CUSTOMERS BY ADDING EMOTIONAL FACTORS WITH THE ADS.

(3) HOWEVER, IF THE CONSUMER DOES NOT PERCEIVE THAT THE PRODUCT WILL SATISFY EXISTING WANTS OR NEEDS, HE OR SHE IS NOT LIKELY TO MOVE TO THE NEXT STAGE IN THE ADOPTION PROCESS.

INTEREST

EVALUATION

•CONSUMER CONSIDERS WHETHER TO TRY THE INNOVATION.

TRIAL• CONSUMER TRIES THE INNOVATION TO IMPROVE ESTIMATE OF PRODUCT VALUE.

• COMPANIES SELL PRODUCTS IN THE FORM OF SAMPLES TO ATTRACT CUSTOMERS.

•FMCG

THE CONSUMER DECIDES TO MAKE FULL AND REGULAR USE OF THE INNOVATION.

AT ANY POINT, THEY MAY BECOME DISSATISFIED WITH THE PRODUCT AND DISCONTINUE ITS USE.

ADOPTION

READINESS TO BUY PRODUCTS

IT IS THE DEGREE TO WHICH AN INDIVIDUAL IS RELATIVELY EARLIER IN ADOPTION OF NEW IDEAS.

CLOTHING FASHION

ADOPTER GROUPS

PERSONAL INFLUENCE

• EFFECT ONE PERSON HAS ON ANOTHER’S ATTITUDE.

• IT HAS HIGH INFLUENCE ON LATE ADOPTERS THAN EARLY ADOPTERS.

CHARACTERISTICS OF THE INNOVATION

RELATIVE ADVANTAGE

COMPATIBILITY

COMPLEXITY

DIVISIBILITY

COMMUNICABILITY

BRAND“A name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.”

PURPOSE OF A BRAND… Inspire

Motivate

Connect

Simplify

Inform

HOW DO YOU BRAND A PRODUCT?

Branding is the process by which companies distinguish their product offerings from the competition.

Branding protects a seller's products against those marketed by  competitors and imitators and helps consumers identify the quality, consistency, and imagery of a preferred source.

BRANDING IS….

An image created in someone’s mind

It’s both tangible and intangible characteristics of a product or service that make it unique

It’s all about creating differences b/w products or services.

Marketing is actively promoting a product or service. It’s pushing out a message to get sales results. Branding, on the other hand is not push, but pull.

Branding is strategic. Marketing is tactical

BRANDING VS MARKETING

Marketing may contribute to a brand, but the brand is bigger than any particular marketing effort. It’s what sticks in your mind associated with a product

Marketing may convince you to buy a particular Maruti but it is the brand that will determine if you will only buy Maruti for the rest of your life.

BRANDING VS MARKETING

SCOPE OF BRANDING

GOODS

SERVICES

PLACES

PERSSON

ORGANIZATION

IDEA etc.

POSITIVES OF BRANDING…

Recognition And Loyalty

A strong brand name and logo/image helps to keep the company’s image in the mind of potential customers.

Image of Size

A strong brand will project an image of a large and established business to any potential customers.

Image of Quality

A strong brand projects an image of quality in your business, many people see the brand as a part of a product or service that helps to show its quality and value.

Image of Experience and Reliability

A strong brand creates an image of an established business that has been around for long enough to become well known. 

POSITIVES OF BRANDING…

NEGATIVES OF BRANDING…

Cost

If you wish to create and maintain a strong brand presence, it can involve a lot of design and marketing costs.

Impersonal

One of the main problems with many branded businesses is that they lose their personal image.

Fixed Image

Every brand has a certain image to potential customers, and part of that image is about what products or services you sell.

Timescale

The process of creating a brand will usually take a long period of time.

NEGATIVES OF BRANDING…

BRAND EQUITY

Brand Equity is defined as the unique set of brand assets and liabilities that is linked to a brand. It is the net result of all the investment and effort that a marketer puts into building a brand.

What’s the first thing that comes to your mind when I say Coffee?

