Module 1: Introduction to IBM

Concept of category and product Concept of Brand & Evolution of Brand Category attractiveness and competitor analysis Product strategy over life cycle New product development

A Product Manager’s Potential Interactions Sales Designers Researchers Premium suppliers Premium screening Store testing Sampling Couponing Media Advertis- ing agency Packagin g Promotion services Purchasin g Publicity Legal Fiscal Market research Manufactur- ing and distribution Research and development Product manager Suppliers Trade Suppliers Trade Research suppliers Suppliers Agency media department Company media department Media sales reps

Product-Focused Structure Head of company/division Corporate communications Finance Marketing Manufacturing Manager of product A Manager of product C Manager of product B Marketing Research Support Product management

Brand: The beginning Searing of flesh with a hot iron to produce a scar or mark with an easily recognizable pattern for identification purpose Livestock were branded by the Egyptians as early as 2000BCE. The practice was brought to North America in the sixteenth century by the Spanish conqueror Hernan Cortes ( )

Brand: The evolution 1882: Harley Procter named his generically named ‘white soap’ as ‘Ivory Soap’: an idea that apparently came to him while reading a psalm in church In December of that year, ‘Ivory’ got a slogan ‘’99 and 44/100% pure’ 1888, in Janesville, Wisconsin, George Safford Parker named each pen produced by his company a ‘Parker Pen’ In Europe, food industry provided the first brand names such as Nestle, Cadbury, Kellogg

Best Global Brands 2009

Summary of INTERBRAND top 100 Global Brands 2008 Country of ORIGINNo. of Brands US52 Finland1 Japan7 Germany10 France8 South Korea2 Sweden2 UK3 Switzerland5 Netherlands3 Canada2 Italy4 Spain1 :: Superbrands India ::

What is a brand? A brand is a name, term, sign, symbol, or design, or a combination of them, intended to identity the goods or services of one seller or group of sellers and to differentiate them from those of competitors - American Marketing Association

“A product is an object or service that’s available. A brand is a complex set of satisfactions delivered.” Jeremy Bullmore, WPP “ Branding is a natural, instinctive human creation. A way of making a complicated world simpler. With a brand, you get a symbol, a cue - you know what you’re getting, you know what to expect.” Niall Fitzgerald, Unilever How others define a brand

Or put another way Personality User imagery Symbols Brand/customer relationships Emotional benefits Self-expressive benefits Corporate associations Country of origin and history Functional benefits Attributes Uses Quality Value Brand/ flesh Product/stone

Brands can reduce risk in product decisions. There are many different types of risks that consumers may perceive in buying and consuming a product: 1. Functional Risk 2. Physical Risk 3. Financial Risk 4. Social Risk 5. Psychological Risk 6. Time Risk SO,

Defining the Competitive Set

Bases of Competition I.Customer-oriented Who they are – competition for same budget When they use it Why they use it- benefits sought II.Marketing-oriented: advertising and promotion Theme/copy strategy Media Distribution Price

Bases of Competition cont. III.Resource-oriented Raw materials Employees Financial resources IV.Geographic

Levels of Competition Diet lemon limes Baseball cards Fruit flavore d colas Coffee Diet Coke Diet Pepsi Diet-Rite cola Bottled water Lemon limes Regular colas Beers Juices Wine Fast food Tea Video rentals Ice cream Product form competition: Diet colas Product category competition: Soft drinks Generic competition: Beverages Budget competition: Food and entertainment

Levels of Competition: Implications for Product Strategy Budget Generic Product Category Product Form Competitive Level Convince Customers that the Brand is Better than Others Convince Customers that the Product Form is Best in the Category Convince Customers that the Product Category is the Best Way to Satisfy Needs Convince Customers that the Generic Benefits are the Most Appropriate Way to Spend their Money Product Management Task

Category Attractiveness Analysis

Aggregate Category Factors Category size Category growth Stage in product life cycle Sales cyclicity Seasonality Profits

Category Attractiveness over the Product Life Cycle Stage of product life cycle Category size Category growth Category attractiveness Introduction Small Low Growth Moderate High Maturity Large Low Low/high Decline Moderate Negative Low Sales Time

Category Factors Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Current category rivalry Pressure from substitutes Category capacity

Customer Analysis: What We Need to Know about Current and Potential Customers Who buys and uses the product What customers buy and how they use it Where customers buy When customers buy How customers choose Why they prefer a product How they respond to marketing programs Will they buy it (again)?

