Products and Brands

Products and Brands

What is a Product?
A product is “anything that is capable of satisfying customer needs”. This definition therefore includes both:
Physical products
q Cars
q Washing machines
q DVD players
Services
q Dental treatment
q Accountancy
q Travel agents
Products are at the heart of marketing. The product needs to exist for the other elements of the mix to happen.

Parts of a Product
For someone doing marketing, the product has various parts that need to be considered:
Product specifications and materials
Product design or styling
Product functions and benefits
Product packaging
Product range

Product Differentiation
Products that are the same – tend to get the same price
Challenges for a business
q To make products different from competitors
q Ensure that customers recognise that product is different!
Ways of differentiating a product
q Distinctive design– e.g. Dyson; Apple iPod
q Branding - e.g. Nike, Reebok
q Performance - e.g. Mercedes, BMW

Launching a New Product
Marketing research – find out what customers want, who they are, and where the gaps are in the marketplace
Product development and testing – make prototypes; experiment by allowing a sample of potential customers to trial the product before it is launched
Distribution of product to outlets – the product cannot be sold unless it is in a position for customers to buy it – books will need to be in the bookshops and hammers in the hardware stores
Promotional launch to inform customers features of new product – this might be done locally, nationally or internationally – the customers need to know that the product is ready, available and that it might be the sort of thing they want to buy
At the first two stages (marketing research and product development/testing) many products are rejected because the findings of research shows that it will not be successful, or they cannot make a satisfactory prototype. Product testing might show that customers react badly to the product.
The new product launch needs all the elements of the mix to be in place to be successful.

Product Range
Product range – a collection of similar products offered by the same business
Helps spread risk – a decline in one product may be offset by sales of other products
A range can be sold to different segments of market e.g. family holidays and activity holidays
Selling a single product may not generate enough returns for business (e.g. market segment may be too small to earn a living)

Marketing Services
Services are mainly marketed through product differentiation
Similar products are adjusted to target audience
Businesses then use heavy promotion to highlight these differences.
Differs from goods marketing, because goods have greater opportunity to use packaging and physical product design

Brands
A product with a unique character for instance in design or image
It is consistent and well-recognised.
Benefits
q Inspires customer loyalty leading to repeat sales
q Can charge higher prices, especially if brand is market leader
q Retailers or service sellers want to stock brands
Own label brands
q A retailer which uses their own name on product rather than manufacturer’s
q Examples: Tesco tea or Sainsbury Cola


Examples of “Global” Brands
Microsoft
Coca Cola
Disney
Mercedes
Hewlett Packard

Brand Extension & Stretching
Brand extension
q When a business uses a brand name on a new product that has some of brand’s characteristics
q Examples include:
• Dove soap and Dove shampoo (both contain moisturiser)
• Mars Bar and Mars Ice Cream
Brand stretching
q Where brand is used for a diverse range of products, not necessarily connected.
q E.g. Virgin Airlines and Virgin Cola; Marks and Spencer clothes and food


Product Life Cycle - Stages
Introduction
q Researching, developing and then launching product
q Note – many new products fail to get past this stage
q Need to promote heavily
Growth
q When sales are increasing at their fastest rate
q Likely to attract competitors into the market
Maturity
q Sales are near their highest, but rate of growth is slowing down, e.g. new competitors in market or saturation
q Usually the best time to make profits from the product
Decline
q Final stage of cycle, when sales are falling
q Product may be withdrawn if it is loss-making

Extending the Life of a Product
Advertising – try to gain a new audience or remind current audience
Price reduction – more attractive to customers
Added value – add new features to current product
Explore new markets – try selling abroad
Re packaging – brightening up old packaging, or subtle changes such as putting crisps in foil packets

Managing Portfolios of Products
What is a product portfolio?
q All the product lines and product ranges that a company offers for sale
What is involved in managing the product portfolio
q Decisions about how to allocate the promotional budget
q Decisions about pricing strategy
q Decisions about whether to invest in new / improved products
q Decisions about whether to withdraw or close a product

What is BCG Matrix
Stars are high growth products competing in markets where they are strong compared with the competition. Often Stars need heavy investment to sustain growth. Eventually growth will slow and, assuming they keep their market share, Stars will become Cash Cows
Cash cows are low-growth products with a high market share. These are mature, successful products with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars
Question marks are products with low market share operating in high growth markets. This suggests that they have potential, but may need substantial investment to grow market share at the expense of larger competitors. Management have to think hard about “Question Marks” - which ones should they invest in? Which ones should they allow to fail or shrink?
Unsurprisingly, the term “dogs” refers to products that have a low market share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in. Dogs are usually sold or closed.

SWOT Analysis and Products
SWOT analysis stands for present Strengths and Weaknesses, future Opportunities and Threats
By categorising business situation under these headings, managers can analyse clearly what strengths to build on and weaknesses to put right
Then they can see which opportunities they might want to take and which threats they may want to react to.

Student of Rai Business School, new delhi

sanjeev kumar singh