Product and Brand Management – MBA-302-DESE-1

Unit - I
Product

1. Philip Kotler:

“Product is anything that can be offered to someone to satisfy a need or a want.”

W. Alderson:

“Product is a bundle of utilities, consisting of various product features and accompanying

services.”

Product is a bundle of benefits-physical and psychological- that marketer wants to offer, or a

bundle of expectations that consumers want to fulfill. Marketer can satisfy needs and wants of
target consumers by products.

Types of Product:
A company sells different products (goods and services) to its target market.

They can be classified into two groups, such as:

1. Consumer Product, and

2. Industrial Products

1. Consumer Products:
Consumer products are those items which are used by ultimate consumers or households and
they can be used without further commercial and engineering processes.

Consumer products can be divided into four types as under:

i. Convenient Products:

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Such products improve or enhance users’ convenience. They are used in a day-to-day life.
They are frequently required and can be easily purchased. For example, soaps, biscuits,
toothpaste, razors and shaving creams, newspapers, etc. They are purchased spontaneously,
without much consideration, from nearby shops or retail malls.

ii. Shopping Products: These products require special time and shopping efforts. They are
purchased purposefully from special shops or markets. Quality, price, brand, fashion, style,
getup, colour, etc., are important criteria to be considered. They are to be chosen among
various alternatives or varieties. Gold and jewelleries, footwear, clothes, and other durables
(including refrigerator, television, wrist washes, etc.).

iii. Durable Products:

Durable products can last for a longer period and can be repeatedly used by one or more
persons. Television, computer, refrigerator, fans, electric irons, vehicles, etc., are examples of
durable products. Brand, company image, price, qualities (including safety, ease, economy,
convenience, durability, etc.), features (including size, colour, shape, weight, etc.), and after-
sales services (including free installation, home delivery, repairing, guarantee and warrantee,
etc.) are important aspects the customers consider while buying these products.

iv. Non-durable Products:

As against durable products, the non-durable products have short life. They must be
consumed within short time after they are manufactured. Fruits, vegetables, flowers, cheese,
milk, and other provisions are non-durable in nature. They are used for once. They are also
known as consumables. Mostly, many of them are non-branded. They are frequently
purchased products and can be easily bought from nearby outlets. Freshness, packing, purity,
and price are important criteria to purchase these products.

v. Services:

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Services are different than tangible objects. Intangibility, variability, inseparability, Perishability,
etc., are main features of services. Services make our life safe and comfortable. Trust,
reliability, costs, regularity, and timing are important issues.

The police, the post office, the hospital, the banks and insurance companies, the cinema, the
utility services by local body, the transportation facilities, and other helpers (like barber,
cobbler, doctor, mechanic, etc.,) can be included in services. All marketing fundamental are
equally applicable to services. ‘Marketing of services’ is the emerging facet of modern
marketing.

2. Industrial Products:
Industrial products are used as the inputs by manufacturing firms for further processes on the
products, or manufacturing other products. Some products are both industrial as well as
consumer products. Machinery, components, certain chemicals, supplies and services, etc.,
are some industrial products.

Again, strict classification in term of industrial consumer and consumer products is also not
possible, For example, electricity, petroleum products, sugar, cloth, wheat, computer, vehicles,
etc., are used by industry as the inputs while the same products are used by consumers for
their daily use as well.

Some companies, for example, electricity, cements, petrol and coals, etc., sell their products to
industrial units as well as to consumers. As against consumer products, the marketing of
industrial products differs in many ways.

Industrial products include:

1. Machines and components

2. Raw-materials and supplies

3. Services and consultancies

4. Electricity and Fuels, etc.

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 The Three Product Levels
 Core Benefit. The core benefit is the fundamental need that the customer satisfies when
they buy the product. ...
 Actual Product. The actual product is the product features and its design. ...
Augmented Product. The augmented product is any non-physical parts of the product.

Product policy

Product policy is defined as the broad guidelines related to the production and development of
a product. These policies are generally decided by the top management of a company i.e.
board of directors. It is like a long term planning with respect to the product-mix of the
company in order to deliver maximum customer satisfaction.

Product policy objectives

1. Survival: - The main objective of any company is to stay in the market profitably.

2. Growth: - Based on the long term goals of the company the policies are defined to get a
good growth in the market.

3. Flexibility: - The product policy needs to be flexible to the changing needs of the customers,
government regulations, global trends and economy.

