Session two of my classes at ITM Executive MBA for Marketing Strategy. This covers Product & Branding Strategy including Theory & speaker notes provides some examples too.

1. DAY 2
Product & Branding Strategies
BUSINESS STRATEGIES AND
THEIR MARKETING
IMPLICATIONS

2. Kotler Speak…
The best way to hold
customers is to constantly
figure out how to give
them more for less.

3. Objectives for the day…
 What are the characteristics of products?
 How can a company build and manage its product
mix and product lines?
 How can a company make better brand decisions?

4. Discussion Question
1. Ultimately the goal for any firm or
business unit is to gain sustainable
competitive advantage. What key
decisions are necessary to get there?
3-4

5. Combined Typology of Business-Unit
Competitive Strategies
Emphasis on new product-market growth
Heavy emphasis No emphasis
Prospector Analyzer Defender Reactor
Units with strong
Differentiation
core bus.; Units primarily
actively seeking concerned with
to expand into maintaining a
Competitive strategy
Units primarily differentiated
concerned with rel. prod-mkts
position in Units with no
with
attaining growth mature markets clearly defined
differentiated
through offerings product-market
aggressive Units with strong Units primarily development or
Cost leadership
pursuit of new core bus.; competitive
concerned with
product-market actively seeking strategy
maintaining a
opportunities to expand into low-cost
rel. prod-mkts position in
with low-cost mature markets
offerings

6. How Business Strategies Differ in Scope, Objectives,
Resource Deployments, and Synergy
Dimensions Low-cost defender Differentiated defender
• Scope Mature/stable/well- Mature/stable/well-
defined domain; defined domain;
mature tech.and mature tech.and
cust. segments cust. segment
• Goals and obj.
Adaptability (new Very little Little
product success)
Effectiveness (inc. Low Low
mrkt share)
Efficiency (ROI) High High
• Resource Generate excess cash Generate excess cash
deployment (cash cows) (cash cows)
• Synergy Need to seek Need to seek operating
operating synergies synergies to achieve
to achieve efficiencies
efficiencies
3-6

7. How Business Strategies Differ in Scope, Objectives,
Resource Deployments, and Synergy
Dimensions Prospector Analyzer
• Scope Broad/dynamic Mixture of defender and
domains; tech. and prospector strategies
cust. segments not
well-established
• Goals and obj.
Adaptability (new Extensive Mix. of defender &
product success) prospector strats.
Effectiveness (inc. High Mix. of defender &
mrkt share) Low prospector strats.
Efficiency (ROI) Need cash for product Mix. of def. & prosp. strats
• Resource dev. (? or *) Need cash for prod. dev.
deployment Danger in sharing but < prospectors
• Synergy operating fac. and Danger in sharing
programs - better to operating fac. and
share tech./mktg skills programs - better to
share tech./mktg. skills
3-7

8. Let’s combine the two perspectives and
examine the book retailing industry
Emphasis on new product-market growth
Heavy emphasis No emphasis
Prospector Analyzer Defender Reactor
Units with strong
Differentiation
core bus.; Units primarily
actively seeking concerned with
to expand into maintaining a
Competitive strategy
Units primarily differentiated
concerned with rel. prod-mkts
position in Units with no
with
attaining growth mature markets clearly defined
differentiated
through offerings product-market
aggressive Units with strong Units primarily development or
Cost leadership
pursuit of new core bus.; competitive
concerned with
product-market actively seeking strategy
maintaining a
opportunities to expand into low-cost
rel. prod-mkts position in
with low-cost mature markets
offerings
3-8

9. Ideas for new products or new ventures: How
do we know how fast customers will adopt?
Laggards
and
nonadopters
Innovators Late
Early
Early majority majority
adopters 34% 34%
2.5% 13.5% 16%
Source: Adapted with permission from Marketing, 11/e, Acetate 8-8, by Michael J. Etzel, Bruce J. Walker, and William J. Stanton. The McGraw-Hill Companies,
Inc. © 1997. All rights reserved.
5-9
5-6

10. Discussion Questions
4. How fast will the adoption curve move for a
particular innovation?
5-10

11. How do opportunities evolve over time?
Profit per unit Product category sales
(real dollars)
Life cycle
extension
Profit/unit
Sales
(real dollars)
Introduction
Maturity Decline or
extension
Competitive
Growth turbulence
Time (years)
Source: Reprinted with permission from p. 60 of Analysis for Strategic Marketing Decisions, by George Day. Copyright © 1986 by West Publishing
Company. All rights reserved.
8-11
8-3

