mk tg 2007 class products
TRANSCRIPT
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Products, New Product
Development Process, Branding
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a. Corporate product portfolio including mergers and acquisition decisions and
changing portfolio
b. SBU product portfolio including design of new product development process and
product deletion decision
c. Product line positioning, width and depth of product line, product modification
d. Brand positioning
Factors affecting product decisions
- the consumer
- the competitors
- the environmental factors
- firms own objectives and resources
Illustrative Product decisions
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Understanding Products
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Product
A product is anything (bundle of benefits) that can be offered to a market
to satisfy a want or need. An offering consists of the product features /
Quality, service mix/quality, value based price. Products include - physicalgoods (automobiles), services (musical concert), persons (electoral candidate),
Experiences (air journey), events (cricket match), tourist places (Kashmir),
Properties (Leela Penta Hotel), organizations(hospitals), information(trade
Shows) and ideas(family planning)
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Core benefit - Transport
Analysing the Five Product Levels Indica Automobile
Basic Product - 4 wheel closed car
Expected product - good performance - all specs
in the ad in small lettersAugmented product - wants beyondexpectations - best after sales service eventhough not required
Potential product - possible evolutiofor the car of tomorrow
CUSTOMER VALUE HIERARCHY
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Classification of productsdurability, tangibility basis
durables, nondurables/consumables, services
use basis
consumer, industrial, military, government
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Industrial goods
raw materials and parts
natural and manufactured raw material, components,
subassemblies/modules, semi-knocked down kits
capital items
Installations - buildings and plant Equipment - portable factory equipment and office equipment
turnkey projects
supplies / consumables and business services
operating supplies (paper, lubricants); maintenance/repair items
(paint) and maintenance / repair service(Copier repair), business
advisory services (legal, management
consulting, advertising)
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Consumer Goods Classification
Convenience goods - staples (soaps), impulse (gum)emergency (umbrellas)
Shopping goods - homogenous (fans, food mixers -price significant), heterogenous (textiles, furniture- non price issues also signficant)
Specialty goods - goods with unique characteristics or
brand identification - cars, camerasUnsought goods - Special selling effort reqd- encyclopedias, life insurance .
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Product Hierarchy
Need Family: Personal Transport
Product Family: Automobiles
Product Class: 4 wheelers
Product Line: Passenger cars
Product Type: Mid size car
Brand: Maruti
Item: Esteem AX
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Product mixwidth - partial
Deodorants
BarSoap
Coffee
Detergents
Toothpaste
IvoryCamayLavaKirks
ZestSafeguardCoastOil of Olay
Product Linelength for Bar soaps
GleemCrest
Product Linelength for Toothpaste
P&G Product-Mix vs Product lineCrest comes in twoformulations andthree sizes andso has a depth of six
P& Gs product lines are consistent(closely relatedto each other) in distribution
PRODUCT SYSTEMPC +PRINTER+ OPERATING SYSTEM + APPLICATION S/W + MOUSE
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Major elements of managing products
Product Life Cycle
Product Portfolio Analysis
Objectives of Product Portfolio Analysis
Product Line Management
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Product Life Cycle
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Making the PLC Operational / Issues to Look at PLC
1. Unit of AnalysisProduct Class, Product Form, Product Line..
2. What is the relevant market to which the PLC applies
Relevant Product Market + Relevant Geographic Market
3. What is likely lifecycle pattern to emerge
- fad, fashion, style, cycle-recycle, staple
4. Identifying the products stage in the PLC Model
5. Unit of measurement of PLCunit sales, rupee value
6. Develop PLC on weekly, monthly, quarterly or annual data
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Empirical Generalization: Always (Almost)
Looks Like a Bass Curve
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Color TV Forecast 1966
Color TV
0
1000
2000
3000
4000
5000
6000
7000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
Sales(x1000)
Sales
Predicted
Peak in1968
Industry Built
Capacity For
14 million units
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An Empirical Generalization
Adoption of Answering Machines
1982-1993t
0
2000
4000
6000
8000
10000
12000
14000
82 83 84 85 86 87 88 89 90 91 92 93
Year
adoption of answering machines Fitted Adoption
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Another Example 35 mm
ProjectorsActual and Fitted Adoption of 35 mm Projectors, 1965-1986,
m=3.37 million, p=.009,q=.173
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86
Year
Units
35mm Proj Fit ted
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Actual and Fitted Adoption of OverHead Projectors,1960-1970,
m=.961 million,p=.028,q=.311
0
20000
40000
60000
80000
100000
120000
1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970
Year
Units Overhead Proj
Fitted
Another Example: Overhead
Projectors
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Capture Law- DRAMS
Norton and Bass: Management Science (1987)
Sloan Management Review (1992)
Four Generationsof DRAMS: 4K, 16K, 64K, 256K, 1sr Quarter 1974-4th
Quarter 1985, Actual and Fitted Shipments, p=.0037, q=.3369
0
50
100
150
200
250
300
1 3 5 7 911
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
Quarter
Thousands
4K-A 4K-F 16K-A 16K-F 64K-A '64K-F 256K-A 256K-F
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Capture Law-Mainframes-Beautiful!
