Todays Discussion

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Todays Discussion
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• Product Management
• Brand Management
• Advertising
• Promotion
• Public Relations

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The Product Mix

• Product
• Promotion
• Price
• Place

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Product is the fist and most important of the
product mix elements
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Five Levels of a product

• Core benefit - The fundamental service the
  customer is buying
• Sleep, transportation, holes
• Basic Product - The realization of a core benefit
• a hotel room with a bathroom, bed, TV, linens,
  desk, dresser
• Expected product - A set of conditions and
  attributes that someone buying the product
  expects
• A clean bed, a bathroom with soap and clean
  towels, a color TV,
• Augmented Product-A product that exceeds their
  expectations Surprise and delight
• mints on the pillow, Wall Street Journal, your
  name on the door, valet parking, flowers in the
  room, shampoo etc. in the bathroom.
• Potential Product - Ways of augmenting product
  that dont exist yet.
• Stay ahead of customer expectations
• Internet access, email access, pick up bags at
  the airport,

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Product Classified in several ways
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Durability

• Durable - refrigerator, car, machine
• Non durable-food product, clothes
• Service - accounting, optometrist, physician

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Consumer Goods

• Convenience-staples, impulse, emergency
• Shopping - people shop around for- compare price,
  benefits,quality, style etc.
• Specialty goods - products that people want -
  period!!!
• Unsought - insurance, encyclopedias, cemetery
  plots

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Industrial Goods

• Raw Materials
• Manufactured materials
• Packaging materials
• Supplies

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Defining the Product Mix

• Length - Number of product lines
• Width -Products in each product line
• Depth- variations in each product
• Examples Coke, PG

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Product Line Strategy

• Analyze for sales and profits
• build, maintain, harvest, divest
• Increase or decrease line length - More products
  to satisfy customer requests
• Increase line width to fill in holes - Product
  lines to serve customers not currently being
  served (line stretch)
• Line pruning - eliminated unprofitable products

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Brand Management
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A brand is a means to differentiate the
product from its competitors and to create a
sustainable competitive advantage. It is a
deep set of meanings about the product
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Brand convey six levels of meaning

• Attributes - Mercedes engineered like no car in
  the world
• Benefits - Im important, Im rich, I can depend
  on my car
• Values - Brand says something about the producers
  values - performance, safety, prestige
• Culture - German engineering, organized,
  efficient, precision
• Personality - the ML bull, the Dryfus lion, the
  Taco Bell dog
• User - What kind of person uses our product

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Brand Equity

• Based on the level of perception by consumers
• Not Known - Expo
• Brand Awareness - Ticonderoga
• Brand Acceptability - Know the brand, its ok but
  youll switch if convenient
• Brand Preference - prefer and will ask for Scotch
  tape
• Brand Loyalty - Gotta have it and only it.
  Buick, IBM, HP

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Competitive Advantage over a long period of time

• Brands have their own product life cycle
• Represents an equity that cannot be easily copied
  or displaced

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Challenges in Branding

• To brand or not to brand
• Brand Sponsors
• Manufactures Brand
• Store Brands - Craftsman, Diehard,
• Licenses-Warner Bros..

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Brand Strategy

• Line extensions/product enhancements
• Brand Extensions
• Multibranding
• Co- Brands

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Line Extensions

• Product variations in the same category
• Most new products fall into this group

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Brand Extensions

• Different categories with the same brand
• Honda cars, motorcycles, snow blowers, lawn
  mowers

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Multi-branding

• Adding additional brands in the same category
• Used to fill in the blanks and prevent
  competitors from gaining a foothold
• Marriott Corp.Fairfield Inn, Courtyard,
  Marriott, Marriott Marquise

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Co- Brands

• Two brands on the same product
• Component Betty Crocker Brownie Mix with
  Diamond Walnut walnuts
• Joint Venture Shell MasterCard

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Advertising, Promotion and Public Relations

• The Second of the Four Ps

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Developing an Advertising Program

• Identify target market
• Mission - sales goals and advertising goals
• How much Money
• What is the Message
• Which Media
• How do we measure the result

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Objective

• Flows from Targeting and Positioning
• Characteristics of a goal
• Can be classified as
• Inform
• Persuade
• Remind

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Money - The Advertising Budget

• Not too much, not too little
• Factors to Consider
• Stage in the product life cycle
• Market share
• Competition and clutter
• Ad Frequency
• Product substitutability

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MediaWhich does the best job?


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Reach, Frequency and Impact

• Reach if I run an ad in your magazine, I can
  expect x households to be exposed to the message
  at least once during y time periods (month, day,
  year).
• Frequency the number of times that an average
  household that reads my magazine will be exposed
  to your message during the time period
• Impact the relative value of your message in
  this magazine. Good housekeeping vs Popular
  Mechanics for a food ad.

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Measurement

• How well is the ad communicating its message?
• What effect is it having on sales

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Communication Effect

• Direct Rating - Survey asking customers what they
  remember
• Portfolio Tests - Listen and watch various ads
  and then see how much they remember
• Laboratory Tests - measure physiological responses

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Sales Effect

• Difficult to measure
• Sales effected by many more factors than just
  advertising

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Promotion

• Advertising gives a reason to buy
• Promotion gives an incentive to buy
• Over promotion weakens a brands perceived value

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Types of Promotion

• Consumer
• Trade
• Sales force

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Promotion programs and Advertising Programs work
together

• Advertising increases customer awareness and
  build brand loyalty
• Consumer promotion gives consumer an incentive to
  try product
• Trade promotion gives retailer incentive to carry
  and display product
• Sales force promotion gives incentive to sales
  force to push product to the retailer

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Public Relations

• Promotes an Protects a companys image and
  products
• PR is more credible and more cost efficient than
  advertising or promotion

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