Formulating Strategic Marketing Programs Product and Brand Management

Product and Brand Management Goals Determining product and brand management tactics is based on what goals are to be accomplished.

Product/Service Differentiation Successful differentiation is distinguished by three characteristics:

Differentiation: Product Differentiate by providing benefits uniquely provided by your product Eight dimensions of product quality: Performance Durability Features Serviceability Reliability Appearance Conformance Reputation

Differentiation: Service Provide unparalleled service to set your firm apart from competitors Five dimensions of service quality: Tangibles Assurance Responsiveness Reliability Empathy

Improving/Leveraging Brand Equity A strong brand provides brand equity Contributes to positive evaluations of product quality Maintains a high level of product awareness Provides a consistent image or brand personality

Brand Equity A set of assets and liabilities linked to a brand’s name and symbol that add to or subtract from the value provided by a product or service to a firm and/or that firm’s customers

Model of Brand Equity Brand Awareness Brand Identity Brand Equity Perceived Quality Brand Loyalty

Brand Awareness The level of familiarity consumers have with a brand name. The ability to link a brand name with a particular product. Can provide a competitive advantage: Product parity Low-involvement

Brand Identity The associations attached to a firm and its brands Anything directly or indirectly linked in memory to a brand The most common associations are usually product attributes or customer benefits  Use or application  Lifestyle and feelings  Product class  Personality  Product user  Symbol

Brand Loyalty The tendency of customers to continue to use the same product over time Resistance to switching Based on: Simple habit Preference Switching costs

A Strong Base of Loyal Customers: Reduces marketing costs Provides substantial entry barrier to competitors Provides trade leverage Contributes to positive brand image Provides time to respond to competitive moves

Expanding Breadth/Depth of Product/Service Offerings In general, firms with broad product lines have: More potential customers Opportunity to sell more to each customer Greater marketing efficiency Greater production efficiency Increased profits at introduction and growth stages of PLC

Product Line Management Product line analysis Product line length Line modernization Line featuring Line pruning

Achieving Product Line Extensions: Product Extensions New products in same product category owned by same company Examples:

Achieving Product Line Extensions: Brand Extensions New products with same brand name in product category Examples: Require lower investment and lower risk than product extensions

Product Line Extensions: Requires product differentiation and careful product positioning If not carefully positioned, may cannibalize core brand and increase marketing costs

Achieving Product Line Extensions: Product Bundling Package individual products together and sell as one unit Must share some common purpose Must offer price savings to customer

Bundling Strategies Pure product bundling Sell 2 or more products at an overall price lower than the total price paid if purchased separately

Bundling Strategies Mixed bundling Offer customers the opportunity to purchase each item separately at a sale price or bundled with an additional level of savings

Bundling Strategies Unbundling Unbundle a set of products that is normally sold as an integrated bundle Useful when meets customers’ needs to purchase individual components

New Product Development There are thousands of new product launches every year: ≈ 25,000 Expensive to launch new product High failure rate: only about 56% of new products will still be around five years after introduction Long-term survival of firm is tied into new product development

New Product Development Process Lengthy Multidisciplinary Market-oriented

Types of New Products New-to-the-world products New product lines Additions to existing product lines Improvements and revisions of existing products Re-positionings Cost reductions

Stages in Development Process Idea generation Idea screening Concept development Concept testing Marketing strategy development Business analysis

Managing New Products Product development Market testing Quality function deployment Alpha testing Beta testing Market testing Estimate trial, first repeat purchase, adoption, and purchase frequency Commercialization Product launch