PRODUCT_AND_BRAND_MANAGEMENT.docx - Product And Brand Management DMGT508 Copyright \u00a9 2012 S Nigam All rights reserved Produced Printed by EXCEL BOOKS

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Unformatted text preview: Product And Brand Management DMGT508 Copyright © 2012 S. Nigam All rights reserved Produced & Printed by EXCEL BOOKS PRIVATE LIMITED A-45, Naraina, Phase-I, New Delhi-110028 for Lovely Professional University Phagwara SYLLABUS Product and Brand Management Objectives: The focus of this course is on decisions about how a company can build and manage its products so that they are profitable to the company and at the same time adequately meet target customers' needs and wants. The course aims to synchronize product and brand management processes. S. No. Description 1. Introduction to Product & Product Related Concepts: Product Management & Scope Marketing Organization & Types, Marketing Planning: Components of Marketing Plan Defining the Competitive Set: Levels of Market Competition, Methods for Determining Competitors Category Attractiveness Analysis: Aggregate Market Factors, Category Factors, Environmental Analysis 2. Competitor Analysis: Sources of Information, Assessing Competitors’ Current Objectives & Strategies, Differential Advantage Analysis Customer Analysis: Purpose, Segmentation Criteria 3. Market Potential & Sales Forecasting, Methods of Estimating Market & Sales Potential 4. Developing Product Strategies, PLC, Product Strategies Over the Life Cycle Managing New Product Development ,Product Modification, Line Extension & Brand Extension 5. Brands & Brand Management, Branding Challenges & opportunities, Concept of Brand Equity 6. Strategic Brand Management Process: Introduction & Phases 7. Identifying & Establishing Brand Positioning: Building A Strong Brand, Positioning Guidelines 8. Planning & Implementing Brand Marketing Programs: Criteria for Choosing Brand Elements, Options & tactics for Brand Elements, Use of IMC for Brand Building, Leveraging Secondary Brand Associations to Brand building 9. Measuring & Interpreting Brand Performance: Developing A Brand Equity Measurement & Management System, Measuring Sources of Brand Equity & Outcome of Brand Equity 10. Growing & Sustaining Brand Equity: Designing & Implementing Branding Strategies Managing Brands Over Time CONTENTS Unit 1: Introduction to Product Management 1 Unit 2: Marketing Planning 19 Unit 3: Competitor Analysis 52 Unit 4: Market Potential and Sales Forecasting 79 Unit 5: Developing Product Strategies 98 Unit 6: Extension 115 Unit 7: Brand and Brand Management 146 Unit 8: Brand Equity 162 Unit 9: Strategic Brand Management Process 186 Unit 10: Identifying and Establishing Brand Positioning 196 Unit 11: Planning and Implementing Brand Marketing Programs 220 Unit 12: Measuring and Interpreting Brand Performance 248 Unit 13: Growing and Sustaining Brand Equity 273 Unit 14: Managing Brands over Time 289 Unit 1: Introduction to Product Management Unit 1: Introduction to Product Management Notes CONTENTS Objectives Introduction 1.1 Product 1.2 Concepts related to Product 1.2.1 Product Development 1.2.2 New Product 1.2.3 Product Life Cycle 1.2.4 Product Upgrade 1.3 Product Management: Meaning 1.4 Aspects of Product Management 1.4.1 Product Planning 1.4.2 Product Marketing 1.5 Product Management: Scope 1.6 Marketing Organisation 1.6.1 Characteristics of a Good Marketing Organisation 1.6.2 Types of Marketing Organisation 1.7 Organizational Structure 1.8 Role of Product Manager 1.9 Summary 1.10 Keywords 1.11Review Questions 1.12Further Readings Objectives After studying this unit, you will be able to: Learn the Concept of Product Explain the Concepts related to Product Discuss the Definition and Scope of Product Management Understand Marketing Organisation Illustrate the Types of Marketing Organisation Introduction Product Management is becoming an important function of marketing. With the passage of time, product management has undergone many changes. It is no more LOVELY PROFESSIONAL UNIVERSITY 1 Product and Brand Management Notes a department of churning out promotional materials but is has now become the nerve center of the organization. Effective product management is a practical, purposeful and positive approach of improving the company results, through the efforts of a competent and committed team, coordinating manufacturing, marketing and sales. In short, it can be said that product management involves. 