Products and Branding by fanzhongqing


									Road Map: Products and Branding
Product overview
Managing products through the product life cycle:
• Positioning products
• Developing and introducing new products
• Appropriate strategies after introduction
Managing products and brands:
• Product mix and product lines
• Branding
• Electronic branding
• Packaging and labeling
         What is a Product?
Anything offered to satisfy a perceived want
or a need. (traditionally goods and service)
Products can be:
   •   Physical Objects
   •   Services, Experiences, Events
   •   Persons
   •   Places, Properties
   •   Organisations
   •   Information, Ideas
   •   Combinations of the above
  The Product and Product Mix
Figure 11-2:
Five Product
         Product Mix
Width - number of
different product

 Length - total     Product Mix -
number of items     all the product
within the lines     lines offered

Depth - number of
versions of each
      Customers buy products not for features (e.g. a
      Pentium 4 chip) or functionalities (e.g. speed),
      but for the perceived benefits they deliver

 More bits & bites

 Documents & spreadsheets
(Logical)                         Physical

 Satisfaction of completion      Logical
(Emotional)                      Emotional
Positioning Exercise - Cars
 Positioning and Differentiation

Performance                      Conformance

Features          Product          Design
   Form             Tools           Style

 Reliability                     Durability
Positioning and Differentiation

Services Differentiation Tools

Ordering                                 Customer
  ease                                   consulting
   Maintenance                      Customer
    and repair                       training

           Installation       Delivery

Positioning and Differentiation

Personnel Differentiation Tools

    Competence    Responsiveness

 Credibility           Communication

       Courtesy      Reliability
Positioning and Differentiation

Channel Differentiation Tools
  Coverage        Performance

  Image Differentiation Tools
   Symbols        Atmosphere
   Media          Events
       New Product Development:
        Slim Chance of Success
                                        New Products
   New Products                            That Fail
   That Succeed                       After Introduction
                                     Reasons for failure
95% of new                              include ignoring
consumer                                     unfavorable
products fail                          market research,
in the USA                                overestimating
                  New Product Ideas
90% of new                             market size, mix
                      That Fail
European                            decision errors, and
consumer                            unexpectedly strong
products fail                        competitive actions
               (In)Famous Quotes I
    Cerf, C., & Navasky, V. (1998). The Experts Speak. New York,
                      New York: Villard Books
“That’s an amazing invention, but who would ever want to use
one of them?”, President Rutherford B. Hayes after
participating in a trial telephone conversation between
Washington and Philadelphia. 1876
“The radio craze . . . will die out in time.”, Thomas Alva
Edison, 1922
“Video won’t be able to hold onto any market it captures after
the first six months. People will soon get tired of staring a
plywood box every night.”, Darryl F. Zanuck, 1946
               (In)Famous Quotes II
     Cerf, C., & Navasky, V. (1998). The Experts Speak. New York,
                       New York: Villard Books

“I think there is a world market for about five computers.” Thomas J. Watson,
Chairman of the Board of International Business Machines, 1943

“Where a calculator on the ENICA is equipped with 18,000 vacuum tubes
and weights 30 tons, computers in the future may have only 1,000 vacuum
tubes and perhaps weigh only 1 ½ tons.”, Popular Mechanics, March 1949

“There is no reason for any individual to have a computer in their home.”,
Ken Olson, President of Digital Equipment Corporation at the World Future
Society Convention, Boston 1977
How Innovative Are New Products?


  New Product Lines
  Product Additions

                                                           All Industry

   Cost Reductions


                      0     10     20      30     40       50

                          Percentage of Product Launches
Managing New Products (fig 10.1, p. 191)
                 Concurrent Development
                                                       Phases of Development

Functional            Concept              Product            Design           Design             Commercial       Market
Activities          Development            Planning           Phase I          Phase II           Preparation   Introduction
Engineering      Propose &               Define            First            Second            Test pilot        Field test
                 develop ideas           product           prototype        prototype         units
Marketing        Propose &               Define            Test first       Test, plan        Prepare for       Promote
                 investigate ideas       market            prototype        roll out          roll out          & sell
Mfg              Propose &               Define            Design           Test new          Refine            Meet
                 investigate ideas       process           process          process           process           targets
Key              Define concept          Define            Verify           Verify            Test              Meet
Milestones                               program           design           process           complete          objectives
Key              CONCEPT                 PROGRAM           DESIGN           PROCESS           SALES             FULL
Decisions        APPROVAL                APPROVAL          APPROVAL         APPROVAL          APPROVAL          APPROVAL

