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Product Strategies for

the Asia Pacific
Asia-Pacific Marketing Federation
Certified Professional Marketer
Copyright
Marketing Institute of Singapore
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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 needto satisfy a need e.g. feet protection
Product classa family of products having similar
function e.g. all shoes
Product linea group of products with closely related
functions e.g. sports shoes
Product typeproducts within a line having similar
form e.g. basket-ball shoes
Branda 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
(contd)
How many product items in each line?
Example: Both Gardenia and Bonjour
launched new flavors in January 1999 to
nibble away at each others 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
(contd)
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 (contd)
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
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Definition of Product
Newness (contd)
2. 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 products 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
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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 oilsnot 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
Brand B
Appearance
Performance
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Repositioning
Why reposition?
Competitors position next to you
Consumer preferences changed
New consumer preference cluster
Original mistake
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Repositioning (contd)
Repositioning among existing customers
e.g. Cerebos repositioned BRANDS 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
BRANDS essence of chicken for students
Repositioning for new uses
Repositioning BRANDS 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 products performance is falling
short of expectations and continued
support is no longer justified, its 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, McDonalds 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 McDonalds 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
(contd)
4. Product line extension
Create cost advantage e.g. Novenas 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;
Seikos 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
(Source: Hi-Tech, Hi-Touch Branding by Temporal and Lee)
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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
Source: Selling, Fortune, April 28, 1986