BRAND MANAGEMENT AND
NEW PRODUCT DEVELOPMENT
SECTION 4B
Brand Management and the Firm
Brand Equity Models
ALAN L. WHITEBREAD
SEVEN BRAND MANAGEMENT
APPROACHES
1.
2.
3.
4.
5.
6.
7.
Economic
Identity
Consumer-based
Personality
Relational
Community
Cultural
COMPANY SENDER FOCUS
• THE ECONOMIC APPROACH
–
–
–
–
–
–
Manages the brand with the traditional marketing mix
Company identity helps shape a brand message
Marketer is in charge of brand value creation
A consumer is an “economic man” passively receiving
and understanding messages from the sender exactly
as intended.
COMPANY SENDER FOCUS
• Economic approach – The economic man
– Human behavior is rational
– Humans maximize their satisfaction and/or
utility [self-interest is important]
– Humans have perfect market information
– The exchange is an isolated event and not
related to any other event
– Humans have limited income which causes
them to maximize the utility of their income
COMPANY SENDER FOCUS
• THE IDENTITY APPROACH
–
– Brand is integrated into all organizational
levels
– Organizational culture and corporate identity
heavily influence the brand
HUMAN RECEIVER FOCUS
• THE CONSUMER-BASED APPROACH
– Brand is linked to customer associations
–
– Focus shifts to the message receiver
–
– Marketer can program the consumer through
brand messages
CONSUMER-BASED BRAND EQUITY
[CBBE]
• Ensure consumers identify and associate the
brand with a specific type of product or solution.
• Establish the brand in the mind of the consumer
through associations to certain properties.
• Assure brand identification and brand meaning
are accurate.
•
HUMAN RECEIVER FOCUS
• Consumer-based approach
–
– The brand is a consumer mental construct
–
– The consumer is the owner of the brand
– Marketer can program the consumer through
brand messages
CUSTOMER-BASED BRAND EQUITY
PYRAMID
4. RELATIONSHIPS
RESONANCE
3. RESPONSE
JUDGMENTS
FEELINGS
2. MEANING
PERFORMANCE
IMAGERY
SALIENCE
Projecting the brand
1. IDENTITY
BRAND IDENTITY
RESONANCE
JUDGMENTS FEELINGS
PERFORMANCE
• Brand salience
SALIENCE
Projecting the brand
– How often is the brand recalled?
– Is it easy to recall?
– What reminders are necessary?
– Dimensions of brand awareness
• Depth: the likelihood of recall
• Breadth: the range of purchase opportunities
– How effective are the brand elements?
• Identify and differentiate each one
IMAGERY
BRAND MEANING
RESONANCE
JUDGMENTS FEELINGS
PERFORMANCE
•
Brand performance
1. Primary product and supplementary
features
2. Product reliability, durability, and
serviceability
3. Style and design
4. Value proposition using emotional and
intangible elements [not price]
IMAGERY
SALIENCE
BRAND MEANING
RESONANCE
JUDGMENTS FEELINGS
PERFORMANCE
•
Brand imagery
1. User profiles
–
Demographics, psychographics, …
2. Purchase and usage situations
–
Channel, store, timing, …
3. Personality and values
–
Sincerity, excitement, competence, …
4. History, heritage, and memorable
experiences
IMAGERY
SALIENCE
BRAND RESPONSE
RESONANCE
JUDGMENTS
PERFORMANCE
•
Brand judgments
1. Brand quality
–
Value, satisfaction, …
2. Brand credibility
–
Expertise, trustworthiness, likeability, …
3. Brand consideration
–
As a relevant solution, …
4. Brand superiority
–
Differentiation, associations, …
FEELINGS
IMAGERY
SALIENCE
BRAND RESPONSE
RESONANCE
JUDGMENTS
PERFORMANCE
•
Brand feelings
1.
2.
3.
4.
5.
Warmth
Fun or excitement
Security
Social approval
Self-respect
FEELINGS
IMAGERY
SALIENCE
BRAND RELATIONSHIPS
RESONANCE
JUDGMENTS FEELINGS
PERFORMANCE
•
Brand resonance
1. Behavioral loyalty
–
Frequency of repeat purchases
2. Attitude attachment
–
Strong affection, pride of ownership, …
3. Sense of community affiliation
4. Active engagement
–
Regularly involved with some aspect
IMAGERY
SALIENCE
CUSTOMER-BASED BRAND EQUITY
PYRAMID
RESONANCE
What about you & me?
JUDGMENTS
FEELINGS
What about you?
PERFORMANCE
IMAGERY
What are you?
SALIENCE
Who are you?
HUMAN RECEIVER FOCUS
• Personality approach
– Humans endow the brand with a human
character / personality, thus giving it
symbolism
– A prerequisite for the relational approach
– Models
• David Aaker’s Brand Equity Model
• Brand Personality [more in Section 7] and
Corporate Brand Personality
DAVID AAKER’S BRAND EQUITY
MODEL
• Brand equity is composed of distinct
categories of brand assets and liabilities.
