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Chapter 6Brand and Product

Management

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Products

A product is anything capable of satisfying customers needs.

It exists on three levels:

Core

Actual

Augmented

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The Levels of Product

Core Benefit

Features

Quality

Packaging

Styling

Guarantees

Delivery

Additional Services

Installation

Brand Values

Augmented Product

Actual Product

CoreProduct

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The Difference Between a Product and a Brand

Branding is the process by which companies distinguish their product offerings from the competition.

Branding permits customers to develop associations (e.g. status, prestige) with products, which eases the purchase decision.

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Top US basketball player LeBron James

Sports celebrity, LeBron James has astutely managed his personal brand to win multiple endorsement contracts with leading firms like Nike, McDonald’s.

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The Benefits of Brands

Company value

Consumer preference and loyalty

Barrier to competition

High profits

Base for brand extensions

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Building Brands

This involves making decisions about the following:

Naming brandsDeveloping brands

A brand is created by means of augmentation

of a core product to add brand values

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Brand Name Considerations:

A good brand name should:

Evoke positive associationBe easy to pronounce and rememberSuggest product benefitsBe distinctiveUse numerals when emphasising technologyNot infringe an existing registered brand name

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Brand Name Strategies and Choices

Brand name strategies

Family brand names

Individual brand names

Combination brand names

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The Anatomy of Brand Positioning

Brand personality

Brand Domination

Brand Domination

BrandValuesBrandValuesBrand

HeritageBrand

Heritage

Brand AssetsBrand Assets

BrandPersonality

BrandPersonality

Brand Reflection

Brand Reflection

Brand Positioning

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Brand Management Issues

Brand extension and stretching

Pan–European and global branding

Co-branding

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Chivas

The Chivas whisky brand’s campaign ‘Live with Chivalry’ implies that the Chivas man is a good guy who gives something back!

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The Boston Consulting Group Growth-Share Matrix

Stars Problem Children

Cash Cows

Dogs

7%

15%

0%

MarketGrowthRate

Market Share10 0

© The McGraw-Hill Companies, 2009

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Strategic Objectives and theBoston Box

• Build sales and/or market share

• Invest to maintain/increase leadership position

• Repel competitive challenges

Stars

• Build selectively• Focus on defendable niche

where dominance can be achieved

• Harvest or divest the rest

Problem children

• Harvest or• Divest or• Focus on defendable niche

Dogs• Hold sales and/or market

share• Defend position• Use excess cash to support

stars, selected problem children and new product development

Cash cows

15Strategic Objectives and theBoston Box

• Build selectively

• Focus on defendable niche where dominance can be achieved

• Harvest or divest the rest

Problem children

• Build sales and/or market share

• Invest to maintain/increase leadership position

• Repel competitive challenges

Stars

• Harvest or• Divest or• Focus on defendable niche

Dogs• Hold sales and/or market

share• Defend position• Use excess cash to support

stars, selected problem children and new product development

Cash cows

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Strategic Objectives and theBoston Box

• Build sales and/or market share

• Invest to maintain/increase leadership position

• Repel competitive challenges

Stars• Build selectively• Focus on defendable niche

where dominance can be achieved

• Harvest or divest the rest

Problem children

• Harvest or• Divest or• Focus on defendable niche

Dogs

• Hold sales and/or market share• Defend position• Use excess cash to support stars,

selected problem children and new product development

Cash cows

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Strategic Objectives and theBoston Box

• Harvest or• Divest or• Focus on defendable niche

Dogs

• Build sales and/or market share

• Invest to maintain/increase leadership position

• Repel competitive challenges

Stars

• Hold sales and/or market share

• Defend position• Use excess cash to

support stars, selected problem children and new product development

Cash cows

• Build selectively• Focus on defendable niche

where dominance can be achieved

• Harvest or divest the rest

Problem children

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The Product Life Cycle

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What is a New Product?

Productreplacements Additions to

existinglines

New-to-the-worldproducts

New product lines

NewProducts

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The Seven-Stage New Product Development Process

New products

Screening

Concept testing

Business analysis

Product development

Market testing

Commercialisation

Idea generation

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ZARA

Zara’s speed to market has given it a competitive advantage in the apparel

industry.

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Diffusion of Innovations

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Chapter SummaryA product is anything that is capable of satisfying customer needs. Brands are the means by which companies differentiate their offerings from those of the competitors.The three different levels of product, namely, the core, the actual and the augmented product and how differentiation can take place at any of these levels. The key to developing a brand is the brand name and the positioning of the brand.Brand management may involve dealing with own-label brands, brand extension, pan-European, global and co-branding decisions.Portfolio planning and the product life cycle are important for the management of a diverse group of products and brands.New product development should be carefully managed throughout the development process.