Generations of Mainframe Computers (Performance Units) 1974-1992
0
20000
40000
60000
80000
100000
120000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Year
Sales
Gen1 Actual Gen1 Fit and Forecast Gen2 Actual Gen2 Fit and Forecas t
Gen3 Actual Gen3 Fit and Forecast Gen4 Actual Gen4 Fit and Forecas t
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World Wide Sales of Generations of Desktop PC's
0
2
4
6
8
10
12
14
75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93
Year
UnitSalesin
Millions
8 Bit 16 Bit 32 Bit
Generations of PCs
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Effects of Different Prices
GBM-Diffusion Under Two Different Pricing Schemes
0
200
400
600
800
1000
1200
1400
1600
1800
2000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Time
Sales(Adoption)
10% Below Baseline Prices Baseline Price
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Product Portfolio Analysis
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Objectives of Product Portfolio Analysis
1) Resource allocation among products and markets
2) portfolio analysis of competitors leads to a refined
understanding of competitive strategy by action
reaction steps3) Assess the marketing effort for each product to direct it
in the product portfolio from one place to another
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Boston Consulting Group- Growth share matrix.
STARS PROBLEM
CHILD
CASH COW DOG
M
A
R
KE
T
G
RO
W
T
H
RELATIVE MARKET SHARE
High
Low
High Low
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Shell International directional policy matrix
Prospects for sectors profitability
Unattractive Average Attractive
Companys
Competitive
Capabilities
Weak Disinvest Phased
withdrawalDouble or
quitCompanys
Competitive
Capabilities
Average Phased
withdrawal
Custodial
Growth
Try
harder
Companys
CompetitiveCapabilities
Strong Cash
generation
Leader Leader
Competitive capabilities- Market position
- Production Capability
- Product R &D
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Mc Kinsey/GE Business ArrayIndustry attractiveness Size, Market Growth, Pricing, Mkt. Diversity
Competitive Structure, Industry Profitability
Business
strength
- Size
- Growth
- Share
- Position
- Profitability
- Margins
- Tech.
Position
- Image- People
High Medium Low
High Investment
and growth
(G)
Investment
and growth
(G)
Selectivity/
Earnings
Medium Investment
and growth
(G)
Selectivity/
Earnings
Harvest
Low Selectivity/
Earnings
Harvest Harvest
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Product performance matrix
Company sales Decline Stable Growth
Industry
sales
Profitability
MKT share
Below
target
Target Above
Target
Below
target
Target Above
target
Below
target
Target Above
target
Growth Dominant
average
Marginal
Stable Dominant
averagemarginal
Decline Dominant
average
Marginal
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Product Line Management
Product Line analysis
Product line length management
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Product Line Analysis
Study sales and profits of each item in line, to see
Which to build, maintain, harvest, divest. Do ABC
Analysis on sales / profits
Core productsBasic Computerslow margins
StaplesCPUs, Memory chipshigher margins
Specialtiesdigital movie equipmentstill higher
margin
Convenience itemsmonitors, printershigh volume
high margin
Manage each of the above four types of products differently
Market Profile: Examine how the line is positioned againstCompeting lines. Understanding corresponding competing
Products between your line and competitors line. Understand
Gaps in product line and understand market segements
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Product Line Length Management
Product line objectives would be to induce both up selling and cross selling
High Market share seeking firms will have longer product lines. High
profitability seeking firms will have shorter lines of important /
more profit product items.
