Product Strategy
040177/1 FK Marketing, WS 2006
MMag. Katharina Roth
Group 5:
Stefan Gartler, Martina Krobath, Clemens Nimmerfall, Elisabeth Raming
Index
Part 1: Brand & Corporate Identity
Management
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Product & Brand
Prduct Line & Product Mix
Brand Types
Why Strong Brands Are Important?
Brand Building
Key Branding Decisions
Rebranding
Brand Extension & Brand Stretching
Co-branding
Global & Pan-European Branding
Corporate Identity Mangement
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Part 2: Life Cycle, Portfolio
Planning & Growth Strategies
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Product Strategy
Product Life Cycle
Managing Brand & Product Line
Portfolios
BCG Matrix
MA-CP Model
Product Strategy For Growth
2
Part 1
Brand and Corporate Identity Management
Chapter 8
Product and Brands
Product:
• Anything that is capable of satisfying customer needs
Branding:
• Process by which companies distinguish their product
offerings from the competition
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Product Line and Product Mix
Product Line:
• A group of brands that are closely related in terms of
their functions and benefits they provide
Æ product depth
Product Mix:
• Total set of brands marketed in a company (= sum of
product lines)
Æ product width
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Brand Types
Manufacturer Brands:
• Are created by producers and bear their own chosen
brand name
Own-Label Brands:
• Are created and owned by distributors
Fighter Brands:
• Are low-price alternatives of manufacturer brands to
compete with low-price supermarket own-label brands
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Why strong brands are important?
To Companies:
To Consumers:
• Company value
• Consumer perceptions and
preferences
• Barrier to competition
• High profits
• Base for brand extensions
• Qualitiy certification
• Trust
QUIZ
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Product Strategy
Brand Building
Augmented product = core product
+
extra functional/emotional value
Successful brand building through 7 factors:
Quality
Well-blended communications
Quality
Internal marketing
Being first
Long-term perspective
Positioning
Repositioning
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Brand building
Product Strategy
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Key Branding Decisions
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Brand names ...
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Family brand names
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Names used for all products
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Individual brand names
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Do not identify a brand with a
particular company
Combination brand names
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should evoke positive
associations
should be easy to pronounce
and remember
may suggest product benefits
may suggest what the brand is
offering in a distinctive way
may be numeric or
alphanumeric for technological
products
should be transferable
should not infringe existing
registered brand names
Product Strategy
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Rebranding
Why rebrand?
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Merger and acquisitions
Desire to create a new image/position in the marketplace
Sale or acquisition of parts of a business
Corporate strategy changes
Brand familiarity
International marketing considerations
Harmonization of brand names across national boundaries
Discouraging of parallel importing
Consolidation of brands within a national boundary
Legal problems
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Brand Extension and Stretching
Brand Equity:
• Goodwill associated with a brand name, which adds tangible
value to a company through the resulting higher sales and
profits
Brand Extension:
• Use of an established brand name on a new brand within the
same broad market or product category
Brand Stretching:
• An established brand name is used for brands in unrelated
markets or product categories
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Product Strategy
Co-branding
Product-based
co-branding
Communications-based
co-branding
• Involves the linking of two
or more existing brands
from different companies to
form a product in which
brand names are visible to
consumers
• Involves the linking of two
or more existing brands
from different companies for
the purpose of joint
communication
ÆParallel co-branding
ÆIngredient co-branding
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QUIZ
Product Strategy
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Global/Pan-European Branding I.
Global branding:
• Achievement of brand penetration worldwide
Global branding decisions:
• Brand form
• Brand communications
• Brand additionals
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Product Strategy
Global/Pan-European Branding II.
Achieving a global/pan-European brand:
Criteria for Evaluation
Strategy
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Speed
Control
Investment
Geographic
expansion
Slow
High
Medium
Brand
acquisition
Fast
Medium
High
Brand
alliance
Moderate
Low
Low
Product Strategy
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Corporate Identity Management
• Ethos, aims and values of an organization, presenting a
sense of its individuality, which helps to differentiate it from its
competitors
Dimensions of corporate identity: AC2ID test
1. Actual identity
2. Communicated identity
3. Conceived identity
4. Ideal identity
5. Desired identity
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Product Strategy
Part 2
Product Life Cycle, Portfolio Planning,
Product Growth Strategies
Chapter 9
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Product Life Cycle I.
Sales
Profits
Source: http://www.tutor2u.net/business/marketing/products_lifecycle.asp
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Product Strategy
QUIZ
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Product Life Cycle II.
Uses of the product life cycle:
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Product termination
Growth projections
Product planning
Dangers of overpowering
Marketing objectives and strategies over the plc
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Introduction
Growth
Maturity
Decline
Strategic
marketing
objective
Build
Build
Hold
Harvest/Manage
for cash/Divest
Strategic
focus
Expand market
Penetration
Protect
share/Innovation
Productivity
Brand
objective
Product
awareness and
trial
Brand preference
Brand loyality
Brand exploitation
Products
Basic
Differentiated
Differntiated
Rationalized
Promotion
Creating
awareness/Trial
Creating
awareness/Trial/
Repeat purchase
Maintaining
awarenes/Repeat
purchase
Cut/Eliminated
Price
High
Lower
Lowest
Rising
Distribution
Patchy
Wider
Intensive
Selective
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Product Life Cycle III.
