Product Development and Brand Management

Product Development and Brand Management

• Focus on Weeks 4 & 5.

Product and Service Classification

• Product quality impacts the ability to satisfy customer needs.
• Total Quality Management and Return-on-Quality are relevant concepts.
• Product Quality has a level vs. consistency.
  • Performance quality.
  • Conformance quality.
• Consumer products are for personal consumption, including:
  • Convenience products.
  • Shopping products.
  • Specialty products.
  • Unsought products.
• Industrial products

Product Development

• The Five W's is a key consideration for what products to launch: Who, Why, When, Where, What.
• Sources for new product ideas include customers, employees, distributors, competitors, R&D, consultants, and other experts.
• Product ideas can come from international competitors.

Test Marketing

• Test marketing involves a limited product introduction with a marketing program to gauge customer reactions.
• Test marketing can be costly, time-consuming as it can take over $1 million and often takes a year or more.
• It exposes the new product to competitors, that can "jam" testing programs with their own promotions.
• Alternatives to test marketing include:
  • Single-source research using scanner data.
  • Simulated (laboratory) market testing.
  • Online test marketing.
  • Test marketing in a smaller international market.

Four Stages of the Product Life Cycle

• The product life cycle includes the introductory, growth, maturity, and decline stages.
• Introductory Stage:
  • High failure rates and little competition.
  • Frequent product modification and limited distribution.
  • High marketing and production costs, with negative profits due to slow sales.
  • Promotion focuses on awareness and information to stimulate primary demand.
• Growth Stage:
  • Increasing sales rate and entrance of competitors.
  • Market consolidation and initial healthy profits.
  • Aggressive advertising to differentiate brands, with wider distribution.
• Maturity Stage:
  • Sales increase at a decreasing rate in saturated markets.
  • Annual models appear, with lengthened product lines.
  • Service and repair become important, heavier promotions, and marginal competitors drop out
• Decline Stage:
  • Long-run drop in sales with large inventories.
  • Elimination of nonessential marketing expenses, potentially leading to organized abandonment.
  • Niche marketers emerge.

Services Marketing

• The service-profit chain links service firm profits with employee and customer satisfaction.
  • Internal service quality leads to satisfied, productive employees.
  • Greater service value results in satisfied, loyal customers
  • Healthy service profits and growth.

Ansoff's Opportunity Matrix

• Market Penetration: Increase market share among existing customers.
• Market Development: Attract new customers to existing products.
• Product Development: Create new products for present markets.
• Diversification: Introduce new products into new markets.

Product & Brand Development

• Existing Product, and Existing Market = Market Penetration
• Existing Product, and New Market = Market Development
• New Product, and Existing Market = Product Development
• New Product, and New Market = Diversification

Benefits of Branding

• Product Identification
• Repeat Sales
• New-product Sales

Branding

• Creating a unique brand identity (brand personality) that the company wants consumers to perceive.
• Providing consistent brand experiences at every contact point.
• Maintain a consistent brand identity: Consistent story-telling
• Successful branding yields consistent brand experiences through products, price, packaging, product design, quality, features, etc.

Brand Management

• Provide consistent brand experiences at all channels.
• Evolving with trends by renewing logos or product design.
• It is important to re-invent a brand making it relevant, e.g., Burberry,.

Brand Naming Strategies

• Successful Brand Names:
  • Suggest Benefits & Qualities
  • Easy to Pronounce, Recognize & Remember
  • Distinctive & Extendable
  • Translatable for Global Economy
  • Capable of registration, legal protection

Types of Brands (Brand Sponsorship Options)

• Manufacturer's Brand
• Private brand
• Licensed brand
• Co-brand

Developing a Brand Identity

• Brand attributes (brand characteristics, positioning bases) should reflect a company's business philosophy or mission statement.
  • Apple: Innovative, User-Friendly, Aesthetically-Pleasing Design, High Quality
• What to prepare:
  • Brand Statement/Mission Statement/Philosophy
  • Key Characteristics
  • Additional Branding Rules

Brand Identity and Positioning

• Positioning: Developing a specific marketing mix to influence potential customers' overall perception of a brand, product line, or organization.
• Positioning Bases: Attributes, Price and Quality, Use or Application, Product User, Product Class, Competitor, Emotion (beliefs & values).
• Brand (Perceptual) Map: Displaying products, brands, or groups of products in customers' minds.
  • Determines a brand's identity/perception to compare multiple brands in attributes.