– Brand loyalty
– Brand awareness
– Perceived quality
– Brand associations
– Other proprietary brand assets
DAVID AAKER’S BRAND EQUITY
MODEL
• BRAND LOYALTY
– Reduced [marginal] marketing expenses
– Provides trade leverage [with resellers]
– The ability to attract new customers and keep
existing ones
– Provides time to respond to competitive
threats
DAVID AAKER’S BRAND EQUITY
MODEL
• BRAND AWARENESS
– It is an anchor to which you can attach other
associations
– It is familiar
– It is an indicator of commitment to the brand
– It indicates the brand should be considered if
not already a customer
DAVID AAKER’S BRAND EQUITY
MODEL
• PERCEIVED QUALITY
– Provides a reason to buy
– Differentiates the brand and its products
– Part of the positioning
– Provides value
–
– Provides the opportunity for extensions
DAVID AAKER’S BRAND EQUITY
MODEL
• BRAND ASSOCIATIONS
– Helps with information retrieval
–
–
– Provides a reason to buy
– Creates positive attitude or feelings
– Provides the opportunity for extensions
DAVID AAKER’S BRAND EQUITY
MODEL
• OTHER PROPRIETARY BRAND
ASSETS
– Establishes competitive advantage
DAVID AAKER’S BRAND EQUITY
MODEL
• BUILDING A BRAND
– Have a strong core brand identity that can be
modified for different segments and products.
– Have a strong value proposition using
emotional and intangible appeals.
– Establish a strong brand positioning that links
to the brand identity.
– Great execution
• NPD, launch, product / family life cycle
DAVID AAKER’S BRAND EQUITY
MODEL
• BUILDING A BRAND
– Be consistent over time
• Coca-Cola vs. RC Cola
– Use the brand leverage that has been
developed – only participate in strong cobranding programs
– Measure and track various brand equity
elements over time
– Have a strong brand manager
– Invest in the brand
PRODUCT BRAND PERSONALITY
• Defined in user imagery
– Understand the characteristics of customers
–
– Customers can express their actual or desired
self-image by association with the product
CORPORATE BRAND PERSONALITY
• Defined in the actions, values, and words
of all its employees
• Supersedes any product brand personality
• Core dimensions [traits]
– Heart [passionate and compassionate]
– Mind [creative and disciplined]
– Body [agile and collaborative]
BRAND MANAGEMENT AND
NEW PRODUCT DEVELOPMENT
SECTION 5
Brand Management and the Firm
Brand Types and Characteristics
ALAN L. WHITEBREAD
THE FOUR STEPS OF BUILDING A
BRAND
• Brand identity
– Who are you?
• Brand meaning
– What are you?
• Brand response
– How do I think or feel about you?
• Brand relationships
– What type of a connection do we have?
BUILDING A BRAND
• BRAND IDENTITY FORMS
– The company is the only brand name used
• ?
– The company and the brand are together
• DuPont, IBM, Philips, Siemens
– The brand by Company X
• ?
– The brand with minor mention of Company X
• Clairol, Crest, Folgers, Noxzema, Pampers, Puffs, Tide –
Proctor and Gamble
– The brand represented / distributed by X
• ?
TYPES OF BRANDS
GENERIC
CORPORATE / FAMILY
Pharmaceuticals, Vegetables
Nike, IBM, GE, RCA
INDIVIDUAL / PRODUCT
COMBINATION
Huggies, P&G soaps, Crest
HP Deskjet, DuPont Stainmaster
PRIVATE LABEL
CO-BRANDING
Post Oreo O’s cereal, Disney SUV
Kenmore, Craftsman, Die-Hard
Great Value, …
BRAND LICENSE
Disney
PRIVATE LABEL BRANDS
•
Are generally a threat only to brands that are
1.
The value equation is wrong because the real or perceived
benefits are not sufficient.
2.
Very small IMC relative to what is needed to build or sustain a
brand.
3.
Very poor differentiation [if any] and probably some
combination of bad POP, IMC, …
PRIVATE LABELS:
SOME DISHWASHERS
Electrolux®
Whirlpool®
GE®
GE ProfileTM
GE SpacemakerTM
Hotpoint®
GE Monogram®
Electrolux Icon
Gibson
Kelvinator
White-Westinghouse
Frigidaire
Frigidaire Gallery
Frigidaire Professional
Tappan®
Roper®
Estate®
Whirlpool®
Whirlpool Gold®
KitchenAid®
KitchenAid BRIVA®
Kenmore
GE
Kenmore
GE®
[In-sink dishwasher]
Kenmore
Kenmore Elite
Kenmore UltraWash®
Maytag®
Admiral
Jenn-Air®
Jenn-Air Pro-Style®
Magic Chef
Maytag Jetclean®III
Maytag Jetclean®II
Maytag Jetclean®
Norge
Hardwick
See http://www.ajmadison.com/cgi-bin/ajmadison/item_list/cat00263/Built_In_Dishwashers.html for more.
See http://www.appliance.com/dishwashers/list.html for a list of firms.
PRIVATE LABEL BRANDS
• PRIVATE LABEL NOTES
– Some people differentiate a private label brand as
one that identifies the source of the product and a
generic brand as one that does not identify the
source.
– Private labels are called store brands for retailers.
– Private labels for wholesalers and distributors may or
may not have detailed specifications and identify the
source of the product.
BUILDING A BRAND
• PRIVATE LABEL BRANDS
– Manufacturer’s brands [OEM]
• Manufacturer A makes products for Manufacturer
B so the market believes Manufacturer B is making
the products.
–?
– Reseller’s brands
• B2B
– Nearly all mail order firms
• B2C
– Sears Craftsman tools, DieHard batteries, and Kenmore
appliances
BUILDING A BRAND
• PRIVATE LABEL BRANDS
– Counter brands or Generic brands
• Usually the same ingredients as the major brand
and imitates it in nearly all aspects – same size
package, information is identical and in the same
place, etc.
