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Product differentiation and brand Management

Product Differentiation

Competitive Advantage: Companies achieve competitive advantage in the market either by a) Offering the products at a low cost and gain cost leadership, or b) Differentiate their products How Companies achieve Product Differentiation? Physical attributes of products Services Types of distribution Positioning A Key Important decision for a Marketer How to position their products as positioning influences other elements of Marketing-mix such as advertising, pricing etc. Repositioning involves high costs.
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Competitive Differentiation & Positioning

Scope of differentiation

Little scope of differentiation in case of commodities such as meat, steel, cement etc. Products like home appliances, electronic equipments etc provide wider scope for differentiation. Basis of Differentiation Form Features Quality Durability Reliability Reparability Style &Design
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Product form
Product form Product form is sum total of the physical attributes of the product. Products can be differentiated based on size, shape, and any other physical attributes of the products. For example, medicine in the form of tablet, syrup or injection. Soap in the form of liquid or bar etc.
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Design
Design Design takes care of functionality or usefulness such as easy to use, easy to maintain etc. Important for products such as Apparels, packaged goods, Audios, Automobiles etc. For example, Tata Motors differentiating Indica on the basis of 1400cc engine, easy shift gears, better suspensions, wide tread tyers, sporty new look, stylish interiors, chrome-lined grill, etc

Features
Features Product characteristics to allow a product to perform certain functions. Adding new features enhances the value of the product. For example, Indigo having features like independent three-link suspension shock absorbers and new front seats providing additional lumbar and thigh support; fire preventing inertia switch to minimize fuel leakage and a steel monochrome frame to offset frontal impact in case of an accident.

Size of Package
Size of Package Firms differentiate their products on the basis of size and weight of the pack. For example, Pepsi captured sizeable part of Cola market in India by changing the packaging of their products.

Product Quality
Product Quality Quality refers to conformance of the product to the expectations of customer and leads to repeat purchases, customer loyalty and word of mouth publicity. For example, Sony Corporation enjoys a competitive edge over its rivals because it is reputed for manufacturing products of excellent quality. - Companies try to achieve six sigma level in quality to eliminate products defects totally.

Durability
Durability Customers are willing to pay premium if the product is durable. Advantage of durability gets reduced if the technology and hence the product becomes obsolete.

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Reliability
Reliability A measure of the probability that a product will not malfunction or fail within a specified period.

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Reparability
Reparability A measure of the ease of fixing a product when it malfunctions or fails. Many computer hardware and software companies offer technical support over the phone or advise the user how to correct them.

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Style
Style Describes the products look and feel to the buyer. Aesthetics play a key role in certain brands of Pens, Motorbikes etc. Creates distinctiveness that is difficult to copy but may not always mean high performance. Packaging is used as a styling weapon especially in food products, cosmetics, toiletries, and small consumer appliances etc.

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Service Differentiation
Service Differentiation Companies are now beginning to differentiate their products on the basis of services they offer along with their products. In fact service is becoming a part of the corporate vision thereby companies calling themselves service companies that also manufacture products. Customer services can include the following: (1) Ease of ordering: refers to the ease with which customer can place the order for the product. Example, Dell computers and Amzon.com (2) Delivery: refers to how well the product has been delivered to customer. Speed and care are important factors. Example, FedEx, Dominos Pizza.

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(3) Installation: vital differentiation factor in Industrial markets particularly when heavy equipment is purchased. a) Ease of installation helps a company to capture a significant share of market. b) Software companies offering step by step instructions on how to install the software in the system. c) Heavy machinery manufacturers provide free installation of transformers, control and relay panels for transmission of electric power.

(4) Guarantees Companies differentiate their services through guarantees. The normal guidelines followed are: Service guarantee should be unconditional. Guarantee should be comprehensive & communicative.
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(5) Financial arrangements (a) Companies tie up with financial institutions that offer loans to help customers purchase new products through easy installments schemes. Example, MUL has tied up with financial institutions such as Citicorp, ICICI, HDFC Bank, ABN-AMRO Bank, Kotak Mahindra , Sundaram Finance to help its customers with car finance. (6) Customer Training Companies also train their customers or customers employees to use the equipment. (7) Maintenance and repairs (a) Increasingly repeat purchases by customers are affected to a large extent on whether his experiences of maintenance and repair services from the company have been good or bad. (8) Disposal (a) Companies also differentiate their products on the basis of disposability of the product after use. (b) This strategy helps to increase the sales as well as establishing it as an environment-friendly organization.
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Personnel Differentiation People in the organization can provide sustainable advantage. A well trained employee can serve customers efficiently and effectively. Organizations differentiate themselves on the basis of the characteristics of their employees. (a) Competence (b) Courteousness (c) Credibility (d) Reliability and responsiveness, (e)Good communication skills
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Channel Differentiation
Channel Differentiation A firms choice of distribution channel, its coverage, expertise and performance helps to differentiate itself from it competitors. Involves making the product available to customers in places where competitors have not entered. Availability of products everywhere makes the customers search process less complicated, less expensive and more habitual.

