Marketing

I'll tell you why I like the cigarette business. It cost a penny to
make. Sell it for a dollar. It's addictive. And there's a fantastic
Product & Brand
brand loyalty.

Warren Buffet
Strategy
Dr. Paurav Shukla

People will accept your ideas much more readily if you tell
them Benjamin Franklin said it first.
David H. Comins

Objectives Product

Products and Brands A product is anything that meets the functional needs of

Building and reinforcing a brand customers.

Multibranding, line and brand extensions

Branding decisions

Innovation: viewpoints and opportunities

Challenges in New Product Development (NPD)

Stages & Management of NPD

Diffusion & Adaptation of New Products

Doyle, P. (1989). Building Successful Brands: The Strategic Options. Journal of Marketing Management, 5 (1),
77-95.

Classifying products Product to Brand

Consumer products
Industrial or Business-to-
Decommoditization

Convenience Products Business Products

Shopping Products
Raw Materials

Increasing corporate value

Speciality Products
Major Equipment
Attracting & retaining customers

Unsought Products
Accessory Equipment

Component Parts

Process Materials

Consumable Supplies

Industrial Services

Shukla, P. and Purani, K. (2003), "Permission Marketing & Youth: Expectations and Attitudes," in Strategic Marketing
Dibb, S., Simkin, L., Pride, W., Ferrell, OC (2005) Marketing: concepts and strategies, 5th edition, Boston, Houghton in the Global Economy, Manoj Kumar and Prashant Mishra, Eds. New Delhi: Excel Books.
Mifflin. Onkvisit, S. and Shaw, J. (2004), International Marketing: Analysis and Strategy, London: Routledge.

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Brand Why Branding?

A brand can be defined as a specific name, symbol or
To create identification & brand awareness
design – or more usually, some combination of these –

Guarantee a certain level of quality, quantity, and
that is used to distinguish a particular seller’s product.
satisfaction

Help with promotion

Brands made consumers

More creative

Show increased arousal

Aaker, D.A. and K.L. Keller (1990), "Consumer evaluations of brand extensions," Journal of Marketing, 54 (1), 48-57.
To Induce Repeat Sales
Kotler, P. (2003), Marketing management, Upper Saddle River, NJ: Prentice Hall
Doyle, P. (2002), Marketing management and strategy, Harlow: Prentice Hall.

World’s most powerful brands Product and Brand Levels

Potential product

Augmented product
Expected product

Basic product

Core benefit

Theodore Levitt, (1980). “Marketing success through differentiation – or anything,” Harvard Business Review,
Source: www.interbrand.com January – February, Reprinted in Theodore Levitt (1986), The marketing imagination, Free Press, pp. 72-93

Brand identity Branding decisions

Traditional views

Economics: rational

Psychology: not rational, affected by emotion, context etc.

Marketers assume that

consumers are largely conscious thinking machines

they are aware of what they’re doing

product utility in use has been seen as the consumers’ prime
consideration in product evaluation and purchase

Therefore, the rational element has been considered
dominant by researchers and marketers alike

Aaker, D. A. (1996) Building Strong Brands, Simon & Schuster. Shukla, Paurav (2008), “Conspicuous Consumption among Middle Age Consumers: Psychological and Brand
Antecedents,” Journal of Product and Brand Management, 17(1), 25-36.

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Branding decisions: alternative perspective Branding decisions: cross-cultural perspectives

Psychological antecedents
Item Estimates
UK India Combined
Gain respect 0.47 0.44 0.58
Gain popularity 0.54 0.94 0.85
Noticed by others 0.65 0.70 0.80
Show who I am 0.72 0.24 0.74
Symbol of prestige 0.45 0.27 0.33
Symbol of success 0.36 0.20 0.44
Indicates wealth 0.29 0.54 0.23
Indicates achievement 0.60 0.52 0.49
Status is important to me 0.45 0.49 0.25
Image enhancement 0.50 0.43 0.13
Try new products 0.51 0.15 0.20
Pay more for good things 0.56 0.32 0.29
Value for money 0.69 0.16 0.46
Attractiveness 0.63 0.39 0.65

Branding decisions: cross-cultural perspectives Luxury consumption in recession

Brand antecedents
Status value H1a
Item UK India Combined Social value
Conspicuousness H1b H2
Brand familiarity 0.73 0.61 0.81
Brand symbolism 0.35 0.75 0.67 Hedonism
H3a
Image congruence 0.36 0.37 0.41
Materialism H3b
Brand awareness 0.75 0.24 0.38 Personal value
H3c
Positive feelings toward 0.81 0.24 0.57 Self-congruity H4
H3d
the brand
Country of origin 0.69 0.65 0.75 Self-gift giving Purchase
intentions
Usability
H5a H6

Quality H5b
Functional value

Uniqueness H5c H8

H7
Price Financial value

What brand exposure does? What brand exposure does?

