Managing & Designing

Product
Marketing Management - II
Importance
• At the heart of a great brand is a great PRODUCT.
• Superior Quality products provide unsurpassed value to customers.

Marketing Planning
(formulating an offering)
To meet

Target customers
(needs & wants)

Offering benefits

Customer judgement
(Product, Service, & Brand)
Product Differentiation
WHY ???

• To successfully compete in the market

• Create a significant competitive advantage and an AURA

around the product  helps distance it from the
competition

Products – A
differentiation
continuum

Very Little variation High Differentiation

(e.g Petrol) (e.g Automobile)
Attributes of Product Differentiation
• Core functionality
• Features
• Performance Quality
• Conformance Quality
• Durability
• Reliability
• Form
• Style
• Customization
 Definition – Totality of features that affect

Product Design
the way consumers perceive a product’s
look, feel, & function
Significance – As competition intensifies, it
offers a potent way to differentiate and
position a company’s product

Functional benefits Aesthetic benefits Approaches

(Rational) (Emotional) • Not a phase but a way of thinking
• Permeates all aspects of a marketing program
• Well designed product is easy to produce & distribute
• Pleasant to look at & easy to open, install, repair, and
dispose of
Critical - because in our visually • Data-driven approach with 3 phases – Observation,
oriented culture, it transmits meaning & Ideation, & Implementation.
positioning
 Product Portfolio – Encompasses all Width
Product Portfolio Design products offered by the company
including various product categories &
Length
Depth
product lines Consistency

(Product Line)

Bar Liquid Powder

Normal Wash Machine Wash

Front Load Top Load


Product Line Analysis
Product Line Length
(Influenced by Company’s Objectives)
Points to Consider
• Appeals to different layers of customer needs
• Allows for different margins
• Develop strategies for profitability maximisation
• Competitive positioning
• Up-selling
•
•
Cross-selling
Protect against economic downturn
• Mkt Share & Growth – Long Product lines
• Profitability – Shorter Product Lines
• Excess manufacturing Capacity
• Sales Force Pressure
• Channel lobby
• Lengthens over time
• Increase in cost – Mfg, design, inventory, promotions, etc.
• Available resources v/s Market opportunities
 • Capture the market
Down
• Downward market movement
Market
Line • Attacked by low price competitor
Stretching
Up • More growth
Market • Higher Margins

Product Line
• Up positioning

Lengthening
• Incremental profits
• Satisfying dealers
When
• Addressing Customer desire for variety
• Plugging holes to competition
Line • Meet genuine market need
Filling
(Adding more items
in the existing range)
Look out • Cannibalization of existing product
for
 Includes all activities of • Buyer’s first encounter with the product

Packaging designing and producing the

container for a product
•
•
Draws the customer in
Encourages product choice
• “5-second” commercial

• Self-service
Factors for
• Consumer Affluence
growing use of
packaging • Company & Brand Image
• Innovation opportunity
• Brand Identification
• Convey information
Objectives
• Facilitate transportation, protection, storage
• Harmonize with other aspects

Use of
• Different meanings in different cultures & market segments
Colour • Different meanings and different emotions attached
• Colour can define a brand

New Realities
• Environmental impact
• Creativity
• Time & Resources
 Can be a simple attached tag or • Identifies the product or a brand

Labeling
an elaborately designed graphic • Grades and describes the product
that is an inherent part of the • Promote the products through attractive graphics
package • Should follow Govt. rules

Replacement of the product or

Guarantee full refund if the product
malfunctions within a stipulated
time
Important Traits • Relevant
• Easily understood
Replacement of part(s) if the • Easy for customer to invoke
Warranty product malfunctions within a
stipulated time
Managing & Designing
Services
Marketing Management - II
 An act that one entity • Govt Sector – Courts, Hospitals, Military, Police, Railways,
performs for another that is Fire dept, Postal Dept, Schools, Regulatory agencies

Service essentially tangible and does • Private Nonprofit – Colleges, Charities, Hospitals, Museums,
not result in ownership. It Foundations, Places of worship
may or may not be tied to a • A good part of business sector – Airlines, Banks, Insurance,
physical product Motion picture cos, Plumbing, Repair, Real estate, Parlours,
etc.
• A pure tangible good – Soap, Salt
• A tangible good with accompanying service – AC, RO
Categories of
• A hybrid offering – Restaurant
offerings
• Major Service with accompanying minor good – Airplane
• A pure service – Insurance, Counselling