1.1 Product The word “product” can be defined in many ways. The definitions differ according to the difference in the connotation in which it is being used. Technically, a product can be defined as anything that is produced, whether as the result of generation, growth, labor, or thought, or by the operation of involuntary causes; as, the products of the season, or of the farm; the products of manufactures; the products of the brain. In manufacturing, products are purchased as raw materials and sold as finished goods. In project management, products are the formal definition of the project deliverables that make up or contribute to delivering the objectives of the project. In marketing, a product is anything that can be offered to a market that might satisfy a want or need. Notes Commodities are usually raw materials such as metals and agricultural products, but a commodity can also be anything widely available in the open market. From all the above connotations, we can say that in general usage, product may refer to a single item or unit, a group of equivalent products, a grouping of goods or services, or an industrial classification for the goods or services. 1.2 Concepts related to Product The world of products has many important concepts related to it that are very popularly prevalent in the industries world over. Let us understand each of them one by one. 1.2.1 Product Development Product development is the process of designing, building, operating, and maintaining a good or service. Product development adds things like pricing, marketing, and customer support to the technology to create a complete product. The companies world over, use a product development process to ensure that they are not just manufacturing a product that people will want to buy but also one that people would like to continue to use. To be sure, a base technology is at the heart of the product, but product development ensures that the customer’s voice is not lost in the rush to an exciting technology. Product development is performed by a multi-disciplinary team whose goal is building, operating, and maintaining the product. Team members may include product managers, product developers, project managers, product operations engineers, customer support managers, quality assurance managers, user interface design engineers, marketers, financial personnel, graphic artists, etc. 2 LOVELY PROFESSIONAL UNIVERSITY Unit 1: Introduction to Product Management Notes 1.2.2 New Product The dynamics of markets, technology, and competition have brought changes to virtually every market sector and have made new product development one of the most powerful business activities. The monumental changes that constantly impact commerce have forced companies to innovate with increasing speed, efficiency, and quality. In turn, this has made new product development one of the most complex and difficult business functions. However, firms must innovate in order to survive. The power of innovation is revealed in numerous studies, which show that companies leading their industries attribute about half of their revenues to products developed in the most recent five years. By comparison, companies at the bottom of their industries achieve approximately one-tenth of their sales from new products. A new product can be defined as a product that is new to the market. Example: Sony introduced Walkman GE introduced Light HLL’s adult diapers, DEPEND, in Indian market. There are five categories of new products. 1. New-to-the-world products or services are new inventions. Example: In-line skates and health maintenance organizations. 2. New category entries are products or services that are new to a firm Example: Sport utility vehicles 3. Additions to product lines add products or services to a firms current markets. Example: When a powder laundry detergent offers a liquid version it is considered a line extension. 4. Product improvements are another type of new product and are common to every product category. Example: Product improvement made in Lifebuoy Soaps (as shown through Figure below) Figure 1.1 5. Repositionings target products to new markets or for new uses. LOVELY PROFESSIONAL UNIVERSITY 3 Product and Brand Management Notes Case Study Repositioning Maggi estlé India Ltd. (NIL), the Indian subsidiary of the global FMCG major, Nestlé SA, introduced the Maggi brand in India in 1982, with its launch of Maggi 2 Minute Noodles, an instant noodles product. With the launch of Maggi noodles, NIL created an entirely new food category – instant noodles – in the Indian packaged food market. During the 1990s, the sales of Maggi noodles declined, and this was attributed partly to the growing popularity of Top Ramen, another instant noodles product. In order to improve sales and attract more consumers, NIL changed the formulation of Maggi noodles in 1997. However, this proved to be a mistake, as consumers did not like the taste of the new noodles. In March 1999, NIL reintroduced the old formulation of the noodles, after which the sales revived. Over the years, NIL also introduced several other products like soups and cooking aids under the Maggi brand. However, these products were not as successful as the instant noodles. In the early 2000s, Maggi was the leader in the branded instant noodles segment, and the company faced little serious competition in this segment. In the early 2000s, NIL started introducing new ‘healthy’ products in accordance with the Nestlé Group’s global strategy to transform itself into a health and wellness company. NIL also adopted the same strategy for the Maggi brand with the launch of the Maggi Vegetable Atta Noodles (Vegetable Atta Noodles), a ‘healthy’ instant noodles product made of whole wheat flour and vegetables (instead of refined flour), in 2005. The Dal Atta Noodles were another variant of Maggi’s healthy instant noodles. Because of its first-mover advantage, NIL successfully managed to retain its leadership. Questions 1. Analyse three benefits that NIL derived by repositioning Maggi. 