– Wal-Mart Equate
– Fakes or Knock-offs
• Illegal versions of usually major brands
– CDs, movies, software, …
B2B BRANDS
• Most are unknown by the average
consumer.
– Known: Alcoa, Intel,
– Unknown: FMC, Lexan, TIVAR
• Important considerations
– Company reputation and financial stability
– Capacity, flexibility, service level[s]
– NPD
POSITIONING: BRAND IDENTITY
• Vision [includes purpose / need fulfillment]
• What makes it different?
• What makes it recognizable?
– This is a part of but not the same as identity
– As seen from sender’s side!
– Sight
• Graphic symbol [logo]
– Sound
• Name
– Must penetrate the noise.
BRAND IDENTITY TRAPS
• Each of these approaches is too limiting or
tactical.
How the brand is
currently perceived
[The customer
determines who you
are]
How we want the
brand to be perceived
[Must be a visionary
positive projection]
The part of the brand
identity and value
proposition that is
communicated to the
target audience.
[focus on attributes
[features] restricts the
brand identity
POSITIONING: BRAND IMAGE
• Brand image [as seen from receiver’s side]
– Perceptions of the product
– Must not be distorted by the noise
– If you are doing a great communications job,
brand image will be very close to the brand
identity.
– Understanding the receiver’s side
• Use a Mental map / Mind map
– A graphical technique that takes advantage of the brain
associative capability not just is linear capability.
MIND MAP
Adult
Children
Thirst quencher
Lemon
Sticky
Sweet
Bittersweet
Fresh
7-Up
Cool
Carbonated
Sparkling
POSITIONING: MIND MAP TOOL
•
To effectively use this technique
1. Get a very large sheet of paper.
2. Put the central idea at the center of the paper.
3. Write down every association where it first appears
to belong.
4. Draw all known connections between ideas with
various arrows, lines, markers, symbols, colors, etc.
5. Go very quickly.
1. NEVER PAUSE, JUDGE, OR EDIT DURING THE MIND
MAP SESSION!
2. This maximizes the number of associations and minimizes
the linear thinking aspect of the brain.
REMEMBER THE BENEFITS OF STRONG
BRANDS
•
•
•
•
•
•
Increased customer loyalty
Increased brand recognition
Stronger competitive position
Larger gross and pre-tax margins
Increased trade cooperation
Increased IMC effectiveness
REMEMBER – STRONG BRANDS
PROVIDE POTENTIAL FOR
• a corporate brand
• brand extensions
• product line extensions
•
POSITIONING: FIRST STEPS
• Four key questions must be answered before
you begin to evaluate positioning alternatives.
– Why does the brand exist?
•
– Who is the brand for?
• Market segmentation; market descriptions
– Why are the benefits meaningful?
•
– What are we competing against?
• SWOT analysis; competitive analysis; product charts
POSITIONING: FIRST STEPS
• Why does the brand exist?
– The brand vision [brand promise for the
consumer].
– Brand benefits must be rank ordered by
perceived value for each target market
[segment].
• Who is the brand for?
– Precise market segmentation and target
marketing are required.
POSITIONING: FIRST STEPS
• Why are the benefits meaningful?
– What proof exists?
– How are those messages conveyed?
• What are we competing against?
– You must understand the nature of
competition.
• By level [direct, various indirect]
• By product for direct competitors
• By company [by probability of competing]
SELECTING BRAND ELEMENTS
•
Six criteria should be used to do this.
1.
2. Meaningful / descriptive / interesting / rich in
visual and verbal imagery
3. Likeable aesthetically and emotionally
4. Transferable within and across product,
geographic, or cultural boundaries
5. Adaptable, flexible over time to keep from
becoming stale or outdated
6.
A SUCCESSFUL BRAND
• When you have positioned a brand
correctly, it has all of the following
characteristics.
– Recall [physically, imagery, familiarity]
– Personality [character]
– Culture [group]
– Relationship [meaning to the customer]
– Customer reflection [perception]
– Self-image
BRAND MANAGEMENT AND
NEW PRODUCT DEVELOPMENT
SECTION 6
Brand Management and the Firm
New Product Development: Risk Assessment
ALAN L. WHITEBREAD
REASONS FOR NPD
• Capitalize on existing
market[s]
• Capitalize on new
technology
• Erect competitive barriers
• Establish a market
presence
• Expand the product
offering
• Improve the company’s
image
• Increase market
penetration
• Preemptive move in an
emerging segment
• Lower cost / higher value
product
• Offset a seasonal cycle
• Utilize excess capacity
• …
NEW PRODUCT DEVELOPMENT [NPD]
• NPD is risky and expensive.
– More than 9 out of 10 new products fail in the first
year.
• Food Industry 1997 first year failure rate
– Top 20 firms success rate is 76%
– Food industry failure rate is nearly 80%
– Large firm vs. small firm NPD performance
• Medicines: Of 5,000
– Only 5 make it to clinical trials
– Only 1 is approved for patient use
• U.S. 2007 Fortune 1000 firms
– Spend more than $60 billion in new product failures each year.
– Even if a product survives its first year, it is likely to
fail in the second year.
NEW PRODUCT DEVELOPMENT [NPD]
• New product development is crossfunctional
– Marketing identifies unfilled customer needs
– Marketing specifies the type of product that is
needed
– R&D develops conceptual alternatives for
marketing to approve
– R&D, engineering, and production develop
the product with marketing’s guidance
– Finance verifies the estimated cost and
profitability
MITIGATING RISK
• Companies are faced with increasing levels of risk in today’s
market.
