Week 6: Product and Brand Management

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Week 6Product and Brand Management

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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

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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)

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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!

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Aveda
Vision Connecting beauty, environment and
well-being.
www.aveda.com
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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

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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

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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 ?

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Creating a Brand
Brand name and images
Brand potential
Brand potential
Service
Core product
Guarantees
Delivery
Quality anddesign
Packaging
Brand potential
3
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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
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Product Mix Strategy
Width, length, depth and consistency are handles
for defining the companys product strategy
Product Line Length
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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

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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

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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

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Product Life Cycle
TIME
Introduction
Growth
Maturity
Decline
SALES
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The PLC Stages

• Introduction
• Growth
• Maturity
• Decline
• Implications for Marketing Management?

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Introduction Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
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Growth Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
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Maturity Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
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Decline Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
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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

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What is a New Product?

• New-to-the-world products 10
• New product lines 20
• Product replacements 45
• Additions to existing lines 25

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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

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Improving New Product Success

• To create successful new products, the company
  must

• New-product success depends on having a

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New Product Development Process
New product strategy
Idea generation
Screening
Concept testing
Business analysis
Product development
Market testing
Commercialization
New products
5
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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

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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

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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?)

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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

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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