“Difficult for the customer to judge the quality of “Service is an experience-oriented journey with
the services even after receiving them” credence qualities”

Classification of • Search benefits – Indian Railways

Service Benefits • Experience benefits – Airplane journey
• Credence benefits - Restaurant visit
 • Buyers look for evidence of quality
Intangibility • Draw inferences from the place, people, comm. material,
symbols, price
• “Manage the evidence” to “tangibalize the intangible”

• Issues of scalability
• Work with larger groups
Service
Inseparability
• Work faster
• Train more service providers

Characteristics • Yield Management

• Invest in good hiring & training practices

Variability • Standardize the service performance
• Monitor customer satisfaction

Perishability Demand Side Supply Side

• Differential pricing • Part-time employees

• Non-peak demand • Increased consumer part
• Complementary services • Shared services
• Reservation systems • Future expansion
 • Changing the rules of the game
Increasing role
• Accelerated digital transformation of services – COVID 19
of technology
• Educational institutes

• More awareness
Customer • Dislike multitude of service partners
empowerment • Power of social media
New Service • Swift response to customer complaints

Realities Customer co-

production
•
•
Active role in delivery
Derive more value, feel more connected
• Technology, consumer sophistication
• Attribute service failures to companies
• +ve employee attitudes  customer loyalty
• Strong customer orientation  Job satisfaction,
Satisfying commitment
employees • Strong Internal drive  Pamper customers, read their
needs, develop personal relationships, deliver high-quality
service
• Companies  Market a career, provide sound training,
provide support, reward for performance, audit job
satisfaction
 • Customer centricity

Best Practices
• Service quality
• Cater high-value customers
• Manage customer complaints

Differentiatin
• Ease of ordering
• Speed & Timing of delivery
• Installation training
g Services •
•
Maintenance & Repair
Returns
 SERVICE QUALITY MODEL
(Reliability, Responsiveness, Empathy, Assurance, Tangibles)
Building Strong Brands
Marketing Management - II
 Name, term, sign, symbol or design or a Ultimate Aim – To create for customers, the company, and
combination of them, intended to identify the
Brand
its collaborators, a value (psychological) that goes beyond
goods/services of one seller or a group of the value created by the product/service aspects
sellers and to differentiate them from those of (functional/monetary) of the offering
competition (AMA)
 Brandin Process of endowing a
product/service with the
•
•
Creating differences between products
Who, What, Why

g power of a brand
•
•
Organise knowledge that classifies decision making
Provide value to the firm

• A brand resides in the minds & hearts of the customers

• Creates value by convincing customers about the meaningful differences
• Attributes & Appealing Imagery
• Genuine & Authentic

Role of
Customers
Brands Firms
• It is a promise - experience/benefits for loyalty • Predictability & Security of demand
• Means to set their expectations & reduce risk • Entry barriers to competitors
• Fulfil/Exceed expectations • Loyalty  Customer willingness to pay more
• Simplify decisions • Impressions in customers’ mind
• Personal meaning & expression
 Brand
Value
Brand Equity Brand Power
Monetary value of a brand & reflects Degree to which brand
the premium placed on company’s influences the way
valuation because of its ownership of customers think, feel & act
brand w.r.t the brand

• +ve if customers react more favourably

• Encompasses NPV of total financial • Arises from differences in customer’s response
return that the brand will generate • Thoughts, feelings, images, experiences, and
over its lifetime beliefs associated
• Important to understand, manage • Must create strong, favourable & unique brand
antecedents & consequences, associations
develop methodologies to assess • Stronger brands earn greater revenue
it.
• Mergers & Acquisitions Key Benefits
• Improved perception • Inelastic response to price rise
• Greater loyalty • Trade co-operation & support
• Less vulnerability to competition • Brand extension opportunities
• Larger margins • Improved employee reccuitment
• Financial market returns
Designing • Marketers build Brand Equity by
creating the right brand associations

the Brand • Success depends on all brand-related

contacts with customers

Defining the Brand • 3 to 5 word articulation of heart & soul of the brand
Mantra • Closely related to the essence & core promise of the brand
(Focus on brand positioning & • Must economically communicate what brand is and what it is not
guide the way to help
customers think about the
brand)