•
– You must develop and introduce products faster!
– Competitors have speeded up their NPD cycles.
•
– Product life cycles are shortening, increasing risk because:
• more new products must continually be in development, and
• there is less time to capture development costs and generate profits.
•
– New product development is expensive.
– A large percentage of all quality problems stem from poor design.
– Most of a new product's cost is determined during the design
stage.
KEYS TO NEW PRODUCT SUCCESS
“THE DIMENSIONS OF INDUSTRIAL NEW PRODUCT SUCCESS AND FAILURE”, R.
G. Cooper, Journal of Marketing, Vol. 43 (Summer 1979), pp. 100-101.
• Product uniqueness and [perceived]
superiority
• Market knowledge and marketing
proficiency
• Technical and production synergy and
proficiency
CRITICAL GENERAL SUCCESS
FACTORS FOR NEW PRODUCTS
•
• Exceptional product quality
– Quality leader
• Superior to competitors perceived ability to meet
a need or solve a problem
• Unique benefits that are highly visible, easily
understood, and
•
CRITICAL SUCCESS FACTORS:
PROJECT LEVEL
• Unique [perceived] superior products
•
• Market research
• Clear, early, and stable project and product
definitions
• Planning and resourcing the launch
• Excellent execution from idea forward
•
CRITICAL SUCCESS FACTORS:
PEOPLE AND THE ENVIRONMENT
• Organizing the right project team
• Strong team chemistry
• Outstanding leadership
QUALITIES PROMOTING CREATIVITY
“A MODEL OF CREATIVITY AND INNOVATION IN ORGANIZATIONS”, Teresa M. Amabile,
Research in Organizational Behavior, Vol. 10, pp. 128-129. 1988.
• Personality traits
– Persistence, curiosity, energy, and intellectual
honesty
• Self-motivation [3M intrapreneurship]
– Self-driven and committed to the idea
• Cognitive abilities
– General problem-solving, tactics for creative
thinking
QUALITIES PROMOTING CREATIVITY
“A MODEL OF CREATIVITY AND INNOVATION IN ORGANIZATIONS”, Teresa M. Amabile,
Research in Organizational Behavior, Vol. 10, pp. 128-129.
• Risk-orientation [Norm Dion, Dysan Corp.]
– Unconventional, attracted to challenge, do
things differently
• Expertise in the area [Al Shugart, Finis Conner]
– Talent, experience, and knowledge in a field
• Qualities of the group
– Synergy of intellectual, personal and social
qualities of the group
QUALITIES INHIBITING CREATIVITY
“A MODEL OF CREATIVITY AND INNOVATION IN ORGANIZATIONS”, Teresa M. Amabile,
Research in Organizational Behavior, Vol. 10, p. 129.
• Unmotivated
– Not challenged by the problem, pessimistic,
complacent, lazy, do not believe in the idea
• Unskilled
– Lack of ability or experience in the problem
area
• Inflexible
– Opinionated, unwilling to do things differently
ENVIRONMENTS FOR CREATIVITY
“A MODEL OF CREATIVITY AND INNOVATION IN ORGANIZATIONS”, Teresa M. Amabile,
Research in Organizational Behavior, Vol. 10, pp. 146-147.
• Freedom of what to do or how to do
– #2 for inhibiting creativity
• Good project management
• Sufficient resources
• Organizational characteristics
– Cooperation and collaboration
– Failure is not fatal
• #1 for inhibiting creativity
THE POWER OF VISUALIZATION
• On the internet find any or all of the
following to appreciate visualization.
CRITICAL SUCCESS FACTORS:
PEOPLE AND THE ENVIRONMENT
•
•
•
•
Organizing the right project team
Strong team chemistry
Outstanding leadership
Provide a supportive corporate
environment
– Climate
– Culture
• Top management support
B2C TARGET MARKET SEGMENT
CRITERIA
1. Measurable
- Is it quantifiable ?
2. Substantial
- Is it the right size for my firm?
3. Accessible
- Does it use our existing channels of distribution?
4. Heterogeneous
- Is it differentiable? Are there obvious customer benefits?
5. Actionable
- Does my firm have a committed long-term desire to succeed?
B2B TARGET MARKET SEGMENT
CRITERIA
1. Measurable
– The degree to which you can measure buyer
characteristics
2. Accessible
– The ability to focus on target market
segments
3. Substantial
– The degree to which target market segments
are large enough and potentially profitable
enough to pursue
B2B TARGET MARKET SEGMENT
CRITERIA
4. Compatible
-The extent to which marketing and business
strengths compare to current and expected
competitive and technology states
5. Responsive
-The extent to which target market segments
respond to elements of the marketing mix
WHAT IS A NEW PRODUCT?
• Product improvements and modifications.
