Product and Brand Management

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 What is a product?

A product is any offering by a company to a market that

serves to satisfy customer needs and wants.
It can be an object, service, idea,etc.

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 New Product Development

Most new product development is an improvement on

existing products
Less than 10% of new products are totally new concepts.

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 Success rate of new products

The success rate of new products is very low – less than 5%.
‘You have to kiss a lot of frogs to find a prince.”
Product obsolescence is rapid with improvements in
technology
Shorter PLCs

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 Product Development Stages

Idea generation
Idea screening
Concept development and testing
Concept testing
Conjoint analysis – to find out the best valued attributes by
consumers

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 Business analysis

The most customer appealing offer is not always the most

profitable to make
Estimate on costs, sales volumes,pricing and profit levels are
made to find out the optimal price – volume mix.
Breakeven and paybacks
Discounted cash flow projections

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 Market testing

Test markets
Test periods
What information to gather?
What action to take?

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 Commercialization

When? (Timing)
Where? (Which geographical markets)
To whom? (Target markets)
How? (Introductory Marketing strategy)

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 Product Levels

Customer value hierarchy

Core benefit
Basic product
Expected product
Augmented product
Potential product

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 Customer Delight

When you exceed customer expectations

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 Product Hierarchy

Need
Product family
Product class
Product Line
Product type
Brand
Item

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 Product classification

Durable
Non – durable
Services

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 Consumer goods classification

Convenience goods
Shopping goods
Specialty goods
Unsought goods

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 Industrial goods classification

Materials and Parts

- raw materials
- manufactured materials and parts
Capital items
Supplies and business services

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 Product Mix

The assortment of products that a company offers

to a market
Width – how many different product lines?
Length – the number of items in the product mix
Depth – The no. of variants offered in a product line
Consistency – how closely the product lines are
related in usage

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 Product Line decisions

Product rationalization
Market rationalization
Product line length
too long – when profits increase by dropping a product
in the line
too short – when profits increase by adding products
to the product line
Line pruning – capacity restrictions to decide

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 Brand

A name becomes a brand when consumers associate it with

a set of tangible and intangible benefits that they obtain
from the product or service
It is the seller’s promise to deliver the same bundle of
benefits/services consistently to buyers

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 Brand Equity

When a commodity becomes a brand, it is said to have

equity.
The premium a brand can command in the market
The difference between the perceived value and the intrinsic
value

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 Levels of meaning

Attributes
Benefits
Values
Culture
Personality
Users

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 Brand Power
Customer will change brands for price reasons
Customer is satisfied. No reason to change.
Customer is satisfied and would take pains to get the brand
Customer values the brand and sees it as a friend
Customer is devoted to the brand

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 Brand Equity – Competitive Advantages

Reduced marketing costs

Trade leverage
Can charge a higher price
Can easily launch brand extensions
Can take some price competition

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 Managing Brand Equity

Brand Equity needs to be nourished and replenished. We

must not flog the brand for equity to be diluted or dissipated
Store brands

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 Advantages of branding
Easy for the seller to track down problems and
process orders
Provide legal protection of unique product features
Branding gives an opportunity to attract loyal and
profitable set of customers
It helps to give a product category at different
segments, having separate bundle of benefits
It helps build corporate image
It minimises harm to company reputation if the
brand fails

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 Brand parity

Consumers buy from a set of acceptable/ preferred brands

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 Umbrella Brand
Products from different categories under one brand
Dangerous to the brand if the principal brand fails
Sometimes the company name is prefixed to the brand. In
such cases the company name gives it legitimacy. The
product name individualises it.

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 Naming the Brand

Product benefits
Product qualities
Easy to pronounce
Should be distinctive
Should not have poor meanings in other languages and
countries

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 Brand strategy
Line extension – existing brand name extended to
new sizes in the existing product category
Brand extension – brand name extended to new
product categories
Multibrands – new brands in the same product
category
New brands – new product in a different product
category
Cobrands –brands bearing two or more well known
brand names

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 Brand Repositioning

This may be required after a few years to face new

competition and changing customer preferences

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 Packaging

Includes the activities of designing and producing the

container for a product
Packaging is done at three levels
- primary
- secondary
- shipping

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 Packaging as a marketing tool

Self service
Consumer affluence
Company and brand image
innovation

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 Designing packaging

Packaging concepts
Technical specifications
Engineering tests
Visual tests
Dealer tests
Consumer tests
Packaging innovations
Environmental considerations

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 Labels

Identification
Grade classification
Description of product
Manufacturer identity
Date of mfg., batch no.
Instructions for use
Promotion

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 Labels as a marketing tool

Labels need to change with time or packaging changes to

give it a contemporary and fresh look

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