• Memorable • Transferable Choosing Brand

• Meaningful • Adaptable Elements
• Likable • Protectable (Name, logo -Devices that
identify & differentiate the
brand)

Choosing Secondary • Company itself • Characters

Associations • Geographic region • Spokesperson
(Linking brands to meaningful • Other brands • Events
information in the memories
of the customer to become
secondary sources of brand
knoeledge)
Brand • Reflects the way in which a company’s brands are related to a company’s

Hierarch products & services and to one another

y
• Important for a company that manages diverse brand portfolios

• Pursue multiple customer segments

Managing Why multiple brands • Increase shelf space & retailer dependence
Brand • Retaining variety-seeking customers
• Increasing competition within the firm
Portfolios • Employing economies of scale

Strategies • House of Brands

• Branded House
• Sub-brand
FLAGSHIP PRODUCT
• Best embodies brand to the customer
• Short term benefit – increased sales
• Long term benefits – Improved Brand Equity
Brand
Dynamic Most brands don’t stay the same, they evolve over time

s
Brand • Reposition your old values
Repositioning • Brand New Repositioning (TATA Motors)

Ask
When • Leverage the existing Brand Equity
Brand • Contribute to the parent Brand Equity

Extensions
Advantages
Use an established brand to
introduce a new product in a
different category or price tier
•
•
Reduces risk for customers
Easy to convince marketing channels
• Savings in advertising cost
• Opens a new market
• Facilitates new category extensions
•
•
Does the brand has significant power?
Is there a strong basis for fit?
• Will the extensions have optimum PoP
& PoD?
• Implications on parent Brand Equity &
Profitability?

• Brand Dilution
Disadvantages • Opportunity to create a new brand
missed
Managing a Brand Crisis
BRAND VALUE CHAIN
Personal Selling
Marketing Management - II
 Personal
• Involves direct interaction with buyers
• Purpose – Making presentations, answering questions, procuring orders • Customised
• Most effective tool at the later stages of the buying process • Relationship oriented

Selling •
•
Influence buyer preferences, conviction, and action
Ancient art
• Response oriented

• Companies spend a lot of money to train salespeople

Prospecting & • Learn about the company • Very essential component

Qualifying • How purchasing is conducted • Long-term relationship with buyer
• Best contact approach • Buyer observation & response Closing
• Offer inducements
• FABV approach • What will the buyer lose
Presentation & • Features – Physical characteristics
Demonstration • Advantages – Why certain features give customer an edge • Follow-up & Maintenance
• Benefits – Economic, technical, service & social benefit • Cement necessary details after
delivered closing the order Servicing
• Value – Describe the offering’s worth • Follow up for installation after
delivery
• Sales is an interactive process – Objections will be raised, • Maintain & Grow account
Questions asked • Give something extra
Persuasion • Sources of objections - Psychological resistance & Logical
Stay close to the
•
resistance
Salesperson – Maintain +ve approach, Ask to clarify Managing customer even after
objections, Smart Questions, Do not give easy discounts, Do
not undermine the competitor directly the Sale the sale has
happened
Designing the • Companies link to the customers
• Crucial to the marketing program, but high in cost
Sales Force • Hence, need to increase the sales force productivity & develop objectives

• Information gathering • Most expensive asset

• Competition Size
Objectives • Targeting
• Communicating • Stage
• Selling • Geography
• Servicing • Turnover
• Allocating
• Attractive package
• Sales Force – Income regularity,
• Own Force Compensation
Strategy Reward, Fair pay
• Contract Force • Company – Control, Economy,
Simplicity
• Geographic • Varies within & among industries
Structure
• Product specific • Fixed, Variable, Expense, Benefits

Managing the Sales
Force
Recruiting • Heart of good sales force –
appropriately selected reps
• Great waste to hire the wrong people
• Affects turnover – lost sales, pressure
on existing people, experience
• Checks – References, Past history,
Interview reactions
Training & • High customer expectations
Supervision • Few weeks to several months
• Classroom, On Field, Online training
• Role plays, Sensitivity or Empathy
training helps identify customer
motives and situations
• Commission based vs Own team
• How much time to spend with Productivity
existing customers/new prospects
• Tracking / Reporting
• Nothing motivates like money Motivation
• Promotion, Handling bigger
teams/territories
• Targets need to broken
Regionwise, Areawise, Sales rep
wise
• Targets – reflection of last years &
market potential
• Targets should not be easily
achievable or too high
• KRA system Evaluation
• Beginning of the year discussion
• Monthly/Quarterly Follow up
• Various categories – Revenue,
Profitability, Expansion, Channel &
customer feedback, Payment
collection
Designing & Managing
Distribution Channels
Marketing Management - II
 Distribution Sets of independent organisations
participating in the process of
Merchants – Distributors, Wholesalers, Retailers
Agents – Brokers, Mfg reps, Sales agents
making a product or service
Channels
Facilitators – Trans cos, Ind warehouses, banks,
available for use or consumption Adv agencies