– A different
•
•
•
•
•
•
•
•
•
Size
Color
Style
Specifications
Package
A new product family or product line
A new SBU
Products that require a new technology
…
LARGE
P
R
O
FIVE TYPES OF DEVELOPMENT
PROJECTS
HARDEST
R&D ADVANCED
DEVELOPMENT
PROJECTS:
GENETIC
ENGINEERING
MORE
C
NEW CORE
PRODUCT
E
S
S
ALLIANCES
PARTNERSHIPS
PROJECTS
NEW CORE
PROCESS
R&D JOINT
VENTURE
NEXT GENERATION
PROCESS
PRODUCT CHANGE
NEXT GENERATION
PRODUCT
ADDITION TO
PRODUCT FAMILY
LESS
DERIVATIVES AND
EXTENSIONS
BREAKTHROUGH
PROJECT:
NEW FAMILY OF
DRUGS
C
H
A
SINGLE
DEPARTMENT
UPGRADE
N
G
PLATFORM
PROJECT:
APPLE iMAC:
TRANSLUCENT
PLASTIC
COLORATION
TECHNOLOGY
INCREMENTAL
CHANGE
E
SMALL
For more information see Creating Project Plans to Focus Product Development, Harvard Business Review, Vol. 70, No. 2, p.74.
DERIVATIVE
PROJECT:
SIMPLE SIZE
CHANGE
EASIEST
NPD
• New product development begins with the
recognition of
– an unmet customer need or want and
– a potential market [segment] that is large enough to
justify exploration.
• NPD proceeds either in a sequential or
concurrent fashion.
– Sequential [completing one step before proceeding to
the next] NPD is the traditional method.
• It is time consuming, thus slow.
• The lack of speed to market results in either not as much of a
lead over competitors or it trails them further in the market.
Either way, the firm does not realize as much profit from NPD
as it could.
NPD: A STAGE-GATE PROCESS
1.
-Conduct necessary research [discovery]
-Determine the type of project [scoping]
2. Gain project approval
3. Development activities
4. Testing and validating
5.
WHERE DO IDEAS COME FROM?
• MARKET RESEARCH / CUSTOMERS /
PROSPECTS / EMPLOYEES
• SUPPLIERS
• ACQUISITIONS
• UNDERSTANDING TRENDS / ISSUES / …
–
–
–
–
–
Demographics
Problems
Competition
Market research
Technology
NEW PRODUCT IDEA STRATEGIES
Acquire
Companies
Original
Products
Acquire
Patents
Product
Improvements
Acquire
Licenses
Product
Modifications
New
Brands
METHODS OF IDEA GENERATION
• METAPHOR BUILDING
• FREE ASSOCIATION
– Fruit → Banana → Yellow → ? +
– Fruit → Banana → Orange → ? +
•
•
•
•
•
BRAINSTORMING
CATALOG TECHNIQUE
ATTRIBUTE LISTING
THINKING OUT OF THE BOX
Techniques for creative thinking
–
http://members.optusnet.com.au/~charles57/Creative/Techniques/
ANSOFF’S PRODUCT / MARKET
EXPANSION GRID
Existing
products
Existing
markets
1. Market
Penetration /
Saturation
New
markets
3. Market
Development
New
products
2. Product
Development
4. Diversification
PRODUCT GENERATION MAP: HP
DeskJet
560C
Cost reduction
DeskJet
300
DeskJet
550C
DeskJet
500C
DeskJet
Plus
Swap color and
black cartridges
Cost reduction
DeskJet
Quality
improvement
TIME
One color and
one black
cartridge
Portable with
small footprint
TECHNOLOGY ROADMAP
Technology
area
Last
year
This
year
+1
year
+2
years
Weight/size
16-bit chip
Micro
controller
Integrated
unit
Single chip Soft radio
Ease of use
4 line
screen
10 line
screen
VGA
Touch
screen
Longevity
Audio quality
Video quality
Vision
Voice
interface
CONCEPT SCREENING
• Sort and classify by type of project
• Concept Screening: Does it fit with the
portfolio?
– Form, function, design, aesthetics
–?
• Risk analysis
– Technological
• Technology demands, engineering, operations,
and quality
– Business
• Business analysis
THREE KEY QUESTIONS
1.
Who?
What?
Where?
Why?
When?
How?
How is it differentiated?
Ø
THREE KEY QUESTIONS
2.
Utilizing which core competency[ies]?
Utilizing which key success factor[s]?
What operating model?
How will it be made?
What are the key hurdles?
Ø
THREE KEY QUESTIONS
3.
Projected units
Projected net revenue [including elasticity]
Projected cost schedules
Projected profitability
Risk assessment – the potential to make
considerably more or less than the
projection[s]
Ø
BRAND MANAGEMENT AND
NEW PRODUCT DEVELOPMENT
SECTION 7A
Brand Management and the Firm
Market Research - 1
ALAN L. WHITEBREAD
MARKET RESEARCH OVERVIEW
Strategic Marketing for
Market Research
The collection and analysis of
data for market decisions about
COMPETITORS
MARKETS
PRODUCTS
RESPONDENTS
STRATEGY OPTIONS
Evaluation data for
-Strategy analysis
-New business analysis
Market Planning for
Market segmentation
Market potential / share
Competitive analysis
Product Management for
New or enhanced products
4 P's decisions
Product Development for
Product concept testing
Sales techniques
Price testing
FRAMING AN ISSUE
McKinsey & Company
• “Breakthrough Thinking from Inside the
Box”, HBR, December, 2007, pp.71-78.
– Create new boxes to think inside
– Bound the range of acceptable ideas
– Tailor the questions accordingly
– Select participants capable of original insight
– “21 Great Questions for Developing New
Products”
ELEMENTS OF A GOOD
QUESTIONNAIRE
• Most are short, simple, and quick – but some
can be quite long
• Precise wording of questions and answers
• Avoids leading questions
• Does not ask unreasonable questions
• Does not alienate the respondent
– Sensitive topics = ?