What do you think when you see this logo

High Brand Equity provides a number of competitive advantages:

The Company will enjoy reduced marketing costs because of consumer brand awareness and loyalty

The Company can charge a higher price than its competitors because the brand has higher perceived quality.

The Company will have more trade leverage in bargaining with distributors and retailers because customers expect them to carry the brand.

The Company can more easily launch extensions because the brand name carries high credibility.

The brand offers the Company some defense against price competition.

BUILDING BRAND EQUITY

BRAND ELEMENTS

Brand Elements are those trademarkable devices that serve to identify and differentiate the brand.

The main ones are brand names, URLs, logos, symbols, characters, spokespeople, slogans, jingles, packaging etc.

WHY BRAND ELEMENTS?

The customer based brand equity model suggests that marketers should choose brand elements

• To enhance brand awareness• Facilitate the formation of strong and unique brand

associations• Elicit positive brand feelings

BRAND ELEMENT CHOICE CRITERIA

MemorableMeaningfulLikable

TransferableAdaptableProtectable

Brand Builders

Defensive

CRITERIA FOR CHOOSING BRAND ELEMENTS

Offensive Strategies

• Memorable

• Easily Recognized• Easily Recalled

• Meaningful

• Descriptive• Persuasive

• Likable

• Rich visual/verbal imagery• Aesthetically Pleasing

CRITERIA FOR CHOOSING BRAND ELEMENTS

Defensive Strategies

• Transferable

• Within and across product categories• Across geographic boundaries

• Adaptable

• Flexible• Update-able

• Protectable

• Legally• Competitively

EXAMPLES OF MEANINGFULNESS

MEANINGFULNESS OF INTELThe word ‘Intel’ is a portmanteau of the words “intelligent” “electronics”.

The name suggests that it is an electronics company that delivers better, even “intelligent” products

PROTECTABILITY EXAMPLE

LOGOS AND SYMBOLS

Along with brand names, visual elements have a critical role in building brand equity, especially brand awareness

Logos have been used since the middle ages to denote names of Kings in the form of a Coat of Arms and Emblems

EXAMPLE OF LOGOS

CHARACTERS Characters are human or life-like brand symbols that take

the characteristics of the brand.

They are usually introduced through advertising campaigns

Brand characters play a central role in brand campaigns and package designs

Brand characters can also be negative in the sense that they dominate other brand elements and decrease brand awareness

EXAMPLES OF BRAND CHARACTERS

SLOGANS Slogans are short phrases that communicate descriptive

or persuasive information about the brand

They often appear in advertising

They function as “hooks” to help consumers understand the meaning of the brand

Eg: “Hungry Kya?” by Domino’s Pizza

Eg: “Isse sasta aur achcha kahin nahi” by Big Bazaar

BENEFITS OF SLOGANS Build both brand awareness and image

Strong links with the

The brand is exaggerated to leverage maximum brand equity. Eg: “It’s not TV, It’s HBO” by HBO; “The Citi Never Sleeps” by CitiBank

The brand is made an aspirational product – “Just Do It” by Nike

JINGLES Jingles are musical messages written around the brand

Usually composed by professional songwriters and musicians

Successful jingles are registered in the minds of the listeners

It was popular in the early 20th century when the primary broadcast medium was radio

Convey brand benefits and product meaning in a fairly abstract manner

IPL JINGLE

BRANDING ELEMENTS – A PICTORIAL OVERVIEW

Brand Names

URLs

Logos and

Symbols

Characters

Slogans

Packaging

Brand Identity

Brand Awareness

Brand Association

s

BRAND REINFORCEMENT

What products the Brand represent

Core benefits

How the brand makes the products superior, strong, favorable etc.

BRAND REVITALIZATION

REVITALIZING BRAND

HOLISTIC MARKETING ACTIVITIES

Word of Mouth

Observation

Interactions w/company

SECONDARY ASSOCIATIONS

Brand

Geographic Regions

Other Brands

Characters

Spokespeople

Sporting Events

BRANDING REVITALIZATION STRATEGY

Develop new brand elements

Apply existing brand elements

Combine new and existing elements

BRANDING STRATEGY

Identifies which brand elements a firm chooses to apply across the various products it sells.

