Strategic Marketing Management - Slide 02

Niroshan J Pieries
Product
“A good, idea, method, information, object or service created as a result of a
process and serves a need or satisfies a want. It has a combination of tangible
and intangible attributes (benefits, features, functions, uses) that a seller offers a
buyer for purchase.”
In marketing, a product is anything that can be offered to a

market that might satisfy a want or need. In retailing,
products are called merchandise. In manufacturing,
products are bought as raw materials and sold as finished
goods.
Product Experience
Anything that can be offered in a market for attention,

P acquisition, use, or consumption that might satisfy a
need or want
R
O Form of product that consists of activities, benefits,
D or satisfactions offered for sale that are essentially
intangible and do not result in ownership.
U
C
Represent what buying the product or service will do for
T the customer.
Product Categories
Product Decisions
Product Life Cycle
Product Portfolio & 7P’s
Organization Portfolio Categorization
Branding
Branding is 'the culmination of a range of activities across
the whole marketing
mix leading to a brand image that conveys a whole set of
messages to the consumer about quality,
price, expected performance and status'.
-Blythe 2006-
Product Portfolio & 7P’s
Added Value
Quality
Communications
Management & Employee support
Differentiation
It needs to be clear to the

consumer what the
unique benefits of the
product are. Brand
Values play an important
Role here.
Innovation
Brands must constantly respond to the

changing needs of its customers or they will
become irrelevant to the consumer. This is
equally true of new and established brands.
Brand Strategies
Any strategy must start from the point 'do we want to

put our brand name on the product?' It can be
argued that for some product categories, there is
little point in branding. This is often true for
undifferentiated or homogeneous products such as
aluminium foil/ Salt/ Oil
However, this trend is reducing with organizations
opting to name the brand as branded goods are
generally easier to sell.
Brand Strategy
Brand Stretching
Stretch the brand (brand extension) typically

into a new or modified product in a similar
category. All brands will carry the same
name, so for example Caterpillar moving into
clothes from its traditional association with
earth moving equipment.
Brand Stretching
•Distributors may perceive there is less risk with a new product if it
carries a familiar brand name.
Ex : If a new food product carries the Heinz brand, it is likely that
customers will buy it
• Customers will associate the quality of the established brand
name with the new product. They will be more likely to trust the
new product.
• The new product will attract quicker customer awareness and
willingness to trial or sample the product
• Promotional launch costs (particularly advertising) are likely to
be substantially lower.
Line Extension
The organisation develops a new product
closely related to an existing product by
developing a new form. This is quite common
as it is a low-cost and generally low-risk
approach to increasing sales within the same
market. There is always the fear that the
consumer can become confused with the
choices available.
Multi Branding
Building Brands
Measuring Brand Personality
-Jennifer Aaker 97’-
Success
Sincerity – down-to-earth, honest, wholesome,
cheerful.
Excitement – Daring, spirited, imaginative, up-to-date.
Competence – Reliable, intelligent, successful.
Sophistication – Upper-class, charming.
Ruggedness – “Outdoorsy”, tough.
Building Brands
Brand Prism
Brand Pyramid
New Product Development
NPD
NPD Process
NPD Process
NPD Process
NPD Process
NPD Process
NPD Process
NPD Process
Types of New Products
Role of Pricing in Product Management
Price is 'the amount of money charged for a
product or service'
-Armstrong and Kotler,
(perceived) VALUE = 2006-
Price is the monetary expression of the value to

(perceived) BENEFITS – (perceived) COSTS
be enjoyed/benefits of purchasing a product, as
compared with other available items.
Role of Pricing in Product Management
Setting prices is a strategic decision that must

be reflected in the other elements of the
marketing mix.
Potential consumers will have a perception

about price in relation to the organisation's
promotion style, including the brand, the
product itself and where it can be purchased.
Deciding the Price
Pricing Objectives
Survival Profit MS
Status Product
Cash flow
Quo Quality
Perceived Value for Money
This is the benefit the customer derives from

the purchase of the product. The organisation
needs to understand the value that the
customer places on the benefits received and
then price the product accordingly. Effectively,
customers assess the price and measure the
benefits received.
Factors effecting Perceived Value
• Service and after-sales service quality

• Level of differentiation from competitor
• Quality of packaging
• Product functionality
• Substitute products which maybe available
Pricing Strategy
What s more profitable?
Pricing Frameworks
Customer
Cost Based
Based
Competitor Professional
Based Pricing
The VALUE proposition
Creating Effective Communication
Summery
• Outline communications campaign plans targeted at
delivering customer value.
• Develop effective creative briefs based on knowledge
of customer value.
• Demonstrate relevant messages and appeals based
on identified customer responses.
• Explain processes for appointing and managing
external agencies and partners.
Campaign Plan – Deliver customer Value
Customer Value Proposition (CVP)
Total Customer Cost – Total Customer Benefit

