Product Strategies for

the Asia Pacific

Asia-Pacific Marketing
Federation
Certified Professional Marketer
Copyright
Marketing Institute of Singapore
1
 Outline
 Product Hierarchy
 Product-Mix Decisions
 Product-Line Strategies
 New product development in ASPAC
 Positioning & Repositioning
 Brand decisions
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 Introduction
 Product (or service) is the main
element of the marketing mix
 Therefore, need to determine the
Product Strategies before deciding on
the remaining marketing mix

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 7-Levels of Product
Hierarchy
 Product need—to satisfy a need e.g. feet protection
 Product class—a family of products having similar
function e.g. all shoes
 Product line—a group of products with closely related
functions e.g. sports shoes
 Product type—products within a line having similar
form e.g. basket-ball shoes
 Brand—a name representing a product or line e.g.
Nike
 Item (Stock Keeping Unit)—a unit item e.g. one pair
of Nike basket-ball shoe
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 Product-Mix Decisions
Decisions on the product mix (the number of
product lines and items in each line) that the
company may offer
 A single product
 Most firms started off as a single-product company
 Multiple products
 e.g. Creative Technology markets sound cards as well
as MP3 players
 A systems of products
 e.g. Nikon sells camera, lenses, filters & other options
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Product-Line strategy
 How many product lines should we
have?
 Example: Delft Sensor Systems offer a
comprehensive range of products, including
portable and platform mounted night vision
systems and thermal imaging systems,
head- and helmet mounted displays, laser
rangefinders and fire control systems
(Source: http://www.oip.be/press/brazil.htm)

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 Product-Line strategy
(cont’d)
 How many product items in each line?
 Example: Both Gardenia and Bonjour
launched new flavors in January 1999 to
nibble away at each other’s market
share of a loaf estimated to be worth
about $80 million
(Source: ST, Home, Jan29/99)

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Expanding the Product Line

1.Product line extension: add an item to

the existing product line
 Many FMCG companies introduced various
sizes of the same product e.g.mini-packs for
travelers, extra-large size for hospital
2.Product category extension: add a new
item or line of items for a company e.g.
 P&G have Vidal Sassoon, Head & Shoulders,
Rejoice, and Panthene in the same category

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Expanding the Product Line
(cont’d)
3. Brand extension: Product category
extension that uses an existing brand
name e.g.
 Cerebos introduced Brands Essence of
Chicken with TangKwei targeting women
 Nestle extended its Bear Brand
condensed milk in Thailand by
introducing Bear Brand with Honey

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More on Product Line Extension
 Downward stretch by introducing lower range of the
products e.g.
 In 1989 the Shangri-La, a chain of deluxe hotels and resorts in
Asia established the Traders Hotels, a sister brand to deliver
high value, mid-range, quality accommodation to the business
traveler
 Mercedes introduced the “baby Merz” to cater to the upper
class mid-sized range of the market
 Upward stretch by entering the high end of the market
e.g.
 Toyota introduced the Lexus and Nissan introduced the Infiniti

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Product Line Extension (cont’d)

 Two-way stretch by filling the whole

line e.g.
 Toyota has the Starlet at the lower end;
the Corolla in the executive range; the
Camry in the upper-management range
and the Lexus in the luxury range

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 New Product Strategy
 New products are critical to survival
 New-product development (NPD) is
essential for companies seeking growth
 It should be an on-going, well organized
NPD process having top-management
support
 What is a new product? (see next slide)
 From a firm's perspective, a new product is
a product that it is unfamiliar in any way
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 Definition of
Product Newness
1. Products new to the world; usually
revolutionary products resulting from
product innovation e.g
 When Creative Technology first
introduced the Sound-blaster
 When disposable cameras were first
introduced
 When Seiko introduced the Seiko
Kinetic Relay, a watch that can go into
suspended animation 13
 Definition of Product
Newness (cont’d)
 Products new to the firm
 Improvements to existing products e.g.
 In 1960 Kao introduced shampoo liquid and in
1970 introduced Kao Merit shampoo (anti-
dandruff)
 Additions to existing lines e.g.
 In 1965 Kao introduced the Kao Tender hair
conditioner
 Costs reductions and re-positionings
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Example of NPD--Logitech
“Logitech, the world's biggest maker of
computer mice, has come up with a
mouse that allows the user to feel
what is seen on the
screen. This
mouse [is] called the iFreeMouseMan”
AP (August 22, 2000)

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 Product Convergence

First coined by Creatives’ Sim W H who

was referring to the marriage between
the PC and home entertainment
 Creative Multi-Speaker Surround
(CMSS) uses seven audio channels

Source: Computer Times, 1997

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 Positioning

 “Positioning refers to placing a brand in

that part of the market where it will
have a favorable reception compared
to competing brands” Subash Jain
 “A product’s position is the place the
position occupies in consumers’ minds
relative to competing products.”
Philip Kotler

