Product Management 5 by fjwuxn

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									Product Management 5
Brand Business

   Business Strategy
   New Product Development Process
   Growth Strategies
   Competitive Strategies
   Marketing Strategies in different situations
For New Product Development


                      BUSINESS STRATEGY




                    MARKETING STRATEGY



                      MARKETING PLAN
For Existing Product/ Brand

                    BUSINESS STRATEGY




                  BRAND STRATEGY/
                  BRAND PLAN

                    MARKETING PLAN
Business Strategy Document

New Product Proposal: Existing Brand/ New
 Brand
   Business Analysis
    –   Consumer NEED Analysis:Trends & Practices,
        Habits & Attitudes, Need gap assessment
    –   Competitive Analysis: Positions, Strategies….
        SWOT
    –   Corporate Analysis: Mission, Policy, …Portfolio
        Analysis…SWOT
Business Strategy Document

   Business Objective:
     –   Competition Focus- Reactive- Market Threat
     –   Self Driven- Proactive- Market Growth/ Leadership
   Business Strategy:
     –   Market Penetration,
     –   Market Development,
     –   Product Development
     –   Diversification
   Business Potential: Volume Projection, Demand
    Estimation… User-Usage-Frequency
   Business Plan: 3 year financial projection ( Turnover,
    Investment details, Profits)
NPD: Process

   Stage 1: Formulation of Business Strategy
   Stage 2: Product Development Stage
   Stage 3: Testing & Developing the
             Marketing Strategy
   Stage 4: Commercialization
   Stage 5: Market Rollout
Stage 1: Ideation to Business
           Strategy
Idea Generation Process

   Objective: To identify categories of interest
    for the next 3 years
    Internal ( multifunctional) Brainstorming
    session from time to time
   Various techniques used to Capture the Needs
    / Voice of the Consumers
   Rule: Quantity over Quality… To generate
    multiple ideas without applying “judgment”
Idea Generation Triggers : Case
Illustration
   Brand : Parachute, Product : Coconut Hair Oil
   Triggers : (mental map)
    –   Hair Needs: Wash to dry-clean, Natural style to
        Colouring, Split ends to Dandruff.
    –   Oil Needs: Non oily oil, Non Smelly oil… single use
        oil, Ayurvedic oil, massage oil
    –   Coconut needs: Haircare to skincare…..soaps to
        shampoos
    Idea Screening Process:
    Innovation Funnel
   Assessment of Ideas generated so as to PRIORITIZE
    the same
   Application of “ Judgment”: rationalization,
    quantification techniques,feasibility studies
    Key Inputs :
    –   Business Direction of the Organization
    –   Consumer Trends: Usage & Attitude Studies
    –   Environment / Market Scan: segment size & growth
    –   Competitive Analysis
Screening : Case Illustration

   Process of Rationalization:
    –   Skincare , Hair Colourants: Low priority
    –   Split ends & Dry Clean: Niche Markets
    –   Shampoos : Extremely Competitive
   Process of Prioritization:
    –   Hair Problems that can be addressed by a hair oil (
        dandruff , hair growth etc)
    –   Modern forms of Hair oils ( light , perfumed etc)
Concept Development & Testing

   Conversion of Ideation to Product Ideas
   Formulation of Product Concepts from Product ideas
   Product Concept captures the product benefit,
    product usage details….image details
   Concept Testing : Projective techniques amongst
    target consumer segments or end user segments
     Product Idea To Product
     Concept : Case Illustration

   Product Idea: Hair oil to fight hair problems…dandruff,
    greying, hairfall etc
   Product Concept 1: Herbal hair oil for strong hair
   Product Concept 2: Hair oil + Anti dandruff agents for
    Dandruff
   Product Concept 3:Hair oil + sunscreens for greying
   Product Concept Test : amongst hair oil users
    Product Concept vs Positioning
    Concept
   Product positioning Idea: A specialized hair oil to
    fight dandruff
   Pdt Positioning Concept 1 : A herbal hair oil
    containing ingredients which also fight dandruff
   Pdt Positioning 2 : An effective dandruff treatment
    oil, which is better than other dandruff treatment
    products
   TARGET SEGMENT
   Concept Test 1 : Hair oil users having dandruff
   Concept Test 2: Anti Dandruff Product users also
    using hair oil
Product Approval Process: GATE
BUSINESS STRATEGY PRESENTATION
 Presentation of the Product Concept to the Top
  Management Team for Approval
 Presentation to include the Marketing Strategy :
    –   Market size, structure.Consumer analysis (why?)
    –   Product Opportunity…volumes, profitability, resources,time
        frames (what?)
    –   Long term strategy,projected financials ( how?)
   Business analysis:Estimating Sales, Costs & profits,
    financial paybacks
                 GO or NO GO
Stage 2 : Product Development
Technology Brief