• Convert potential buyers into profitable customers

• Not just serve markets but also make them
• The channel chosen affects all marketing decisions – Pricing, Salesforce, Advertisement
• Include long-term commitments, as well as a set of policies & procedures
• Make goods widely available and accessible to target markets – Efficiency & Effectiveness
• Resource & expertise support

Functions •
•
Gathering information – customers, competition, other actors & forces in the mktg environment
Develop & disseminate communication – Stimulate purchasing & foster brand loyalty
• Negotiate & reach agreements on price & other terms – Effecting transfer of ownership
• Place orders with manufacturers
• Acquire the funds to finance inventories at different levels in the mktg channel
• Assume risks connected with carrying out channel work
• Provide buyers with financing & facilitating payment
• Oversee actual transfer of ownership of goods from one organisation or person to another
FIVE MARKETING FLOWS IN MARKETING CHANNELS
 Distributor

CONSUMER MARKETING CHANNELS INDUSTRIAL MARKETING CHANNELS

 Multichannel Using two or more marketing channels to

Distribution
reach customer segments in one area

• Using a single channel is not efficient.

• Each channel can target a different segment of buyers or different need states for one buyer.
• Deliver the right products in the right places in the right way at the least cost.
• Increasing employment of digital distribution strategies.
• Multichannel customers buy more than single-channel customers (more for hedonic products).
• Unconventional or New Channel – Dell, Netflix.
• More Channel conflict & problems with control & co-operation.
• Increased Market coverage – Benefit for the firm & the customer
Benefits • Lower Channel Cost
• Ability to do more customised selling

Online • Offering different brands or products offline & online

vs • Offering offline partners higher commissions to cushion the negative impact on sales
• Taking orders on websites but having retailers deliver & collect payment.
Offline
 ROT Retail Of The Future
F
Customers

Franchise Partners

Company
Channel Management
Decisions
Establishing • The customer aimed to reach Motivating Channel Power
Objectives • Product Characteristics Channel • Coercive
• Legal regulations and restrictions Members • Reward
• What other firms are doing • Legal
• Forge long-term relationships • Expert
• Referent

Selecting • Exclusive Distribution Evaluating • Evaluate performance – Sales, Avg Inventory,

Channel • Selective Distribution
Members • Intensive Distribution
• Franchising – Planned, Directed, and
Controlled by the Franchisor
Channel Customer delivery time, Promotional activities.
Members • Performers – Reward, recognition
• Underperformers – Counseled, retrained,
motivated, or terminated
• Review of Channel design – Buying patterns,
Market growth, Competition, Innovative
channels, Stage of product life cycle.
Channel Cooperation • Conflict – When one channel member’s action prevents another
channel member from achieving its goal
& Conflict • Conflict is inevitable

Types • Horizontal channel conflict

• Vertical channel conflict
• Multichannel conflict

Causes • Goal incompatibility

• Differences in strategies & tactics
• Power imbalance
• Unclear roles & rights

Managing • Information-intensive mechanisms

Channel • Building Relational Norms – Flexibility, Solidarity
Conflict • Incentives
 Managing Market Includes planning the infrastructure to meet demand and then
implementing and controlling the physical flows of materials from

Logistics points of origin to points of use to meet customer requirements at a

profit

• Minimizing the cost – repercussions

• Decisions should be made on a total-system basis
• What customers require
• What competitors are offering
• Establish some promise made to the market

• How should we handle orders?

Market-Logistics - Shorten the order-to-payment cycle
Decisions • Where should our warehouses be located?
- More locations v/s centralised

• How much stock should we hold?

- Inventory carrying cost v/s stock out
- Fast v/s slow moving goods

• How should we ship goods?

- Affects pricing, on-time delivery perf, condition of goods