  Source: Wheelwright, Steven C., and Kim B. Clark (1992), Revolutionizing Product Development:
  Quantum Leaps in Speed, Efficiency and Quality, New York: The Free Press, p. 173.
             Quality Function Deployment
                                  Example: Designing a Car Door
       Primary                      Secondary                  Tertiary
      Customer                      Customer                  Customer               Engineering
      Attribute                     Attributes                Attributes            Characteristics
                                   •Easy to open             •Easy to close from   •Energy to close
      Good                           and close                outside (7) (1.5)     door (5%)
    operation                      •Isolation from           •Stays open on        •Door seal
                                     noise and                a hill (5) (1.5)      resistance (6%)
     and use                         climate                 •Easy to open from    •Check force on 10°
                                   •etc                       outside (3) (3.5)     slope (2%)
                                                             •Doesn’t kick         •Energy to open
                                                              back (3) (3.5)        door (9%)
                                                                Importance           Cost to produce
                                                                weights and          (% of total)
Hauser, J. R. & Clausing, D. 1988, “The House of Quality,”
Harvard Business Review, vol. 66, no. 3 (May-June),             perceived            Current and
pp. 63-73.                                                      delivery             targeted values
  Executing a Concept Test
Factual presentation
 • Presents the product concept
Persuasive presentation
 • Presents with a product positioning statement
 • Story board as close as possible to what consumers will see
   in finished media advertising
 • Choice of visuals or words depends on how a consumer will
   normally think about the concept.
Information Acceleration [Urban, G.L., Hauser, J.R., Qualls,
W.J., Weinberg, B.D., Bohlman, J.D. And Chicos, R.A. (1997)
Information Acceleration: Validation and Lessons From the Field. Journal
of Marketing Research, 34 (February): 143-153]
   Test Market
                               Test Market
Full marketing campaign     A few stores that have
 in a small number of        agreed to carry new
 representative cities.        products for a fee

                  Test Market
                Test in a simulated
               shopping environment
                  to a sample of
   Introductory Marketing Strategies
            High                       Low

   High    Rapid-                   Slow-
           skimming                 Skimming

          Rapid-                    Slow-
   Low    penetration               penetration
     New Product Launch
Timing of market entry
• strategic window of opportunity only open for a
  short time?
Identification of target market(s)
• use mass marketing, single-segment, or multiple
  segmentation strategy?
Initial market entry strategy
• whether to enter one or a few segments, or entire
  market rollout?
Consumer Adoption Process
  Cumulative Sales
                                Rapid vs. Slow Diffusion
                                                     Forecast Sales

Market Penetration

                                                                                 Hybrid corn
                     60%                                                         Oxygen steel furnace
                     50%                                                         CD player
                                                                                 Telephone answering device
                            1    2   3     4     5      6    7      8   9   10
                                         Years since introduction
    Factors Affecting Diffusion
Product factors            Marketing factors
 Relative Advantage        Extent of
 Compatibility              advertising and
 Complexity                 promotion
 Divisibility (or          Ability to generate

  Trialability)              word-of-mouth
 Communicability
  (Visibility and Result
The Relative Importance of Different Types of
Information Sources in the Adoption Process

                                                                  Personal and

                Low                          Evaluation

           Diffusion Enhancement Strategies
 Determinant               Inhibitor       Enhancement Strategies
 1. Group nature-          Conservative   Seek other markets, target innovators
 2. Decision type-         Group          Choose media to reach deciders
                                          Provide conflict reduction themes
 3. Marketing effort -     Limited        Target innovators within group
                                          Use regional rollout
 4. Felt need -            Weak           Extensive advertising importance of benefits
 5. Compatibility -        Conflict       Stress attributes consistent with values norms
 6. Relative advantage -   Low            Lower price
                                          Redesign product
 7. Complexity -           High           Distribute through high-service outlets
                                          Use skilled sales force, demonstrations
 8. Observability -        Low            Use extensive advertising
 9. Trialability -         Difficult      Free samples to early adopter types
                                          Special prices to rental agencies
                                          Use high-service outlets
10. Perceived risk -       High           Document success
                                          Endorsement by credible sources
The Bass Model of Diffusion
             due to
till now
(time t)