   Project handover to the Research & Development
    Team to develop a “Technical solution” to the Product
    Need..within specified time frame & cost
    considerations
   The Technical Task : Example:
    –   “Effective Dandruff Hair oil”: A coconut hair oil which reduces
        the dandruff flakes, & does not freeze during the winter months
    –   “Fairness Soap” : A wash off product ( soap) which provides
        UV protection for a minimum of 5 hours post bath
Product Development

   Product Brief:For the completion of the actual
    product & packaging development
   Quality Function Deployment ( QFD): a
    technique to translate consumer needs &
    wants into a technical concept or design
    –   Marketing & R&D work towards a joint solution
    –   Translation of marketing inputs ( consumer needs,
        wants & perceptions) & R&D factors ( design
        attributes & specs) via a relationship matrix
    Product Tests & Concept Tests
    ( Concept Use Test)

   To finetune the product attributes according to
    consumer needs
   Product form tests: product attributes, delivery
    system, colour, shape, perfume etc
    –   Example: “playtime” & absorbency of a lotion and foam & after
        wash perfume of a detergent : important parameters of Quality
   Packaging options: size , colour, design , finish etc
    –   Example: Shampoos in sachets and Lip Balms in tubes :
        deliver Convenience
Clinical Tests

   To quantify the product performance
   Product usage amongst the target consumer
   Technical calibration of before & after use
   Often used in communications as “ Product Claims”
   Example: Fair skin over 6 weeks or Twice as effective
    as other washing powders
   Expensive & time consuming
   Competitive attack : High Legal sensitivity
Completion of a Benched Product

   Preparation of a product & packaging
    prototype
   Quality checks to test stability & other
    parameters
   Issue product Raw Material & Packaging
    Material specifications to the Manufacturing
    Department for the Commercialization stage.
Stage 3: Market Testing of
     Brand Strategy
Brand Strategy

   Brand Positioning : Benefits, competitive
    advantage
   Target Segment Definition
   Marketing mix elements ( product , branding,
    packaging,price, promotion, distribution)
   Communication development
   Marketing Plan
   Brand financials
Market Testing Methods

   Test Market launch:
    –   Select markets ( Strong & weak)
    –   Launch prototype product with complete support
    –   Expensive, time consuming but reliable
    –   Issues on Confidentiality
   Simulated Test Market
    –   Simulate a test market situation
    –   Sample consumers exposed to advertising
    –   Map responses before & after product placement
Testing Parameters

   Volume Validation
   Key measures: awareness,trial, repeat,
    adoption, purchase frequency
   Communication Effectiveness
   Pricing Test
   Priority Markets
   Finetune product / packaging
   Image Indicators
Stage 4 : Commercialization
Project Management :
Manufacturing Interface

      Plan project Schedules
      Allocate responsibilities
      Control Brand Decisions
      Co ordinate inter functional activities
      Manage changes
Sales Target Setting : Sales
Interface

   Market Prioritization
   Seasonal Skews
   Distribution Plan
   Selling Strategy
Stage 5 : Market Rollout
Product Launch : Front Stage

   Sales Launch Conference: Product
    background ,market analysis,product support,
    selling tools
   Product placement: Retail briefing, displays,
    incentives…below the line activities
   Media Break
Important Tracks : Back Stage

   Monitor stock distribution, movement, inventory control
   Monitor sales- areawise, outletwise, SKU wise
   Monitor effectiveness of inputs – displays, promotions
   Monitor advertising effectiveness
   Monitor media effectiveness
   Take corrective action : where ever & when ever
    required
           BRAND-WAGON


                                         Marketing Mix:
Analysis




           Business    Brand    Segment Product/Pkg     Mktg     Sales Plan
           Potential   Values   Target Price            Plan
                                Position Place
                                         Promo