2. What do you learn from the case above? Source: Firms can obtain new products internally or externally. External sourcing means the company acquires the product or service, or obtains the rights to market the product or service, from another organization. Internal development means the firm develops the new product itself. This is riskier than external development because the company bears all of the costs associated with new product development and implementation. Collaborations, which include strategic partnerships, strategic alliances, joint ventures, and licensing agreements, occur when two or more firms work together on developing new products. 1.2.3 Product Life Cycle We have all heard about the product life cycle can be divided into four phases namely introduction, growth, maturity and decline. On the basis of these stages, product planning is done. The life cycle concepts on which a product planning team works are shown in Figure 1.2. 4 LOVELY PROFESSIONAL UNIVERSITY Unit 1: Introduction to Product Management Notes Figure 1.2 Product Initiation Feasibility Development Testing Product Launch Operation Decommisioning 1. Product Initiation Phase: In the Initiation Phase, Product Management, Engineering, or Operations submits a request for a new service or modification to an existing service. Figure 1.3 Right Team Executive Sponsor Scope & Boundaries These requests are received and prioritized by the Program Management Office (PMO). Once prioritized, the requests are reviewed by various management teams to assess the impact and viability of the request in the context of business needs and the organization’s strategy. If approved, the request is given necessary funding and resources in order to proceed to the Feasibility Phase. 2. Feasibility Phase: The Feasibility Phase is where an idea is explored in more depth in order to determine the feasibility of engineering the requested service within the scope of the business needs. The request that has been approved during the initiation phase by the Governing Committee is evaluated at the engineering and product management level. LOVELY PROFESSIONAL UNIVERSITY 5 Product and Brand Management Notes From an engineering perspective, the service is evaluated for technical feasibility. The preliminary Technical Service Description outlines the general architecture of the proposed service. The Feasibility Analysis and stable Business Case are also developed during this phase. These documents summarize time and cost estimates and other investment information necessary for deciding whether to continue the product development process or not. 3. Design and Plan Phase: In the Design & Plan Phase, the cross-functional team documents all detail pertaining to the development of the service. While core documents, such as the Marketing Service Description, Technical Service Description, and Design Specifications, are stabilized, other groups, including Operations, QA, and Customer Care begin to specify their requirements for supporting the service. All of these documents are approved and signed off by the project team and the Design & Plan Checklist is presented to the Governing Committee for final approval before moving into the Development Phase. 4. Development Phase: In the Development Phase, the actual engineering of the service is completed. As the service is being developed, other functional groups continue preparatory work for the Testing and Introduction Phases. Much of the documentation to support Customer Care, Training, Vendors, and Clients is created during this phase. Also, the Quality Assurance (QA) Group prepares for the testing handoff by documenting Test Plans and Test Specifications, and configuring the test environment. In this phase, a decision gate ensures that all pieces required for testing have been completed. The following are requirements to pass through the decision gate: (a) Ready for Testing Phase from a System Integration Test perspective (b) Documentation Complete (c) Test Environment Complete (d) Code Complete (e) Vendor Requirements met (f) Integration Testing & Results Complete. Once the Project Team has approved the readiness of the service, the Development Checklist is compiled and presented to the Governing Committee for approval to move the service into the Testing Phase. 5. Testing Phase: The majority of the Testing Phase is spent certifying the hardware and software changes involved in the service. The service will undergo a number of readiness tests in a Lab Environment. An operation also performs necessary system and network tests to ensure operational readiness prior to deployment. Once QA Test Results and Operations Readiness Test Results are completed, the service may undergo field trials as directed by product management. The Testing Phase Decision Gate is based on the QA Test Results, Operations Test Results, Field Verification, Change Requests, and Business Needs. A ‘go’ decision at the gate authorizes the launch of the service. 