• Readily lends itself to statistical analysis
THE QUESTION MUST BE
VERY CAREFULLY WORDED
AND STRUCTURED!
THE STRUCTURE OF THE
ANSWER IS JUST AS
IMPORTANT AS THAT OF THE
QUESTION!
TYPES OF QUESTIONS
DICHOTOMOS QUESTION
THE RESPONDENT MUST ANSWER ONE OF JUST TWO CHOICES
DO YOU THINK TIDE GET CLOTHES CLEAN WITHOUT INJURING
THE FABRIC?
YES NO
TYPES OF QUESTIONS
OPEN-END or COMPLETELY UNSTRUCTURED
QUESTION
OBTAINS INFORMATION WITHOUT BIAS
IT IS LIKE AN ESSAY EXAM
IT IS VERY HARD TO ANALYZE
FREE RESPONSE QUESTION
ANSWERS ARE LIMITED TO A WORD OR A PHRASE
TYPES OF QUESTIONS
SENTENCE COMPLETION QUESTION
THE ______ IS OBTAINED BY DIVIDING ______ BY ______.
GOOD FOR ROTE MEMORY MEASUREMENT
THE RISK IS THAT IS ALL THEY MEASURE!
TYPES OF QUESTIONS
MULTIPLE CHOICE QUESTION – you must know
everything about an issue to properly write these
structured questions.
1-VERY EASY ANSWER SET
ONE CORRECT ANSWER
2-TO MEDIUM HARD ANSWER SET
SEVERAL ANSWERS ARE ONLY SLIGHTLY DIFFERENT
3-TO HARD ANSWER SET
COMBINATION ANSWERS ONLY SLIGHTLY DIFFERENT
TYPES OF QUESTIONS
RANKING, RATING, and CONTINUUM QUESTIONS
FORCE A MORE PRECISE SCALE OF MEASUREMENT
SCALE DETERMINES TYPE OF STATISTICAL ANALYSIS
PROBLEM IS THE MEANING OF THE SCALE OF MEASUREMENT
CHECK QUESTIONS
QUALITATIVE RESEARCH
•
•
•
•
•
Words and images
“Soft” or subjective data
Exploratory in nature
Understand unmet needs
Heuristic analysis: search for themes and
deeper meanings
COMPETITIVE ANALYSIS
Traditional competitors
Evolving competitors
New competitors to the industry
The growing role of strategic alliances
COMPETITIVE ANALYSIS
Company
#1
#2
#3
#4
#5
#6
#7
#8
#9
#10
OUR
COMPANY
Y
Y
Y
N
N
Y
Y
Y
GUI
Win
5,000
MCS
Y
Y
Y
?
?
?
Y
?
CLI
Unix
?
DMCS
Y
Y
Y
Y
PROP
Y
Y
Y
CLI
Unix
12,000
AS
Y
Y
Y
Y
PROP
?
Y
?
GUI
Unix
?
API
Y
Y
N
N
Y
?
N
?
GUI
Win
5,080
PCSS
Y
Y
Y
Y
PROP
Y
Y
Y
GUI
Win
7,460
MAC
Y
Y
N
N
N
N
N
N
GUI
Win
?
FMSI
Y
Y
N
N
PROP
Y
Y
?
GUI
Win
?
HTC
Y
Y
N
N
Y
N
Y
N
GUI
Win
3,980
LEGEND: Y=yes N=no GUI=graphic user interface CLI=command line interface PROP=proprietary
4 User $
PRODUCT LINE EXPLOSION
MEN’S SHIRTS
BRAND
TYPE
Dress, casual,
sport, work
SIZE
S, M, L, XL
Plus
long and short
Button down or not
--Colors
--Fabrics
PRODUCT LINE EXPLOSION
• Look at what happens with only a little
changes to the previous slide.
– Brands*types*sizes*collars*colors
• 1*4*8*2*4
=
• 3*4*8*2*6
= 1,152
256
CONTEXTUAL RESEARCH
CONTEXT
-Activities
-Environment
-Interactions
-Other products
-People
-Processes
-Relationships
CONTEXTUAL RESEARCH:
PRINCIPLES
• Empathy for understanding
• Rapport for true behavior and values
• Subjects lead the session and identify
what is important
• Focus on what subjects do more than their
opinions
• General patterns should emerge
CONTEXTUAL RESEARCH:
THE PROCESS
Defining the
problem and
research
objectives
Marketing
Decisions
Developing
the research
plan
Present the
findings
Collect the
information
Analyze the
information
QUALITATIVE TECHNIQUES
• INTERVIEW USERS
• FREE ASSOCIATION
– What does _________ mean to you?
QUALITATIVE TECHNIQUES
• FOCUS GROUPS
– How do they work?
• PROJECTIVE TECHNIQUES
– Completion and interpretation tasks
– Comparison tasks
– To try and uncover true opinions and feelings
– Example: Rorschach Test [inkblot]
http://www.stupidstuff.org/main/rorschach.htm
CONCEPT TESTING:
What ideas should we pursue?
“The universal carryall”
• The unmet need or want
– “The universal carryall”
•
•
•
•
•
What is it?
How should it work?
Feature[s] = ?
Advantage[s] = ?
Benefit[s] = ?
CONCEPT TESTING:
What ideas should we pursue?
