New Product Strategy and Brand Management

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New Product Strategy and Brand Management
Ananda Sabil Hussein, PhD
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INNOVATION AND NEW PRODUCT STRATEGY

• Innovation as a Customer Driven Process
• New Product Planning
• Idea Generation
• Screening, Evaluating, and Business Analysis
• Product and Process Development
• Marketing Strategy and Market Testing
• Commercialization
• Variation in the Generic New Product Planning
  Process

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INNOVATION FEATUREManaging Googles Idea Factory
As director of consumer Web products Marissa
Mayer is a champion of innovation. She favors
new product launches that are early and
often. She joined Google in early 1999 as a
programmer when the workforce totaled 20. By
2007 Google had 5,700 employees with expected
sales of 16 billion. How Google Innovates The
search leader has earned a reputation as one of
the most innovative companies in the world of
technology. A few of the ways Google hatches new
ideas

• FREE (THINKING) TIME

Google gives all engineers one day a week to
develop their own pet projects, no matter how far
from the companys central mission. If work gets
in the way of free days for a few weeks, they
accumulate. Google News came out of this process.
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FINDING CUSTOMER VALUE OPPORTUNITIES
Customer value analysis

• Objective is to identify needs for
• New products
• Improvements to existing products
• Improvements in production processes
• Improvements in supporting services

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TRANSFORMATIONAL Break-through innovation
Digital photography NEW PRODUCT CATEGORY
Dell Printers Nike
Apparel Golf
clubs LINE EXTENSION New
color/package/style INCREMENTAL IMPROVEMENTS
Software updates
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Characteristics of Successful Innovators
Creating an Innovative Culture
Selecting the Right Innovation Strategy
STRATEGIC INITIATIVES
Leveraging Capabilities
Making Resource Commitments
Developing and Implementing Effective New Product
Processes
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NEW PRODUCT PLANNING PROCESS
Customer Needs Analysis
Business Analysis
Screening and Evaluation
Idea Generation
Marketing Strategy Development
Product Development
Testing
Commercialization
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Achieving Cross-Functional Interaction and
Coordination
R D
Operations
Marketing
Finance
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IDEA GENERATION

• Idea search targeted or open-ended?
• How extensive and aggressive?
• What specific sources are best for generating a
  regular flow of new product ideas?
• How can new ideas be obtained from customers?
• Where will responsibility for the new product
  ideas search be placed?
• What are potential threats from alternative (or
  disruptive) technologies?

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SCREENING, EVALUATING, AND BUSINESS ANALYSIS
IDEA GENERATION
SCREENING (fit/feasibility)
CONCEPT EVALUATION
BUSINESS ANALYSIS
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Business Analysis

• Revenue Forecasts
• Preliminary Marketing Plan
• Cost Estimation
• Profit Projections
• Other Considerations

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PRODUCT AND PROCESS DEVELOPMENT
NEW PRODUCT CONCEPT
PRODUCT DEVELOPMENT AND USE TESTING
MARKETING STRATEGY DEVELOPMENT
MARKET TESTING
LAUNCH
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MARKETING STRATEGY AND MARKET TESTING

• Marketing Strategy Decisions
• Market Targeting
• Positioning Strategy
• Market Testing Options
• Simulated Test Marketing
• Scanner Based Test Marketing
• Conventional Test Marketing
• Testing Industrial Products
• Selecting Test Sites
• Length of the Test
• External Influences

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COMMERCIALIZATION

• The Marketing Plan
• Complete marketing strategy
• Responsibilities for execution
• Cross functional approach
• Monitoring and Control
• Real time tracking
• Role of the Internet
• Include product performance metrics with
  performance targets

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Marketing Strategy
Market Target(s)
Marketing Program(s)
Objectives
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A brand is a name, term, design, symbol, or any
other feature that identifies one sellers good
or service as distinct from those of other
sellers. American Marketing Association A
compelling logic has been proposed that the
distinction between goods and services should be
replaced by a view that services are the dominant
perspective in the 21st century, consisting of
both tangible and intangible components.
Stephen LVargo and Robert F. Lusch, Evolving to
a New Dominant Logic for Marketing, Journal of
Marketing, January 2004, 1-17.
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Brand Management Challenges
Internal and external forces create hurdles for
product brand managers in their brand building
initiatives
Intense Price and Other Competitive
Pressures Fragmentation of Markets and
Media Complex Brand Strategies and
Relationships Bias Against Innovation Pressure
to Invest Elsewhere Short-Term Pressures
David A. Aaker, Building Strong Brands, 1996,
26-35.
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Responsibility for Managing Products