12. Discussion Questions
1. Key question: Is it better to be a market
pioneer, or a follower?
8-12

13. Discussion Questions
2. So, when, and for whom, does it make
sense to pursue a pioneer strategy?
8-13

14. Discussion Questions
3. When, and for whom, does it make sense to
pursue a follower strategy?
8-14

15. Discussion Questions
4. If you want to be a pioneer, what are your
strategic options?
Under what circumstances might each
option be more likely to succeed?
8-15

16. Discussion Questions
5. How might introductory marketing plans
differ under each of these pioneering
strategies?
8-16

17. Some Advice for Would-Be Pioneers
 First mover advantage is trumped by pioneers
who are better. Best beats first. Concentrate on
being best.
 Being a pioneer without the basis for
sustainable competitive advantage is a trap!
8-17

18. The Product and the Product Mix
 Product
 Physical goods
 Services
 Experiences
 Events
 Persons
 Places
 Properties
 Organizations
 Information
 Ideas Components of the Market
Offering

19. The Product and the Product Mix
 Product levels
 Customer value hierarchy
 Core benefit
 Basic product
 Expected product
 Augmented product
 Potential product
(Consumption system)
Five Product Levels

20. The Product and the Product Mix
 Product hierarchy
 Need family
 Product family
 Product class
 Product line
 Product type
 Item
 Product system
 Product mix

21. The Product and the Product Mix
 Product classifications
 Durability and Tangibility Classification:
 Nondurable goods
 Durable goods
 Services

22. The Product and the Product Mix
 Consumer-Goods Classification:
 Convenience goods
 Staples
 Impulse goods
 Emergency goods
 Shopping goods
 Homogeneous shopping goods
 Heterogeneous shopping goods
 Specialty goods
 Unsought goods

23. The Product and the Product Mix
 Industrial-Goods Classification
 Materials and parts
 Farm products
 Natural products
 Manufactured materials and parts
 Component materials
 Component parts
 Capital items
 Installations Equipment

24. The Product and the Product Mix
 Supplies and business services
 Maintenance and repair items
 Operating supplies
 Maintenance and repair services
 Business advisory services
 Product mix (Product assortment)
 Product mix has a certain:
 Width
 Length
 Depth
 Consistency

25. Example

26. The Product and the Product Mix
 Product-line decisions
 Product-line analysis
 Sales and Profits
 Four types of product classes:
 Core product
 Staples
 Specialties
 Convenience items

27. The Product and the Product Mix
 Market profile
Product Map for a Paper-Product Line

28. The Product and the Product Mix
 Product-line length
 Line Stretching
 Downmarket Stretch
 The company may notice strong growth opportunities as mass
retailers attract a growing number of shoppers
 The company may wish to tie up lower-end competitors who
might otherwise try to move upmarket
 The company may find that the middle market is stagnating or
declining
 Upmarket Stretch
 Two-Way Stretch

29. The Product and the Product Mix
 Line Filling  Brand decisions
 Just-noticeable Difference  What is brand?
 Line Modernization,  Attributes
featuring, andpruning  Benefits
 Values
 Culture
 Personality
 User

30. What is a Brand?
30
A name, term, sign, symbol or
design, or a combination
Identifies the goods or services of a
seller
differentiates them from competitors

31. Brand
 Commonly used research
approaches to determine
brand meaning:
 Word associations
 Personifying the brand
 Laddering up the brand
essence
 Brand essence
 Laddering up

32. The Eight Roles of a Brand
32
Identify the maker
Simplify product handling
Organize accounting
Offer legal protection

33. The Eight Roles of a Brand
33
Signal quality
Secure Price Premium
Create Barriers to Entry
Create Competitive
Advantage

34. Building Brand Identity
 Building Brand Identity
 Brand bonding
 Brands are not built by advertising but by the brand
experience
 Everyone in the company lives the brand
 Three ways to carry on internal branding – Employees must
 Understand
 Desire, and
 Deliver on the brand promise

35. Building Brands in the New Economy
 Building Brands in the new economy
 Heidi and Don Schultz urge companies to:
 Clarify the corporation’s basic values and build the corporate
brand.
 Use brand managers to carry out the tactical work.
 Develop a more comprehensive brand-building plan.
 Define the brand’s basic essence to be delivered wherever it is sold.
 Use the brand-value proposition as the key driver of the company’s
strategy, operations, services, and product development.
 Measure their brand-building effectiveness, not by the old
measures of awareness, recognition, and recall, but by a more
comprehensive set of measures including customer-perceived
value, customer satisfaction, customer share of wallet, customer
retention, and customer advocacy

36. Brand Equity
 Brand Equity
 Brand awareness
 Brand acceptability
 Brand preference
 Aaker’s five levels of customer attitude:
 The customer will change brands, especially for price reasons.
No brand loyalty.
 Customer is satisfied. No reason to change brands.
 Customer is satisfied and would incur cost by changing brand.
 Customer values the brand and sees it as a friend.
 Customer is devoted to the brand.

