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Product/Brand Management

Responsibility
1. 2. 3. 4. 5. Improving / Maintaining Profit Increasing Market Share Growth Increasing Customers satisfaction Develop brand equity

Functions
1. 2. 3. 4. 5. 6. 7. 8. 9. Prepare and implement Marketing plan Formal observation of competitors activities Consistent update on market information and research Administer marketing mix elements Packaging and price fixation of a brand for market effectiveness Recommend product improvements Inform a sales approved marketing strategy to field staff Ensure that sales forecasts are met Ensure fair amount of sales force time for brand he is handling.

Functions
10. 11. 12. 13. 14.

(contd)

Recommend selling prices and volume discounts. Ensure production understand plan. Consult production for feasibility of product changes. Ensure balance between inventory and production plans. Fit marketing plan into corporate plan.

15. Synergy between marketing strategy and company philosophy. 16. Recommend new products /selling methods/ new markets.

Functions

(contd)

17.Do Strategic appraisal-Integrate planning assumption, identify key issues, opportunity, threat,indetify commercial opportunity 18.Selling knowledge and skills.-Analysis of data 19.Time Management-reduce procrastination, Handle daily works Have one project at one time, prioritize activity, 20.Project Management-Be focused and bring accountability, Provide resources in different areas, Manage new product development team 21.Product Manager score card: Business skills-Marketing plan, Financial knowledge, Selling skills Deliver Results through People-Communication, developing others, interaction with people Ensure market driven direction-customer relation, market research skills, Competitive intelligence, leading cross functional teams Guide Product fit function-Technical understanding, QC knowledge,Product portfolio analysis, New product development. Manage Multiple project-Time management, project management

Changing job function of a PM/BM


Government

Profit

Market

Coordination

Products

PM
Pricing Sharp timely decision PR Promotion Packaging Planning Technology

BRANDS INNER AND OUTER CORE


OUTER CORE Design Product INNER CORE The spiritual central/brand essence/brand soul. Brand name

Character
Packaging

Logo/symbol Slogan

Personality

BRAND VALUE PROPOSITION

BRAND IDENTIFY PARACHUTE

INNER CORE:

Expertise in Coconuts
Brand lineage Experience

BRAND IDENTIFY PARACHUTE


OUTER CORE: Personality: Innovative, confident, trustworthy, young

Product focus:
Price/quality: User profile:

Coconut oil, coconut perfumed hair oil, coconut anti-dandruff hair oil
Value for money Men/women, 18-45 years, SEC-B

Extensions:
Symbol/Logo: Heritage: Discrimination:

Parachute Coconut Hair Oil, Parachute Jasmine, Parachute Dandruff Solution.


Flag shaped logo with a coconut tree against a blue background. Has been in coconut business for decades Expertise Parachute Dream centre

VALUE PROPOSITION: Essential coconut nourishment

What is Product
Product is a Bundle of Tangible & Intangible Benefits

Core Benefits
In Tangible benefits Eg: Brand Name, Delivery, Credit, services Tangible Benefits Eg: Colour, Design, Quality, Price, Durability

Characteristics of Product
There are 3 aspects to any product/service: 1. Core Benefit [In-use benefit, psychological benefit etc] 2. Tangible product or service: [Benefits and product attributes and features]

3.

Intangible product and service: [Brand name, delivery etc]

Theodore Levitt of Havard observed: A product is not a product unless it sells. Otherwise its merely a museum piece

Definitions
Philip Kotler A product is anything that can be offered to a market to satisfy a want or need. William Stanton A product is a set of tangible attributes including packaging, colour, price, quality and brand plus the services and reputation of the seller. A product may be a good, service, place, person or idea. Skinner A product is any good, service or idea that satisfies a need or wants and can be offered in an exchange.

