Transcript Chapter 6: Developing Product and Brand Strategy The Marketing

Chapter 6: Developing
Product and Brand Strategy
The Marketing Plan Handbook
Fourth Edition
Marian Burk Wood
6-1
Introduction
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Product strategy is critical to the success of
the overall marketing strategy.
Value is captured in two key areas:
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Product Strategy
 Existing and proposed products.
Branding
 Value enhancement through awareness
and image.
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Product Strategy
Products can be:
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Tangible Goods.
Services.
Places.
Ideas.
Organizations.
People.
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Designing a Service
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Features and Benefits
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Features: Specific attributes that enable a
product or service to perform its function.
Benefits: Need-satisfaction outcomes.
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Mass Customization
Mass Customization: Creating products,
on a large scale, with features tailored
to the needs of individual customers.
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Sample Needs, Features, and
Benefits
Product
Targeted
Segment
Need
Feature
Benefit
Cordless drill
Do it
yourselfers
Drill holes
without
electricity
Extra battery
pack included
Drill can be
used for long
periods of time
Mortgage loan
First-time
home buyers
Obtain money
to buy a home
Low down
payment
Less money
needed up
front to buy a
home
Laser printer
Small
business
owners
Print
documents
economically
Draft-quality
printing mode
uses less
toner
Toner
cartridge lasts
longer, saving
money
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Quality
Quality: How well the product satisfies
customers.
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Basic functionality is only the price of entry.
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Superior quality attracts business.
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Poor quality can lead to negative word-of-mouth.
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Design
Design: Quality comes from design,
components/ingredients and processes.
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At the forefront of many categories.
Includes “emotional quality” – the impact
of design on how it makes the customer
feel.
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Packaging
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Keeps products safe.
Helps companies enhance their brand
imagery and highlight points of
differentiation.
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Labeling
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Communicates product contents, uses and
warnings.
Conforms to national, regional and local
laws.
Helps attract attention, stand out from retail
clutter.
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The Product Life Cycle
The four stages of the PLC:
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Introduction
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Growth
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Maturity
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Decline
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Product Development
Steps in the Product Development Process:
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Idea generation.
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Screening of new ideas.
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Initial concept testing.
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Business analysis.
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Prototype design.
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Market testing.
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Commercialization.
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Monitoring customer reaction.
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Product Mix and Product Lines
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Product Mix: The overall assortment of all product or
services offered.
Product Lines: A group of products that are all
similar in some way.
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Product Mix Width: Number of lines offered.
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Product Line Depth: Number of products in a line.
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Line Extensions & Brand
Extensions
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Line Extension: Putting an established brand on a
new product and adding it to an existing product
line.
 Example: A low fat version of Lay’s potato chips.
Brand Extension: Putting an established brand on a
new product in a different category for a new
customer segment.
 Example: Snicker’s brand ice cream.
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Product Line and Mix Decisions
DECISION
RESULT
New product
Lengthens product line
Line extension
Lengthens product line
New line
Widens product mix
Brand extension
Widens product mix
Product deletion
Shortens product line
Line deletion
Narrows product mix
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Planning Branding
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Giving a distinct identity using: words, designs, and
symbols.
In terms of branding, a product may carry:
 Company name and individual brand.
 Individual name.
 Private-label brand.
 Multiple brands (co-branding, ingredient
branding).
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Brands Should Be….
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Meaningful.
Recognizable and memorable.
Capable of being legally protected.
Suitable for international markets.
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Branding and Positioning
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Branding not only identifies a particular
product, but also sets it apart from the
competition (both direct and indirect).
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Positioning
Positioning: What the target group perceives
about your brand relative to how they
perceive the competition.
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The Power of Brand Equity
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Brand Equity: the extra value customers
perceive that enhances their long-term
loyalty to a brand.
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Can insulate a company against competitive
threats.
Can help new products achieve acceptance.
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The Power of Brand Equity
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The Value of Strong Brands:
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Encourages brand loyalty.
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Boosts customer lifetime value.
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The total amount that a customer spends on a
brand or with a company during the life of their
relationship.
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Pyramid of Brand Equity
Resonance
Judgments Feelings
Performance
Imagery
Salience
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