Can simple exposure change actual purchasing
behaviour?

Consumers exposed to photos of people with Dasani and then
given choice of bottled water

Dasani bottle is subtly displayed in photos near person

Consumers viewed 20 photographs for 2 seconds each

People in photos were engaged in various everyday activities

0, 4, or 12 of the photos contained a Dasani brand bottled water
positioned by the individual

Participants instructed to focus on the faces of the individuals

Participants given a choice among 4 bottled waters

Participants’ awareness of having seen the brand was assessed Dasani Dasani

Tanner, R. J., Ferraro, R., Chartrand, T. L., Bettman, J. R., and Baaren, R. V. (2008), "Of Chameleons and Tanner, R. J., Ferraro, R., Chartrand, T. L., Bettman, J. R., and Baaren, R. V. (2008), "Of Chameleons and
Consumption: The Impact of Mimicry on Choice and Preferences", Journal of Consumer Research, Vol. 34, No. 6. Consumption: The Impact of Mimicry on Choice and Preferences", Journal of Consumer Research, Vol. 34, No. 6.

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What brand exposure does? Brand prism

70

60

50

40
Aware
30 Not aware

20

10

0
0 4 12
Tanner, R. J., Ferraro, R., Chartrand, T. L., Bettman, J. R., and Baaren, R. V. (2008), "Of Chameleons and
Consumption: The Impact of Mimicry on Choice and Preferences", Journal of Consumer Research, Vol. 34, No. 6.
Doyle, P. (2002), Marketing management and strategy, Harlow: Prentice Hall.

Three pillars of branding excellence Brand report card

Brand relevance
The brand excels at delivering the benefits customers truly desire

Brand personality
The brand stays relevant

The pricing strategy is based on customers’ perceptions of value

Customer-brand relationships
The brand is properly positioned

The brand is consistent

The brand portfolio and hierarchy make sense

The brand makes use of and coordinates a full repertoire of
marketing activities to build equity

The brand’s managers understand what the brand means to
customers

The brand is given proper support, and that support is sustained
over the long run

The company monitors the sources of brand equity

Keller, K. L. (2000), The Brand Report Card, Harvard Business Review, Jan – Feb, pp. 3-10. Keller, K. L. (2000), The Brand Report Card, Harvard Business Review, Jan – Feb, pp. 3-10.

Shifts in societies & competition Challenges in NPD

 Idea Shortage
Agrarian Cost  Fragmented Markets
 Social & Governmental Constraints
Industrial Quality  Cost
 Capital Shortage
 Need for Speed
Knowledge Innovation  Shorter Product Life Cycles

Toffler, A. (1991), Third wave, New York: Bantam Books.

Shukla, P. (2002), "The Place Impact and 10 commandments of new age marketing," in Local Champions to
Global Masters Mobilizing for Growth, Upinder Dhar, Ed. New Delhi: Excel Books.

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Cost of NPD New product development process

Marketing Business
Stage No. of Ideas Pass ratio Cost per Total cost Strategy Analysis
product idea Development
Idea screening 64 1:4 $1,000 $64,000 Concept Product
Concept test 16 1:2 20,000 320,000 Development Development
Product 8 1:2 200,000 1,600,000 and Testing
development
Test marketing 4 1:2 500,000 2,000,000
Idea Market
National 2 1:2 5,000,000 10,000,000 Screening Testing
launch
Total 5,721,000 13,984,000
Idea
Generation Commercialization

Where new ideas come from? Adopter categorization

Lead users

Scientists, Engineers, Designers

Employees
34% 34%

Competitors Early Late

Sales representatives, Middleman majority majority
2 1/2% 13 1/2% 16%

Top management, other professional agencies Innovators Early Laggards
adopters

Time of adoption innovations

Brands and Culture Degree of Newness

Cultural Influences
Congruent innovation

Innovative Products and Adaptation
Continuous innovation

Diffusion of Innovations
Dynamically continuous innovation

Degree of Newness
Discontinuous innovation

Characteristics of Innovations

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Characteristics of the innovation rate of adoption Why new products fail?

 Relative advantage

Development too slow
 Compatibility

Lack of differential advantage
 Complexity

Poor planning
 Divisibility

No management enthusiasm
 Risk
 Communicability

Product Development Process US & Japan

UNITED STATES JAPAN
Market Research Market Research

Product Characteristics Product Characteristics

Design Planned selling price less

desired profit
Engineering
TARGET COST
Supplier Pricing
Design Engineering Supplier Price
Cost
Target costs for each component forces
If cost too high return to marketers, designers, and engineers from all
design phase departments and suppliers to negotiate tradeoffs

Manufacturing Manufacturing

Periodic cost reduction Continuous Cost Reduction

SOURCE: Adapted from Ford S.Worthy, “Japan’s smart Secret Weapon,” Fortune,
August 12, 1991, p.73.

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