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Product line length Management
Line stretching
UpwardMaruti800, Omni, Esteem, Baleno, Toyota - Lexus
DownwardSurfWheel
Two way - Rural Transport VehicleAmbassadorMitsubishi Lancer
(Hindustan Motors)
Line Filling (each item should produce a just noticeable difference)
TVS50 --- TVS Scooty --- TVS SUZUKI Mobike
Line Featuring: (oft promoted brand in line)
Lux in Soaps for HLL
Line modernizationIntel in Microprocessors
Line PruningFirst Ruf & Tuf ready to stitch kits. Later Ruf & Tuf Jeans
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Developing New Products
Firm end
New Product Development Process
Consumer end
Consumer Adoption Process
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New Product Development Process
Make or Buy Decision
Issues to New Product Development
Steps to New Product development Process
Factors for success of new product launches
New Product Strategies - Reactive and Proactive
Some reasons for new product failures
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Make or Buy Decision
Considerations
1. Timing Considerations
2. Superiority of Buy technology
3. Cost considerations
4. Management, Legal and Market feasibility
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Some Issues to New Product Development
1. Factors hindering new product development
- Shortage of important ideas- Fragmented markets
- social and government constraintsPollution standardsimplementing
them may increase cost relative to what market can bear
- cost of development very high
- capital shortages
- demands for shorter development timecompetition catches up quickly
2. Budgeting for New Product development
- how much money to provide for each project
- how many projects to provide
- how to grapple with failure
- how to reward success
3. Organizing for New Product development
- New Product Managers, New Product Department
- Cross Functional Venture Team
- Stage Gate SystemGO, KILL, HOLD, RECYCLE
New product development decision process
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New product development decision process
Buy
Plans
DROP
Coordinate,
Stimulate, and
search for ideas
in external
envt. Andamong company
personnel
Identify:
1) company
factors
2) their
weights
Develop
Alternative
product
Concepts
Prepare:
Price
Distributio
npromotion
Prepare:
Market
analysis
Cost
analysis
Conduct:Engineerin
g tests
Consumerpreference
tests
Branding
Packaging
Go into
limited
Productio
n,
PrepareAdvertisi
ng
Buy
equipme
nt
And gointo full
Productio
n &
distributi
on
Idea
generation
Is the
particular
Idea worth
considering?
Idea
screening
Concept
Developi
ng
And
Testing
Marketin
g
Strategy
develop
ment
Busines
s
analysis
Produ
ct
Devel
opme
nt
Mark
et
Testi
ng
Commerc
ialization
Should we
Send the idea
Back for
Product
development
Would it
help
To modify
our
Product or
marketing
Program?
Yes Yes Yes Yes Yes Yes YesYes
NoNo No No No
NoNo
No
No
Yes
Yes
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Idea Generation
Creativity Techniques + Interacting with others
Idea Screening
Drop Error (Wheel after Nirma)
Go Error (Edsel)
Weighted Index method of factors to success and relative weights
Concept Development
Idea converted to a usable proposition with a price for a
particular target market. Product positioning map is used to find
the ideas position in relation to competition (cornflakes with idli,dosa etc)and then the idea is used in concept development . The brand positioning
is also used to evaluate the features and benefits the brand should have.
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Concept Testing
- Simple presentation of concepts, rapid prototyping, virtual reality
- use of conjoint analysis technique to test consumer preferences withalternative concepts
- check concept oncommunicability, believability, need level (or intensity),
gap level (gap between current products and need), perceived value,
purchase intentions, user targets, purchase occasion and purchase
frequency.
Marketing Strategy
- Marketing strategy plan is made that consists of
a. target market analysis, positioning, sales, market share and profit
goals in the first few years
b. planned price, distribution strategy and marketing budget for first year
c. long run sales and profit goals and marketing mix over time.
