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Week 6: Product and Brand Management

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Starbucks more than just coffee; Niketown more than a sports shop; Aveda more than shampoo ... making cosmetics in the factory but selling hope in the store. ... – PowerPoint PPT presentation

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Title: Week 6: Product and Brand Management


1
Week 6 Product and Brand Management

2
Product Concepts
  • By the end of this session you will
  • Gain an understanding of the product element of
    the marketing mix
  • Gain awareness of product mix, lines and
    branding, the role and limitations of the product
    life cycle
  • Explore the new product development process and
    understand its importance to marketers

3
Product Definition
  • A product is anything, that one receives in an
    exchange. It is a complexity of tangible and
    intangible attributes, including functional,
    social and psychological utilities or benefits
  • A product can be an idea, a service or a product
    (Jobber, 2004 covers physical products service
    products)
  • A product can be anything that is capable of
    satisfying customer needs (Jobber Fahy, 2004)

4
Designing Experiences into Products (Armstrong
Kotler, 2006)
  • Increasingly difficult to differentiate between
    products or services in a category
  • Companies are marketing and delivering
    experiences
  • Memories, magical moments, mystical or spiritual
    experiences, fulfilment …
  • Starbucks more than just coffee Niketown more
    than a sports shop Aveda more than shampoo …
  • Marketers have long talked about the core benefit
    e.g. Charles Revlon making cosmetics in the
    factory but selling hope in the store. Experience
    is the core benefit and then some!

5
Aveda
Vision Connecting beauty, environment and
well-being.
www.aveda.com
6
Consumer Product Characteristics
  • Shopping Products
  • Buy less frequently
  • Higher price
  • Fewer purchase locations
  • Comparison shop
  • i.e Clothing, cars, appliances
  • Unsought Products
  • New innovations
  • Products consumers dont
  • want to think about
  • Require much advertising
  • personal selling
  • i.e Life insurance, blood donation
  • Specialty Products
  • Special purchase efforts
  • High price
  • Unique characteristics
  • Brand identification
  • Few purchase locations
  • i.e Lamborghini, Rolex

7
Difference between Products and Brands
  • Products exist on 3 levels
  • Core
  • Actual
  • Augmented
  • Branding is the process by which companies …
  • A brand may be defined as a marketing identity
    created for a generic product

8
Managing Brands (Portfolio Planning)
  • Manufacturer brands
  • Own-label brands
  • Consider Category Brand Variants
  • Components of a Brand
  • - positioning
  • - personality
  • Think of strong brands - What do they give the
    company /or the customer ?

9
Creating a Brand
Brand name and images
Brand potential
Brand potential
Service
Core product
Guarantees
Delivery
Quality and design
Packaging
Brand potential
3
10
Product Mix
Some of PGs Product Lines
Baby Care
Beauty Care
Fabric Home
Food
Health Care
Care
Beverage
  • Line - closely related products with same
    customer groups, same outlets ...
  • Width number of different product lines
  • Length total number of items the company
    carries within product lines
  • Depth number of versions offered of each
    product in line
  • Consistency how closely related are the various
    product lines?

Six Toothpastes
in Line
Crest Multicare
Crest Cavity
Protection
Crest Tartar
Protection
11
Product Mix Strategy
Width, length, depth and consistency are handles
for defining the companys product strategy
Product Line Length
12
Role of Packaging (primary secondary)
  • Must contain and protect
  • Enable inspection
  • Act as POS advertising
  • Reflect needs of target market
  • Reflect consumer and legislative pressure
  • Stimulate repeat purchases

13
Role of Labelling
  • Functional role size, weight, contents….
  • Promotional role ensures recognition and
    endorsement of brand. Can encourage likelihood
    that the brand will be reselected

14
The Product Life Cycle
  • Conceptual tool (model) to describe the sales
    patterns of products, over their time in a
    market develops marketing strategies
  • On review of cycle, marketing mix strategies
    relating to competition, promotion, distribution,
    pricing and market information can be
    periodically evaluated
  • Enables the introduction, alteration and
    termination of a product to be timed and executed
    properly

15
Product Life Cycle
TIME
Introduction
Growth
Maturity
Decline
SALES
10
16
The PLC Stages
  • Introduction
  • Growth
  • Maturity
  • Decline
  • Implications for Marketing Management?

17
Introduction Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
18
Growth Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
19
Maturity Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
20
Decline Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
21
Limitations of the PLC
  • Fad products some products rise quickly and then
    die just as fast
  • Classics some defy entering the decline stage
  • Marketing effects the shape of the curve
    (pattern of sales) may reflect the marketing
    activity
  • Unpredictability the PLC outlines the phases
    but does not give indicate their duration

22
What is a New Product?
  • New-to-the-world products 10
  • New product lines 20
  • Product replacements 45
  • Additions to existing lines 25

23
New Products
  • One study estimated that up to 95 of new
    consumer products fail. Failure rate has not
    altered over time
  • Only about 40 of new consumer products are
    around 5 years after introduction
  • Why?
  • Overestimation of market size
  • Product design problems
  • Product incorrectly positioned, priced, or
    advertised
  • Product may have been pushed despite poor
    marketing research findings
  • Costs of product development or
  • Competitive actions

24
Improving New Product Success
  • To create successful new products, the company
    must
  • New-product success depends on having a

25
New Product Development Process
New product strategy
Idea generation
Screening
Concept testing
Business analysis
Product development
Market testing
Commercialization
New products
5
26
New Product Development Process
  • Starts and ends with the CONSUMER !!!!
  • Increasing pressure to speed up yet maintain
    integrity
  • New Product Strategy
  • Describes target market, planned product
    position, sales, market share and profit goals
    for first few years
  • Outlines planned price, distribution and
    marketing budget for year 1
  • Describes planned long-run sales, profit goals
    and marketing mix strategy

27
NPD Process Ctd.
  • Idea Generation systematic process
    (brainstorming) to generate a large number of
    ideas
  • Idea Screening select good ideas
  • Concept Testing development and testing of new
    concepts with a group of target consumers (mock
    up, description)
  • Business Analysis review of sales, costs and
    profit projections for a new product in relation
    to company objectives

28
NPD Process Ctd.
  • Product Development develop concept into
    physical product (if possible?)
  • Market Testing assess consumer response in the
    marketplace, either through simulated or
    representative markets
  • Commercialisation management decide whether to
    launch product and make a clear product
    positioning strategy (When? Where? To Whom? And
    How?)

29
Organising NPD
  • Project Teams cross-functional to enable the
    identification of issues
  • Product and Brand Managers co-ordinate
    functional areas. Responsible for success of
    brands
  • New Product Departments high ranking functional
    managers who consider progress reports and budget
    considerations - decide if further funds will be
    assigned

30
Product / Brand Issues
  • Product safety
  • Deceptive packaging
  • Planned obsolescence
  • Manufacturer brands vs. Own-label
  • Brand extension (Dove soap brand) and stretching
    (Caterpillar brand on clothing)
  • Pan-European and global branding
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