Basic Customer Strategies 1.Customer acquisition 2.Customer retention 3.Customer expansion 4.Customer deletion

New-Product Development

Categories of New Products New-To-The-World New Product Lines Product Line Additions Improvements/Revisions Repositioned Products Lower-Priced Products Six Categories of New Products Six Categories of New Products

New-Product Development Process Idea Generation Idea Screening Concept Development and Testing Marketing Strategy Business Analysis Product Development Test Marketing Commercialization

Idea Generation Customers Employees Distributors Competitors R & D Consultants Creative Thinking Sources of New-Product Ideas “you could not help but notice that there were three or four family members on a scooter, the kid standing in the front, the guy driving the scooter and the wife sitting side saddle holding a little kid. And when you're driving a car, you certainly say, Oh my god, be careful, they may slip. Add to that slippery roads and night time too.”

Idea Screening  The first filter in the product development process, which eliminates ideas that are inconsistent with the organization’s new- product strategy or are inappropriate for some other reason. Many companies have systems for rating and screening ideas which estimate: – Market Size – Product Price – Development Time & Costs – Manufacturing Costs – Rate of Return –Strange New ProductsStrange New Products

1. Develop New Product Ideas into Alternative Detailed Product Concepts 1. Develop New Product Ideas into Alternative Detailed Product Concepts 2. Concept Testing - Test the New Product Concepts with Groups of Target Customers 2. Concept Testing - Test the New Product Concepts with Groups of Target Customers 3. Choose the One That Has the Strongest Appeal to Target Customers 3. Choose the One That Has the Strongest Appeal to Target Customers New Product Development Process Step 3. Concept Development & Testing

Part Two Describes Short-Term: Product’s Planned Price Distribution Marketing Budget Part Two Describes Short-Term: Product’s Planned Price Distribution Marketing Budget Part Three Describes Long-Term: Sales & Profit Goals Marketing Mix Strategy Part Three Describes Long-Term: Sales & Profit Goals Marketing Mix Strategy Marketing Strategy Statement Formulation Part One Describes Overall: Target Market Planned Product Positioning Sales & Profit Goals Market Share Part One Describes Overall: Target Market Planned Product Positioning Sales & Profit Goals Market Share New Product Development Process Step 4. Marketing Strategy Development

Step 5. Business Analysis Considerations in Business Analysis Stage Demand Cost Sales Profitability apple-history.com :: iPod

Step 6. Development  Creation of prototype  Marketing strategy  Packaging, branding, labeling  Manufacturing feasibility  Final government approvals if needed

New Product Development Process Step 7. Test Marketing Advertising Packaging Product Budget Levels Positioning Strategy Positioning Strategy Distribution Pricing Branding Elements that May be Test Marketed by a Company Test Marketing is the Stage Where the Product and Marketing Program are Introduced into More Realistic Market Settings.

When? Where? Commercialization is the Introduction of the New Product into the Marketplace. New Product Development Process Step 8. Commercialization Whom? How?

Why New Products Fail No discernible benefits Poor match between features and customer desires Overestimation of market size Incorrect positioning Price too high or too low Inadequate distribution Poor promotion Inferior product

From Product to Brand

Why do Brands matter?

For Consumers Identification of Product Source Risk reducer Reduces search costs Symbolic of self image Signal of Quality Assignment of responsibility

For Manufacturers Identification to simplify handling or tracing Legal Protection Signal of Quality Level Competitive Advantage Financial Returns

Contracting with a Brand A Brand is a contract, carved in stone and long (ever ?) lasting contrat with the final consumer with her own environment This is a two ways contract (return contract ?) Historical / Memory Future / Project

Battle Field Utility (Functions/Values) Existence (Identity) Target Acceptance The Moral Contract of a Brand

MENTAL MAPS Portrays salient brand associations and responses for a particular target market Reflect how brand is perceived by consumers –Beliefs –Attitudes –Opinion –Feelings –Images –Experiences

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