37. Brand Value
 Value of Brand Equity
 Brand valuation
 Competitive advantages of high brand equity:
 The company will have more leverage in bargaining with distributors
and retailers because customers expect them to carry the brand.
 The company can charge a higher price than its competitors because
the brand has higher perceived quality.
 The company can more easily launch extensions because the brand
name carries high credibility.
 The brand offers some defense against price competition.
 Managing Brand Equity
 Branding Challenges
 Branding Decision: To Brand or Not to Brand?

38. Discussion Question
When is a brand more than just a brand? Have you
ever based a purchasing decision primarily on the
brand? Was it because of some perceived quality
difference, or was it based on the expectation of how
others would see or treat you? Have you ever seen
someone buying a given brand of an item in an
attempt to be seen as “cool”?

39. Eight Advantages of Strong Brands
39
Improved Perceptions of Quality
Greater Loyalty
Less Vulnerability to Competitive Actions
Less Vulnerability to Crises

40. Eight Advantages of Strong Brands
40
Larger Margins
More inelastic consumer response
Increased IMC effectiveness
Potential Licensing opportunities

41. Branding Decisions
 Brand-Sponsor Decisions  Brand-Name Decision
 Manufacturer brand  Four available strategies:
 Distributor brand  Individual names
 Licensed brand name  Blanket family names
 Separate family names for
 Slotting fee
all products
 Brand ladder
 Corporate name combined
 Brand parity with individual product
names

42. Qualities of a brand name
 Desirable qualities for a brand name
 It should suggest something about the product’s benefits
 It should suggest the product or service category
 It should suggest concrete, “high imagery” qualities
 It should be easy to spell, pronounce, recognize and remember
 It should be distinctive
 It should not carry poor meanings in other countries and
languages

43. Tools
 Brand building tools
 Public relations and press releases
 Sponsorships
 Clubs and consumer communities
 Factory visits
 Trade shows
 Event marketing
 Public facilities
 Social cause
 High value for the money
 Founder’s or a celebrity personality
 Mobile phone marketing

44. Discussion Question
 Nike’s arrangement with Michael Jordan has
provided an excellent example of a celebrity
endorsement. Can you think of an endorsement
campaign that backfired? What did it cost the
company in the short term? What, if any, have been
the lasting effects?

45. 4 Branding Strategies
45

46. Branding Decisions
 Brand Strategy Decision  Multibrands, New
 Functional brand Brands, and Co-Brands
 Image brand  Multibrand
 Experimental brands  Flanker Bands
 Line Extensions  Co-branding (Dual
 Branded variants branding)
 Brand extensions  Ingredient co-branding
 Brand dilution  Same-company co-
branding
 Joint venture co-branding
 Multisponsor co-branding

47. Packaging as Branding
 Packaging and Labeling  Labeling
 Packaging
 Functions
 Package
 Identification
 Primary Package
 Grading
 Secondary Package
 Shipping Package  Description
 Factors which have  Consumerists have
contributed to the growing lobbied for:
use of packaging as a
marketing tool  Open dating
 Self-Service  Unit pricing
 Consumer affluence  Grade labeling
 Company and brand image  Percentage labeling
 Innovation opportunity

48. Branding is a Business Process
One that is planned, strategically-focused and
integrated throughout the organization. Branding
establishes the direction, leadership, clarity of
purpose, inspiration and energy for a company’s
most important asset – its brand. Even the most
potentially powerful strategy will fail if not executed
effectively and consistently.

49. Brand Promise
Everyone in the company must live up to the Brand
Promise – the concept is simple but all-
encompassing – it is about turning every company
member, product, service, piece of communication or
interfaces into a walking, talking, touchable
reflection of the brand itself

50. Brand Strategy
It is not a
consequence, but
the starting point
itself.

51. Three requirements of Branding Strategy
 Clearly articulated business strategy with a view
of the scale & scope of the business and how you
want to compete
 Deep customer insights and understanding of
evolving business economics
 Determine the role of branding as perceived by your
corporation which will help shape many strategic
brand decisions during the development process.

52. 7 Step Brand Strategy Development Process

53. Brand Positioning, Identity and Image
Brand Identity
How brand strategists want the
brand to be perceived or needed
to be perceived as part of the
business strategy
Brand
Brand Image Positioning
How the brand is currently being The part of the brand identity
perceived in the market place as and value proposition to be
confirmed by research actively communicated to
selected target segments

55. Kingfisher – Irreverence, individual, freedom-loving
and anti-establishment.
Kingfisher stands for all the above qualities whether
you like it or not and that’s why it is loved.

57. Brand Positioning Example
Uniqueness
Importance Endurance
5
Consistency Positioning Believability
Principles

58. 7 Step Brand Strategy Development Process

59. END OF DAY 2