Management of Management of Products and ServicesProducts and Services

Management of Management of Products and ServicesProducts and Services

Product: its nature Anatomy of a Product

Core Offering: value it offers to the customer Tangible Specifications:

Physical dimensions, other tangibles

Augmentation: support. Image: brand, manufacturer; ease of availability etc.

What is a Product?

Primary characteristicsThe total product

Auxiliary dimensions

AugmentedAugmentedproductproduct AUXILIARYAUXILIARY

CHARACTERISTICSCHARACTERISTICS

Core & Augmented Product

PrimaryPrimaryCharacteristicsCharacteristics

CoreCoreproductproduct

Managing of the Product

• Handling the issues related to the product• Co ordination with

the field force to assess the demand product design to ensure suitability in

the marketplace production/ manufacture to ensure availability

Thus it is at the hub of the organisation

Changing Environment• Environment in a state of Constant flux

• Factors responsible:Globalisation

Global economyTechnological Change

• Higher level of earnings• Greater Disposable income

Consequences of Change

• Higher Level of aspirations• Availability of much larger variety • Availability from many more sources• Constant need of tracking the customer

preference • Much shorter product life Need of

modifications, re launches• Need of co ordination within the company

Strategies to protect• Filling in the gaps• Strengthen and synergise communication• Strengthening and/or extending the network• Defining the position more carefully

Concentrate on the economyConcentrate on Premium segment

• Various forms of augmentationAdditional services, Greater Convenience

Position within the Company

• As a Functional Operation• As a Line head

• Single Product• Product Range• Multiple Product/Range

Perspective on New Domestic Competition

• Emergence of Rural Markets

• Competition for Channels

• Regional Brands• Value for Money

segments• Niche Players

• New Product Variants• Identifying and

capturing New segments, sub segments

• Improving Distribution& Service

• Dealing with new competition

Emerging Focus from Global Competition

• Well known Brands• Focus on Quality and

Service• High end Technology• New Product

Categories• Financial muscle of

MNCs• Catering to New

Segments

• Expanding Range• New Product

Development• Up gradation; moving to

premium segments• Strengthen Distribution• Concentrate on Core

competencies• Optimum, creative use

of Marketing Resources

Types of Products Convenience

Shopping Specialty

Example Grocery Clothing Appliances

Motive Availabiliy

Choosing to suit personal taste

Long deliberation for final selection

Prior Knowledge

High Medium Low

Effort spent

Minimal Moderate

High/V.High

Frequency

Regular Occasional

Variable

Buyer Behaviour

Low Information Search

Comparing Options w.r.t. budget

Intensive Consultation

Classifying Consumer Products

ConvenienceProducts Shopping

Products

SpecialtyProducts

Effort expended

Product Lines & Product Mixes

Product item

Product line

Product class

The Product Portfolio

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Market shareMarket share

Brand, What is it?• A Brand is a distinguishing name and/or

symbol, logo, trademark or package design) intended to identify the goods or services of a seller, and to differentiate these from those of competitors. A brand thus signals to the customers the source of the product, and protects both sides from the competitors who would attempt to provide products apparently identical.

Relevance and Logic of BRANDING

• Aims to segment the market• Starts with a big idea• Has an enduring value• Tries to protect the innovation• Is a living memory• Should sustain even though the

product may die

Successful Brands : criteria

• At Product level: Should deliver benefits

• Should offer intangibles besides tangible benefits

• Benefits on offer should be consistent with the personality

• Benefits offered must be relevant to the customer

Need for Success: Product Quality

• Performance: How well does a washing m/c clean

• Features: How many channels on TV• Conformance with specs: Level of defects• Reliability: Will the mixer work early in the

morning• Durability: How many years will the DVD last• Serviceability: Efficient, competent &

convenient• Fit & finish: Feel of Quality

Need for Success: Service Quality

• Tangibles: Facilities, equipment & personnel• Reliability : Will the accounting work be done

dependably and accurately • Competence: Does the service staff have the

required knowledge and skills, do they generate trust and confidence

• Responsiveness: Is the staff willing to help• Empathy: Does the bank provide

caring ,individualized attention to the customers

Predicting Success (Delta Habit Factor)

• Changing duration of consumption• Evolving new occasions for use• Changing sharing habits• Changing buying habits• Doing something new• Changing the frequency of the consumption

• DHF: index based upon the above• <3 easy to have higher trials

Are these cases of failures?

• Did we learn anything to improve next time• Did we have reasonable expectations from the

market• Can we recalibrate and try again• Does the potential of opportunity warrant

another try

What do we learn from the answers?In which case is it a real failure?

