MKTG 301: Product, Positioning & Branding

• The Marketing Concepts presentation focuses on product-related marketing tactics.
• The course is MKTG 301 – Marketing Concepts, Winter 2025.
• The instructor is Lawrence E. Williams.

Quick Recap: Positioning and Branding (5b)

• Good positioning statements distill marketing strategy into a clear, credible, and digestible format.
• Brands are intangible assets that are infused with tangible value.
• Brand management leverages positive and useful brand associations to build brand equity.
• Line extensions, brand extensions, sub-branding, and co-branding are important tools, but it's important to consider tradeoffs.

Housekeeping

• Midterm scores are scheduled to be released by the end of the day (EOD).
• Situation analysis grades will be released by the end of the week (EOW).
• The first deliverable for the MP+P project is due Sunday, February 16 at 7 p.m.

Agenda

• An in-class exercise focused on entire studios will be conducted.
• The definition of "Product" will be discussed.
• The product-service continuum will be examined.
• The Product Life Cycle will be explained.
• Two approaches to new product development are covered: a stage model vs. the minimal viable product.

Marketing Tactics

• Marketing is defined as the processes by which social actors form, cultivate, manage, and extend mutually valuable relationships with each other.
• The marketing mix (4P's) represents the tactics that bring marketing strategy to life.
• A key goal of the marketing mix is to manage customer relationships.
• The 4Ps include Product (Solutions), Promotion (Education), Price (Value), and Placement (Access).
• The graphic also includes outside factors such as Climate, Company, Customers, Competitors, and Collaborators.
• The graphic also includes segmentation, targeting and positioning for the product.

Customer Experience (CX)

• Customer Experience (CX) includes a holistic set of thoughts, feelings, judgments, and impressions customer gets from a brand/offering/firm.
• All marketing tactics such as product, promotion, pricing, and placement directly impact CX via touchpoints.
• Touchpoints are the points of contact/interaction between market actors.
• Customers' interactions with offerings, which include products and services, are considered the "focal" touchpoints for building relationships with firms/brands.

Entire Studios Exercise

• The exercise involves "reverse engineering" a positioning statement for entire studios.
• The exercise involves identifying five important product-related touchpoints with the brand.
• The exercise involves making recommendations for how entire studios should strategically manage its touchpoints.
• The exercise is posted on Canvas.

Managing Customer Touchpoints

• Companies need to determine MKTG strategy for managing customer touchpoints.
• Companies need to evaluate if quiet branding fits with strategy.

Defining Products

• When "product" is referenced, a number of words can be used
• These include: Offerings, tangible or intangible services, experiences, or ideas that firms offer as part of mutual value exchange
• Solutions are a bundle of benefits that solve customers’ problems
• A blend of goods and services

Three Product Levels

• Core product is the primary solution to the problem consumers want solved.
• Actual product is how that solution is delivered.
• Augmented product is a bundle of services that enhance the solution's value.

The Product-Service Continuum

• Most market offerings involve a combination of tangible and intangible sources of value.
• Pure products are tangible goods.
• Pure services are intangible.
• An example of a pure product is a baby walker.
• An example of a pure service is a dog walker.

Product-Service Bundling

• The wisdom of customer centricity suggests that firms should bundle services with their products when possible.
• Adding services provide new revenue streams and creates new customer touchpoints.
• Bundling services can convert one-off purchases into subscriptions, which facilitates CLV estimation.
• Bundling services can extend products' life cycles.
• An example of a service is Peloton, which bundles it's exercise bike with a monthly trainer subscription.

The Product Life Cycle

• Offerings develop over a "life cycle", akin to humans.
• The product life cycle (PLC) encompasses four phases of the relationship between sales (Y) and time (X).
• The phases are:
  • Introduction, initial customer awareness, sales start.
  • Growth, sharp increase in sales/profit.
  • Maturity, sales start to slow, profit plateaus.
  • Decline, sharp decrease in sales and profitability, prepare to divest/harvest.
• The time-scale for PLCs ranges from days such as with fads to decades such as with heritage brand offerings.
• Marketing costs are generally highest during the introduction phase.
• Competition is most intense during the maturity phase.

Product Life-Cycle Curves

• The Product Life-Cycle curve varies for fads, fashions, and slow starters.
• Sales for fads rise and fall quickly.
• Sales for fashions rise and fall in a cyclical manner.
• Sales for slow starters stay flat for a long time.

Introducing New Products

• Introduce new products to Play offense
  • Achieve market share or profit goals
  • Attract/satisfy investors
• Introduce new products to Play defense
  • Preempt competitors' attacks on your position
  • Replace declining products/services

Spanx Case Study

• Spanx's brand extensions beyond shapewear is an example of playing offense and defense, and estimates product categories

Successful New Products

• To succeed in the marketplace, new offerings should be viewed as unique by customers and supported by a differentiated capability system (aligned with the firm's operating advantages).
• Metrics that align with business objectives, marketing objectives, and strategy define new product success

Defining Success

• Common indicators of success for new offerings are:
  • Persistent demand, such as still on shelf 2 years post launch.
  • Usage frequency during specified timeframes.
  • Return on investment (ROI).
  • Beating competitors to market by gaining first mover advantage.
  • An attributable lift such as in brand sales, in brand awareness.

Why New Offerings Fail

• Capacity problems:
• Inadequate technological skill or financial resources, lack of manufacturing and servicing ability, lack of access to supply or distribution channels, operations inabilities to keep up with demand
• Strategy problems can cause new offerings to fail:
• Poor product-market fit, insufficient differentiation, poor positioning, poor entry timing, poor marketing mix decisions such as pricing, distribution, and promotion.

Examples of Failures

• Apple Vision Pro is an example of a (Capacity or strategy problem?)
• Webvan is an example of a (capacity or strategy problem?)

Costs of Failure

• Costs of failure can include R&D/production sunk costs, marketing sunk costs, opportunity costs such as market opportunities missed via money misallocation.
• Failing products can also lead to reduced brand equity and/or increased brand liabilities.

Two Takes on New Product Development

• Two different ways to approach new product development are outlined.

NPD Stages

• New product development (NPD) is a set of processes firms undertake to bring a new offering to market.
• A common approach is the Stage-Gate model (outputs of earlier stages = inputs for later stages)
• Idea generation: source a bunch of ideas from everywhere
• Screening: weighs strengths/weakness, keep subset.
• Evaluation: Test concepts, keep subset of subset.
• Development: build prototypes, market test, keep winner(s).
• Commercialization: finalize marketing plan, go to market.

NPD Stages Costs

• Idea generation can cost $16,000
• Screening can cost $320,000
• Evaluation can cost $1,600,000
• Development can cost $2,000,000
• Commercialization can cost $10,000,000
• The overall cost is $13,984,000

Minimum Viable Products

• An alternative approach to NPD that's gaining popularity is the minimum viable product (MVP) approach.
• When using MVP, firms:
  • Identify a core problem that customers face
  • Build a bare-bones solution to that problem
  • Quickly launch that solution and collect data on use, demand, and customer feedback
  • Iterate and improve the solution based on market research
  • Scale up if and only if there is sufficient evidence for demand
• Zara is an example of which approach to NPD - Stage-Gate or MVP?

Coming Up Next Week (7a)

• Promotion as education
• Integrated marketing communications and the promotional mix
• Getting media right
• Deep dive on social media marketing