4. Scalability: - The companies should use its resources properly to make the most of its
valuable resources. With time the company needs to develop economies of scale to improve
profits

The product mix is the variety of products a company produces or sells to the marketplace. A
product line often evolves, as manufacturers want to take advantage of a brand's value and the
success of other products in the mix. Retailers carry a mixture of products to satisfy various
customers. The product mix includes four common elements: Length, breadth, depth and
consistency.

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Length
The length element of the product mix refers to the number of products in a given product line.
You could also describe it as the number of stock keeping units or SKU's a company carries in
a product line. For instance, the length of a grocery retailer’s soft drink product line is the
number of distinct brands it carries. A longer product line means consumers have more options
and access to greater assortment.

Breadth
Breadth of the product mix refers to the number of product lines that a company offer or the
variety a company offers. Offering a wider array of product lines is common for discount and
department that sell products in a number of different product categories. Manufacturers
develop breadth to diversify risks of a given product becoming obsolete. Retailers with wide
variety often attempt to market themselves in a virtual one-stop shop.

Depth
Depth is closely related to length in the product mix in the sense that it offers the consumer
options when selecting a given product. Depth refers to the different ways that you can buy a
particular product in a product line. For instance, you can buy soft drink in a 2-Liter bottle, a six
or 12-pack of cans, a 20-ounce bottle or other sizes. You can buy dish soap in liquid, powder
or gel form. These options further enhance your flexibility as a buyer.

Consistency
The consistency element of the product mix refers to the connection between products within
the product line and the way they reach the consumer. For manufacturers, consistency refers
to how closely related production processes are for various products. The more consistent
production is, the more efficient and cost-effective. For retailers, consistency in a product mix
makes it easier to perform suggestive selling and recommend close products. Distinct products
in the mix typically translate to a unique selling process for that product

A product line is a group of related products all marketed under a single brand name that is
sold by the same company. Companies sell multiple product lines under their various brand
names, seeking to distinguish them from each other for better usability for consumers.

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Packaging

Process of providing a container or a wrapper for providing safety and security for the product
and to enhance it appeal by the customers. In present competitive situation it is so significant
that it is considered as 5th p of marketing mix

Levels of packaging

Product modification and deletion

An adjustment made to an existing product, usually made for greater appeal or functionality. A
modification may include a change to a product's shape, adding a feature or improving its
performance. Often a product modification is accompanied by a change in packaging

There are three major ways of product modification, i.e. quality modifications, functional
modifications, and style modifications. (1) Quality modifications: These are changes that
relate to a product's dependability and durability and usually are executed by alterations in the
materials or production process employed

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Product deletion is the process of removing products that perform below market
expectations or fail to meet company objectives. Deletion results in either product
replacement or product elimination, in the following some of the reasons are mentioned which
are responsible for prodi=uct deletion from market or company portfolio

Brand

A brand is a name, term, design, symbol or any other feature that identifies one seller's good
or service as distinct from those of other sellers. [2][3][4] Brands are used in business, marketing,
and advertising

Branding is a set of marketing and communication methods that help to distinguish a

company or products from competitors, aiming to create a lasting impression in the minds of
customers. The key components that form a brand's toolbox include a brand's identity, brand
communication (such as by logos and trademarks), brand awareness, brand loyalty, and
various branding (brand management) strategies

Types of Brands and branding strategies

Uni-Brnading, Co branding, Multi branding

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Family branding, Private branding, Brand extension, Brand extinction

Brand Loyalty, Brand equity, Brand Image

Brand management practices

These practices are to ensure that the brand continues in the market for a longer time, in order
to increase the brand life time value this following measure can be considered by the
companies

1. Leveraging technologies

2. Enhancing public relations

3. Empowering employees’

4. Improving USP

5. Being proactive and Market and Business analysis etc

Unit-II

New Product Development

Whenever the company decides to develop new product a committee will be formulated
comprising of expert from all departments, this committee is named as new product
development committee. The job of this committee is the process of new product
development. The following stages of new product development was propounded by
BAH model (Booz, Allen and Hamillton-1982). The stages are as follows

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 1. Idea generation – The New Product Development Process

The new product development process starts with idea generation. Idea generation refers to
the systematic search for new-product ideas. Typically, a company generates hundreds of
ideas, maybe even thousands, to find a handful of good ones in the end. Two sources of new
ideas can be identified:

 Internal idea sources: the company finds new ideas internally. That means R&D, but
also contributions from employees.
 External idea sources: the company finds new ideas externally. This refers to all kinds of
external sources, e.g. distributors and suppliers, but also competitors. The most
important external source are customers, because the new product development
process should focus on creating customer value.