Example: Maruti Udyog

Ltd opened True Value Outlets for catering to second hand car markets.

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Image Differentiation Many customers base their purchase decision on the image of the company. Companies create and promote features that foster a unique image or value for their products. Companies communicate their image through: a) Ethical management practices such as accurate and transparent company audits, corporate social responsibility e.g. Infosys, Wipro b) Symbols help differentiate the company from its competitors on the basis of its image. c) Logos project certain public image though emblem, graphic picture or a sign. Used in audio-visuals or print media. d) Atmosphere by creating right ambience, colour and lighting, furnishings, and architecture. e) Events: Company builds its image based on the type of events it sponsors.
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Image Differentiation

If you are asked to select one of two chocolates kept in front of you one with Cadbury's brand name visible on it & other also Cadbury's brand name hidden on it ,which one will you prefer?

What

is

brand?

Brand Decisions

Brand: a name, term, sign, symbol, or design, or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

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Brand Name

Words, letters, or symbols that make up a name used to identify and distinguish the firms offerings from those of its competitors.

Individual Name s : E.g P&G - Vicks ( health Care ) , Ariel and Tide (Fabric care ) Pantene , Head and Shoulders , Rejoice ( Shampoo) , and Pampers ( Baby care ) Blanket Family names : Policy followed by Tata Salt , Tea , Automobile ,and Steel

Separate Family names for all products Aditya Birla group follows this policy to a great extent like Hinadlco Aluminium , Ultra Tech Cement , Grasim Suiting and Graviera suiting
Corporate names combines with Individual product names : by Kellogg's Kellogg's Rice Krispies , Kellogg's Raisin Bran , and Kellogg's Cornflakes

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Brand Extensions
Acquire competitors customers Stimulate demand among current non-users.
Related Brand extension/Category extension - Maggi Noodles to Maggi Ketchup ,Maggi soup etc. Dettol soap -----antiseptic soap , Dettol plaster-------Antiseptic bandage , Dettol Hand wash..antiseptic wash Ponds Dreamflower Talc , Ponds Dreamflower Talc Magic , Sandal Talc , Pond Dreamflower soap , Ponds cold soap ,Ponds face wash , Ponds cold cream ,Ponds complexion defense moisturizer , Ponds Moisturizing lotion Unrelated Brand extension or Category extension Anchor electrical switches to Toothpaste (Gut feeling of CEO Atul Shah)

Line Extension trap

Car

Motor Cycle

Marine
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Engines
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Multi Branding
Two or more brands in same product category.

Seiko
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Seiko Pulsar

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New Brands New Category New Brands National-Household

Panasonic-Audio
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Brand Decisions
Brand Rejuvenation Adding value to existing brand by improving product attributes and enhancing its overall appeal. New lifebuoy , New Horlicks , Nestles New Nescafe , New Bournvita , P&Gs New Vicks Vaporub. Brand relaunch Wipros Santoor , Godrejs Marvel , Close-up , P&Gs Action 500 (brand leader with 30% market share) , Dabur Chyawanprash. Brand Proliferation (exposition) it is opposite of brand extension . E.g Unilever has more than 25 brands of ice-cream and P&G has more than a dozen brands of Detergent It helps expand the market share but leads to Brand Cannibalization.

Popsicle, Klondike, Ocean Spray ice cream, Slim Fast ice cream, Breyers, Starbucks and Ben & Jerry's .
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Brand Decisions
Brand Development through Acquisition/Takeover Pepsi acquire Duke Godrej acquire Good Knight

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Co-branding/Dual Branding- two or more well known brands are combined for a offer

Examples: Volvo Advertises That it uses Michelin Tires PC manufacturers - IBM, Dell, Compaq purchase their chips from Intel at a premium price. Hero- Honda Maruti- Suzuki
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Co-branding: Count the Brands


Notice all the brands:

1. Ingredient co-branding Maruti car using JK tyres, Compaqs PC using Intel chips 2. Same company co branding Cosmetic companies linking their product brands with each other 3. Joint venture/post-merger co branding HP, Compaq 4. Multiple sponsor co-branding- When the product has more than one sponsor e.g. Jet airway, citibank card 5. McDonald's India is entering into a co-branded strategic tie-up with Multi Vision - releasing Teenage Mutant Ninja Turtles (TMNT) movie in India this April,
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Elements of Brand Management


Brand Identity

Brand Communication
Brand Image

Awareness

Brand Personality

Positioning

BRAND EQUITY

Aspects of a Brand Attractiveness

Image Elegant Beautiful

Celebrity Priyanka chopra Katrina Kaif

Product Scooty , Garniear eye care Lux

Classy
Trustworthiness Dependable Honesty Reliable Expertise Knowledge Qualified Skilled

Amir Khan
Amitabh Bacchan Lara Dutta Sachin Tendulkar Hema Malini Amitabh Bacchan Shilpa shetty, Priyanka Chopra, Sanjeev kapur

Titan watches
Polio dose Kellogs cornflex Max insurance KEN Purifiers Incredible India Shampoo, skin cream Ariel washing podwer Sugar free

Thank You