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SUBJECT : << PRODUCT & BRAND
MANAGEMENT >>
100 Marks Internal Assessment Total 5 Modules covered in 12 Lectures
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Biotech Sector Outlook Growth in India is primarily export-driven.
Export sales of Indian biopharmaceutical products are currently rising at an annual rate of 47%, domestic sales of Indian biopharmaceutical products have risen only 4–5% per annum
Vaccines are the largest and fastest-growing sector. Indian vaccine sales currently account for about 43% of the country's total biopharmaceutical sales, 16% for diagnostics 13% for therapeutics. Most of the growth in Indian biopharmaceuticals is because of vaccines India is one of the world's leading suppliers of vaccines for measles and other childhood vaccinations. 1
Industry growth is concentrated in a relatively small number of companies. About 30 Indian companies account for the great majority of the country's biopharmaceutical sales.
Indian companies manufacture an increasingly wide range of biopharmaceutical products. These include recombinant insulin, erythropoietin (EPO), G-CSF, recombinant hepatitis-B vaccine,
streptokinase, interferon alpha-2b, rituximab, and an anti-EGFR MAb product. 1,2
Indian biopharmaceutical R&D is increasing rapidly.
Top ranking Bio-Pharma companies in India
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Top 10 Agricultural Biotech Companies
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Pharma Sector Outlook Population is ever increasing
Disposable income increasing
People becoming more aware and concerned for Health & Well Being
Proliferation of Health insurance
NRHM
Rural push by Pharma Companies and Hospitals
Lifestyle & Chronic Diseases on the rise
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Overall Government (DBT) is pushing research and product
development
Bio-Pharma Industry Association also working on regulatory easing
Agriculture has immense scope
Clinical Research & diagnostic sector is also coming-up
Long-term Career prospects are Very Good
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Course & Lecture Outline
The course contents are developed with special emphasis on Pharmaceutical & Biotech Industry
Course & Lecture Outline Module 1: Frame work of Product
Management & Marketing
Organization
Lecture 1:
Introduction to Product Management
Lecture 2: Role and Operation of Product Management in
Marketing
Module 2: Covers Product /Customer/
Competitor and demand Analysis
Lecture 3: Competition, Competitor Analysis
Lecture 4: Category Analysis
Lecture 5: Customer Analysis
Lecture 6: Demand Analysis & Forecasting
Module 3: New Product Planning,
Development & launch
Lecture 7 & 8: New Product Development
○ Process and Role of Product Managers
Module 5: Brand, Branding and Brand
Strategies
Lecture 9 & 10: Brand vs. Product, Brand Elements
Brand Extension/Brand Relationships Spectrum
Brand Identity
Brand Equity
Brand Building Strategies
Lecture 11 & 12 Practice of Preparing new products, Product
launches, Brand Plans, Marketing Plans, Field-force interactions
Summary of the course
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Course Objectives
We focus on the following questions:
What are the characteristics of products? How can a company build and manage its
product mix and product lines? How can a company make better product &
brand decisions? How can packaging and labeling be used
as marketing tools?
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Introduction to Product Management
What is a Product? A product is “anything” that can be “offered” to a
market to satisfy a want or a need or desire of a customer
e.g. Cifran, Core, Dr. Lal Path lab, Sildenafil Citrate, Mobile Phone, Soap, Hotel Room, Airline Service
Introduction to Product Management
Introduction to Product Management
“Anything” that can be “Offered” (whether tangible or intangible) would be called a product, such as;
Physical Goods ○ e.g. Medicine, Cars,
Shampoos Services
○ e.g. Hospital, Diagnostic Lab Financial, , Internet
Experiences ○ e.g.Vergin Atlantic Space
Flight, Spa, Movie TheatreEvents
○ e.g. Iifa, Pravasi Bharatiya Sammelan
Persons ○ e.g. Movie Stars, Political
Leaders, Dhoni Places
○ e.g. Switzerland, Nainital Organizations
○ e.g. Girl Scouts, Political Parties, Fortis
Ideas ○ e.g. Family Planning,
Driving in Single Lanes
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Introduction to Product Management
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Introduction to Product Management
Product LevelsDevelopment of a product in various levels depends on customer value perception and hierarchy of it.
