Product & Brand

Management-
MR411

Semester IV, KIMDS

 McKinsey 7S framework
 Strategy, structure and Systems- H/W of success

 Style, skills, Staff, Shared Values- S/W for Success

Product Planning- product managers come up with

marketing plan for individual Product lines, brands,

channels, or customer groups

 Each Product level- whether product line or brand must

develop a marketing plan for achieving its goals.

Product Management
 Product management is an organizational lifecycle function within a company
dealing with the planning, forecasting, or marketing of a product or products at all
stages of the product lifecycle.
 The role consists of product development and product marketing, which are different (yet
complementary) efforts, with the objective of maximizing sales revenues, market share,
and profit margins. The product manager is often responsible for analyzing market
conditions and defining features or functions of a product. The role of product
management spans many activities from strategic to tactical and varies based on the
organizational structure of the company. Product management can be a function separate
on its own, or a member of marketing or engineering.
 While involved with the entire product lifecycle, the product management's main focus is
on driving new product development.
 Depending on the company size and history, product management has a variety of
functions and roles. Sometimes there is a product manager, and sometimes the role of
product manager is shared by other roles. Frequently there is Profit and Loss (P&L)
responsibility as a key metric for evaluating product manager performance. In some
companies, the product management function is the hub of many other activities around
the product. In others, it is one of many things that need to happen to bring a product to
market and actively monitor and manage it in-market.
 Product management often serves an inter-disciplinary role, bridging gaps within the
company between teams of different expertise, most notably between engineering-
oriented teams and commercially oriented teams. For example, product managers often
translate business objectives set for a product by Marketing or Sales into engineering
requirements. Conversely they may work to explain the capabilities and limitations of the
finished product back to Marketing and Sales. Product Managers may also have one or
more direct reports who manage operational tasks and/or a Change Manager who can
oversee new initiatives.
Major Responsibilities of Product Management
Functions
 A PRODUCT MANAGER‟S POTENTIAL
INTERACTION
Advertising
Agency Media
Manufacturing
Promotion
& distribution
services

Packaging
R&D

Product
Manager

Legal Purchasing

Fiscal Publicity

Market
Sales
Research
 PRODUCT Vs. GENERAL
MARKETING MANAGEMENT
Product Management General Marketing
Management

Scope of Narrow: Single product Broad: Portfolio of

Responsibility or product line products

Nature of Decision Mainly tactical Mainly strategic

Making

Time Horizon Short-run (often annual Long run

or shorter)
MARKETING ORGANIZATION:
PRODUCT- FOCUSED ORGANIZATIONS

Head of
company/division

Corporate
Manufacturing Marketing Finance
communications

Marketing Product
Support
research management

Manager of Manager of Manager of

product A product B product C
 MARKETING ORGANIZATION: PRODUCT-
FOCUSED ORGANIZATIONS

Advantages
 Locus of responsibility is clear

 Develop the ability to work with other areas in org.

 Advocate for the product

Weaknesses
 Focus on one product

 Removed from “where the action is”

 Too myopic

 In-bred competition (product cannibalization)

Product Management- An
Introduction
 The Indian Market- Emerging
Panorama
 Demographic picture
 Rising Income
 Consumer Trends
 New focus in Marketing
 Rural Marketing- aspects
 Emerging Marketing Issues
 Corporate Strategy and
Product Policy

 Assessing New Competition and

Strategic Response
• Strategic response to New Competition
• Entry Strategies of MNC‟s
• Assessing New Competition across
Different product categories
• Strategies for defending Market Position
 Assessing New Competition
and Strategic Response
 Strategic response to New Competition
 Free Trade and Opening of Market
• Increasing turnover and untapped
opportunities
• Consumer getting wider choice due to
increase competition
• Quality of product has improved
• Cost of operation gone up, New ways of
promotion
• Co.'s becoming global
• Speed of Response much higher
 New Domestic Competition
Perspective
Emerging Scenario Strategic Focus

Emphasis on Rural New product Variant

Market
New Domestic Modern Trade Identifying and
Competition Capturing New Market
Segments and Sub
segments
Entry of Global Brands Highlighting Brand
Salience
Growth of Premium Face New/ Foreign
Segment Competition
Attract new consuming Improving Customer
class Service
 Entry Strategies of MNC‟s
Emerging Strategic Focus
Introduce International Concentrate on core
Brands In India competencies
International Focus on Service Selection of Particular
Competition Consumer Segment
Derive the advantage of Innovate on Marketing
High Technology Resources
Introduce New Product Expand Product
Categories range/line
Withstand Power of Trade Strengthen Distribution

Leverage on financial Develop creative

muscle of MNC advertising
Meet aspiration of Neo Invest In NPD
Rich consumers
Move into premium
category