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Business Analysis
- Assess Business Attractiveness
- Estimate total salesBASS Model, one time, repeat+ replacement sales slide)
- Estimate Costs and profits
- Breakeven analysis
- Risk analysis (optimistic, pessimistic and likely profit plans)
Absolute Product FailureVariable cost not recovered
Partial Product FailureFixed Cost not recovered
Relative Product FailureTarget ROI not achieved
Product Development
- Prototypingconversion of customer attributes into engineering attributes
- acceleration rate into required horsepower
- Customer testingeither alpha or alpha and beta- alpha testingtest within the firm to see how it performs
- beta testingrefine the prototype after alpha testtest with
consumers, opinion leaders, several decision makers
consumer preferences measured on 3 scales
- Rank Order
- Paired Comparison
- Monadic rating like a seven point interval scale
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Market Testing
(Limited Market
Infothen test;
Risky productsThen test)
Consumer
Sales Wave Researchrepeated offer of the
product at a reduced price noting down
the repeat purchase and satisfaction
Simulated Test Marketsused for testing
advertising effectiveness, trial rates
Controlled Test Markets- panel of stores are
enlisted to check sales, local ad and promo effects
Test MarketsHow many test cities, Which cities,
Length of Test, What information to collect,
What action to take (rollout nationallyyes or no)
Variables monitoredtrial, first repeat, adoption,purchase frequency
Industrial
Trade shows, Distributor and dealer displays,
Test Marketing
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Commercialization
WHEN (TIMING)
WHERE (GEOGRAPHY)
TO WHOM ( among target market, also is itTo innovators, early adopters, opinion leaders)
HOW (Introductory Marketing Strategy)
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Time Time Time
Replacement
sales
Repeat purchase
sales
2.5%
innovators
13.5%
early adopters
34%
Early majority
34%
LateMajority
16% laggards
One time purchased product Infrequently purchased product
Frequently purchased product
Time of Adoption
Of Innovations
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Factors for success of new product launches
a) top management commitment
b) selective top management involvement in the product
development process
c) development of a continuous new product development system
d) multiple product development efforts
e) continuous evaluation at each phase
f) flexibility in the product development system
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General foods, for example, had the following experience over a 10
year period.
Number of projects
1 Screening and
analysis of new
product ideas
600
2 Development 118
3 Test market 87
4 Market introduction 40
5 Market success 30
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New Product Strategies
Reactive strategies
React to pressures of product development
From competition, within the organization
Proactive strategies
Explicitly allocate resources to preemptCompetition and market events
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Reactive
Defensivedefend against competitors new products e.g. Nescafe vs Bru
Imitative Strategyme too strategies in fashion for clothes, furniture
Peter England after Louis Phillipe; NIMA after NIRMA
Second but better strategycopy and improve
Lotus 1-2-3 was second, Visicalc was first
Dove was first, Mysore Sandal Gold was later in a local market sense
Purposively reacting to customer requests e.g. landscaping
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Proactive
Initiate new R&D projects in a planned manner so new products
Are introduced e.g. IBM, HP, Microsoft especially Windows
MarketingSystematic need analysis and gap analysis to identify
Products and services e.g. HLL, P&G, Colgate
EntrepreneurialINFOSYSEntrepreneur makes it happen.
At 3M there is a separate division for entrepreneurial new product
introductions
Acquisitions / AlliancesHLL of TOMCO, AT&T-BT,
Toyota - Kirloskar
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4. Cross-functional integration in new
product strategy
Marketing
Finance
ProducitonSales forecast
Inventory
R & D
Engineering
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SOME REASONS FOR NEW PRODUCT FAILURES
1. Market too smallImported cars
2. Poor match or fit with companyUnilever Chemical Business
3. Not new / Not differentRelaunch of Godrej-Cinthol
4. No real benefitSavings Deposit Certificates in High Inflation Environment
5. Poor positioning Vs competitionNIMA in soaps vs NIRMA
6. Inadequate support from channel of distribution7. Forecasting errorsCars, TVs
8. Poor TimingMicrowave Owens in early 1990s
9. Competitive Response too goodNescape Vs Bru
10. Changes in Customer tastesfashion goods
11. Poor after sales serviceEDSEL a lemon
12. Insufficient return on investmentpossibly in pharma area13. Lack of coordination in functionsR&D designs product not needed by user
IBM PS/2
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Developing New Products Consumer Adoption Process - Individual level
Awareness, Interest, Evaluation, Trial, Adoption
Consumer Adoption Process - Aggregate levelDiffusion process, Diffusion of Innovations
Adopter Categorization on the basis of Relative Time ofAdoption of Innovations
Innovators, Early adopters, Early majority, Late majorityLaggards
Factors influencing rate of adoptionRelative advantage, compatibility, complexity, divisibility,communicability
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Time Time Time
Replaceme
nt
sales
Repeat purchase
sales
2.5%
innovators
13.5%
early adopters
34%
Early majority
34%
LateMajority
16% laggards
One time purchased product Infrequently purchased product
Frequently purchased product
Time of Adoption
Of Innovations
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BRANDING
Definition of a Brand
Issues in Brand Equity
Devising a Branding Strategy
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What is a Brand
Products come to life, live and disappear but brands endure
Jean Noel Kapferer
Branding means nothing more and nothing less than creating a
distinct personality and telling the world about it .. Hook or crook
.. Tom Peters
A brand should represent a program in addition to products
. Jean Noel Kapferer
A companys brand is the primary source of its competitive advantage and a
valuable strategic asset . David Aaker
A Brand is the sum of how consumers feel about a product
.. Ogilvy and Mather
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Why are brands built ?