                            due to
Forecasting Total Sales

Total Sales = Trial + Repeat Sales

Long Run Market Share %
           = Trial% × Repeat%

             Product Life-Cycle Sales
             for Three Types of
Marketing Through the
 Product Life Cycle
                                       Recording Industry PLC’s
Millions of units sold

                         400                 Albums
                         300                                                             Compact
                         100            Cassettes










                          Source: Figure drawn from Recording Industry Association of America statistics.
Maturity Stage Product Defense

      Market                 Product
    Modification            Modification

Few products follow prescriptive cycle.
The length of each stage varies and decisions of
marketers can change it
Not all products go through each stage – some
go from introduction to decline.
It is not always easy to tell the stage.
Similar to other tools, use PLC to inform decision
making – but don’t rely on it alone.
                       Double Jeopardy
                                                The Dirichlet model
                                                predicts that repeat rate
                          “Niche”               is proportional to
                          brands                market share.
                                                However, in most
Fader, Peter S.,                                markets, small brands
and David C.
Schmittlein (1993),                             have an even lower
“Excessive                                      repeat rate than the
Behavioral Loyalty
for High-Share                                  Dirichlet predicts while
Brands: Deviations           “Change-of-Pace”   big brands do better
from the Dirichlet
Model for Repeat                 brands         than the model.
Journal of Marketing
Research, 30
(November), 478-93.

Don't Be Changing When You
     Should Be Saming
     Food for thought

McDonald’s brand logo is more recognised
       than the Christian cross !
Overview of Branding Decisions
         Figure 11-3, p. 219
            What is Branding?
Brand - image - the impression of a product [service] in the
minds of potential users or consumers.
“Branding refers to establishing such a strong identity for
your product or service that potential users think of you first
when they’re in the market for that particular product or
service” Internet InfoScavenger
“A brand is a combination of name, symbol and design that
clearly identifies one product from another” David Stokes,
             Purpose of Branding
“The purpose of branding is to facilitate the organisation’s task
of getting and maintaining a loyal customer base in a cost-
effective manner to achieve the highest possible return on
investment” De Chernatory and McDonald, quoted in Rowley, J
e-Business principles and practice
“A key objective of branding is to build a relationship with
customers which keeps them loyal to the product” David
Stokes, Marketing
“A good brand image can be one of the greatest assets a
company possesses” Sowter, C Marketing high technology
                   Brand is…
A brand is a name, term,      Branding Policies
design, symbol, or other       • Individual branding
feature that identifies one    • Overall family
seller’s goods or service        branding
as distinct from those of      • Line family branding
other sellers                  • Brand extension

     Types of Brands
      • Manufacturer brands
      • Own label brands
      • Generic brand
 The Brand and the Product Mix
Multi-brands, New Brands, and Co-Brands

• Multi-brand
   • Flanker Brands

• Co-branding (Dual branding)
   •   Ingredient co-branding
   •   Same-company co-branding
   •   Joint venture co-branding
   •   Multi-sponsor co-branding
    Why is branding important?
Branding is the heart
   of marketing

• Aid in promotion
• Simplify handling
• Pull product through channel
• Enhance manufacturer control
• Emphasise quality
• Create a preference
• Reduce price sensitivity
         Interbrand Criteria
Market type (sector)
Stability (longevity)
Protection (legal integrity/ patent etc)
Support (present efforts)
     Brands a New Religion?
Ikea on Sundays instead of Church
‘Belief brands’ eg Calvin Klein, MTV, Nike,
Virgin, Yahoo etc
Harley Davidson riders buried in HD Coffins
        Branding Strategy
• Name (vocalized) or Symbol (unutterable?)

• Legal Protection

Imply Image Differentiated Product
Dangers are generity and infringement.
        Branding Strategy
Strategy Options
• Individual Brands
  • no connections
• Blanket Brands
  • help pull new products through channel
• Separate Family Brands
  • similar manufacturing but not marketing
  • does not tie all products together
        Branding Strategy contd.
• Brand Extension
   • Brand X, new and improved, with additives, new
     package size, new flavor…..

• Multibrand (proliferation)
   • increase shelf space and market share
   • catch brand switchers
   • reach new segments

• Brand Repositioning
   •   move to a better segment
   •   competition increased in current segment
   •   customer preference changed
   •   new segment opened up
     Developing a Brand Name
suggest product benefit or quality
easy to spell, remember, pronounce
no negative connotations
no legal restrictions
cannot be immoral, deceptive, scandalous
Reflect the profile of the organization
Be simple and universally understood and accepted
Work to help build Brand equity
                 Intel Video

Branding Strategy

      Family Branding

Generity Problem

  ……..Does the “Intel Inside” strategy work?
    A Holistic Approach

“Who you are and
 what you stand for.”