Customer value hierarchy Customers will choose a product based on their
perceived value of it.
Satisfaction is the degree to which the actual use of a product matches the perceived value at the time of the purchase.
A customer is satisfied only if the actual value is the same or exceeds the perceived value
Introduction to Product Management
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Introduction to Product Management
Product Levels Customer value hierarchy Core Benefit
the fundamental need or want that consumers satisfy by consuming the product or service
Basic product a version of the product containing
only those attributes or characteristics absolutely necessary for it to function and cater to core benefit
Introduction to Product Management
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Introduction to Product Management
Product LevelsExpected Product
the set of attributes or characteristics that buyers normally expect and agree to when they purchase a product
Augmented inclusion of additional features, benefits,
attributes or related services that serve to differentiate the product from its competitors
Potential Product all the augmentations and transformations
a product might undergo in the future
Introduction to Product Management
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Product level: Example
Mobile Phone○ Core Benefit
Voice communication while on move or anywhere
○ Basic Product
Hand Held device, able to send & receive voice communication
○ Expected Product
Hand-set with voice & text communication abilities with ringtones, color screen, light weight, long battery life, sufficient memory, Calendar, Camera, FM Radio etc.
○ Augmented Product
Large screen, touch screen, internet, other applications, mobile map, games etc.
○ Potential Product
Hand-set with mind reading capacity, mobile working as Credit card/Debit card/Travel card/Unique identity etc.
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Class work: 30 minutesDefine Product Levels for following products
/services○ Car○ Aatta○ Bank○ Hospital○ Mouth Dissolving Tabs○ Penta vaccine
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Introduction to Product Management
Product Hierarchy Product need—to satisfy a need e.g. feet
protection
Product class—a family of products having similar function e.g. all shoes
Product line—a group of products with closely related functions e.g. sports shoes
Product type —products within a line having similar form e.g. basket-ball shoes
Brand—a name representing a product or line e.g. Nike
Item (Stock Keeping Unit)—a unit item e.g. one pair of Nike basket-ball shoe
Introduction to Product Management
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Product Classification 1. On basis of durability and tangibility
Non-Durable : The products which last only for some-time and have few uses
e.g. Crocin, Antibiotics, soap, salt
Durable: The products which last for a long time, have repeated uses
e.g. Spectrophotometer, clothing, cooking range, Mobile, Washing Machine etc.
Services : Intangibles e.g. Path lab,
Banking brokerage
Introduction to Product Management
Introduction to Product Management
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2. Consumer Goods Convenience Goods
○ Frequently used, purchased with minimum effort – bread, cooking oil, tooth paste
Shopping Goods ○ Purchased less often, comparison on
price, quality, and style – TV, Mobile Phone, Sofa
Specialty Goods ○ Purchased as desired, branded products
anti-aging cream, Pharma Ethical
Unsought Goods ○ Purchased on perceived need, can do
without – food processor, Music System, Car, Personal Jet
Introduction to Product Management
Introduction to Product Management
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FMCG
A sub-category of Consumer Goods Groceries Food Items Home CarePersonal Care/Body CareCloths
Introduction to Product Management
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3. Industrial GoodsCapital Goods Plant Equipment,
Computers Materials and Parts Plastics, Auto Parts
Supplies Paper, Toner InstallationsEquipment
Introduction to Product Management
Introduction to Product Management
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Introduction to Product Management
4. Supplies and business servicesBusiness advisory Services Market Research, Patent
Services e.g. ORG-IMSMaintenance and repair
itemsOperating suppliesMaintenance and repair
servicesInformation Services
Introduction to Product Management
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Product Mix
Product mix has following terminologies:
○ Width - refers to the no. of different product lines the co.
○ Length - refer to the total no. of items the Co. carries within its products lines
○ Depth - depth refer to the no. of versions, offered of each product in the line
○ Consistency - refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way.
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Product Mix
Company may have an assortment of productsThis assortment of products is known as
Product Mix○ E.g.
