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
   Business Analysis
    –   Consumer NEED Analysis:Trends & Practices,
        Habits & Attitudes, Need gap assessment
    –   Competitive Analysis: Positions, Strategies….
    –   Corporate Analysis: Mission, Policy, …Portfolio
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
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
   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
    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
   Product Concept 3:Hair oil + sunscreens for greying
   Product Concept Test : amongst hair oil users
    Product Concept vs Positioning
   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
   Concept Test 1 : Hair oil users having dandruff
   Concept Test 2: Anti Dandruff Product users also
    using hair oil
Product Approval Process: GATE
 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
   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
   Quality checks to test stability & other
   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
   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

   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

                                         Marketing Mix:

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

               Busi. Obj.        Mktg Obj       Mktg Obj         Sales Obj

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

                    Own Brand

   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

    Own Brand
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
   Nestle Frugurt: First Mover of the Flavoured yoghurt
   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
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
   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
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
While the competition is accordingly determined.
The Strategy Matrix

     Market Competitiveness


                                   Innovation Differentiation

                                   Focus        Expansion

                              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
      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
         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
         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
   New Product Development: Product classification/
    Excise classification, Trademark registration, copyright,
    patent, FDA regulations on Brand name, formulation &
   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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