WHAT IS BRAND..
Brand is a Name , Symbol, Numbers, or Nemonics attached with the Product

TYPES OF BRAND
Functional
Hero Honda Fill it, shut, it forget it Disprin Quick relief from pain

Symbolic
Raymond Complete man Classic Discover or passion

Mixed
Johnson Tiles Not just tiles, lifestyles Opel Carsa Achtung baby

Surf Excel Surf Excel hai na


Nirma Doodh jaisi safedi Captain Cook Free flow salt Bajaj Aspire 110% bike Bisleri Play safe

Ell 18 Be your self


Louis Philippe Upper crest Carbon Very provocative Lacoste Be what you are Cortier Opulence

Hero Honda Passion When style matters


Liril The freshness soap Dove With moisturing cream Nescafe The taste that gets you stated Cadbury Dairy milk Khane walon ka khane..?

TYPES OF BRAND
Functional Dettol 100% bath Symbolic Thumps up Have you grown up to Thumps up yet Mixed woodland Leather that weathers

Complan The complete planned food

American Express Quite frankly American Express card is not for everyone (earlier) Wills Sport Be a sport

Rexona Deo It keeps working

Panasonic First & Fast Telecom Solutions

Honda Accord Style and substance

TYPES OF BRAND
Functional Kelvinator The coolest one Moove Ah se aaha tak Symbolic Nike Just do it Allen Solly Friday dressing Mixed Alto The hottest little car in town BMW Ultimate driving machine

Vim Bar Bas thoda sa vim bar


Indica More car per car

Boss Hugo Boss


Mant Blanc Art of writing

Product

PRODUCT V/S BRAND


Refers to a mindset A brand is something that is bought by a customer. A brand is unique. A successful brand is timeless. A brand is a set of values and associations that exist only in the mind of consumers Leads to customer loyalty

Brand

Refers to a commodity A product is something that is made in a factory A product can be copied by a competitor. A product can be quickly outdated. A product is something tangible

Leads to customer

What is Brand Equity?


Brand equity is a set of brand assets and liabilities linked to a brand, its name, and a symbol, that add to or subtract from the value provided by a product or service to a firm or to that firms customers.

David Aaker Theory


Brand equity is the brand assets or liabilities linked to a brands name and symbol that add to or subtract from a product or a service. These assets can be grouped into 4 dimensions brand awareness, perceived quality, brand associations and brand loyalty.
- David Aaker

Brand Equity .

Value of a Brand Name or Symbol Sets of Assets & Liabilities linked with a Brand Incremental Value of a Business above Physical Asset

Higher Market Share Does Not Mean Higher


Brand Equity

What is Brand Equity?


Perceived Brand Quality Brand Awareness
Brand Name
Symbols

Brand Associations
Attributes Benefits Attitudes

Brand Loyalty

Brand Equity

Other Proprietary Brand Assets


Patents Trademarks Channel relationships

Provides Value to Customer by Enhancing:


Interpretation/processing of information Confidence in the Purchase Decision Use Satisfaction
Source: Aaker (1991) Managing Brand Equity

Provides Value to Firm by Enhancing:


Efficiency and Effectiveness of Marketing Programs Brand Loyalty Prices/margins Brand extensions Trade Leverage Competitive Advantage

Lower Marketing Cost

Higher Loyalty

Excellent Channel Relationship

Name awareness

High perceived quality

STRONG BRAND EQUITY

Competitive Advantage

Can be sold at higher price

Strong brand association

STEPS IN DEVLOPING BRAND EQUITY

Identify product attributes What is USP / UCP Market Segment which is more attractive?

Developing positioning based on segment / USP /UCP/ Psychographic Profile

Does it tally with companys image and strength? Develop campaign on new product

Brand Equity
Top Ten Brands of Asia 1. Coca cola 2. Kelloges 3. McDonalds 4. Kodak 5. Marlbro 6. IBM 7. American Express 8. Sony 9. Mercedes 10. Nescafe

Measuring brand equity


a) Sales value X 1.1-- 2
b) Book Value X 2 or 3 or 4

RKS Model

c) Profit X 10 or 15 . d) Basis of the Stock Value

MEASUREMENT OF BRAND EQUITY


COST BASED
HISTORICAL COST REPLACEMENT COST MARKET VALUE METHOD INTERBRAND METHOD

PRICE-BASED
PRICE PREMIUM EQUALIISATION PRICE INDIFFERENT PRICE

CONSUMER-BASED
ATTRIBUTE RATING BLIND TEST

Cost based methods Historical cost


Money spent till date on the brand Eg: Rs.100mn. Have been spent so far in creating a brand X. So, value at which brand can be sold is Rs.100mn. Disadvantage : 1. No guarantee of realization. 2. Cost incurred in brands are no measure of the efficiency with which the money was spent. Eg:

