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

Features

Reliability

Conformance

Durability

Serviceability

Appearance

Reputation

Differentiation: Service

Provide unparalleled service to set your firm apart from competitors

Five dimensions of service quality:

Tangibles

Reliability

Responsiveness

Assurance

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

BrandEquity

PerceivedQuality

BrandIdentity

BrandAwareness

BrandLoyalty

Model of Brand Equity

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• Quality function deployment

• Alpha testing

• Beta testing

Market testing• Estimate trial, first repeat purchase, adoption, and

purchase frequency

Commercialization• Product launch