session 4 product

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1

Product, Services,

and Branding Strategies

Chapter 9



Product strategy begins with a strategic visionthat states-

where a company wants to go,how it will get there, and

why it will be successful.

Product Strategy



What is a Product? Products, Services, and Experiences

Market offerings, pure tangible goods, pure services,experiences

Levels of Productand Services

Core benefit, actualproduct, and

augmented product



Product Classifications

Convenience

Shopping

Specialty

Unsought

Frequent purchasesbought with minimalbuying effort and littlecomparison shopping

Low price

Widespread distribution

Mass promotion byproducer

Types of Consumer

Products

Typical products are of two types:

* Consumer products * Industrial productsAnd we will concentrate mostly on consumer products here.



Convenience

Shopping

Specialty Unsought

Less frequent purchasesrequiring more shoppingeffort and price, quality,and style comparisons.

Higher than conveniencegood pricing

Selective distribution infewer outlets

Advertising and personalselling by producer andreseller

Types of Consumer

Products

Product Classifications (contd.)



Convenience

Shopping

Specialty Unsought

Strong brand preferenceand loyalty, requiresspecial purchase effort,little brand comparisons,and low price sensitivity

High price

Exclusive distribution

Carefully targetedpromotion by producersand resellers

Types of Consumer

Products




Convenience

Shopping

Specialty Unsought

Little product awarenessand knowledge (or ifaware, sometimesnegative interest)

Pricing varies

Distribution varies

Aggressive advertisingand personal selling byproducers and resellers

Types of Consumer

Products




Product and Service Decisions

Individual Product Product Line

Product Mix

Product attributesQuality, features, style

and design Branding

Packaging

Labeling

Product supportservices

Key Decisions



Product and Service Decisions (contd.)

Individual Product

Product Line

Product Mix

Product line length

Line stretching: adding products thatare higher or lowerpriced than the

existing line Line filling: adding

more items within thepresent price range

Key Decisions



Individual Product

Product Line

Product Mix

Product line width: number of different product

lines carried by company

Product line depth: Number of different versions

of each product in the line

Product line consistency

Key Decisions

Product and Service Decisions (contd.)



Branding Brand is something emotional, psychological having an added

dimension created over the years often with the help of creativeand imaginative advertising.

brands are not just products, but creating, maintaining,protecting, and enhancing products.

A brand is a name, term, sign, symbol, or design, or acombination of these, that identifies the maker or seller of aproduct or service.

Marketing is at its peak when powerful brands are created

Brand Equity is the positive differential effect that the brandname has on customer response to the product or service.

Provides: More brand awareness and loyalty

Basis for strong, profitable customer relationships



Services?

Any activity or benefit that one party canoffer to another that is essentially intangibleand does not result in ownership of anything.

Services are a form of products.



Services: Features

Intangibility

Consumers look for service quality signals

Inseparability

Services can’t be separated from providers

Heterogeneity

Difficult to standardize, harder to controlDesign, Production and Delivery

Perishability

Services can’t be inventoried for later sale



Service Marketing Pyramid1. External

Marketing: Making Promises byCompany to Customers

Traditional Elements:

Advertising, Salespromotions

Expansion:

Communicate thePromise to Customers:

• Training of ServiceEmployees

• Design & decor offacility offered

• Service Process

3. InteractiveMarketing:

Keeping Promisesby Providers(employees orthird-party) to

Customers

Occurs when:

Customersinteracts with

company and theService isproduced &consumed

Crucial from

Customers point ofview!

2. Internal Marketing:

Enabling promises.

A company effort to

providers ensuringproper:

• Skills,

• Abilities,

• Tools, and

• Motivation to deliver

Company

CustomersProviders

I n t e r n

a l M a r k e t i n

g

( E n a b l i n

g P r

o m i s e

s ) E x t e r n a l M

a r k e t i n g

( M a k i n g P r o m

i s e s )

Interactive Marketing

(Keeping Promises)

Technology

Company

CustomersProviders

I n t e r n

a l M a r k e t i n

g

( E n a b l i n

g P r

o m i s e


a r k e t i n g


i s e s )


(Keeping Promises)

Company

CustomersProviders

I n t e r n

a l M a r k e t i n

g

( E n a b l i n

g P r

o m i s e


a r k e t i n g


i s e s )