3. May or may not be adequate measure of brands future potential even when the costs are adjusted to the current prices.

Interbrand INTER-BRAND METHOD


Valuation Method Is Based On Brand Earnings Approach. Brand Earnings Are Determined By Using Brand Index- A Combination Of Seven Variables

STEPS USED TO MEASURE BRAND EQUITY


a) The weighted average of the last three years profits of the brand is computed b) This figure when multiplied with a number gives the value of brand equity. The number is arrived at by multiplying the P/E of the company or industry in which the company operates and a factor called Brand Strength. c) Brand strength is dependent on Brand Index which consists of certain variables like leadership, stability, etc . Of the brand.

BRAND EQUITY = (weighted average of brand profits X P/E of the Industry X Brand strength)

CONSIDER A BRAND X, WHOSE PROFITS ARE GIVEN BELOW

YEAR

PROFITS (Rs. Million)

WEIGHTAGE

1998
1999

15
20

1
2

2000

30

AVERAGE PROFIT = 15X1+ 20X2 + 30X3/1+2+3 = Rs. 24.2 million

FACTORS

IMPLICATION

MAXIMUM SCORE
25

SCORE FOR BRAND X


13

Leadership

Is The Brand Leader In Market Share, Pricing Does The Brand Have Stable Market Share What Is The Brand Acceptance Level Internationally Is The Brand Actively Supported And Promoted By The Company

Stability

15

Geographic Spread Support

15

15 Protection Is It Adequately Supported By Trademark 5 Market Trend Is The Market In Which Brand Operates Is Stable Long Term Future For The Brand 5 20

2 2 10

TOTAL

100

43

BRAND STRENGTH SCORE = 43/100 = 0.43


SUPPOSE THE P/E VALUE OF THE INDUSTRY IS 15, THEN BRAND STRENGTH SCORE X P/E = 0.43 X 15 = 6.45 BRAND EQUITY = 6.45 X 24.2= 156.09 million This is the recommended price at which brand X can be sold.

ADVANTAGES
IT IS WIDELY ACCEPTED IT TAKES ALL ASPECTS OF BRANDING IN ACCOUNT IN VALUATION

DISADVANTAGES
BRAND STRENGTH COMPUTATION RESTS MORE OR LESS ON SUMJECTIVE JUDGEMENT.

HOW TO MEASURE BRAND EQUITY-- VALUME BUSINESS RANK IN MARKET

RKS model

MARKET SIZE
RELATIVE PRICE

MARKETING EXPENSE TO TOTAL SALES RATIO


ACTUAL QUALITY SATISFACTION SCORE

HOW TO MEASURE BRAND EQUITY


STATUS OF THE PRODUCT ON PRODUCT LIFE CYCLE

PRICE ELASTICITY
PROFITABILITY SCOPE FOR LINE EXTENTION

Measuring Brand Equity (RKS Model)


Factors
Value Business of product Rank in the market ( 1-3- = 10 15 <3 = 10 ) Market Share ( > 5% = 10 - 15 < 5% = 10) Perceived Value (Higher - 10 - 15 Lower - 10)

Score (a) 10 15

(b) 1 2 3 4 5

Weighted Score (axb)

15

15

Measuring Brand Equity (RKS Model)


Factors
Profitability (> 60% GM 10- 15 > 60% GM 10) Marketing Expense to total Sales Status of product on Life cycle

Score (a) 15

(b) 1 2 3 4 5

Weighted Score (axb)

10

10

Measuring Brand Equity (RKS Model)


Factors
Scope of life Extension

Score (a) 10 100

(b) 1 2 3 4 5

Weighted Score (axb)

Total

Total Weighted Score ( a x b) Index Scores = ---------------------------------------- X 100 500

B Eq. = Profit X Index Score % = --------------

crore

Brand Equity Valuation


RKS MODEL

ROOSTER 25 Cr. NORMAXIN 15.4 Cr.