• Test as many ideas as possible
• Test before any feasibility analysis
• Do not mix innovative and very futuristic
ideas in the same test set
BRAND ATTRIBUTES AND BENEFITS
User
imagery
Usage
imagery
Product-related
attributes
Brand
personality
PRODUCT
OR
SERVICE
Symbolic
benefits
Functional
benefits
Experiential
benefits
TTU DELOITTE PROJECT, FALL 2008
SCALES OF MEASUREMENT
SCALE
STRUCTURE
1:1 correspondence
Subjective data
A scale exists
No distance relation is
known (e.g. 3-2 <> 4-3)
EXAMPLE(S)
Football numbers
Lottery drawing
numbers
Military rank
Quality of lumber, beans
Upper-middle-lower class
Ordinal scales are often used to evaluate consumer satisfaction. [Likert scale]
How satisfied are you with PRODUCT X?
1.
Not satisfied
2.
Neither satisfied or dissatisfied
3.
Satisfied
4.
Very satisfied
5.
Extremely satisfied
SCALES OF MEASUREMENT
SCALE
STRUCTURE
Equal
Equaldistances
distancesbetween
items
between items
(e.g.
(e.g.4-2=4-3)
3-2=4-3)
EXAMPLE(S)
Calendar days
Calendar days
Temperature
Temperature
Interval scales are often used to rank items.
Which products do you prefer the most? Assign #1 to the most
preferred and #5 to the least preferred product.
PRODUCT A
PRODUCT B
PRODUCT C
PRODUCT D
PRODUCT E
_____
_____
_____
_____
_____
A continuous scale of
measurement
Definite relationships
A true zero point
Measurement
Loudness scale
BRAND PERSONALITY
IF PRODUCT __________ WAS YOUR
FRIEND,
HOW WOULD IT TALK TO YOU?
THE BRAND PERSONALITY APPROACH
SUPPORTING
THEME:
Brand-self
congruence
SUPPORTING
THEME:
Personality
BRAND
PERSONALITY
SUPPORTING
THEME:
Consumer self
BRAND PERSONALITY:
Supporting theme: personality
Recessive
personality
Quiet, reserved, shy, silent,
withdrawn
Personality
dimensions
Dominant
personality
EXTROVERSION
Talkative, active, energetic,
outgoing
Fault-finding, cold, unfriendly,
quarrelsome, hardhearted
AGREEABLE
Sympathetic, kind,
appreciative, affectionate,
softhearted
Careless, disorderly, frivolous,
irresponsible, slipshod
CONSCIOUSNESS
Organized, thorough, efficient,
responsible
Tense, anxious, nervous,
moody, worrying
EMOTIONAL STABILITY
Stable, calm, contented,
unemotional
Commonplace, narrow
interests, simple, shallow,
unintelligent
OPENNESS / CULTURED Wide interests, imaginative,
intelligent, original, insightful
BRAND PERSONALITY
Brand Personality
Central Theme
Sincerity
•Hallmark
•Coke
Excitement
•Pepsi
Competence
Sophistication
Ruggedness
•HP
•Wall Street
Journal
•BMW
•Lexus
•Grey Poupon
•Nike
•Wells Fargo
THE POWER OF PASSIONS
• The brand is what makes a product more than
just a product – it makes it unique.
• The brand goal is to be more than brand
preference – a passionate brand insistence!
• This is done through engagement and fulfilling
self-concept and image to others.
•
CONNECTING WITH CONSUMERS
• B2C
– Needs and wants
– Emotions and self-actualization
– Hopes [dream realizations]
– Fears [risk reduction, safety]
– Familiarity and trust [brand loyalty]
– Understanding demographic trends
CONNECTING WITH CONSUMERS
• B2B connections
– Performance and reward [best solution]
– Fears [risk reduction, improve safety]
– Familiarity and trust [consistency → brand
loyalty]
– Understanding trends
BRAND MANAGEMENT AND
NEW PRODUCT DEVELOPMENT
SECTION 7B
Brand Management and the Firm
Market Research - 2
ALAN L. WHITEBREAD
QUANTITATIVE RESEARCH
•
•
•
•
•
Numbers based
“Hard” data
More confirmatory in nature
Optimize the appeal of new products
Statistical analysis
QUANTITATIVE TECHNIQUES
• ANALYSIS OF VARIANCE [ANOVA]
– Closely related to multiple regression
– Can examine multiple variables and their influence on some
response
• Analysis of - 1:A, 2:B, 1: [A & B], [1 & 2]: [A & B], etc.
• CONJOINT ANALYSIS
– Many tools including variance and regression analysis
– Allows many variables and aspects to be analyzed simultaneously
– Human perceptions and preferences
• to single attributes and interactions such as price point, sales
likelihood, and cannibalization
• CORRESPONDENCE MAPPING
– Graphically represent the relationship between brands or products
and other variables such as psychographics, media, etc..