BRANDING STRATEGY

When a firm introduces new product, three main choices it has:

Develop new brand elements for the new product.

Apply some of its existing brand elements.

Use combination of new and existing brand elements.

BRANDING STRATEGY DECISIONS

Whether to develop a brand name for a product.

If a firm decides to brand its products or services, it must then choose which brand name to use.

BRANDING STRATEGY DECISIONS

Four strategies often used:

1. Individual names.

2. Blanket family names.

3. Separate family names for all products.

4. Corporate name combined with individual product names.

INDIVIDUAL NAMESCompany does not tie its reputation to the product.

For example : HUL

BLANKET FAMILY NAMESSame name is used in diverse product categories.

Development costs are lower.

For example : TATA

SEPARATE FAMILY NAMES

Firms use separate family names for its various products..

For example : Aditya Birla Group

CORPORATE NAME COMBINED WITH INDIVIDUAL PRODUCT NAMES

Kellog combines corporate & individual names in Kellogg’s Rice Krispies, Kellogg’s Raisin Bran, Kellogg’s Corn Flakes.

J&J

BRANDING STRATEGY

Two key components of any branding strategy are:

Brand Extensions

Brand Portfolios

BRAND EXTENSION

BRAND EXTENSION

Two general categories are:

1. Line Extension

2. Category Extension

LINE EXTENSIONThe parent brand covers a new product within a product category it currently serves, such as with new flavours, forms, ingredients and package sizes.

Examples: Dove, LUX

CATEGORY EXTENSIONA company may use its parent brand name to launch new products in other categories.

Example: Bajaj

ADVANTAGES OF BRAND EXTENSIONS

Facilitate new product acceptance.

Provide positive feedback to the parent brand company.

Reduce cost of the introductory launch campaign.

Avoid difficulty and expense of coming up with the new name.

DISADVANTAGES OF BRAND EXTENSIONS

May cause the brand name to be less strongly identified with any one product.

For example : Cadbury.

Brand dilution occurs i.e. consumer no longer associate a brand with a specific product and start thinking less of the brand.

Consumers become confused and perhaps frustrated.

BRAND PORTFOLIOS

Marketers often need multiple brands in order to target multiple segments

Reasons for introducing multiple brands:

Increasing shelf presence in the store.

Attracting consumers seeking variety who may otherwise have switched to another brand.

Yielding economies of scale.

BRAND PORTFOLIOSReduce consumer confusion.

For Example: PepsiCo.

BRAND POSITIONING

POSITIONING: Act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market.

A good brand positioning guides marketing strategy by clarifying the brand essence.

Result of positioning – customer-focused value proposition.

BRAND POSITIONING

Place in the customer’s mind that you want your brand to own.

Deciding on positioning requires :

determining frame of reference by identifying the target market and the competition.

Identifying and establishing points-of-parity and points-of-difference to establish right brand identity and brand image.

EGS. OF BRAND POSITIONING

Based on low price.

FRAME OF REFERNCE (FOR)

Concerns with category membership of the product or which product category it competes with.

To determine competitive frame of reference, marketers need to understand consumer behaviour.

For Example: Frooti – Mango drink

If Frooti – Apple drink, out of frame of reference.

POINTS-OF-DIFFERENCE (PODS)

Attributes or benefits consumer strongly associate with brand, positively evaluate, and believe they could not find to the same extent with the competitive brand.

Examples

design

performance

POINTS-OF-PARITY (POPS)

Associations that are not necessarily unique to the brand but may in fact be shared with other brands.

POPs may not be the reason to choose the brand, but their absence can certainly be the reason to drop the brand.

For example: Savlon & Dettol

CONCLUSIONProduct & it’s Characteristics

Product Differentiation

Product Line Analysis

New Product Development

Challenges to New Product Development

Consumer Adoption Process

CONCLUSIONBranding & it’s Scope

Brand Equity

Brand Elements

Brand Revitalization

Branding Strategy

Brand Positioning