Unique Selling Proposition (USP)
Ted Bates Agency 1940
Be the customer…..
• As a customer, what do I want or need?
• What problems do I need the product to
solve?
• What do I expect from this product/service?
• What benefits do I get from it?
• Why should I choose this one over competing
offers?
Models of Communication
Market Response • Measure the relationship between advertising and
purchasing behavior by metrics as such as sales revenue,
Model market share and brand choice
Cognitive • Assume that consumers make rational decisions and that

advertising provides information that helps them to
Information Model differentiate and position brands based on what they know
• Suggest that advertising works by appealing to our

Effective Model emotions
• Related to behavior and are based on observations of how

Conative Model customers behave in certain given circumstances
Hierarchy of • Combination of cognitive and affective aspects of

advertising in order to drive or influence behavior
effects model
DAGMAR
(Defining Advertising Goals for Measured Advertising Results)
This model measures advertising effectiveness without focusing

on sales alone, using additional concepts such as timescale,
objectives, benchmarking and exact target audience.
Awareness – Comprehension – Conviction – Action

DAGMAR is sometimes known as the ACCA advertising formula
Purchase Decision making and Communication
High Involvement Characteristics
• When consumers perceive a high level of risk

(monetary or other) in an intended purchase, they are
highly involved.
• They may have developed an attitude to the purchase
before committing to it, or before trying it out or
experimenting with it.
• A prolonged search for information results in product
awareness, followed by the formulation by the
formulation of an attitude.
Low Involvement Characteristics
• People perceive a low level of risk in the intended

purchase.
• They seek little or no information (how many look at
the ingredients on a can of Beans, for example?).
• They often try something before forming an attitude
about it.
Consideration when Advertising
Emotional Vs
Rational Messaging
Perceived Risk • Performance/ Financial/ Physical / Social/ Ego
Credibility of • The ability to change and sell the product

Advertising
Campaign Planning
Key inputs to this process required from brand owners and/or their agencies include:
• Insights into customer behavior, wants and needs.
• Media creative ideas to generate the highest possible engagement from the target
audience.
Campaign plans should include:

• A clear definition of the target audience.
• The specific message to be communicated.
• Desired outcomes – For example, changed attitudes, increased awareness, leads,
phone calls, mouse clicks, website traffic, store visits, sales.
• Mechanisms for monitoring and controlling the campaign.
• Mechanisms to measure results.
The flow of communication can take a variety of courses:

• One-step flow – The direct communication of the message to the target audience.
• Two-step flow – The message is communicated through opinion leaders and opinion
formers.
• Multi-step flow – Communication flows in many directions from a variety of people
within the communication networks.
Campaign Planning Tools
Campaign
Strategy
Agency & Agency
Relationships
Types of Creative Agencies
• Offers the complete range of products and services which
Full Service a client may need to advertise its products.
Agency • Research, strategic planning, creative, media planning

and buying planning
• Provide specialist media services such as planning,

Media buying and evaluation
Independents • Suggest the media, the size of the advertisement,

location
• Online brands, mobile communications, email and viral

New Media marketing are all growing areas which require a specialist
approach.
• Choose to select a number of agencies to carry out its

A La Carte communication activities.
Creative Brief Elements
Background & Product
Target Reasons to
Market Features and
Audience Advertise
Information Benefits
Competitors
Marketing Communication Information
and Competitor
Objectives Objectives from research
offerings
Customer Type of Recommended

Key Message
benefit Campaign Media
Duration of
Budget
Campaign

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Niroshan J Pieries

In marketing, a product is anything that can be offered to a

Anything that can be offered in a market for attention,

It needs to be clear to the

Brands must constantly respond to the

Any strategy must start from the point 'do we want to

Stretch the brand (brand extension) typically

Price is the monetary expression of the value to

Setting prices is a strategic decision that must

Potential consumers will have a perception

This is the benefit the customer derives from

• Service and after-sales service quality

Total Customer Cost – Total Customer Benefit

Cognitive • Assume that consumers make rational decisions and that

• Suggest that advertising works by appealing to our

• Related to behavior and are based on observations of how

Hierarchy of • Combination of cognitive and affective aspects of

This model measures advertising effectiveness without focusing

Awareness – Comprehension – Conviction – Action

• When consumers perceive a high level of risk

Low Involvement Characteristics

• People perceive a low level of risk in the intended

Perceived Risk • Performance/ Financial/ Physical / Social/ Ego

Credibility of • The ability to change and sell the product

Campaign plans should include:

The flow of communication can take a variety of courses:

Agency • Research, strategic planning, creative, media planning

• Provide specialist media services such as planning,

Independents • Suggest the media, the size of the advertisement,

• Online brands, mobile communications, email and viral

• Choose to select a number of agencies to carry out its

Customer Type of Recommended

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