Unit 9 Product Management Services and Branding Strategy

8/13/2019 Unit 9 Product Management Services and Branding Strategy

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Contents

Introduction Brand

Brand equity

Brand positioning Brand name selection

Brand sponsorship

Brand development

Nature and characteristics of a service

Strategies for service organizations

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Introduction

Services are deeds or performance.

The services sector in India is growing every year.

The IT (Information Technology) and ITES (Information Technology

Enabled Services) sectors are increasing the contribution of services to

the Indian economy. According to the National Council of Applied Economic Research

(NCAER), the share of services in total GDP (Gross Domestic Product) is

55%.

Services may be used for intermediate consumption (transportation) or

final consumption (beauty saloons). Branding is also an important part of product management. It provides

identity to the product.

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Learning Objectives

After studying this unit, you will be able to

Understand the constituents of brand equity.

Analyze the techniques of brand development.

Evaluate the brand name selection strategies.

Know the characteristics of services.

Discuss the strategies used in service marketing management.

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Brand

A name, term, design, symbol, or any other feature thatidentifies one seller's good or service as distinct from those

of other sellers.

---- American Marketing Association

Explanation of the definition: A brand can be

Brand is a name TVS, Infosys, Santoor, Mysore Sandal

Brand is a term Victor means the person who won.

Brand is a design The exteriors of a retail outlet which help the customers

to identify it quickly.

Brand is a symbol Mercedes is recognized by its symbol.

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Advantages of branding

It helps in identifying the goods and services.

It motivates the purchase decision of the

customer.

It helps in creating customer loyalty.

It helps the company to maintain its leadership

position in the market if they are market

leaders.

Disadvantages of branding

It needs large investment.

An unsuccessful brand brings negative image to

the company.

Customers may not pay extra just for the sake of

brand.

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Brand Equity

Brand Equity is the set of assets linked to a brandsname and

symbol that adds to products value or a service to a firm

and/or that firmscustomer.

The components of brand equity are:

1. Brand loyalty

2. Brand awareness

3. Perceived quality

4. Brand associations

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Brand Loyalty

It is the customers commitment to purchase a brand (product or service)

repeatedly or other positive behaviors like word of mouth support.

Brand loyalty helps organizations to reduce cost of promotion.

Brand Awareness

It is the number of customers that know the brand name.

Higher is the brand awareness, higher is the brand equity.

Awareness among the customers is created when the product is at introductionstage.

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Perceived Quality

It is the customers opinion about the actual

quality of the product.

Brand Associations

It is the attribute of the brand that customers

link with his/her belief.

A person may associate a brand for power,

strength or protectiveness.

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Brand Positioning

Brand positioning is defined as the process of building the

image of the product in the minds of customers.

Positioning strategies are of three types

1. Product attributes ( Ingredients and taste)

2. Benefit( safety, caring, adventure and on time delivery).

3. Beliefs and Values( Peaceful and happy).

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Brand Name Selection

Brand provides image to the product.

The brand name should be selected very carefully.

Philip Kotler has provided six suggestions to create a successful brand

name. They are:

1. It should suggest something about the product benefits and qualities.E.g. Frooti or Appy Fizz

2. It should be easy to pronounce, recognize, and remember.

3. It should be distinctive

4. It should be extendable.

5. It should be easily translated into foreign language.

6. It should be capable of registration and legal protection.

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Brand Sponsorship

A brand can be sponsored in four ways, namely,

1. Manufacturer brand

2. Private brand

3. Licensing

4. Co-branding

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Manufacturer brand

This brand is owned by manufacturer and promoted either directly or indirectly.

This type of strategy has been followed for many years. For example, Pillsbury atta is a manufacturer brand.

Private brands

Private brands are also called as store brands.

These brands carry the store name.

The basic features of a private label are

It must be a unit package: It must be a single pack. A private label cannot be

used for rice sold loose from a 100 KG bag.

Relabeling: The single pack must carry only the brand name of the particular

store.

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Brand licensing

It is legal permission granted by a brand owner to allow another company to use its

brand for a fee.

For example, Hugo Boss, Tommy Hilfiger, Lovable, Lacoste, Nike are brands that

licensed their brands in the Indian market.

The advantages of brand licensing are low cost, free publicity and revenue from

royalty fees.

The disadvantages of brand licensing are lack of manufacturing control and failure of

licensing arrangements.Co-branding

According to Kotler, co-branding is the practice of using the brand names of two

different companies on the same product.

For example, ICICI and HPCL combined together to sell ICICI-HPCL petro cards to the

customer.

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Brand Development A company can develop brand on the basis of product category and brand

name.

The different strategies used by companies to develop brands are

Brand name

Product Category

Existing New

Existing Line extension Brand extension

New Multi brands New brands

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Line extension

In this strategy, the company uses its well known brand name

to introduce more items in a given product category in a new

form, flavor or package size.

It is less risky and requires less investment.

The risk of line extension is brand cannibalization, i.e., the

companysbrand or items compete with each other.

Brand extension

In this strategy, the company uses its well known brand name

for new product category items.

For example, UB (United Breweries) group used its brandKingfisher for different categories. Originally it was a beer

brand which was extended to airlines.

It makes the brand well known immediately.

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Multi brands

In this strategy, the product or items are introduced in an existing product category

but with a new brand name.

For example, Hindustan Unilever uses different brand names for its home andpersonal care products.

Organizations use this strategy to avoid brand cannibalization.

The disadvantage of this strategy is that no brand has a major market share and

hence there is lesser profitability.

New brands In this strategy, new brands are introduced for new product categories.

It requires large investment.

For example, Hindustan Unilever launched Pure it in the water purifier category.

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Nature and Characteristics of Services

Services are becoming important part of companies and

economy as well.

Companies that were hesitant to enter the services sector are

giving priority to them.

The characteristics of services are

Intangibility: Services cannot be seen, tasted, felt, heard or smelt

before they are bought.

Inseparability of production and consumption: Services are produced

and consumed at the same time. Perishability: Services cannot be stored for later sale or later use.

Heterogeneity or variability: The quality of service provided differs

from person to person, place to place, time to time.

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Strategies for Service Organizations

1. Service differentiation

a) Service firms use different strategies to be different from

competition. Air Deccan started no frills (luxury) airline

services when all other companies were trying to provide

luxury.

b) Service firms differentiate their services in supply chain

management practices. For example, Air Deccan started

booking tickets only on website and telephone. They did not

use agents like other companies.

c) Service firms differentiate on the basis of image also.

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2. Service quality

Managing the quality of service is very difficult because of its

characteristics. Organizations work on following attributes to improve the

quality of service

a) Reliability

b) Responsiveness

c) Assurance

d) Empathy

e) Tangibility

3. Service productivity

The productivity of service can be increased by

a) Training the existing employees.

b) Recruiting new employees who work better.

c) Increasing the quantity of their services.

d) Providing physical evidence to the services. 20


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Unit 9 Product Management Services and Branding Strategy

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