HUL product Assortment consists of many product Lines
- Food brands- Home care brands- Personal care brands- Water- Nutrition- Health, hygiene & beauty
Introduction to Product Management
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Case Product mix – Sun Pharma
Product Mix (Assortment)
Line 5: Anti-infectives
Line 4: Gastroenterolog
y
Line 3: Optholmology
Line 2: Cardiovasculars
Line 1: CNS drugs
Length1.Anti-Depressent2. Anti-epileptics3. Alzheimer’s4. OCD
Depth1. Amexide2. Citopalm3. Cloferanil4. Fluvoxin
Form, Flavours, packaging
Consistency
Using Same Channel, Dr, Rep
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Product Mix Product-line length
Line Stretching○ Down-market Stretch: Means when the company
launches lower end versions of a product generally to capture mass market. Some of the reasons for down market stretch are as follows; The company may notice strong growth opportunities as mass
retailers attract a growing number of shoppers The company may wish to tie up lower-end competitors who might
otherwise try to move up-market The company may find that the middle market is stagnating or
declining
○ Up-market Stretch: This is a terminology used for launching higher end versions of an existing product/service so as to capture premium segment of market/customer
○ Two-Way Stretch
Introduction to Product Management
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What is Management?
Management is coordination of the resources of the firm to produce goods and services○ It is Marketing department which is responsible for co-
ordination
○ Within the marketing department it is product Manager who is responsible for the product.
Introduction to Product Management
Introduction to Product Management
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Marketing Organization Set-up
Introduction to Product Management
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Marketing Organization Set-up
1. Product-Focused Organization
Head of Co./Div
Head MfgHead FinHead HRHead
Marketing
Marketing Research
Product Management
Product Manager C
Product Manager B
Product Manager A
Support
Introduction to Product Management
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Marketing Organization Set-up
Product Focused OrganizationCharacteristics
○ Classic brand management structure developed by P&G in 1930s
○ Commonly used where different products use the same channels of distribution
○ Product Manager acts as a ‘Mini-CEO’ Product Manager has the ultimate responsibility for the brand
Associate Product Manager develops brand extensions or manages a small brand
Assistant Product Manager is responsible for market and share forecasting, budgeting, coordinating with production, executing promotions, and packaging
Introduction to Product Management
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Advantages of Product focused Marketing organization set-up Center of responsibility is clear
Clear who to turn to for information on the product
Product has an advocate with training, experience, persuasion, and communication skills
Breeding ground for senior executives
Marketing Organization Set-up
Introduction to Product Management
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Marketing Organization Set-up
Disadvantages of Product focused Marketing organization set-up Narrow focus on one product
Induces a centralized structure
Quest for quarterly or short-term sales and market share goals
Several salespeople representing different products calling on the same customer
Inefficient use of marketing funds to build brand name
Introduction to Product Management
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Marketing Organization Set-up
Examples of product focused organizationsElli-LillyP&G HULDaburIntel Maruti-Suzuki Taj HotelsORG-IMS
Introduction to Product Management
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Marketing Organization Set-up
Market Focused OrganizationCharacteristics
○ Marketing authority by market segment
○ Useful when there are significant differences in buyer behavior in the market segments
○ Does not give managers full responsibility for the services or products delivered
Introduction to Product Management
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Marketing Organization Set-up
Market-Focused Organization
Head of Co./Div
Head Mfg Head Fin Head HRHead
Marketing
Market Manager A
Market Manager 2
Market manager 3
Introduction to Product Management
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Marketing Organization Set-up
Advantages of Market Focused Organization set-up Focus on the customer as an asset
Easier to justify product modification or elimination
Useful when bundling different products or when consumer purchases many different products form the same company
Enhances product manager interactions due to specific knowledge in the particular segment
Introduction to Product Management
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Marketing Organization Set-up
Disadvantages of Market Focused Organization set-upPossible conflict with the product management
structure that may lie below
‘ Mini-CEO’ training and experience of traditional product managers may be lost
Most product management skills need to be sustained
Introduction to Product Management
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Marketing Organization Set-up
