Formulating Strategic Marketing Programs

1. Formulating Strategic Marketing Programs Product and Brand Management

2. Product and Brand Management Goals • Determining product and brand management tactics is based on what goals are to be accomplished.

3. Product/Service Differentiation • Successful differentiation is distinguished by three characteristics:

4. Differentiation: Product • Differentiate by providing benefits uniquely provided by your product • Eight dimensions of product quality: Performance Durability Features Serviceability Reliability Appearance Conformance Reputation

5. Differentiation: Service • Provide unparalleled service to set your firm apart from competitors • Five dimensions of service quality: Tangibles Assurance Responsiveness Reliability Empathy

6. 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

7. 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

8. Model of Brand Equity Brand Awareness Brand Identity Brand Equity Perceived Quality Brand Loyalty

9. 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

10. 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

11. 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

12. 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

13. 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

14. Product Line Management • Product line analysis • Product line length • Line modernization • Line featuring • Line pruning

15. Achieving Product Line Extensions: Product Extensions • New products in same product category owned by same company • Examples:

16. 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

17. Product Line Extensions: • Requires product differentiation and careful product positioning • If not carefully positioned, may cannibalize core brand and increase marketing costs

18. 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

19. Bundling Strategies • Pure product bundling • Sell 2 or more products at an overall price lower than the total price paid if purchased separately

20. 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

21. 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

22. 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

23. New Product Development Process • Lengthy • Multidisciplinary • Market-oriented

24. 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

25. Stages in Development Process • Idea generation • Idea screening • Concept development • Concept testing • Marketing strategy development • Business analysis

26. 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