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1. Identify goods/services of one seller or group
2. Differentiate goods / services of one seller / group from competition
3. Reduce risk of uncertainties in demand through promise of a set of
features / attributes / benefits delivered with consistent quality. The
brand is a promise of the offer. Makes product less price volatile
4. Leverage across marketse.g. Marlboro Tobacco moved into Marlborobrand classic jeans to gain on advertising for Marlboro brand as there
was legal restraint on advertising tobacco; Similarly Wills cigarettes
and Wills Sports
5. Makes an emotional connection with the customers and among customers
6. Move from descriptive reality to abstract reality. E.g. Palmolive originally
stood for Palm products, today Palmolive stands for softness.
Similarly WIPRO originally stood for Western India Vegetable products,
today it stands for integrity, applying thought (generation of ideas).
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Why are brands built ..cont
7. In a modern technological world, branding is a way ofsimplifying decision making and a way of reducing risk ofconsumers
8. Branding offers legal protection for unique features of aproduct :
- brand naming through registered trademarks
- manufacturing process through patents
- packaging and designs through copyrights
Brands are thus valuable pieces of legal property
9. Brands can develop associations with a certain level ofquality
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AMA definition of a brand:
Brand is a name, term, sign, symbol or design or a combination ofthem intended to identify the goods or services of one seller or group ofsellers and to differentiate them from competitors
A brand conveys meaning about attributes, benefits, values, culture,personality, user. When the meaning is properly and fully conveyed it is
deep, else it is shallow.
A brand is a perceptual entity that is rooted in reality that reflects theperceptions and perhaps even the idiosyncrasies of consumers
Branding is all about creating differences. Brand differences can be
often related to attributes or benefits of the product (Gillette). It can alsoarise creating relevant and appealing images around the product byunderstanding consumer motivations and desires (Coca-Cola).
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Ingredients : Cocoa
Attributes : Chocolate Taste
Benefits : Nourishing, Mentally alert, Energy
Values : Hardworking, aiming for excellence
Cultural Meaning : Upwardly mobile middle class culture
if any
Brand Personality Phrase : Winner
Brand User : Healthy and hardworking child
IABVCPU
Brand : Bournvita
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Brand Identity is the meaning of what the brand represents and stands for and
what the brand promises to customers. Normally brand identity is anchored at
one or more levels of brand meaning (as shown in the previous slide). When the
brand identity is anchored at the benefit level and is representing a single benefitit tantamounts to the Unique Selling Proposition.
If Colgate Dental Cream is anchored at the benefit level of strong teeth, then that
Could be its USP.
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Issues in Brand Equity
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Defining Brand Equity
Brand Equity is a brand value endowed to products / services that helps protect
and nurture product / services. Subjectively brand equity represents a surplus
meaning attached to the brand, something more than the expenditure that has
been incurred by the seller.
Marketing Advantages of Strong Brands
- Improved Perception of Product Performance
- Greater Loyalty
- Less vulnerability to Competitor marketing actions and crisis situation
- Larger margins
- Greater trade cooperation and support
- Increased marketing communication effectiveness
- Additional Brand Extension opportunity
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Building Brand Equity
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Building Brand Equity
Initial choices for the brand elements or identities making up the brand
- name, URL, logo, symbols, characters, spokespeople,
slogans, jingles, packages and signage
- firms use more than one of above elements e.g.
WIPROcolored sunflower, Applying thought
slogan, WIPRO name based on earlier acronym- choice of each element on criteria that includes
memorable, meaningful, likeability, transferable to
brand extensions, adaptable as times change (e.g.
Lifebuoywhich retains its core proposition of
health), protectible (legally)
- brand elements should be easily recognized and recalled and
can reduce the burden on marketing communication
to build awareness and brand associations
- Logos as important as brand namesLIC with folded hands
covering a lamp, Parachute Oil with a coconut tree.
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Building Brand equity
- Experience with the product or service
- Sum total of all brand contacts put together. In a long term time
frame this could mean reputation
- Personalization of marketing efforts e.g. High end banks
- Integration of marketing efforts to the customer, especially
integrating communications
- Internalizationeveryone in the company lives the brandgood
internal marketing as it would reflect in brand contacts
- Leveraging secondary associationsCoke with music concerts,
Adidas with cricket (Sachin Tendulkar),
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Managing Brand Equity
- Brand reinforcement to ensure that the brand value does not depreciate in time.
