Products and Branding
Document Sample
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
Levels
Product Mix
Width - number of
different product
lines
Length - total Product Mix -
number of items all the product
within the lines lines offered
Depth - number of
versions of each
product
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
(Physical)
Documents & spreadsheets
(Logical) Physical
Satisfaction of completion Logical
(Emotional) Emotional
Positioning Exercise - Cars
Positioning and Differentiation
Performance Conformance
Features Product Design
Differentiation
Form Tools Style
Reliability Durability
Repairability
Positioning and Differentiation
Services Differentiation Tools
Ordering Customer
ease consulting
Maintenance Customer
and repair training
Installation Delivery
Miscellaneous
Positioning and Differentiation
Personnel Differentiation Tools
Competence Responsiveness
Credibility Communication
Courtesy Reliability
Positioning and Differentiation
Channel Differentiation Tools
Coverage Performance
Expertise
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-to-the-World
New Product Lines
Moderate/High
Technology
Product Additions
All Industry
Improvements
Cost Reductions
Repositionings
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
system
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 MARKETING
Standard
Controlled
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
Simulated
Test Market
Test in a simulated
shopping environment
to a sample of
consumers
Introductory Marketing Strategies
Promotion
High Low
High Rapid- Slow-
skimming Skimming
Price
Rapid- Slow-
Low penetration penetration
New Product Launch
Decisions
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
100%
90%
80%
Market Penetration
70%
Hybrid corn
60% Oxygen steel furnace
VCR
50% CD player
Telephone answering device
40%
Calculators
30%
20%
10%
0%
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
Demonstrability)
The Relative Importance of Different Types of
Information Sources in the Adoption Process
High
Personal and
interpersonal
sources
Importance
Impersonal
mass-media
sources
Low Evaluation
Interest
Awareness
Adoption
Trial
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
Guarantees
The Bass Model of Diffusion
Sales
due to
advertising
Sales
till now
(time t)
Sales
due to
word-of-mouth
Forecasting Total Sales
Total Sales = Trial + Repeat Sales
Long Run Market Share %
= Trial% × Repeat%
Product Life-Cycle Sales
for Three Types of
Products
Marketing Through the
Product Life Cycle
Recording Industry PLC’s
650
600
550
500
Millions of units sold
450
400 Albums
350
300 Compact
disks
250
200
150
100 Cassettes
50
0
1993
1973
1975
1977
1979
1981
1987
1983
1985
1989
1991
1995
Source: Figure drawn from Recording Industry Association of America statistics.
Maturity Stage Product Defense
Strategies
Market Product
Modification Modification
Marketing
Mix
Modification
PROBLEMS WITH PLC
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.
Purchasing,”
Journal of Marketing
Research, 30
(November), 478-93.
Branding
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,
Marketing
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
services
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
branding
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
www.interbrand.com
Market type (sector)
Stability (longevity)
Leadership
Trend
Internationality
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
Brand
• Name (vocalized) or Symbol (unutterable?)
Trademark
• 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
distinctive
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
• www.yourbrand.com
• info@yourbrand.com
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
Costs?
Who is in Charge?
Internet Corporation for Assigned
Names and Numbers (www.icann.org)
Evolution of domain names
Future of domain names
• US or UN?
• Languages and characters?
• More top-level domains (.xxx ?)
Domain Deceptions
Typo-squatters
Para-sites
Gripe sites
Hijacking
eBranding
eXercise
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
boardroom?
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
Shipping
Package
Primary Packaging
Package Aspects
Secondary Package
Packaging and Labeling
Packaging
Package
• 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
Labeling
• 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