Examples of Market Focused Organization Cipla (and Majority of Pharma companies)HULInfosys (Vertical focused)Intel Thomas CookHimalaya Ayurvedic
Introduction to Product Management
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Marketing Organization Set-up
Function Focused Marketing Organization Set-upCharacteristics
○ Aligned by marketing functions
○ Product and market-focused organizations have aspect of this structure embedded in their organizations
○ A single manager is not responsible for day-to-day marketing activities of the product
○ Marketing strategies are designed and implemented through coordinated efforts
Introduction to Product Management
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Marketing Organization Set-up
Function-Focused Organization
Head of Co./Div
Head Mfg Head Fin Head HRHead
Marketing
Adv. Mgr Product Marketing
Market Service
Market Research
Sales Promotion
Introduction to Product Management
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Marketing Organization Set-up
Advantages of Function Focused Marketing Organization Set-upAdministratively simple
Useful if company has few products
The structure is logical with normal marketing activities
Functional training is easier to deliver
Managers become functional experts
Introduction to Product Management
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Marketing Organization Set-up
Disadvantages of Function Focused Marketing Organization Set-upProduct responsibility is shared so no one down
the line can be held accountable
Requires substantial time in cross-functional meetings
Training is limited to function
Marketing VP or head needs to do much of the planning
Introduction to Product Management
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Marketing Organization Set-up
Examples of function focused Marketing Organization Intel GoogleIOC (Oil Marketing)More (Mall)Hotel Leela VentureAventisApple
Introduction to Product Management
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Introduction to Product Management
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Role and Operation of Product Management in Marketing
Develop a long-range and competitive strategy for the product
Preparing an annual marketing plan and sales forecast
Working with advertising and merchandising agencies to develop copy, programs and campaigns
Stimulating support of the product among the sales force and distributors
Gathering continuous intelligence on the product’s performance, customer and dealer attitudes, and new problems and opportunities
Initiating product improvements to meet changing market needs
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Role and Operation of Product Management in Marketing
Critical Skills for a Product ManagerObservationAnalytical AbilityNegotiationsTeam-workCommunication
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Role & Operation of Product Management
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Role and Operation of Product Management in Marketing
Marketing PlanningOne of the key responsibility of a Product
manager is to develop Marketing Plan
“Marketing Plan is a written document containing the guidelines for the business centre’s Marketing Programs and allocation over the planning period”
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Marketing Planning
Hierarchy of Planning
Corporate strategic planning
Group/Sector planning
SBU Planning
Annual Marketing Plan
Brand Plan
Role & Operation of Product Management
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Marketing Planning
Objectives of a Marketing Plan To define current situation facing the product
To define problems & opportunies facing the product/Business
To establish Objectives
To define “Strategies & Actions/Programmes” necessary to achieve product objectives
To Estimate & project “Financials of the product”
Role & Operation of Product Management
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Marketing Planning
Marketing Planning “Process & Sequence”Update Historical data
Collect current situation data Analyse data
Develop Objectives, Strategies & ProgrammesDevelop Financial plan (P&L)
Negotiate final Plan Implement & Measure Progress
Audit
Role & Operation of Product Management
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Marketing Planning Marketing plan Contents (Summary)
Executive summary Situation Analysis
○ Category/Competitor definition
○ Category Analysis
○ Company & Competitor Analysis
○ Customer Analysis
○ Planning Assumptions
Objectives (Sales, M.S. Growth, Profitability, volumes, any other)
Product/Brand Strategy Supporting Marketing Programs Financial Documents Monitoring & control Mechanism Contigency Plans
refer to Product Management by
Lehmann, p. 45-48
Role & Operation of Product Management
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Reference Books
Product Management – Lehmann
Strategic Brand Management – David Aaker
Strategic Brand Management – Noel Kapferer
Building Strong Brands – Keller
Marketing Management - Kotler
Course & Lecture Outline
Module 1: Frame work of Product Management & Marketing Organization
Lecture 1:
Introduction to Product Management
Role and Operation of Product Management in Marketing
Module 2: This Modules covers Product Analysis
Lecture 2:
Product Analysis:○ w.r.t. Competition, Competitor Analysis, Category Analysis
Lecture 3:
Product Analysis Contd….