Million $ COKE 70453 MICROSOFT 65174 IBM 51087 INTEL 31112 MCDONALD 24599 MARLBRO 22183

1. 2. 3. 4. 5. 6.

BRAND IDENTITY CONFUSION

BRAND IMAGE : How the brand is now perceived BRAND IDENTITY : How strategists want the brand to be perceived BRAND POSITION : The part of the brand identity and value

proposition to be actively communicated to a target audience

Identity and Image

Identity: The way a company aims to identify or position itself.

Image: The way a public perceive the company or its product

BRAND IDENTITY CONFUSION

Brand identity strives to support the relationship between customer and brand by generating a value proposition that can include functional, emotional and self expressive benefits

Brand Image vs Sales


Sales Low Hi Brand Image Low Unrealized Potential Dying Brand Hi Healthy Brand

Vulnerable

BRAND IDENTITY PLANNING MODEL


BRAND IDENTITY Extended Core Brand Essence Continue

Brand as Product 1. Product scope 2. Product attributes 3. Quality / Value 4. Uses 5. Users 6. Country of origin

Brand as a organization 7. Organization attributes (e.g., innovation, consumer concern, trustworthy) 8. Local versus global

Brand as person

Brand as Symbol 11. Visual image and metaphors

9. Personality (e.g., genuine, energetic, rugged)


10. Customer/ brand relationships

12. Brand heritage

BRAND IDENTITY PLANNING MODEL


Continue
VALUE PROPOSITION Functional benefits Emotional benefits Self-expressive benefits CREDIBILITY Support other brands

RELATIONSHIP

BRAND IDENTITY PLANNING MODEL

BRAND IDENTITY IMPLEMENTATION SYSTEM

BRAND IDENTITY ELABORATION

BRAND POSITION The part of the brand identity and value proposition that is to be actively communicated to the target audience

BRAND-BUILDING PROGRAMS

TRACKING

BRANDS INNER AND OUTER CORE -identity


OUTER CORE Design Product INNER CORE The spiritual central/brand essence/brand soul. Brand name

Character
Packaging

Logo/symbol Slogan

Personality

BRAND VALUE PROPOSITION

Brand Personality
Expression of the core values & characteristics of a brand with emphasis on human personality traits e.g. friendly, intelligent, innovative
Process of transforming brand into a person or humanizing the brand.

Acts as brand differentiator &offers sustainable competitive advantage

Personaity
Brand personality describe brands in terms of human characteristics and was seen as a factor in increasing brand awareness and attachment in much the same ways as people related and bonded themselves to other people. (Aaker J.L.(1997).

Sincerity

Brand Personality Dimensions-David Aaker


down-to-earth, honest, wholesome, cheerful

Excitement
daring, spirited, imaginative, up-to-date

Competence
reliable, intelligent, successful

Sophistication
upper class, charming

Ruggedness
outdoorsy, tough

CRESS

BRAND PERSONALITY PARAMETERS ELABORATION


1. SINCERITY : DOWN-TO-EARTH Family oriented, Small town, Conventional, Blue-collar, All Indian HONEST Real, Ethical, Thoughtful, Caring. WHOLESOME Original, Genuine, Ageless, Classic, Old-

fashioned.
CHEERFUL Sentimental, Friendly, Warm, Happy.

BRAND PERSONALITY PARAMETERS ELABORATION


2. EXCITEMENT: DARING Trendy, Exciting, Off-beat, Flashy, Provocative. SPIRITED Cool, Young, Lively, Outgoing,

Adventurous.
IMAGINATIVE Unique, Humorous, Surprising, Artistic, Fun. UP-TO-DATE Independent, Contemporary, Innovative, Aggressive.

BRAND PERSONALITY PARAMETERS ELABORATION


3. COMPETENCE: RELIABLE Hardworking, Secure, Efficient, Trustworthy, Careful. INTELLIGENT Technical, Corporate, Serious. SUCCESSFUL Leader, Confident, Influential.

BRAND PERSONALITY PARAMETERS ELABORATION


4. SOPHISTICATION: UPPER CLASS Glamorous, Good Looking,

Pretentious, Sophisticated.
CHARMING Feminine, Smooth, Sexy, Gentle.