What are FailuresAbsence of the following factors

which could be considered pre requisites:

• A significant price or performance advantage

• Significant difference • A new, untried idea

Benchmarks of Success• Market Share• Duration (number of years of stay in the

market)• Profit : Staying Power of the organisation :Objectives of the organisation

• A combination of these

• Brand Success: the ability to retain a reasonable market share despite market redefinition

Longevity a measure for Successful Brands Product Leading In 20s New Century

Batteries Eveready Leader

Breakfast Cereal Kellogg Leader

Cameras Kodak Leader

Razors Gillette Leader

Sewing M/c Singer Leader

Soft Drink Coca Cola Leader

Tea Lipton Leader

Tyres Good Year Leader

Toothpaste Colgate Leader

Market Redefinition• Segment Redefinition:

Consumers moving in from high price to low price segments e.g. Nirma

Reverse also possible, e.g. Titan• Product Redefinition: Offering a product in a different form,

package, price point etc. singly or in combination

• Category Redefinition: Completely different products to become a competitor

Brand Personality• What distinguishes a brand from another

brand or product• Uniqueness critical to ensure the necessary

quality of being distinguished from the crowd• A sum total of all significant tangible and

intangible assets• All the symbolic aspects of the brand• What does it remind you of

Brand Personality• What distinguishes a brand from another

brand or product• Uniqueness critical to ensure the necessary

quality of being distinguished from the crowd• A sum total of all significant tangible and

intangible assets• All the symbolic aspects of the brand• What does it remind you of

Brand Personality : Image What image does the brand create in your

mind?• LUX: Cines tar's beauty Soap• Amrutanjan: Grandma’s care, Reliable,

Heritage• Dabur: Nurturing, Reliable, Dependable,

Heritage, Ayurvedic• Parle G : Economic, energy giving, Heritage

Brand Personality (5 Personality Factors)

• Sincerity: Down to Earth, Honest, Wholesome, Cheerful• Excitement :Daring, Spirited,

Imaginative, Up-to-date• Competence: Reliable, Intelligent,

Successful• Sophistication : Upper Class, Charming• Ruggedness : Outdoorsy, RuggedStress on the human characteristics of the brand, taking

special care that we are not looking at the customer

Brand Personality (3 Approaches for development)

• Self Expression : Pulsar Motor Cycle

:Honda City : Titan Watches

• Relationship : Parle: G

( Dependability and Trust) :Colgate, Surf

• Functional Benefits : Nirma, Mahacola,

: Asian paints, Ruffles

Another Approach to Brand Personality

• Ritualistic: Associated with an occasion,

e.g. Marie and Tea

• Symbolic: Logo more important Devil and Onida

• Heritage : Pioneer advantage, setting agenda in the segment or category, e.g. Mysore Sandal

• Exclusive: Snobbish, e.g. B.M.W.,Provogue • Belonging: Acceptance; having arrived,

e.g. Ray Ban, Levi's

• Legendary : Historical, semi god status, e.g. Lux, Dabur

Brand Image• Totality of Impressions about the

brandphysical,

functional and

psychological aspects of the brand

Brand Image• How the Brand is perceived by the

Consumer, thus Brand Personality

is the cause and the Image the effect

Brand Image and linkage with Brand Personality

Lifebuoy Soap PriceCarbolic

Value for MoneyHard Working

Honda City Gracious Stylish

ImageComfort

Classic Milds Mild Gracious Sophistication

Little Hearts Puffed, Heart Shaped, Distinctly packed

Novel, attractive,Romantic

Brand Images and Celebrities

Aspects of of a Brand

Image Celebrity product

Attractiveness BeautifulClassy

MadhuriPataudi

LuxRaymond

Trustworthiness DependableReliable

Ratan TataKapil Dev

IndicaBoost

Expertise KnowledgeQualification

SachinNaina

AdidasShampoos

Brand Identity Sum of the Brand as expressed as a

product, organisation, person or a symbolProduct: Scope, Attributes, Quality/Value, Uses,

Users, Country of OriginOrganisation: Attributes like innovativeness,

trustworthiness, concern for the customerPersonality and relationship with the customerSymbol: Visual Imagery and metaphors, Brand

Heritage

Brand Extension• Extension into related categories a. Category related , new variants, e.g. Cinthol lime

b. Image related, different category but similiar benefits,

e.g. Cinthol talcum

• Extension into unrelated categories • Variants of flavours and tastes are category

related extensions whereas changes in packaging and sizes are not.