Upgrade popular brands

Accessing New Competition across
different product categories

 Consumer Non Durables

 Consumer Durables

 Service businesses
Strategies for defending
market position
 Pre empting the competition
 Filling the gaps
 Strengthening the Brand Equity
 Synergistic Communication
 Increasing Usage and Market expansion
 Becoming Futuristic
 Mergers and Acquisitions
 Strengthening the Distribution Network
 Creating Hurdles, Creating Price Gaps
 Being Leader in the segment
 Selling the Brand Name
 Quitting the Premium segment
 Offering Gamut of Services
 Innovation in Packaging
 Multibranding, Exclusive retailing, Rejuvenating Old
Brands
 Product Management-
Introduction
L.O  Product:
 Classification of Consumer Product

 FMCG

 Product Mix and Line Decision

 Growth Strategies for FMCG

 Managing Line Extension

Product
 Is any tangible or intangible offering
that might satisfy the needs or
aspirations of a consumer.

Anatomy of a Product
Augmented Product

Tangible Specifications

Core Benefits
 TOTAL PRODUCT CONCEPT / LEVELS OF PRODUCT

AUGMENTED PRODUCT

pre sale Tangible Specification

features
warranty
Core Benefit
functions
benefits
quality
brand equity packaging
delivery

relationships

After sales service financing

Classification of Consumer
Products
 Durable and Non Durable
 Non Durable- FMCG
• Consumer product for personal family or
household use classified into three types:
• Convenience
• Shopping
• Specialty
 FMCG- Fast Moving Consumer
goodds usually refers to non durable
products
FMCG subdivided into three

 Staples
 Impulse Goods
 Emergency Goods
Characteristic of FMCG

 Frequent Purchase
 Low Involvement

 Low Price

 High Volume
 Low margin

 Extensive distribution network

 High stock turnover

Product Mix and Line
Decisions
 Product Mix :
The assortment of products that a company
offers to a market

 Width – how many different product lines

 Length – the number of items in the product mix

 Depth – The no. of variants of each product . .
offered in a product line
 Consistency – how closely the product lines are
related in usage
Product Line

 Product Line - is a group of products closely

related due to similar function, targeted at same customer
group and marketed through same channels.

• Line stretching
• Upward stretch
• Downward stretch
• Line Filling
• Line Modernisation
• Line Featuring
Growth Strategies for FMCG
 Multibrand Strategy
 Product Flanking
 Brand Extension
 Building Product Lines
 New Product Development
 Innovations in core product
 Long Term Outlook
 Extending the PLC
 Expanding Market by Usage
 Wide Distribution Network
 Monitoring the pulse of consumers
 Advertising and Media Coverage
 Sales Promotion
Managing Line Extension
 Customer segmentation
 Consumer Desires
 Pricing Breadth
 Excess Capacity
 Short term gain
 Competitive intensity
 Trade pressure
 Energizing a brand
 Exploitation of variety fulfillment
 Expanding brand’s core promise to new users
 Managing true innovation
 Managing a dynamic environment
 Testing ground for National launch
 Product life cycle and strategies

 Product life cycle

 Weakness of PLC concept

 Ansoff‟s classic model of Growth
Strategies
 Product Life Cycle
 Product Life Cycle – shows the
stages that products go through from
development to withdrawal from the
market
 Product Life Cycle (PLC):
 Each product may have a different life cycle
 PLC determines revenue earned
 Contributes to strategic marketing planning
 May help the firm to identify when a product
needs support, redesign, reinvigorating,
withdrawal, etc.
 May help in new product development
planning
 May help in forecasting and managing cash
27 flow
 A new product progresses through a
sequence of stages from introduction to
growth, maturity, and decline....impacting the
marketing strategy and the marketing mix
 The Stages of the Product Life Cycle:
 Development/ Pre Introduction
 Introduction/Launch
 Growth
 Maturity
 Saturation
 Decline
 Withdrawal

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 Product Life Cycles
Sales
Development Introduction Growth Maturity Decline

Time

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 Product Life Cycle

The Development Stage:

 Initial Ideas – possibly large number
 May come from any of the following –
 Market research – identifies gaps in the market
 Monitoring competitors
 Planned research and development (R&D)
 Luck or intuition – stumble across ideas?
 Creative thinking – inventions, hunches?
 Futures thinking – what will people be using/wanting/needing
5,10,20 years hence?

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 Product Life Cycles

 Introduction/Launch:
 Advertising and promotion campaigns
 Target campaign at specific audience?
 Monitor initial sales
 Maximise publicity
 High cost/low sales
 Length of time – type of product

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 Product Life Cycles

 Growth:
 Increased consumer awareness
 Sales rise
 Revenues increase
 Costs - fixed costs/variable costs, profits
may be made
 Monitor market – competitors reaction?