               Busi. Obj.        Mktg Obj       Mktg Obj         Sales Obj

BUSINESS STRATEGY               MARKETING STRATEGY             SALES STRATEG
Business Strategy
Powering the Engine
   Business/ Growth Potential: Analyse Company-
    Competition- Consumer Growth Chart
                New Users          Increase Usage Quantity   Increase Usage Frequency


                 Non- Users

                Existing Users


                    Other Brands
                      SWITCH

                    Own Brand
                 CANNIBALIZATION


   Brand Fit: Image- Identity- Proposition-Position
    Growth Strategies

    Intensive Growth Opportunities
    1.   Market Penetration Strategy
    2.   Market Development Strategy
    3.   Product Development Strategy
Current Mkt            1               3

New Market           2      Diversify
                Current Pdt New Pdt
    Integrative Growth Opportunities
         Backward( Supplier),     Forward( Distribution),
         Horizontal( Competition)
    Diversification Growth Opportunities
Market Penetration Strategy: Increase
Mkt Share
                        Growth Chart


New Users          Increase Usage Quantity   Increase Usage Frequency


 Non- Users

Existing Users


    Other Brands
      SWITCH

    Own Brand
 CANNIBALIZATION
Market Development Strategy:
Increase Availability

   New User Groups / Consumer Markets
   New Distribution Channel
   New Location/ Region
Product Development Strategy

   Additional/ New Features
   Improved Quality
    Growth Strategies
                                          Growth Chart


Attract New Users to the Brand                                      More Usage


     Convert Non- Users of the Pdt Category                        Increasing the occasions for use
         Market Penetration Startegy                                 Usage Frequency or Rate
  Eg: Upgrade Toothpowder users to toothpaste                      Eg: Brushing Teeth Twice a Day

         Enter New Market Segments                                   More Usage per Occasion
        Market Development Strategy                                 Usage Amount or Quantity
    Eg: Computers from Office to Home Use                Eg:Apply shampoo twice & rinse off for better cleaning

   Switch Competitor's Users to your Brand                     New / Different Uses for the same Product
               Brand Switching                                                 New Uses
  Eg: Fair & Lovely users switching to Fairever                   Eg: Milk maid for Dessert Recipes
    Growth Path

   Britannia Cheese: Major player in Niche market
   Cadbury’s Dairy milk: Leading the Chocolates
    market.
   Nestle Frugurt: First Mover of the Flavoured yoghurt
    market.
   Pepsi Cola: Less than 30 % share in a Competitive
    market, dominated by Thums Up & Coke
   Bisleri : First mover of the Mineral water market.
    Lost its position to Kinley.
   Onida TV: Erstwhile Market Leader in a competitive
    Market.
Competitive Analysis- Porter’s Model

  Five Competitive Forces determine Industry Profitability
  – Threat of New Entrants/ Entry of New Competitors
          Entry Barriers: Market Leadership, Brand identity,Distribution,
           Capital Reqt, Technology, Govt. Policy, Switching Cost
  –   Threat of Substitutes….Mobiles to Telephones, Shampoos
      to hairoils
         Price- Value equation, Switching cost

  –   Bargaining Power of Buyers….Instore Labels
          Buyer concentration/ information/ volumes/ switching costs,
           Ability to backward integrate, substitute products, relative
           switching costs, price sensitivity
Porter’s Model

  –   Bargaining Power of Suppliers…Godrej Real Good
      Chicken, Diamonds
        Differentiation of inputs, Importance of volume, Forward
         Integration ability, Relative switching Costs
  –   Rivalry amongst existing competitors
          Product Differentiation, Brand identity, Industry growth,
           Market penetration, Operating Costs, Exit Barriers
    Competitive Strategies
    Based on Level/ Nature of Competition


   Cost Leadership Strategy
    –   Lower Cost of Production than its Competitors
    –   May or May NOT be at the Lowest price
    –   Ensures Higher returns which it can use advantageously against the
        Competitor
   Differentiation Strategy …. Competitive Advantage
    –   Differentiating the Product/ the Offering in the minds of the Consumer
    –   From Product Innovation to Brand Building , all aim to create a
        sustainable competitive advantage
   Focus Strategy
    –   Selecting only a certain segment/ group in the entire market… & then
        ensure a cost advantage over the competitors or a point of
        differentiation to attract the consumers.
 Understanding Business Strategies