(Keeping Promises)

Technology



15

New-Product

Development & Product Life-Cycle Strategies

Chapter 10



Strategic Reason for Product Development

In a competitive market where businesses have easy accessand profits are worth while pursuing, the market will be lively &active

but at the end of the day the profit will decline and the marketwill be less attractive

also consumers have different and ever-changing tastes &habits that can quickly change the demand for a product

to overcome these, like any other businesses banks need tocontinuously develop products, through either of the ways:

adding new services to the range

recombining and repackaging services

modifying or extending existing services

some combination of the above



New Product Development

Development of original products, productimprovements, product modifications, and newbrands through the firm’s own R&D efforts.

New Product Development Strategy

New products can be obtained via acquisition ordevelopment.

New products suffer from high failure rates.Several reasons account for the failure.



Stage 1: Idea Generation Internal idea sources:

R & D

External idea sources: Customers, competitors, distributors, suppliers

Stage 2: Idea Screening Product development costs increase substantially in later

stages.

Ideas are evaluated against criteria; most are eliminated.

Stage 3: Concept Development and Testing Product concepts provide detailed versions of new

product ideas.

Concept tests ask target consumers to evaluate product

concepts.

Usual Process of Product Development



Stage 4: Marketing Strategy Development Strategy statements describe:

The target market, product positioning, and sales, share, and profitgoals for the first few years.

Product price, distribution, and marketing budget for the first year.

Long-run sales and profit goals and the marketing mix strategy.

Stage 5: Business Analysis Sales, cost, and profit projections

Stage 6: Product Development Prototype development and testing

Stage 7: Test Marketing

Stage 8: Commercialization

Usual Process of Product Development



Product Life-Cycle Strategies

Time

ProductDevelop-

ment

Introduction

Profits

Sales

Growth Maturity Decline

Losses/Investments (Tk.)

Sales andProfits (Tk.)

Time

ProductDevelop-

ment

Introduction

Profits

Sales

Growth Maturity Decline

Losses/Investments (Tk.)

Sales andProfits (Tk.)

The Typical Product Life Cycle (PLC) Has Five Stages

But NOT all products follow this cycle!!



Product Life-Cycle Strategies (contd.)

Product development

Introduction

Growth

Maturity

Decline

Begins when the

company develops anew-product idea

Sales are zero

Investment costs are high Profits are negative

PLC Stages



Product development

Introduction

Growth

Maturity

Decline

Low sales

High cost per customeracquired

Negative profits

Innovators are targeted Little competition

PLC Stages




Product – Offer a basic product

Price –

Use ‘cost-plus basis to set

Marketing Objectives – Create product awareness andtrial

Distribution – Build selective distribution Advertising – Build awareness among early adopters

and dealers/resellers

Sales Promotion – Heavy expenditures to create trial

Marketing Strategies:

Introduction Stage



Product development

Introduction

Growth

Maturity Decline

Rapidly rising sales

Average cost per

customer Rising profits

Early adopters aretargeted

Growing competition

Product/services arefine-tuned

PLC Stages




Product – Offer product extensions, service, warranty

Price –

Penetration pricing Marketing Objectives – Maximize market share

Distribution – Build intensive distribution

Advertising – Build awareness and interest in the mass

market Sales Promotion – Reduce expenditures to take advantage

of consumer demand


Growth Stage



Product development

Introduction

Growth

Maturity Decline

Sales peak

Low cost per customer High profits

Middle majority are

targeted Competition begins to

decline

PLC Stages




Product – Diversify brand and models

Price –

Set to match or beat competition Marketing Objectives – Maximize profit while

defending market share

Distribution – Build more intensive distribution

Advertising – Stress brand differences and benefits Sales Promotion – Increase to encourage brand

switching


Maturity Stage



Product development

Introduction

Growth

Maturity Decline

Declining sales Low cost per customer

Declining profits

Laggards are targeted

Declining competition

PLC Stages




Product – Phase out weak items

Price –

Cut price Marketing Objectives – Reduce expenditure and

get the most out of the brand Distribution – Use selective distribution: phase out

unprofitable outlets Advertising – Reduce to level needed to retain

hard-core loyalists Sales Promotion – Reduce to minimal level


Decline Stage

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