BRAND PERSONALITY PARAMETERS ELABORATION


5. RUGGEDNESS: OUTDOOR Masculine, Active, Athletic.

TOUGH Rugged, Strong, No-nonsense.

EXTENSION
What is line Extension?

Occurs when original brand name is extended by modifying features within the existing product category. Ex,Coke,Diet Coke What is Brand extension ? -is using the leverage of a well known brand name in one category to launch a new product in a different category. ponds cold cream ponds telcum powder

1.Line Extension-approach
Product Existing
Customer

New
Existing Brand with little modification. eg: LUX Liquid soap. Diversification eg:Cocktail Drinks. (Breeze) Alcoholic drink

Existing

Line extension For Better Penetration Eg : Different packs.

New

New Users Brand development activity Grocery shop to club shop/ Petrol shop Liquor shop to bars

2.Igor Ansoffs Matrix (Product/Market Matrix) Existing Markets Market Penetration Colgate Dental Cream New Markets

Market Development
Tata Tea Ujala Supreme

New Products

Product Development Ariel Liquid with fabric softener Bru Cappuccino

Diversification Tanishq

3.Four Brand Extension Strategies


Product Category Existing Existing Brand Name Line Extension Dannon Yogurt Flavors New

Brand Extension Barbie Electronics

New

Multibrands Seiko Lasalle & Pulsar

New Brands Windex (by acquisition)

TEN COMMANDMENTS OF PRODUCT LAUNCH Do not try introducing a new product if you have no: 1) Market Research 2) Free availability of raw material. 3) Clear knowledge of regulatory formalities. 4) Capability of in house manufacturing facilities. 5) Clear cut product differentiations. 6) Good positioning slot. 7) Worthwhile USP./UCP 8) Good training programme. 9) Well planned launch.

10) Well developed feedback systems

TEN COMMANDMENTS OF PRODUCT LAUNCH Do not try introducing a new product if you have no: 1) Market Research 2) Free availability of raw material. 3) Clear knowledge of regulatory formalities. 4) Capability of in house manufacturing facilities. 5) Clear cut product differentiations. 6) Good positioning slot. 7) Worthwhile USP./UCP 8) Good training programme. 9) Well planned launch.

10) Well developed feedback systems

HOW TO SELECT A NEW PRODUCT


1. Follow company Objective 2. Off patent Product / Patent Office 3. Top ten therapeutic Market Segment 4. Usage Of Precise Models 5. Indian Research lab Company Venture / International Literature

6. Customer Feed back / Suppliers / Licensing Agents


7. National Product 8. Existing Molecules With Longer PLC

9. Tie Ups
10. Smaller niche Market 11. MD idea/ New Marketing Recruits / Production foremen/ Sales Personnel 13. Exhibition / Merger / Acquisition

What kind of product to select ?


Application of RKS Model in new product selection
Relevance to company Whether product is different than others. Will product benefit to customer. Will it answer why should he change and buy your product. Production Expertise. Market competitive level. 200 300% to Sales or COG = 25 35%

High Margin :

USP of product - can we differentiate

What are customer perceptions about product ? High volume sales.


Niche market product

NEW PRODUCT INTRODUCTION SYSTEM TIMING IDEAS EXPENSE

BASIC MARKET DATA IDEAS IDEAS CONS. SCREENING PRODUCT CONCEPT

4 Weeks
Concept Test

CHECK POINT

Concept use Test


PACK ADV DEV DEV TEST TEST

8 Weeks --------------8 Weeks ---------------

CHECK POINT

RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS RS

CHECK POINT

6 Weeks

TEST MARKET NATIONAL SALES

MODEL - II
1. Product offers something new to consumer.
2. Product will improve or change the habits 3. Product offers advantages over the existing competitive products

Rating Scale 0 1 2 3 4 5

4. Perceived benefits scores over the price. 5. Matching of product profile with current requirement of consumer which is not yet fully filled.