• Product/Brand Management
• Planning, managing, and coordinating the strategy
  for a specific product or brand
• Product Group/Marketing Management
• Product director, group manager, or marketing
  manager
• Product Portfolio Management
• Chief executive at SBU
• Team of top executives

TM 5-1
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Strategic Brand Management
Brand Identity Strategy
BRAND EQUITY MANAGEMENT
Identity Implementation
Brand Strategy Over Time
STRATEGIC BRAND ANALYSIS
Managing the Brand Portfolio
Leveraging the Brand
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Product Life Cycle Analysis

• Relevant issues in PLC analysis include
• Determining the length and rate of change of the
  PLC
• Identifying the current PLC stage and selecting
  the product strategy that corresponds to that
  stage
• Anticipating threats and finding opportunities
  for altering and extending the PLC

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• Product Performance Analysis
• Managements performance criteria
• Strengths and weaknesses relative to portfolio
• Brand Positioning Analysis
• Perceptual maps for brand comparison
• Buyer preferences
• Other Product Analysis Methods
• Information Services
• Research studies
• Financial analysis

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BRAND EQUITY
Company/Customer Value of Brand Name and Symbol
of a Product
Determined by the brands set of assets (and
liabilities)
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Brand Equity
Effective strategic brand management requires
that we understand brand equity and evaluate its
impact when making brand management
decisions Brand equity is a set of brand
assets and liability linked to a brand, its
name, and symbol, that add to or subtract from
the value provided by a product or service to a
firm and/or to that firms customers.
David A. Aaker, Managing Brand Equity, The
Free Press, 1991, 15. Ibid, 102-120.
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• Measuring Brand Equity. Several measures are
  needed to capture all relevant aspects of brand
  equity.
• loyalty (price premium, satisfaction/loyalty),
• perceived quality/leadership measures
  (perceived
• quality, leadership/popularity),
• associations/differentiation (perceived value,
  brand personality, organizational associations),
• awareness (brand awareness), and
• market behavior (market share, price and
• distribution indices).
• These components provide the basis for developing
  operational measures of brand equity.

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BRAND IDENTITY STRATEGY
Brand identity is a unique set of brand
associations that the brand strategist aspires to
create or maintain. These associations represent
what the brand stands for and imply a promise to
customers from the organization members. Four
Brand Identity Perspectives
Product Organization Person Symbol
David A. Aaker, Building Strong Brands, 1996,
68.
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MANAGING BRAND STRATEGY
Proactive efforts should be devoted to
managing each brand over time.
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Strategies for Improving Product Performance
Product improvement
Cost reduction
Alter marketing strategy
Product line Strategy
Add new product(s)
Eliminate specific product(s)
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Strategies for Brand Strength

• Brand-Building Strategies
• Developing the brand identification strategy
• Coordinate identity across the organization
• Brand Revitalization
• Find new uses for mature brands
• Add products related to heritage
• Strategic Brand Vulnerabilities
• Brand equity can be negative
• Retailer private brands compete with manufacturer
  brands
• Major shifts in consumer tastes
• Competitive actions
• Unexpected events

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Product Mix Modifications

• Motivation for changing the product mix
• Increase the growth rate of the business
• Offer a more complete range of products to
  wholesalers and retailers
• Gain marketing strength and economies in
  distribution, advertising, and personal selling
• Leverage an existing brand position
• Avoid dependence on one product line or category

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BRAND LEVERAGING STRATEGY
LINE EXTENSION
Minor variants of a single product are marketed
under the same brand name
BRAND EXTENSION
Extensions of the brand name to other product
categories --Similar --Dissimilar
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CO-BRANDING
Co-branding (dual branding) involves two or more
established brands making a joint offer of their
product brands The participants brand
names are identified on the good
or service. Several different forms
Component co-branding (Volvo and
Michelin) Same company co-branding Alliance
co-branding (Delta and American
Express) Ingredient co-branding
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BRAND LEVERAGING EVALUATION CRITERIA

• Brand Relevance/Differentiation
• Capabilities/Perceived Value Match
• Market/Segment Opportunity
• Cannibalization Risks
• Potential for Core Brand Damage
• Clarity of Product Offerings
• Estimated Financial Performance
• Brand Equity Impact

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SEVEN DEADLY SINS OF BRAND MANAGEMENT

• Failure to fully understand the meaning of the
  brand.
• Failure to live up to the brand promise.
• Failure to adequately support the brand.
• Failure to be patient with the brand.
• Failure to adequately control the brand.
• Failure to properly balance consistency and
  change with the brand.
• Failure to understand the complexity of brand
  equity measurement and management.

Kevin Lane Keller, Strategic Brand Management,
Prentice Hall, 2003, 736.