Product Strategy, Branding, and Product Management Notes on Product Management

Learning Objectives and Introduction to Product Management

• Core Learning Objectives:     * Discuss different product objectives and strategies available for a firm to choose from.     * Develop an understanding of how firms manage products throughout the various stages of the product life cycle (PLC).     * Explain the contribution of branding and packaging strategies to the overall identity of a product.     * Discuss the methods marketers use to structure organizations for the management of both new and existing products.

• Introductory Example: HUAWEI Mate 9:     * Tagline: "A Step Ahead: Revolutionary Smartphone Experience."     * Key Collaboration: Co-engineered with Leica.     * Context: Used to illustrate the concepts of product strategy and co-branding in the smartphone industry.

Product Objectives and Strategies: Individual vs. Multiple Products

• Objectives and Strategies for Individual Products:     * Introduction of New Products: Focusing on a successful market launch.     * Regional to National Expansion: Taking a product that has been successful in a local or test market and introducing it nationwide.     * Mature Products: Re-energizing mature products to increase consumer enthusiasm while maintaining a distinct brand personality.

• Objectives for Single Products (Based on Figure 9.2):     * Introduce New Products: The goal in the launch phase is to establish the brand-new item in the market.     * Regional Product (Introduce Nationally): Expanding the reach of a successful local product to the entire country.     * Mature Product (Increase Consumer Enthusiasm): Reigniting interest through methods like new advertising campaigns, packaging redesigns, or finding new use cases after sales have leveled off.

• Objectives and Strategies for Multiple Products (Product Line Management):     * Product Line Definition: A firm’s total product offering designed to satisfy a single need or desire of target customers.     * Product Line Length: Determined by the number of Stock Keeping Units (SKUs).     * Product Line Strategies:         * Full-Line Strategy: Offering a wide range of products in the line.         * Limited-Line Strategy: Focusing on a smaller number of specific products.         * Product Line Stretching: Expanding the line beyond its current price or quality range.             * Upward Stretch: Adding premium, high-end, or luxury versions.             * Downward Stretch: Adding cheaper, budget-friendly versions.             * Two-Way Stretch: Simultaneously adding both premium and budget versions to a mid-range line.         * Filling Out: Adding variations (sizes or styles) within the current price and quality range to increase consumer choice.         * Contracting a Product Line: Pruning the lineup by removing (dropping) items that are no longer profitable or are failing to sell.     * Risk Factor: Cannibalization (where a new product takes sales away from the firm's existing products).

Product Mix Breadth and Length: The Procter & Gamble Case Study

• Product Mix Definition: The complete set of all different product lines a company sells.

• Product Mix Breadth (Width): The number of different product lines a company carries.

• Product Mix Length: The total number of items within those lines.

• Procter & Gamble (P&G) Example (Total Length = $42$):     * Detergents (16 brands): Ivory Snow, Dreft, Tide, Joy, Cheer, Oxydol, Dash, Cascade, Ivory Liquid, Gain, Dawn, Era, Bold 3, Liquid Tide, Solo, Ariel.     * Toothpaste (4 brands): Gleem, Crest, Complete, Denquel.     * Bar Soap (7 brands): Ivory, Camay, Lava, Kirk's, Safegard, Coast, Oil of Olay.     * Deodorants (2 brands): Secret, Sure.     * Fruit Juices (6 brands): Citrus Hill, Sunny Delight, Winter Hill, Texsun, Lincoln, Speas Farm.     * Lotions (7 brands): Wondra, Noxzema, Oil of Olay, Camay, Raintree, Tropic Tan, Bain de Soleil.

• Strategy Note: When a company increases the width of profit mix, it moves into a completely new category (e.g., a sports company adding energy drinks).

Marketing Throughout the Product Life Cycle (PLC)

• PLC Concept: A framework explaining how market responses and marketing activities fluctuate over the life of a product. Products can range from long-lived items to short-lived "fads."

• Stages of the PLC (Figure 9.4):     1. Introduction Stage:         * Characteristics: No profits as the company is recovering Research and Development (R&D) costs. Low awareness.         * Success/Failure: Up to $95\%$ of new products fail. Offshoots of well-known brands have a higher advantage.         * Focus: Effective advertising and promotion are essential.     2. Growth Stage:         * Characteristics: The product is accepted; sales rapidly increase. Profits increase and peak.     3. Maturity Stage:         * Characteristics: Typically the longest phase. Sales peak, but profit margins begin to narrow due to competition.     4. Decline Stage:         * Characteristics: Market shrinks; sales and profits fall as customer needs change.

Detailed Marketing Mix Strategies Throughout the PLC (Figure 9.5)

Branding: Identity, Equity, and Meaning

• Criteria for a "Good" Brand Name:     * Maintains relationships with customers.     * Positions the product by portraying an image or describing functionality.     * Is easy to say, spell, read, and remember.     * Fits the target market, benefits, culture, and legal requirements.

• Trademarks: The legal term for a brand name, brand mark, or trade character. Legal registration provides protection for exclusive use within a specific country.

• Brand Equity: The value of a brand to its organization over and above the generic version of the product. It provides competitive advantage and results in brand loyalty and attachment.

• Brand Meaning: The beliefs and associations a consumer has about a brand. Today, this builds virally online through brand storytelling.

Branding Strategies and Classifications

• Brand Extensions: Leveraging brand equity to sell new products under the same brand name.

• Sub-branding: Creating a secondary brand to differentiate a product line (e.g., Virgin Mobile, Virgin Atlantic, Virgin Galactic).

• Individual vs. Family Brands:     * Family Brand: Multiple items share a common brand name (e.g., Campbell's serves as an "umbrella").

• National vs. Store Brands:     * National Brands: Produced and marketed by a manufacturer.     * Store Brands (Private Label): Offered by a retailer under an exclusive trade name (e.g., Costco's "Kirkland's," Wal-Mart's "Sam's Choice").

• Generic Brands: Products are unbranded, sold at the lowest price possible, typically in white packaging with black letters (e.g., "GREEN BEANS").

• Licensing: Selling the right to use a brand name for a specific period and purpose (Example: Ferrari World, Abu Dhabi).

• Cobranding: Two brands work together to market a new product (Example: Cavalli Villas by DAMAC, Dubai).     * Ingredient Branding: A specific type of cobranding where one brand is a component of another (Example: Leica lenses in Huawei Mate 9 phones).

Design and Functions of Packaging and Labeling

• Functions of Packaging (Figure 9.7):     * Functional: Pour spouts for ease of use, protective material to prevent spoilage, shape for storage efficiency (cabinet/refrigerator).     * Communication: Recognizable logos/names, warnings, directions, recipes for alternative use, nutritional information, ingredients, toll-free contact numbers, UPC codes, and photos of the product in use.

• Effective Design Considerations:     * Comparison with competitors' packaging.     * Copycat Packaging: Mimicking the look of a leading brand.     * Choice of material and its projected image.     * Environmental impact.     * Influence of shape and color on brand image.     * Graphic information and labeling regulations.

Organizational Structure for Product Management

• Management Roles in Large Firms:     * Brand Managers: Managing specific brands.     * Product Category Managers: Overseeing entire categories of products.     * Market Managers: Focusing on specific customer segments or markets.

Questions & Discussion

• PLC Statistics: "Up to $95\%$ of new products ultimately fail. What are some implications of this statistic for marketers?"

• Packaging Ethics: "Is it fair for retailers like Walgreens and Wal-Mart to use copycat packaging on store branded products?"

• Brand Recovery: The transcript notes that some companies are now using social media to bring products "back from the dead."