○ Customer/Demand
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Lecture Objectives
Understand how to define competition Determining & selecting competition How to Analyze Category with various
parameters Learn to Assess Market Attractiveness Analyze Competitor(s)
Data Collection/AnalysisWhat and how to analyze
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Defining the Competitive set
Define Competition Set
Bases of Competition○ Customer oriented
Who are theyWhen they useWhy they use (what benefit sought)
○ Marketing OrientedAdvertisement/Promotion/Channel/Media/Price
○ Resource OrientedRaw material, Shelf-Space, employees, Financial
resources
○ Geographic
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aabc
Define Competition Set
Levels of Competition:○ Product form○ Product Category○ Generic ○ Budget
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aabcaabcaabcc
Define Competition Set
Determine Competitors Set1. Managerial Judgement:
- Experience , Internal Sources, Traders, KOLs
2. Customer Based MeasuresBehavioural data
- Primary source – Deptt. Stores, A.C. Nielsen, Scanned data, IMS, C-Marc
- Brand-Switch MatrixCustomer Judgement
- Surveys – Focus Groups, Exploratory
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Using Customer JudgmentsProduct Deletion – in a group that are
substitutes for each other, if one is deleted or not available, which one would the customer select from the choice set or the rest
Substitution in Use – judged similarities in usage context, use and substitutes are indicated for the target product
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Using Customer Judgments (Models)Perceptual Mapping
○ Judged Overall Similarity – for a pair of products
○ Similarity within Consideration Set –
large set of products divided into groups in which each is a substitute for another
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Perceptual Map
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Marketing Planning Marketing plan Contents (Summary)
Executive summary
Situation Analysis○ Competitor definition○ Category Analysis○ Competitor Analysis○ Customer Analysis○ Planning Assumptions
Objectives (Sales, M.S. Growth, Profitability, volumes, any other)
Product/Brand Strategy Supporting Marketing Programs Financial Documents Monitoring & control Mechanism Contnigency Plans
REPEAT
Role & Operation of Product Management
Course & Lecture Outline
Module 1: Frame work of Product Management & Marketing Organization
Lecture 1:
Introduction to Product Management
Role and Operation of Product Management in Marketing
Module 2: This Modules covers Product Analysis
Lecture 2:
Product Analysis:○ w.r.t. Competition,, Category Analysis, Competitor Analysis
Lecture 3:
Product Analysis Contd….
○ Customer/Demand
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Category Attractiveness Analysis
Aggregate Category Factors Category Factors Environmental Factors
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Category Attractiveness Analysis
1. Aggregate Category Factors
Remarks Mkt. Attractiveness
Category Size
Category Growth
Stage in PLC
Sales Cyclicity
Sales Seasonality
Profits
2. Category Factors
Threat of new entrants
Bargaining Powers of Suppliers
Bargaining powers of Buyers
Existing Category Rivalry
Pressure from Substitutes
Category Capacity
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Category Attractiveness Analysis
Environmental Factors Remarks AttractivenessTechnological
Political
Economic
Regulatory
Social
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Category Attractiveness Analysis
Aggregate Category Factors 1. Category Size
2. Category Growth
3. Stage in the PLC
4. Sales Cyclicity
5. Seasonality
6. Profits
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Category Attractiveness Analysis
Aggregate Category Factors
1. Category Size For Category Attractiveness Analysis, size is an
important parameter to assess
- Measured in units and monetary value
- Will revenues support investment?