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Generic Positioning Strategies
 Our product is unique
 e.g. Raffles Hotel (oldest hotel); Westin Hotel
(tallest hotel)
 Our product is different
 e.g. Seng Choon eggs (low in cholesterol)
Listerine (kills germs)
Amex Blue credit card (6-month rate of
15.9% vs the market rate of 24%)
 Our product is similar
 e.g. Thai fragrant rice 18
Approaches to Positioning
 By attributes
 e.g. Singapore Airlines (first class comfort)
 By benefits
 e.g. Citibank Credit Card (7/24 availability)
 By price/quality e.g. Proton
 By usage or application e.g.100Plus (fluid replenishment in
sports)
 By users e.g. Johnson Baby Shampoo; J&J Affinity Shampoo
(hair conditioner for women)
 By product class
 e.g. Camay soap (with bath oils—not just soap)
 By competitors e.g. Avis against Hertz
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 Product Positioning Using
Perceptual & Preference Maps

Marketing managers use a Mapping

technique to help them visualize the
competitive structure of the market
before they develop differentiation
and positioning strategies

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 Positioning Statement
For [a target segment], the [concept] is [the
primary claim] because [it is the single most
important factor].

Example:
For Seng Choon eggs, the low cholesterol level
is the only healthy alternative because it is
safe for frequent consumption
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 Example of a 2D Perceptual Map
for Laptop
Brand A
Sl
o w-
sp
ee
d

Performance
Light-
w eight
le

Va
y
St

lue
Brand B

Appearance 22
 Repositioning

Why reposition?
 Competitors position next to you
 Consumer preferences changed
 New consumer preference cluster
 Original mistake

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Repositioning (cont’d)
 Repositioning among existing customers
 e.g. Cerebos repositioned BRAND’S from a
traditional therapeutic and recuperative tonic to
one for preventative health maintenance
 APB repositioned Tiger Beer as a beer for all time
 Repositioning among new users
 BRAND’S essence of chicken for students
 Repositioning for new uses
 Repositioning BRAND’S as a base for double-boil
cooking

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Product-Overlap Strategy
This strategy refers to a situation in which a
company decides to compete against its own
brand by using:
 Competing brands
 e.g. Gillette Atra, Sensor, Mach 3
 Private labeling
 e.g. Sin Sin Chilli Sauce, Watson Vitamins
 OEM
 e.g. IBM selling magneto-resistance (MR) heads to OEM
disk drive developers/manufacturers
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 Product-Elimination
Strategy
 When a product’s performance is falling
short of expectations and continued
support is no longer justified, it’s time
to pull it out of the marketplace
 How?
 Harvesting, line-simplification, total-line
divestment

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Value-Marketing Strategy
 Value-marketing strategy means delivering real
product performance based on the following
promises
 Quality strategy
 Customer-service
 Time-based
 Example:
 Dell cuts the duration from order to delivery of most
of its products to the minimum
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 Brands
 “A rose by any name smells as sweet.” True or
false?
 Would you go vacationing on Hog Island?
 Why are Coca-Cola, McDonald’s and Kentucky
Fried Chicken (KFC) successful?
 Do you think Maikenji would be half as
successful?
 Maikenji restaurant in Badaling, north of Beijing
combines the Chinese Characters used in the names
for McDonald’s and KFC and offers a menu similar to
KFC located 100 metres away (AP 11,Jul2001)
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 Brands (continued)
“Buildings age and become dilapidated.
Machines wear out. Cars rust. But what
lives on are brands.”

Sir Hector Laing

United Biscuits, U.K. Source: The
economist, Dec 24, 1988

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 What is a brand?
Six levels of meaning:
 Attributes e.g. High resale value
 Benefits e.g. Safety
 Values e.g. Brand loyalty
 Culture e.g. organized and efficient
 Personality e.g. serious
 Type of users e.g. by occupation
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 Alternative Brand
Strategies
1.No brand identity
 Small firms with unknown brands e.g.
small tailoring outfits
2.Private brands
 Retailers with established brand
names e.g. NTUC Fairprice
3.Corporate brands
 Family name e.g. This Fashion
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Alternative Brand Strategies
(cont’d)
4. Product line extension
 Create cost advantage e.g. Novena’s collection of
an extensive range of furniture at reasonable price
5. Specific product
 Individual brand e.g In addition to the Novena
brand, Novena Holdings also carry the Castilla
brand of Italian designed furniture
6. Combination
 e.g. Novena Holdings’ Novena Collection, Dickson
Beech Collection and the White Collection;
Seiko’s Alba and Pulsar
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 The Branding Process
 From commodity to product
 e.g. air travel
 From product to brand
 e.g. Singapore Airlines
 From brand to experience
 e.g. Romance in the air
 From experience to the heart
 e.g. A Great Way to Fly
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 Branding on the Web
 Profile of “Gen-N”
 How to harness the Internet for brand-
building?
 By rewarding brand loyalty and updating your
site etc.
 Decision-influence factor
 Conventional branding => image
 Online branding => customer experience
 The issue of trust in a brand 34
(Source: Hi-Tech, Hi-Touch Branding by Temporal and Lee)
 Old Brands Strategy
 Old brands survive due to emotional bond
with the consumer
 For slow moving brands either revive it with
marketing money or kill it
 Growing interest in old brands because
brand names carry value that is getting more
expensive and risky to create
 When re-promoting old brands, do not
ignore younger consumers
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Source: “Selling”, Fortune, April 28, 1986