32
 Product Life Cycles

 Maturity:
 Sales reach peak
 Cost of supporting the product declines
 Ratio of revenue to cost high
 Sales growth likely to be low
 Market share may be high
 Competition likely to be greater
 Price elasticity of demand?
 Monitor market – changes/amendments/new
strategies?

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 Product Life Cycles

 Saturation:
 New entrants likely to mean market is „flooded‟
 Necessity to develop new strategies becomes more pressing:
 Searching out new markets:
• Linking to changing fashions
• Seeking new or exploiting market segments
• Linking to joint ventures – media/music, etc.
 Developing new uses
 Focus on adapting the product
 Re-packaging or format
 Improving the standard or quality
 Developing the product range

34
 Product Life Cycles

 Decline and Withdrawal:

 Product outlives/outgrows its usefulness/value
 Fashions change
 Technology changes
 Sales decline
 Cost of supporting starts to rise too far
 Decision to withdraw may be dependent on
availability of new products and whether
fashions/trends will come around again?

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 Product Life Cycles

Sales
Development Introduction Growth Maturity Decline

Time

36
 Product Life Cycles
Sales/Profits PLC and Profits

PLC

Profits

Time
Losses
Break Even

37
 Product Life Cycle:
Implications for Business Strategy
Stage of the product life cycle

Introduction Growth Maturity Decline

Sales revenue

Total industry
or profit

sales revenue

Total industry profit

+
0
–

38
 Introduction Stage of the PLC

Sales Low sales

Costs High cost per customer

Profits Negative
Create product awareness
Marketing Objectives
and trial
Product Offer a basic product

Price Use cost-plus

Distribution Build selective distribution
Advertising Build product awareness among
early adopters and dealers
39
 Growth Stage of the PLC

Sales Rapidly rising sales

Costs Average cost per customer

Profits Rising profits

Marketing Objectives Maximize market share
Offer product extensions,
Product
service, warranty
Price Price to penetrate market
Distribution Build intensive distribution
Advertising Build awareness and interest in
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the mass market
 Maturity Stage of the PLC

Sales Peak sales

Costs Low cost per customer

Profits High profits

Marketing Objectives Maximize profit while defending
market share
Product Diversify brand and models
Price to match or best
Price competitors
Distribution Build more intensive distribution
Advertising Stress brand differences and
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benefits
 Decline Stage of the PLC

Sales Declining sales

Costs Low cost per customer

Profits Declining profits

Marketing Objectives Reduce expenditure and milk
the brand
Product Phase out weak items
Price Cut price
Go selective: phase out
Distribution unprofitable outlets
Advertising Reduce to level needed to retain
hard-core loyal customers
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Shapes of PLC
 Classical bell
shaped curve
 Growth-slump
maturity pattern
 Style
 Fashion
 Fad
 PLC- Important Observations
 Individual brands may not follow this pattern
 Sometimes a product may crash and not get to the maturity stage
 Product Life Cycle - length of time at each stage - varies
 depends on the products
 can be a few months in each stage
 or it can be years
 Generally speaking, due to the
 Competitive Environment
 Technological Environment
 The PLC is getting shorter
44
 Extending Product Life Cycle

 Market Modification:
 Increase Frequency of use by Present
Customers
 Add New Users
 Find New Users

 Product Modification:
 Change Product Quality or Packaging

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 Intro Stage
 Competitive Situation
 Monopoly or Monopolistic Competition
- your company has no competition because you
originated the product first and are the first to get
customers

 Product:
 One or a few number of people selling the product
 Place:
 Try to find good channels to get exposure
- maybe offer exclusive distribution rights
 Promotion:
 AIDA begins
- informative type ads
 Price:
 skimming or
46 penetration pricing
 Growth Stage
 Competitive Situation
 Monopolistic Competition or Oligopoly
- once the market grows, other vendors will want to get
involved so you will lose your monopoly position
 Product:
 There are several companies selling so there is
competition to make the "best" product -many companies
at this stage will add variations, color changes, and new
FABs to the product to make it more competitive
- companies in the lead will also work to develop brand
familiarity
 Promotion:
 Competitive ads
 Price:
 "meet the competition" pricing or price cutting
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 Maturity/ Decline Stage
 Competitive Situation
 Monopolistic Competition or Oligolpoly or Pure
Competition
- more and more vendors get involved as more
companies learn to make the product and people try to
"cash in" on the original idea

- because there are so many vendors, the supply/demand

situation will cause the price to drop and eventually the
price will be so low, nobody will want to make the product
anymore because it will be unprofitable
 Product:
 Several companies make the product
- it will become a battle of the brands
 Promotion:
 Discount price oriented ads
 Price:
48
 Some companies drop out if they cannot afford to compete
at a lower price
PLC stage