      What about Global / e-Branding …
• Companies that brand their products have
various options when they sell their goods in
multiple countries.

• More and more companies see global (or at
least regional) branding as a must.
Domain Names and Branding
Online branding
Global versus local domains
Who is in charge?
Domain name deceptions
        Online Branding
Extend brand from offline to online
Website and email addresses
Domain versus domain name
Short, intuitive, memorable
Domain name registration strategies
Registering Domain Names
Global versus Local
Registry versus Registrar
First come, first served
Rent, not buy
     Who is in Charge?
Internet Corporation for Assigned
Names and Numbers (
Evolution of domain names
Future of domain names
• US or UN?
• Languages and characters?
• More top-level domains (.xxx ?)
    Domain Deceptions
Gripe sites
       Some Brand Elements
Advertising             Answering the Phone
Public Relations        Replying to email
Media Relations         Reception People
Website/Videos          Community Relations and
Booth/Convention        Employee Involvement
Presentations           Business Associations
Promotional Materials   Speeches, etc.
Domain name(s)          Other?
          Questions to answer:
Is being recognized important to you?

Are you cognizant of what Branding really means to you?

Which parts of a Branding effort are more important to you?

Where do you start?

Are you already on your way?
• If so, how much farther do you have to go?
           10 Branding Basics
1.    Is it really a brand?
2.    Does the brand have a future?
3.    Does the brand have the right support?
4.    Is the importance of the brand recognized?
5.    Are you treating the brand-owning company as a brand?
6.    Has the brand gone down or up in value?
7.    And why has the brand gone down or up?
8.    Are marketing and brand management discussed in the
9.    Are you maximizing your budgets effectiveness?
10.   Do you have too many brands?
          Brand Decisions
Consumer experiences create brand bonding;
brand advertising does not.
Marketers should attempt to create or facilitate
awareness, acceptability, preference, and loyalty
among consumers.
Valuable and powerful brands enjoy high levels
of brand loyalty.
         Brand Decisions
Brand equity refers to the positive differential
effect that a brand name has on customers.
• Extra Revenue: IBM can charge more than rivals;
  more successful extensions
• Lower costs: Easier to distribute, no need to
  respond to price cuts
Customer equity:
• Lifetime value of customers depends on brand
  loyalty and brand switching, which are influenced by
  brand equity.
      Some Best Practices
Establish Brand identity standards

Develop a Brand management strategy

Implement a formal process of management

Align Brand strategy with business strategy

Establish a set of Brand policies

Identify Brand promise

Implement measurement of Brand equity

Ensure ability to articulate Brand promise
      Critical success factors.

Strength of identity
Effective use of imagery
Ability to capture Brand slogan
CEO/Executive Director leadership
Distinctive culture
Employee support
Alignment of Brand messages
Enough academic stuff!
  Fred’s Rules for
Successful Branding
1. Be Consistent
2. Be Consistent
3. Be Consistent
4. Etc, etc, etc, ….
  Four Levels of learning
The Unconscious Incompetent
The Conscious Incompetent
The Conscious Competent
The Unconscious Competent
          Packaging and Labeling
Are important because:
1. Self-service—package must advertise and sell the product
2. Consumer affluence—willing to spend more on packaging
3. Image—maintains awareness and preference (franchise-building)
4. Opportunity—better packages benefit customers and producers

        Primary            Packaging
        Package             Aspects

                       Secondary Package
      Packaging and Labeling
• Primary Package
• Secondary Package
• Shipping Package
Factors which have contributed to the growing use of
packaging as a marketing tool
•   Self-Service
•   Consumer affluence
•   Company and brand image
•   Innovation opportunity
Labelling is packaging information used for a variety of
promotional & legal purposes
• Functions
  • Identification
  • Grading
  • Description
Consumerists have lobbied for:
  • Open dating
  • Unit pricing
  • Grade labeling
  • Percentage labeling
  Packaging and Labeling
Developing an effective package:
• Determine the packaging concept
• Determine key package elements
• Testing:
   •   Engineering tests
   •   Visual tests
   •   Dealer tests
   •   Consumer tests

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