- Large markets are better
- Large categories offer more opportunities for segmentation
- Large size tends to draw competitors
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Category Attractiveness Analysis
Aggregate Category Factors2. Category Growth
Current growth are important Growth projections are crucial Fast-growing support high margins and
sustain future profits Attract competitors Cause dramatic shift in market share survivability of product
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Category Attractiveness over the PLC
3. Stage in the PLC
Stage of PLC Intro Growth Maturity D’line
Category Size Small Medium Large Medium
Category Growth Low High Low -Ve
Category Attractiveness
Low High Medium/High
Low
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Category Attractiveness Vs PLC
3. Stage in the PLC ○ The introduction stage is unattractive for new
entrants
○ The growth stage is attractive
○ The maturity stage may be attractive for some categories
○ The decline is unattractive to new entrants and low market share holders may exit
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Aggregate Category Factors
4. Sales Cyclicity ○ Due to inter-year variation in demand
○ General Economic conditions introduce peaks and valleys in sales as GDP varies
○ Swing in sales, profits, employment, cash available for new product development
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Aggregate Category Factors
5. Seasonality ○ Intra-year cycles in sales
○ Clothes, sweets, fire-crackers, and toy sales during festivals
○ Generates price wars
○ Many products are seasonal like cold remedies, skin creams, ice cream
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Aggregate Category Factors
6. Profits ○ Vary across products or brands in a
category, and over time
○ Inter-industry differences also exist
○ Average profit margins for footwear is about 6%, personal care 20%, and biotechnology 50%
○ Chronic low profitability is less attractive
○ Variation used as industry risk
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Category Attractiveness Analysis
1. Aggregate Category Factors
Remarks Attractiveness
Category Size
Category Growth
Stage in PLC
Sales Cyclicity
Sales Seasonality
Profits
2. Category FactorsThreat of new entrates
Bargaining Powers of Suppliers
Bargaining powers of Buyers
Existing Category Rivalry
Pressure from Substitutes
Category Capacity
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Category Factors
1. Threat of New Entrants
2. Bargaining Power of Buyers
3. Bargaining Power of Suppliers
4. Amount of Intra-category Rivalry
5. Threat of Substitute Products or Services ○ Category Capacity
Five Forces Determining Segment Structural Attractiveness
- M. Porter1. Threat of New Entrants 2. Bargaining Power of Buyers 3. Bargaining Power of
Suppliers 4. Amount of Intra-category
Rivalry 5. Threat of Substitute
Products or Services ○ Category Capacity
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Category Factors
1. Threat of New Entrants ○ If high, attractiveness diminishes ○ In early stages of market development it can
help a market to expand ○ Usually it heightens competitiveness and
reduces profit margins ○ Offset by setting up barriers to entry
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Category Factors Potential Barriers to Entry
○ Economies of Scale ○ Product Differentiation ○ Capital Requirements ○ Switching Costs ○ Distribution
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Category Factors 2. Bargaining Power of Buyers
○ Distributors, original equipment manufacturers (OEMs) or end users
○ High if – product bought is a large % of buyer’s cost, product is undifferentiated, buyers earn low profits, buyer can backward integrate, buyer has full information, when substitutes exist
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Category Factors 3. Bargaining Power of Suppliers
○ Is a mirror image of buyer power
○ High if – suppliers are concentrated, no substitutes, differentiated product, built in switching costs, supply is limited
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Category Factors 4. Threat of Substitute Products or
Services
○ Large number is less attractive ○ Threat from generics ○ Threat generally in all categories ○ High rates of returns when few
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Category Factors 5. Amount of Intra-category Rivalry
○ Intense category competition is not attractive ○ Escalates marketing expenditures, price, ○ employee switch ○ High if – many or balanced competitors, slow
growth, high fixed costs, lack of differentiation, personal rivalry
○ Difficult for a product manager to have an impact on category rivalry
85
Category Factors Category Capacity
○ Chronic overcapacity is not a positive sign for long-term profitability
○ Operating at capacity – costs stay low, supplier bargaining power high
○ Indicates health of category ○ Recession may lead to overcapacity
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Category Attractiveness Analysis
Environmental Factors Remarks Attractiveness
Technological
Political
Economic
Regulatory
Social
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Environmental Factors Technological Political Economic Regulatory Social
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Environmental Factors Technology
○ If weak – vulnerable to new product and global competition
○ If well positioned – firm can take advantage of change
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Environmental Factors Political
○ Affects products with global sales ○ Product manager must assess political risk ○ Free market – affected by political party in
power
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Environmental Factors Economic
○ Interest rate fluctuations – short-term financing
○ Currency exchange rates – global markets ○ Employment conditions – availability of
skilled labor ○ Recession – sales, GDP growth declines ○ Inflation rates – consumer buying power
diminishes
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Environmental Factors Regulatory
○ Restrict industry from specific media use ○ Stringent testing requirements ○ Air, water, soil pollution ○ Intervene in global competition - dumping
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Environmental Factors Social
○ Trends in demographics, lifestyles, attitudes, and personal values
○ Trends affect B2B due to derived demand ○ Young adults ○ Mature consumers ○ Children as consumers ○ Shift of power from seller to consumer
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Course & Lecture Outline
Module 1: Frame work of Product Management & Marketing Organization
Lecture 1:
Introduction to Product Management
Role and Operation of Product Management in Marketing
Module 2: This Modules covers Product Analysis
Lecture 2:
Product Analysis:○ w.r.t. Competition,, Category Analysis, Competitor Analysis
Lecture 3:
Product Analysis Contd….
