Managing The Product Flashcards
A brand is more than a product:
It builds an emotional connection with a consumer. Marketers spend huge amounts of money on new-product development, advertising and promotion to develop strong brands. It works; this investment creates brand equity, which is a brand’s value to its customers.
Brand Equity:
The commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself.
Steps in Managing Products:
- Develop Product’s Objectives
- For individual products
- For product lines and mixes
- Design products strategies
- Make tactical product decisions
- Product Branding
- Packaging and Labelling design
Product Planning:
- The strategies outlined in the product plan spell out how the firm expects to develop a product that will meet marketing objectives.
- Good product decisions are more critical than ever. As today’s technology moves forward at an ever-increasing pace, products are created, grow, reach maturity and decline at faster and faster speeds.
When marketers develop product strategies, they make decisions about product…
- Benefits,
- Features,
- Styling,
- Branding,
- Labelling
- Packaging.
Product objectives provide focus and direction. They also need to:
- Support the broader marketing objectives of the business unit + Support the overall mission of the firm.
- Specify how product decisions will contribute to reaching a desired market share or level of sales.
Uncertainty Horizon Maps
Product-related objectives must be :
- Measurable, clear and unambiguous as well as feasible.
- They must indicate a specific time frame.
- Planners must keep in touch with their customers so that their objectives accurately respond to customer needs.
- Product objectives should consider the long-term implications of product decisions.
Product line VS Product mix
Product line = Firm’s total product offering
Product mix = Total number of product lines a company has.
A product line is…
A firm’s total product offering designed to satisfy a single need or desire of a group of target customers. The number of separate items within the same category determines the length of the line.
Large number of variations in a product line are described as:
- A full line that targets many customer segments to boost sales potential.
- A limited-line strategy with fewer product
Variations can improve the firm’s image if it is perceived as a specialist with a clear, specific position in the market.
Organisations may decide to extend their product line by …
Adding more brands or models when they develop product strategies. When a firm stretches its product line, it must decide which the best direction to go is.
Line extensions types:
- If a firm’s current product line includes middle and lower-end items, an upward line stretch adds new items – higher priced and claiming more quality, bells and whistles
- A downward line stretch augments a line by adding items at the lower end. The firm must take care not to blur the images of its higher priced, upper-end offerings.
- A two-way stretch adds products at both the upper and lower ends.
- A filling-out strategy may mean adding sizes or styles not previously available in a product category.
Whenever a product line or a product family is extended, there is a risk of …
Cannibalisation, which occurs when sales of an existing brand are eaten up by the new item as the firm’s current customer’s switch to the new product
Objectives and Strategies for Individual Products:
- For new products, the objectives relate to successful introduction.
- For mature products, product objectives may focus on breathing new life into a product while holding on to the traditional brand personality.
- For products that have achieved success at the local or regional market, it may be decided to introduce them nationally.
Objectives and Strategies for Multiple Products:
A larger firm often markets a set of related products.
This means that strategic decisions affect two or more products simultaneously.
Implications of product dev:
- The firm must think in terms of its entire portfolio of products.
- Product planning means developing product line and product mix strategies encompassing multiple offerings
Product Mix Strategies:
- A firm’s product mix is its entire range of product lines. In developing a product mix strategy, planners usually consider the width of the product mix, that is, the number of different product lines produced by the firm
- There is risk associated with putting all your eggs in one or too few baskets.
Total Quality Management: every employee has customers
Total quality management (TQM), calls for company-wide dedication to the development, maintenance and continuous improvement of all aspects of the company’s operations.
Marketing throughout the Product Life Cycle:
Brands seek to stimulate consumer hope in the face of disequilibrium
Hope is about ‘future prospects’ and that “one has faith in the future precisely because one seeks to confront the present at its most rebarbative….seeing what futurity will deliver with the comfort of knowing that it will involve no inconvenient upheaval”
(Eagleton, 2015).
The Paradigm/Brand Elements
- Concept: The big idea that it fights for
- Product: Embody the idea
- Identification: mental connection through symbols
Brand equity pyramid:
- At the lowest level of the “brand equity pyramid”, consumers are aware of a brand’s existence.
- At the highest level, with truly successful brands, brands “bond” with their customers so that people feel they have a real relationship with the product.
Coca-Cola Brand Equity Pyramid
Individual Brands Versus Family Brands
- An individual brand strategy – using a separate, unique brand for each product item
- A family brand (or umbrella brand) strategy - multiple items under the same brand name
National and Store Brands:
- In addition to choosing from producers’ brands, called national or manufacturer brands, retailers decide whether to offer their own versions. Private-label brands, (also called store brands), are the retail store’s or chain’s exclusive trade name.
- Generic branding is basically nobranding
Licencing:
Some firms choose to use licensing to brand their products. A licensing agreement means that one firm sells another firm the right to use a legally protected brand name for a specific purpose and for a specific period of time.
A co-branding strategy :
Benefits two partners when combining two brands and provides more recognition power than either enjoy alone. An example is when McDonalds sells Coca-Cola. A new and fast-growing variation on co-branding is ingredient branding where branded materials become component parts of other branded products