• Some would consider the first one as a line extension only

Why Brand Extension• Energising a brand : increase visibility by

introducing variants• Expanding to meet new customers : Extension

to target price sensitive customers• Inhibiting Competition : Covering various price

points in a competitive market• Managing a dynamic environment:

Responding to changes brought in by competition, client preferences or technology

Results of Extension of a Brand Name

The good More goodName Brand helps to Extension enhances the brand extend the product name

Effects of extending a brand to a new product

The bad The Ugly More UglyFails to help the brand name is damaged Opportunity to create extension new brand equity lost

What to Extend into• Same Product in a different form : Shaving cream

to cake• Distinctive taste/ ingredient : Chocolate Horlicks• Companion Product : Toothbrush to the paste• Customer franchise : Powder to soap• Expertise: Bajaj from scooters to bikes• Benefit/ Attribute/ Feature: Liril freshness soap to talc• Designer/ ethnic image : Park Avenue to men’s toileteries

Preferred Extension Product Category

• There has to be relationship between prospective extension and the parent brand

• In some case the consumer can accept extension into any category. This would happen only in case of the extreme credibility of the parent brand; e.g. Tata, G.E. etc.

• Brand has to be strong in the beginning.• What woul happen if the brand is very strong

and has very close associations?

Positioning• Place occupied in a given market• Mental perceptions towards the offering• Conscious effort to stress differentiation• Other decisions follow this basic decision• Affected by the following: a. the product b. the company c. the competition d. the consumer

Positioning• Place occupied in a given market• Mental perceptions towards the offering• Conscious effort to stress differentiation• Other decisions follow this basic decision• Affected by the following: a. the product b. the company c. the competition d. the consumer

Differentation Strategies employed

Features Santro, Sony Wega, Talking washing m/c

Performance Dove beauty soap, Wet ones

Exclusivity Tanishq, Charagh Din

Service ICICI bank, Xerox

Range, Variety Lakme cosmetics, Ray-ban

Value - Strategy key links

Functional Continuous upgrading require

Social Long term relationship, stable only when established, reinforcement reqd

Emotional Periodic reinforcement to build on intimate relationship

Conditional Niche opportunities to be taken advantage of, cross promotions and quick response desirable

Value of Brand Associations

Associations result in:• Differentiate/ Position• Reason to Buy• Create Positive Attitudes / Feelings• Help Process/ Retrieve information• Basis of Extensions

Repositioning Different kinds • Increasing relevance to the consumer• Increasing the occasions for use• Search for a viable position • Making the brand serious• Falling Sales• Bringing in new customers• Making the brand contemporary• Differentiating from others• Changed market conditions

Increasing Relevance• Lipton Yellow LabelExotic & British Exotic & Indian• Visa CardWorld’s most Prefered Card Visa Power• Bourn VitaExtra Nutrition, Extra Taste Nutrition, Mental Stimulation

Increasing Occasions• Cadbury’s Drinking Chocolate Good Night Cap Happiest time of the day• Monaco Perfect salted biscuit Excellent plain, terrific with toppings• Vicks Cough Drops Cough Drops Adult Candy

Making the Brand Serious

• Cadbury’s 5 Star Togetherness Bar Energiser for Young Achievers• Saffola Good for Heart Heart not safe without Saffola

Bringing in New Customers

• Red EvereadyFocus on Battery Focus on the User• Johnson’s Baby Oil Babies Babies & Mothers• Cinthol Deodorant Soap Soap for Macho Men Freshness Soap

Making the Brand Contemporary

• Dabur’s Chyawanprash Traditional Traditional & Nutritional• Onida Neighbour’s Envy Owner’s Pride World’s Envy India’s Pride

Changed Market Conditions

• Horlicks Milk Additive Nutritive• Milkmaid Whitener Tastiest Milk Topping for Puddings Making of Desserts

Brand Equity• A product is something made in a factory,

a brand is something that is bought by a customer. a product can be copied, a brand is unique. A product can be quickly outdate, a successful brand can be timeless.

• A set of assets & liabilities linked to the name and symbol that add to the value provided by offering to the customer

Brand Equity (cont’d) Five categories that sum up to the

Brand Equity• Brand Loyalty• Name Awareness• Perceived quality• Brand Associations in addition to quality• Other proprietary brand assets-patents,

trademarks, channel relationships, etc.

Brand Equity (contributions)

Providing value to customer by enhancing the following for the customer:

• Interpretation Processing of information• Ease of making choice decision• Confidence in the purchase decision• Use Satisfaction

Brand Equity (contributions)

Provides value to the firm by enhancing:• Efficiency and effectiveness of the

marketing programme• Brand Loyalty• Prices/Margins• Brand extensions• Trade Leverage• Competitive Advantage

Value of Brand Loyalty

• Reduced Marketing Costs• Trade Leverage• Attracting New Customers: a. Brand Awareness Created b. Reassurance to New

Customers• Time to respond go Competitive Threats

Value of Brand Awareness

• Anchor to which other Associations can be attached

• Familiarity to lead to Liking• Signs of Substance/

Commitment• Brand to be Considered

Top Mind

Brand Recall

Brand Recognition

Unaware of the Brand