○ Customer/Demand
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Competitor Analysis Steps Data Collection Data Analysis
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Data Collection
Primary Sources of Information Primary Data
○ Investment Bankers ○ Sales Force ○ Suppliers○ Customers ○ Employees ○ Consultants
Data Collection
Secondary Sources of Information Secondary Data
○ Internal Sources ○ Newspapers ○ Annual Reports ○ Patent Filings ○ Financial Audit Filings ○ Business Press ○ Government Computer
Databases
○ Internet ○ News Releases ○ Trade Associations ○ Promotional Literature ○ Trade ○ Press ○ Consultants○ Customer
Communications
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Data Collection
Other Sources of Information Classified Ads Trade Shows Plant Tours Reverse Engineering Monitoring test Markets Hiring Senior Employees
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Competitor Analysis Model
Primary Data/ Secondary Data
Key Questions
Who are they?
What are the competing product features?
What do they want?
What is their current strategy?
Differential Competitor Advantage
Analysis Who has the competitive product advantage?
Competitor Marketing Plan
What are they going to do?
100
Data Analysis Questions Who are the major competitors?
How do the competing products or services stack up against each other?
What are the objectives of the major competitor products?
What is the current strategy being employed to achieve the objectives?
Who has the competitive edge?
What are they likely to do in the future?
101
Assessing Competitors’ Current Objectives
Is a critical first step in a competitor analysis for major competitor products
Gives valuable information on intended aggressiveness of the competitors in the future
Helps to assess the capabilities of the competitors
102
Determine the Objectives Growth Objective – increase unit sales
or market share
Hold Objective – brand losing market share, stop the slide
Harvest Objective – profit is paramount relative to market share
103
Determining the Objectives Growth Objective
○ Improve market share at the expense of short-term profits The following will occur:
- A cut in price - Increase in advertising expenditures - Increase in promotions to consumers and
distributors - Increase in distribution expenses
104
Harvest Objective ○ Focus on profitability – brand marketed
in the opposite way The following will occur:
- Increase in price - Decrease in marketing budgets
105
Assessing the Competitors’ Current Strategies The important second step in competitor
analysis is to determine how competitors are attempting to achieve their objectives
○ Marketing Strategy ○ Differential Advantage Analysis ○ Competitor’s Will
106
Marketing Strategy Three Major Components:
1. Target Market Selection
2. Core Strategy - Positioning, Differentiating
3. Implementation - Supporting Marketing Mix
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3. Implementation (Supporting Marketing Mix )
○ Marketing Mix (The mix provides insight into the basic strategy of the competitor and special tactical decisions)
4P’s - Product (Physical product or service and how it is
sold)
- Price - Promotion (Which type and how often)
- Place (Which channels are being emphasized?)
108
Tracking Competitors’ Strategies Industrial Products
○ Product sales literature ○ The company’s own sales force ○ Trade advertising
Consumer Products ○ Tracking Ads
109
Comparing Value Chains
110
Technology Strategy Framework of Six Criteria
○ Technology Specialization ○ Level of Competence ○ Sources of Capability – Internal/External ○ R&D Investment Level ○ Competitive Timing – Initiate/Respond ○ R&D Organization and Policies
111
Competitive Product Analysis Matrix Handout Grid 2
Differential Advantage Analysis – Capabilities Matrix Hand out Grid 3
Differential Advantage Analysis – Success Matrix Handout Grid 3A
112
Assessing A Competitor’s Will A strong competitor can be overcome A weak competitor can cause damage Assess:
○ How crucial is this product to the firm? ○ How visible is the commitment to the
market? ○ How aggressive are the managers?
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Predicting Future Strategies Competitor signals with an
announcement Use historical information to forecast:
○ Competitor’s Strategy – dependent variable ○ Capabilities and Resource – independent
variable ○ Extrapolate that the trend may continue ○ Link Capabilities/Resources with Strategy ○ Simulate by Role-Play
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