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12. prod mix,branding

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prod mix,branding

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12. prod mix,branding

  1. 1. STRATEGIC CONCEPTS IN MARKETING Product Mix & Branding
  2. 2. Product & Product Mix  Product is the key element of a company’s marketing plan  Types of goods Consumer Goods Industrial Goods  Convenience goods - Capital goods  Shopping goods - Raw Materials  Specialty goods - Supplies  Unsought goods  Elements of a Product Quality—Features—Design—Product Mix Branding…Brand name, Brand sponsor, Brand strategy
  3. 3. PRODUCT MIX Product Mix An organization with several product lines has a product mix----a product mix thus consists of all the product lines & items that a particular seller offers for sale. What is a product line ?
  4. 4. PRODUCT LINE  Products that are closely related and serve similar needs of the customer segment e.g Product lines & Brands of HLL Personal wash…Lifebuoy, Lux, Liril, Rexona, Dove Fabric wash…Surf, Wheel, Rin, Sunlight Household care…Vim Oral care…Close-Up, Pepsodent Shampoos…Sunsilk, Clinic, Organics, H&S Hair oils…Clinic, Nihar Skin care…Fair & Lovely, Perfumery…Denim after shave
  5. 5. Elements of Product Mix  Product width…How many different product lines the company carries  e.g HLL carries 8 in the Home & Personal care category  Product length…Total number of items in the mix or within a line number of brands  e.g Personal wash…the various brands will represent the length of the personal wash line  Product depth… number of variants offered of each product in the line  e.g Lipton Tea… Lipton Taaza, Lipton Green Label, Lipton Yellow label & in various sizes 100/250/500gm  Product consistency… how closely related the product lines are in end use  E.g Consumer segments, distribution channels
  6. 6. Product Mix Strategy  Analyze the existing product mix in terms of  Meeting sales/profit objectives  Satisfying customers current & emerging needs  Responding to competitive moves—proactively or reactively  Utilizing resources  As a strategy a company could do any of the following  Build, maintain, divest or harvest product lines  Reposition existing products/brands  Add new products to fill gaps.
  7. 7. Branding  One of the outcomes of building or maintaining a product line is to invest in BRANDING---the art & cornerstone of marketing.  A brand is a sellers promise to deliver a specific set of features, benefits, services consistently to the buyers.  A product is something that is made in a factory, a brand is something that is bought by a customer. A product can be copied by a competitor, a brand is unique. A product can be quickly outdated, a successful brand is timeless. …….. Stephen King, WPP Group, London
  8. 8. What is a successful Brand  At the product level it should deliver benefits  It should offer some intangibles besides tangible benefits  The benefits it offers must be consistent with it’s personality  The benefits offered must be relevant to the customer  A significant price or performance advantage  Some significant difference from the existing brands
  9. 9. Some successes that turned sour….  PROMISE Toothpaste---after a successful launch with clove oil positioning, Promise changed it’s positioning to freshness and thus lost its differentiation to Colgate.  VELVETTE Shampoo---Revolutionized the sachet market & thus offered a price-value benefit that gave the brand an edge but change is distribution & loss of excise benefits as also lack of resources led to the brand’s eventual failure What does a brand mean to the Consumer ?
  10. 10. Brand : a source of value for the consumer  A brand is seen as overcoming the risk of purchase, whenever the perceived risk is high e.g edible products, durables; where differentiation is minimal or where price is high e.g in the case of high involvement products.  Functions that a brand performs for the consumer:*  Identification…quick identification of sought after products  Guarantee…same quality, no matter where/when bought  Ethical…responsible behavior  Practicality…saves time & energy in repeat purchase  Characterisation…confirmation of buyers self image or the image buyer wishes to convey  Continuity…satisfaction through familiarity & intimacy * Jean-Noel Kapferer…Strategic Brand Management
  11. 11. Brand : a source of value to the company  Financial standing…branding removes the risk of investment  Consumer loyalty…stability of future sales  Reputation of brand… image of quality justifies premium pricing  Dominant brand… entry barrier  Prestige…can generate royalties through licensing or franchising  Recognition…ease of entry into new markets & categories
  12. 12. Meaning of a brand  Attribute…TATA suggests reliability, quality  Benefit…translate the attribute into a benefit e.g reliability means low perceived risk  Values…produces values, a TATA product stands for performance, safety  Culture…Effect of organisational culture e.g professionalism, commitment to quality  Personality…Can project a certain personality e.g MARLBORO a macho personality  User…Association of the consumer with the brand e.g Macho man rather than a woman smoking a Marlboro
  13. 13. What is Brand Equity ?  A set of brand assets & liabilities linked to a brand, it’s name & symbol that add to or subtract from the value provided by a product or service to a firm and/or to the firm’s customers Committed buyer Likes it & Considers it a friend Satisfied buyer with Switching costs Satisfied habitual buyer No reason to change Switcher,price Sensitive, no loyalty Loyalty Pyramid
  14. 14. Branding Strategy Strategic Choices  Line extension…existing brand name in existing categories  Brand extensions…brand name extended to new product categories  Multi Brands…new brands in same product category  Co-brands…brands bearing 2 or more well known brand names
  15. 15. Brand Extension Brand extensions can be of two types  Extension into related categories e.g Cinthol soap to Cinthol Talcum Powder  Extension into unrelated categories e.g Tata Steel to Tata Tea
  16. 16. Some rules of Brand Extensions -Al Ries & Jack Trout  Expected Volume…small volume products should & not potential winners  Competition…In a crowded field as opposed to a vacuum  Advertising support…small budget brands should as opposed to big budget brands  Significance…commodity products should  Distribution…items using push strategy should