Underlying Factors of a Business Strategy
Market Attractiveness:
 Market Potential of the Category…. Market Size & Market
  Growth
Competitive Position:
 Level of Competition in the Category …Market Share &
  Relative Market share of the players i.e. Market Share
  Relative to the largest competitor.
Where the “Market” or the Potential User Segment ( those
  who will use the pdt) is first defined by the Marketer, & then
  quantified.
While the competition is accordingly determined.
The Strategy Matrix

     Market Competitiveness

                              Hi


                                   Innovation Differentiation


                                   Focus        Expansion
                              Lo




                              Lo                            Hi
                                   Market Attractiveness
       Business Strategies of Brands


   Growth / Market Expansion….Market Leader Strategies
     – When the Market Potential is high, & the level of competition is minimal
     – Objective to build a User base.
     – High Investment Required over a period of time
     Eg : Creation of the Deodorants category in India by Rexona.
   Differentiation/ Competitive Advantage…Market Challenger Strategies
     – When the Market Size is high, but there are strong existing competitors
        one has to deal with.
     – Objective to gain market share through Brand switches.
     – Medium- High Investments
     Eg: Introduction of Britannia Milkman, in the dairy pdts mkt dominated by
        Amul & Nestle.
    Business Strategies of Brands


    Focus/ Specialization….Market Nicher stategies
      – When Market Size is limited, no major competitors
      – Objective to focus on & gain ownership of a particular target
        segment
      Eg: Launch of Loreal Hair Colour in India…focused on Beauty
        Parlour distribution
    Innovation+ Significant Cost advantage…Frontal/
     Encirclement Attack strategy
      – Need a lot of consideration before entering such a market
      – Objective to displace competition
      Eg: Launch of Pond’s Body Lotion at a Low Price Point in the
        Skincare Market..threatening the leadership of Lakme
        Maximum Moisturiser.
Marketing Strategies
Based on Market Position



   Market Leader:
    –   Market Expansion Strategy…Market Growth strategies
          Developing New Users- convert non-users to users of the
            Product Category
         Eg: Airlines flexible fares to attract Rail Passengers.
          Developing New Uses for the Product …New applications, new
            markets.
         Eg: Maggi noodles … from choice cuisine to commonplace easy
            to make snack food/ tiffin.
          More Usage – Increase amount used or frequency of use of the
            Product
         Eg: Toothpastes promoting twice a day brushing
    –   Defense Strategy…Through continuous innovation
         ( Brand Revitalization Strategy)
Marketing Strategies
Based on Market Position



   Market Challenger:
    –   Attack Strategy- Competitive
            Frontal attack- Pitched against Competitor’s Strength
               –   Eg: Pepsodent- Fights germs Better than Colgate
            Flank attack- Bring to light Competitor’s Weakness
               –   Eg Anchor Toothpaste as 100% Vegetarian, unlike others
            Encirclement Attack- Close in on Competitor with Multiple
             Attacks on all fronts
               –   Eg: Airtel
            Bypass Attack – Deviate to unrelated products/areas
               –   Eg: Reliance Mobiles with Technology, Nirma with Price
            Guerilla attack- Harass Competitor with small frequent attacks
               –   Eg: Nihar Coconut Hair Oil
Marketing Strategies
Based on Market Position


   Market Follower: Me- Too Strategy- Following or
    copying the moves of the Key Competitor
    –   Eg: Detergents…Ghari, Coconut Hair oil…Cococare, CocoRaj
   Market Nichers:
    –   Specialist/ Focus Strategy- Building Customer goodwill where
        competition is weak or not present or not interested.
    –   Eg: Gillete in men’s pdts
    –   Low volumes, but high growth & high margins.
    –   Eg: Loreal Hair Colour
Legal Aspects of Brand
Management
   New Product Development: Product classification/
    Excise classification, Trademark registration, copyright,
    patent, FDA regulations on Brand name, formulation &
    packaging
   Advertising & promotions: Claim substantiation,
    ASCI rulings, MRTP regulations
   Sales & Distribution: Distributor relationship, region
    specific issues
   Manufacturing:Manufacturer relationship, product
    specific issues

								
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