Limitations of the product life cycle:
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Fads and classics
Marketing effects
Unpredictability
Misleading objective and strategy prescriptions
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Managing Brand and Product Line
Portfolios
Portfolio planning:
• Process of managing groups of brands and product
lines
2 tools for decision-making:
• Boston Consulting Group Growth-Share Matrix
(BCG Matrix)
• General Electric Market Attractiveness-Competitive
Position Model (MA-CP Model)
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BCG Matrix I.
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BCG Matrix II.
Guidelines for setting strategic objectives:
Stars
Problem Children
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Build sales and/or market share
Invest to maintain/increase
leadership position
Repel competitive challenges
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Build selectively
Focus on defendable niche where
dominance can be achieved
Harvest or divest the rest
Cash Cows
Dogs
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Hold sales an/or market share
Defend position
Use excess cash to support stars,
selected problem children and
new product development
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Harvest or divest
Focus on defendable niche
QUIZ
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Product Strategy
MA-CP Model
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3
1: Build
2: Hold
3: Build/Hold/Harvest
2
4: Harvest
4
5: Divest
5
Competitive Strength
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Criticism
BCG Matrix
MA-CP Model
• Cash Flows not always
determinable by product‘s
position
• Distracts management
• Ignores interdependencies
• Building stars might be
inappropriate
• Competitors‘ reactions are
ignored
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• Requires managerial
agreement
• Requires managerial bias
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Product Strategy
Product Strategy for Growth I.
Ansoff Matrix
Source: http://www.strategicassets.co.uk/ansoff_matrix.htm
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Product Strategies for Growth II.
Market penetration:
• Winning competitors’ customers
• Buy competitors
• Discouraging competitive entry
Market expansion:
• Converting non-users to users
• Increasing usage rate
Product development:
• Prodcut line extension
• Product replacement
• Innovation
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Market development:
• Promotion of new uses
• Marketing of existing
products to new market
segments
Entry into new markets:
• New products for new
markets
Product Strategy
Thank you for your attention!
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References
Jobber, David: Principles and Practice of Marketing. London: McGraw-Hill, 2004.
The 100 Top Brands: http://www.businessweek.com/pdfs/2005/0531_globalbrand.pdf Access: 24.11.2006
Images:
Ansoff Matrix: http://www.strategicassets.co.uk/AnsoffMatrix6.gif Access: 24.11.2006
Apple Ipod: http://www.apple-history.com/images/models/ipod_mini.jpg Access: 23.11.2006
BenQ Mobile Phone: http://asia.cnet.com/i/r/2006/hp/39249860/b001.jpg Access: 24.11.2006
Coca-Cola: http://www.childrensmiraclenetwork.org/images/coke_logo2.jpg Access: 23.11.2006
Disney: http://reviews.mobilewhack.com/disney_logo.jpg Access: 23.11.2006
GE: http://www.acca.com/anniversary/logo/generalelectric.jpg Access: 23.11.2006
Häagen Dazs: http://nightwish.bleublog.ch/files/images/2006/3/450/mob28_1142785540.jpg Access: 23.11.2006
HP: http://www.monitor.si/images/novice/slika/2008_08_17_m_hp.jpg Access: 23.11.2006
IBM: http://www.cpdm.iisc.ernet.in/plm06/IBM_Logo1.jpg Access: 23.11.2006
Intel: http://www.core77.com/blog/images/_41170098_intel_logo203.jpg Access: 23.11.2006
McDonald’s: http://www.schilloxmedia.de/images/content/referenzen/mc_donalds_logo.jpg Access: 23.11.2006
Microsoft: http://www.keeptabs.org/wp-content/uploads/2006/08/microsoft-logo.jpg Access: 23.11.2006
Nokia: http://www.laflecha.net/img/news/0/3/nokia-logo(1)_bg.jpg Access: 23.11.2006
Product Life Cycle: http://www.tutor2u.net/business/marketing/products_lifecycle.asp Access: 24.11.2006
Sony MP3-Player: http://www.hauser.lu/images/products/ne-w107.jpg Access: 23.11.2006
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Product Strategy
QUIZ
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= ?
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Product Strategy
BACK
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QUIZ
Introduction
E-Conferencing
Growth
Maturity
Email
Faxes
Decline
Handwritten
letters
Faxes, E-Conferencing, Email, Handwritten letters
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Product Strategy
BACK
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QUIZ
The 8 TOP Brands based on Brand Value
http://www.businessweek.com/pdfs/2005/0531_globalbrand.pdf
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Product Strategy
BACK
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QUIZ
Problem
Children
• Sony Mp3-Player
• Apple Ipod
• BenQ/Siemens Mobile
Phones
• Microsoft Windows
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BACK
Product Strategy
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Rebranding
Managing the rebranding process
Set rebranding objectives
Generation of new names
1st key
decision:
Screening
Chosing a
new brand
name
Information search
Consumer research
Choice of a new brand name
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Rebranding
Implementing the name change
2nd key decision
5 key issues:
• Co-ordination
• Communication
• Understanding what the consumer identifies with the brand
• Providing assistance to distributors/retailers
• Speed of change
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Ethical Issues Concerning
Products
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Product safety
Planned obsolescence
Deceptive packaging
Branding and developing economies
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Corporate Identity Management
Managing corporate identity programmes:
1. Reveal the 5 identities
2. Examine the 10 identity interfaces
3. Diagnose the situation – What are the problems?
What are their nature? What are the implications?
4. Select the interfaces for attention
5. Strategic choice
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