6. Product profile can be communicated is communication effectively. 7. Product profile does not require concept selling.
35 ----- X 100 = 100% 35

NEW PRODUCT MARKETABILITY INDEX


WEIGHT (Wi) 0 A. MARKETABILITY FACTORS 1) 2) 3) 4) 5) 6) B. MARKET SHARE CONCENTRATION RATIO PRICE / QUALITY ADV. COMPETITION ADV. SPENDING INDEX IMPACT ON EXSTING PRODUCT SALES DISTRI. NETWORK VS COMP. PROFITABILITY 10 7 7 7 1 2 3 4 5

Model 1
RATING SCORE (Ri) 6 7 8 9 10 Wted Score

20 42 7 63

9
10

45
60

DURABILITY FACTORS 7) MARKET SIZE 8 10 6 8 72 70 36 48

8)
9) 10) C.

MARKET GROWTH RATE


LIFE CYCLEDURATION SENSITIVITYTOECONOMIC FLUCTUATION

PRODUCTION ABILITY FACTORS 11) 12) 13) EQUIPMENT NECESSARY PERSONNEL NECESSARY RAW MATERIALS TOTAL 6 6 54 54

6
100

54
625

MARKETABILITY INDEX (MI) VG = 80 % G = 71% - 80% AV = 60% - 70% BELOW AV = 50% - 59% POOR = < 50%

625 ------ X 100 1000 = 62.5%

Livon
RKS MODEL
Product offers something new to the consumer Product will improve or change the habits like usage, buying pattern Rating (0 5)

5 5

Product offers advantages over the existing competitive products


Perceived benefits scores over the price Product matches with current requirements of consumer, which is not yet fully filled Product profile can be communicated in communication media effectively Product does not require concept selling

5
3 5 5 3

Categories of New Products


New-To-The-World

Mobile Movie
Gatorade- Propel Water

New Product Lines

Six Categories of New Products

Product Line Additions Improvements/Revisi ons Repositioned Products Lower-Priced Products

McDonalds Value Meals New look Honda City

Milkmaid Wheel Bar

New-Product Development Process


New-Product Strategy Idea Generation Idea Screening Business Analysis Development Test Marketing Commercialization

New Product Development Process Step 7. Test Marketing


Test Marketing is the Stage Where the Product and Marketing Program are Introduced into More Realistic Market Settings.
Budget Levels Packaging Product Positioning

Branding
Pricing

Elements that May be Test Marketed by a Company

Advertising
Distribution

Product Positioning is creating a desired product


concept based on consumer perceptions.

Segmentation is grouping of people


by needs or wants.

Positioning: is the way


consumers perceive the brand relative to its competitors DUE TO competitive advantage by - Differentiating the product & - Stressing salient characteristics

According To Ries And Trout


Positioning is a battle for a place in the consumers mind

Positioning What?
Positioning is the act of designing the companys offering and image to occupy a distinct and valued place in the target customers mind Philip Kotler

DO PERCEPTUAL MAPPING
Cosmetic o Anchor o Colgate Gel o Close Up Poor Taste Colgate o o Colgate Cibaca o Meswak Babool o o Pepsodent o Colgate Total Good Taste

Emoform o

Medicinal

Types Of Positioning Strategies


Attribute Positioning - Gillette Mach 3 Benefit Positioning - Imax Adlabs Dome

Users Positioning - Mercedes

Types

Use/Application Positioning - Maggi

Competitor Positioning - 5paisa.com

Quality/Price Positioning - Maruti VFM

New Product Launch Process


Product selected
Name Trade Mark clearance

Pricing
Trade margin Price

Packaging Design etc. Yearly Sales Fore casting Monthly 3 months Placement stocks

Inform sales
Get feed back Finally announce the price

Samples /

Mfg - Raw Material - Batch Size

Product specification (MKT)

New Product Launch Process


Finished product Bonded store Distribution/ Depot Stockiest / Distributor / C&F /CA/ Depot Retailers Consumer Marketing Activity Product : MKT plan

Product concept Testing

New Product Launch Process


Concept & use Test Segment Analysis Advt.& Positioning / UCP Testing Field Testing Training & Launch Meeting

Media Availability selection product & Dealers meet

Customer selection

Incentive for SR/ Manager

Communication Details
Print TV SR

Control & monitoring with mkt plan