- Establish a brands abstract reality and reinforce this reality (e.g.
Palmolive on softness, Nivea on skin care and personal care),
through suitable line extensions and category extensions
- Reinforce brand equity through constant innovation and relevance; Kmart
failed in this to find its equities dwindling
- Consistency of the marketing support to the brandsHLL in soaps,
especially LUX.Brand Crisis
Cola crisis in India on account of high level of pesticides, Cadbury India
on account of worms in chocolates. Reactions should be swift and sincere.
-Brand Revitalization- Go back to basics of consumer needs and wantsfinding gaps in FMCG
market or at the other end of spectrumgo for reinvention (Intel).
- Revitalization finds elements of both of the above, to refresh existing
sources or find new sources of brand equity e.g. Lifebuoy
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Issues in Branding Strategy
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Parent BrandICICI (financial products)
Sub BrandICICI Prudential Life Insurance
Family BrandParent Brand in multiple product categoriesGE
as in GE Medical Systems, GE Lighting, GE Plastics
Brand Extension
- Line ExtensionColgate with Active Salt in toothpaste line
- Category ExtensionWIPRO Hydraulicsoriginally WIPRO
consumer products
Brand LineAll productsboth original and line and category extensions
sold under a particular brand e.g. Colgate product
Brand Mixthe set of all brand lines that a seller makes
e.g. Colgate and Palmolive
Branded VariantSpecific brand lines made available to specific retailers ordistribution channelsNIKE FOR FOOTLOCKER
Licensed ProductAMCO - YUASA
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An overview of Branding Decisions
Brand
No brand
Manufacturer
brand
Distributor
(Private) Brand
*Licensed
brand
*Individual
names
*Blanket familyname
*separate family
names
* Company
individual names
Brand
extensions
Line orcategory
Multi-brands
New brands
Co brands
Reposi
tioning
No
repositi
oning
Branding
Decision
Brand-Sponsor
Decision
Brand-Name
Decision
Brand-Strategy
Decision
Brand
Repositioning
Decision
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Brand Sponsor Decision
Manufacturer BrandNIRMA;
Distributor brandSears Kenmore Appliances from Whirlpool,Food-world Brand , Nilgiris
Licensed brandAMCO-YUASA, Pierre Cardin and Christian Dior
licensed names for clothes of Hart Schaffner and Marx.
Brand Name Decision
Individual NamesLexus; Blanket Family NameTATA, GE;
Separate Family NamesColgate Toothpaste, Palmolive Shave Cream;
Company Individual NamesKellogs Rice Krispies, Kellogs Raisin
Bran
Brand Strategy DecisionLine ExtensionColgate Dental Cream, Colgate Gel;
Category ExtensionWIPRO consumer products, WIPRO Computers;
Multi-brandsHLL in soaps such asLux, Dove, Hamam..
New Brandsnew brand in new product categoryGoodKnight
CoBrandsWIPRO-GE, ICICI-HP credit cards
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Product based brands vs Value based brands
Brands that are associated with a product are called product based brands.
e.g. Kellogg, Sprite, Woolworth (retailer)
Brands that are based on value tend to live longer and is easier to extend across
Product items. E.g. Nestle stands for warm, caring, nutritious, healthy.
Levis s today is an umbrella brand for trousers not just jeans Levi,Dockers, Slates; likely stands for values such as comfort, quality, style.
Celebrity endorsements tend to increase value of a brand when there is a good fit
Between the celebrity endorser and the benefits the brand is supposed to possess.
Roles of CelebrityEndorsements, Spokesperson, Peripheral route to persuasione.g. Benefitperformance quality; SachinAdidas
Brand AssociationsCoke sponsors music concerts to build brand
association with music.
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Brand Extensions
B d E t i f l t l k t It f ilit t
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Brand Extensions are a useful way to leverage across markets. It can facilitate
new product acceptance
Brand Extensions can create positive feedback effects for the parent brand. It can
Also increase market coverage. (Rexona deodorant in stick, spray, gel to cater
Different segments and thereby increase coverage).
Useful to reduce rising cost of multi-brand portfolios
Create Mega Brands e.g. Nestle
Move away from product marketsTata trucks to Tata Indica
Dilemma for category extensions is to maintain the identity of brands while playing
The rules of game for the new category
One type of brand extension is to keep brand name and product category but
Change product item to suit lifestyle e.g. Lifebuoycarbolic to noncarbolic