Session : 6 PRODUCT Impact on Marketing Plan
What is a Product:
It can be said that a product is a combination of several characteristicsphysical and psychological. How people personally feel about, or perceive the product is just as important as the actual physical characteristics of it.
Product Differentiation:
A product is really a bundle of potential benefits offered to a purchaser. To make their product distinct from others the manufacturers identify them to the customer, that is, `differentiate', by using different packaging, colouring etc. and by emphasizing different benefits or advantages in their promotion.
Product Positioning:
A manufacturer can use the needoriented segmentation. Positioning is used for bringing about differentiation in a manufacturer's product. This concept of product positioning can be done in terms of pricing, contents and in many other ways.
For example
a toothpaste manufacturer may appeal to prevention of `tooth decay', while another might offer `sociability' in the sense of preventing bad breath. Still another may provide the need to be `attractive' by emphasizing the whiteness of the teeth which his product, toothpaste, gives.
When an organization introduces a product into a market they must ask themselves a number of questions.
Who is the product aimed at? What benefit will customers expect? How does the firm plan to position the product within the market? What differential advantage will the product offer over their competitors?
Kotler suggested that a product should be viewed in three levels.
Product Decisions
When placing a product within a market many factors and decisions have to be taken into consideration.
Product Decision
Product design Will the design be the selling point for the organization as we have seen with the iPod, the new VW Beetle or the Dyson Ball vacuum cleaner.
Product quality Quality has to consistent with other elements of the marketing mix. A premium based pricing strategy has to reflect the quality a product offers
Product Decision
Product features Product Decision What features will you add that may increase the benefit offered to your target market? Will the organization use a discriminatory pricing policy for offering these additional benefits?
Product Decision
Product branding One of the most important decisions a marketing manager can make is about branding. The value of brands in todays environment is phenomenal. Brands have the power of instant sales, they convey a message of confidence, quality and reliability to their target market.
Product-line decisions
concerned with the combination of individual products offered within a given line. The product-line manager supervises several product managers who are responsible for individual products in the line. Decisions about a product line are usually incorporated into a marketing plan at the divisional level. Such a plan specifies changes in the product lines.
Product-line managers responsibilities: (1) considering expansion of a given
product line; (2) evaluating the effects of product additions and deletions on the profitability of other items in the line; and
Product-line managers responsibilities:
(3) considering candidates for deletion from the product line; (4) allocating resources to individual products in the line on the basis of marketing strategies recommended by product managers.
Product-line decisions
Decisions at the first level of product management involve the marketing mix for an individual brand/product. These decisions are the responsibility of a brand manager (sometimes called a product manager). Decisions regarding the marketing mix for a brand are represented in the product's marketing plan.
The plan for a new brand would specify
price level, advertising expenditures for the coming year, coupons, trade discounts, distribution facilities, and a five-year statement of projected sales and earnings.
The plan for an existing product would focus on any changes in the marketing strategy. Some of these changes might include the product's target market, advertising and promotional expenditures, product characteristics, price level, and recommended distribution strategy.
Product Decisions
A companys product mix refers to the total number of products that are offered for sale. The product mix has certain width, length, depth and consistency.
The width of a product mix refers to the total number of different product lines of the company. For example, width = 2 (pasta and pasta sauces). The length of a product mix refers to the total number of brands in all of the companys product lines.
The depth of a product mix refers to the average number of variants of the companys products. For example, depth = 4 (three
pasta brands, each marketed in two sizes: 3 2 = 6 and 2 pasta sauce brands, each marketed in 1 size: 2 1 = 2 means 6 + 2 = 8/2 = 4).
The consistency of a product mix refers to how closely related are the companys product lines in terms of characteristics, production process, distribution channels to name just a few.
Product Service Decisions
Branding
Branding is more than just a business buzzword. It has become the crux of selling in the new economy. Brand in its simplest form, a brand is a noun. Brand is a collection of feelings and perceptions about quality, image, lifestyle and Status .
What factors are important in building brand value?
Professor David Jobber identifies seven main factors in building successful brands, as illustrated in the diagram below:
Quality
Quality is a vital ingredient of a good brand. Remember the core benefits the things consumers expect. These must be delivered well, consistently. The branded washing machine that leaks, or the training shoe that often falls apart when wet will never develop brand equity.
Quality
Research confirms that, statistically, higher quality brands achieve a higher market share and higher profitability that their inferior competitors.
Positioning
Positioning is about the position a brand occupies in a market in the minds of consumers. Strong brands have a clear, often unique position in the target market.
Positioning
Positioning can be achieved through several means, including brand name, image, service standards, product guarantees, packaging and the way in which it is delivered. In fact, successful positioning usually requires a combination of these things.
Masoom Pears
Repositioning
Repositioning occurs when a brand tries to change its market position to reflect a change in consumers tastes. This is often required when a brand has become tired, perhaps because its original market has matured or has gone into decline.
Pulsar Definitely Male to Digital Biking
Communication
Communications also play a key role in building a successful brand. We suggested that brand positioning is essentially about customer perceptions with the objective to build a clearly defined position in the minds of the target audience.
Communication
All elements of the promotional mix need to be used to develop and sustain customer perceptions. Initially, the challenge is to build awareness, then to develop the brand personality and reinforce the perception.
First Mover advantage
Business strategists often talk about first-mover advantage. In terms of brand development, by first-mover they mean that it is possible for the first successful brand in a market to create a clear positioning in the minds of target customers before the competition enters the market.
Long term perspective
This leads onto another important factor in brand-building: the need to invest in the brand over the long-term. Building customer awareness, communicating the brands message and creating customer loyalty takes time. This means that management must invest in a brand, perhaps at the expense of shortterm profitability.
Internal Marketing
Finally, management should ensure that the brand is marketed internally as well as externally. By this we mean that the whole business should understand the brand values and positioning. This is particularly important in service businesses where a critical part of the brand value is the type and quality of service that a customer receives.
Brand Equity
Brands represent enormously valuable pieces of legal property, capable of influencing consumer behavior, being bought and sold, and providing the security of sustained future revenues to their owner. The value directly or indirectly accrued by these various benefits is often called brand equity.
Brand Equity?
A basic premise of brand equity is that the power of a brand lies in the minds of consumers and what they have experienced and learned about the brand over time. Brand equity can be thought of as the "added value" endowed to a product in the thoughts, words, and actions of consumers.
Brand Equity
The sources of brand equity help managers understand and focus on what drives their brand equity; the outcomes of brand equity help managers understand exactly how and where brands add value.
BRAND IMAGE
How the brand is now perceived
Brand Position
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
Y H A N K