6. Product Launch Phase: The Product Launch Phase coordinates the deployment of the new or modified service. As the service is enabled by Operations, the supporting organizations initiate support processes to maintain the service. Once deployed a service check is made by the Project Team and Program Management Organization to ensure that the Service is available. If the service is found to be unsuccessful, a predetermined un-launch process will be 6 LOVELY PROFESSIONAL UNIVERSITY Unit 1: Introduction to Product Management executed. If the service is launched without incident, the Project Team then evaluates the stability of the release and the service is transitioned to the Life Cycle Management Process. 7. Operation Phase: The Operation Phase is typically the longest of the phases since once a product is developed, it may be operated for quite some time before it is updated or decommissioned. The operation phase requires an organization that can manage the product, track problems and bugs, and respond to customer issues regarding the product in a timely and cost effective manner. A multi-tiered product support model is used to ensure that products are operated in a way that leads to RASM (reliability, availability, security, and manageability). 8. Decommissioning Phase: The Decommissioning Phase occurs at the end of the product life cycle. While it may seem like the decommissioning phase is something that can be safely ignored since there will likely be larger problems if the product is decommissioned, the truth is that many products are taken out of service. Even when a company is in bankruptcy, the rational, orderly closing down of a product or service is important to managing the company’s assets. Notes ! Caution The distinction between a new product and a minor modification to an existing product is not always clear. Certain products have a product life cycle in which the supply and demand for the product increases then decreases over time. The demand for certain food products such as bread will tend to increase with population, but the supply and demand for a specific brand of bread may decline over time. 1.2.4 Product Upgrade When a customer is finished using a product, he can be upgraded to a follow a product that meets their needs or deprovisioned. The product upgrade path is desirable because it keeps the customer and reduces customer reacquisition costs. Customers frequently outgrow products or their needs change. If a company has a well managed product portfolio, a product more suited for the customer’s current situation will be waiting for them. Did u know? What is Deprovisioning? Deprovisioning a customer may seem like an issue that need not be dealt with: the customer stops using the product and nothing more need be done. However, in many cases, particularly where service with a recurring billing has been provided, if the customer is not properly deprovisioned, there will be future costs resulting from either providing service that is not being paid for or from billing a customer who is not receiving service. In either case there are likely to be costly customer support calls and an unhappy customer. Customer deprovisioning, where appropriate, should be planned for and built into the product from the beginning. Self Assessment Fill in the blanks: 1. Effective ………………………..is a practical, purposeful and positive approach of improving the company results. LOVELY PROFESSIONAL UNIVERSITY 7 Product and Brand Management 2. Notes A commodity can also ………………………..market. be anything widely available in the 3. The product ………………………..path is desirable because it keeps the customer and reduces customer reacquisition costs. 4. The dynamics of markets, technology, and competition have brought changes to virtually every market sector and have made ………………………..development one of the most powerful business activities. 1.3 Product Management: Meaning Product management is an organizational life cycle function within a company dealing with the planning or marketing of a product or products at all stages of the product life cycle. Product management and product marketing are different yet complementary efforts with the objective of maximizing sales revenues, market share, and profit margins. Product Management Process starts with the type of company one works for. There may be companies that are: 1. Technology-driven 2. Company driven 3. Sales-driven 4. Market-driven Product Manager’s primary role is to serve as the “voice of the customer”. Thus product management includes indirect management and cooperation with other members of various groups other members of various groups. The day to day work ...
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