– Can be a preliminary step to cluster analysis, used in determining
the most discriminatory psychographic statements
QUANTITATIVE TECHNIQUES
• FACTOR ANALYSIS
– A data reduction technique to explain variability of factors
– Finds commonality in sets of variables
– Used to identify consumer lifestyle and personality types
• PRINCIPAL COMPONENT ANALYSIS [PCA]
– A type of factor analysis
– Used to identify
• the most independent variables
• and relative strength/position of a set of linear variables
• MULTIDIMENSIONAL SCALING
– Similar to factor analysis
– Human perceptions and preferences in relative perceptual space
[e.g. perceptual map]
FACTOR ANALYSIS AND PCA
Deloitte study 2009
Rotated Factor Analysis [PCA]
Rotated Common Factor Analysis
Factor 1 by Sex; Single
Factor 1 by Sex; Single
MALE
Exterior design
0.7829
FEMALE
0.5233
MALE
0.5833
GPS system
Fuel efficiency
Horsepower
0.4914
0.6915
0.4410
0.7468
0.6816
iPod link
Leg room
0.5497
0.5856
0.6206
0.4816
Newest model
Performance
0.5113
0.8633
0.5986
0.7602
0.8159
Quietness inside
0.8902
0.6436
0.7513
Sound system
0.5224
0.6015
0.4585
Steering wheel controls
0.4122
0.5275
Responsiveness / handling
0.7664
Tells you when it needs service
Type of transmission
FEMALE
0.4497
0.4054
0.4244
See what happens when you force the results to only one attribute!
CORRESPONDENCE MAPPING
0 Degree Angle: 100% Correlation
AWKWARD ABSENTMINDED FORGETFULUL
MONEY IS THE BEST MEASURE OF SUCCESS
MAGAZINES MAIN SOURCE OF ENTERTAINMENT
MAXWELL HOUSE REG GRND
READ INFO ON LABEL
MOST MAGAZINES ARE
WORTH THE MONEY
WIN LOTTERY WOULD
NEVER WORK AGAIN
LITTLE I CAN DO TO CHANGE MY LIFE
MAKE SURE I TAKE EXERCISE REGULAR
PAY ANYTHING WHEN IT
CONCERNS MY HEALTH
MAXWELL HOUSE INST
ON WHOLE PEOPLE GET WHAT THEY DESERVEE
I AM A WORKAHOLIC
ADV GIVES TRUE PICTURE
• Maxwell House Regular Ground & Maxwell
House Instant have a nearly 100% positive
correlation, meaning if you buy more of one,
you buy more of the other (the brands are
perceived very similar in the marketplace).
JOB SECURITY IS
MORE IMPORTANT
CORRESPONDENCE MAPPING
90 Degree Angle: 0% Correlation
CHIPS AHOY CHUNKY
CABLE TV HAS TOO MANY CHANN; NEVER KNOW
LISTEN TO RADIO FOR QUICK NEWS UPDATE
BUY PRODS USE RECYCLE
SPANISH ADS RESPECT MY HERITAGE
PLAN AHEAD FOR EXP PURCHASES
I ENJOY TAKING RISKS
NO GOOD AT SAVING MONEY
SHOP FOR SPECIALS
COMPUTERS CONFUSE ME WILL NEVER GET USEE
MUCH INFO AS POSS BEFOR BUY ELECT ITEM
LOYAL TO COMPANIES WITH ADS IN SPANISH
• Chips Ahoy Chunky and Oscar Mayer Hot Dogs
OSCAR MAYER HOT DOGS
form near a 90 degree angle and therefore
have no correlation.
CORRRESPONDENCE MAPPING
180 Degree Angle: 100% Negative Correlation
AWKWARD ABSENTMINDED FORGETFULUL
MONEY IS THE BEST MEASURE OF SUCCESS
MAGAZINES MAIN SOURCE OF ENTERTAINMENT
READ INFO ON LABEL
MAXWELL HOUSE REG GRND
MOST MAGAZINES ARE
WORTH THE MONEY
WIN LOTTERY WOULD
JOB SECURITY IS
NEVER WORK AGAIN
MORE IMPORTANT
LITTLE I CAN DO TO CHANGE MY LIFE
MAKE SURE I TAKE EXERCISE REGULAR
PAY ANYTHING WHEN IT
CONCERNS MY HEALTH
ON WHOLE PEOPLE GET WHAT THEY DESERVEE
I AM A WORKAHOLIC
ADV GIVES TRUE PICTURE
• Maxwell House Regular Ground and Starbucks are
opposite, meaning they have a negative correlation.
If you buy more of one brand, you buy less of
another (brands are perceived as opposites in the
market). This is particularly helpful when looking at
competitors in a market.
STARBUCKS
CLUSTER ANALYSIS
• USED FOR SEGMENTING MARKETS BY GROUPING
INDIVIDUALS WITH SIMILAR RESPONSES INTO
DISCRETE GROUPS.
– Respondents will be more like their group than outside
their group, e.g., no overlap.
– There is a greater probability of being in one group than
any other.
• A POWERFUL STATISTICAL TOOL FOR
UNDERSTANDING CHARACTERISTICS AND
RELATIONSHIPS.
CLUSTER 3: TOP MAGAZINES
CONSUMER REPORTS
NEWSWEEK
NAT GEO
MARTHA STEWART LIVING
U.S. NEWS & WORLD RPT
TIME
SOUTHERN LIV.
MODERN MATURITY
PEOPLE WKLY
BETTER HOMES AND GRDNS
SPORTS ILLUSTRATED
PARADE MAG
COSMO
100
110
120
130
140
150
Expected Frequency of Interest
160
EXPECTED BUYER BEHAVIOR
Try doing this for a product you like and one you know little about.
• Describe the expected buyer behavior profile of
the market.
– CONSUMER - use key items like demographics,
psychographics, POP behavior, the marketing mix,
classification of your product, and other relevant items
to generally describe how buyers would purchase this
item.
– B2B – use industry [NAICS], application, quantity,
purchasing patterns, the marketing mix, classification
of your product, and other relevant items to generally
describe how buyers would purchase this item.