2. Idea screening – The New Product Development Process

The next step in the new product development process is idea screening. Idea screening
means nothing else than filtering the ideas to pick out good ones. In other words, all ideas
generated are screened to spot good ones and drop poor ones as soon as possible. While the
purpose of idea generation was to create a large number of ideas, the purpose of the
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succeeding stages is to reduce that number. The reason is that product development costs rise
greatly in later stages. Therefore, the company would like to go ahead only with those product
ideas that will turn into profitable products. Dropping the poor ideas as soon as possible is,
consequently, of crucial importance

3. Concept development and Testing – The New Product Development Process

To go on in the new product development process, attractive ideas must be developed into a
product concept. A product concept is a detailed version of the new-product idea stated in
meaningful consumer terms. You should distinguish

 A product idea à an idea for a possible product

 A product concept à a detailed version of the idea stated in meaningful consumer terms

 A product image à the way consumers perceive an actual or potential product

Concept development
Imagine a car manufacturer that has developed an all-electric car. The idea has passed the
idea screening and must now be developed into a concept. The marketer’s task is to develop
this new product into alternative product concepts. Then, the company can find out how
attractive each concept is to customers and choose the best one. Possible product concepts
for this electric car could be:

 Concept 1: an affordably priced mid-size car designed as a second family car to be

used around town for visiting friends and doing shopping.
 Concept 2: a mid-priced sporty compact car appealing to young singles and couples.

 Concept 3: a high-end midsize utility vehicle appealing to those who like the space
SUVs provide but also want an economical car.

As you can see, these concepts need to be quite precise in order to be meaningful. In the next
sub-stage, each concept is tested.

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Concept testing
New product concepts, such as those given above, need to be tested with groups of target
consumers. The concepts can be presented to consumers either symbolically or physically.
The question is always: does the particular concept have strong consumer appeal? For some
concept tests, a word or picture description might be sufficient. However, to increase the
reliability of the test, a more concrete and physical presentation of the product concept may be
needed. After exposing the concept to the group of target consumers, they will be asked to
answer questions in order to find out the consumer appeal and customer value of each
concept

4. Marketing strategy development – The New Product Development Process

The next step in the new product development process is the marketing strategy development.
When a promising concept has been developed and tested, it is time to design an initial
marketing strategy for the new product based on the product concept for introducing this new
product to the market. The marketing strategy statement consists of three parts and should be
formulated carefully:

 A description of the target market, the planned value proposition, and the sales, market
share and profit goals for the first few years
 An outline of the product’s planned price, distribution and marketing budget for the first
year

 The planned long-term sales, profit goals and the marketing mix strategy.

5. Business analysis – The New Product Development Process

Once decided upon a product concept and marketing strategy, management can evaluate the
business attractiveness of the proposed new product. The fifth step in the new product
development process involves a review of the sales, costs and profit projections for the new
product to find out whether these factors satisfy the company’s objectives. If they do, the
product can be moved on to the product development stage. In order to estimate sales, the
company could look at the sales history of similar products and conduct market surveys. Then,

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it should be able to estimate minimum and maximum sales to assess the range of risk. When
the sales forecast is prepared, the firm can estimate the expected costs and profits for a
product, including marketing, R&D, operations etc. All the sales and costs figures together can
eventually be used to analyse the new product’s financial attractiveness

6. Product development – The New Product Development Process

The new product development process goes on with the actual product development. Up to
this point, for many new product concepts, there may exist only a word description, a drawing
or perhaps a rough prototype. But if the product concept passes the business test, it must be
developed into a physical product to ensure that the product idea can be turned into a
workable market offering. The problem is, though, that at this stage, R&D and engineering
costs cause a huge jump in investment. The R&D department will develop and test one or
more physical versions of the product concept. Developing a successful prototype, however,
can take days, weeks, months or even years, depending on the product and prototype
methods.

7. Test marketing – The New Product Development Process

The last stage before commercialisation in the new product development process is test
marketing. In this stage of the new product development process, the product and its proposed
marketing programme are tested in realistic market settings. Therefore, test marketing gives
the marketer experience with marketing the product before going to the great expense of full
introduction. In fact, it allows the company to test the product and its entire marketing
programme, including targeting and positioning strategy, advertising, distributions, packaging
etc. before the full investment is made.

The amount of test marketing necessary varies with each new product. Especially when
introducing a new product requiring a large investment, when the risks are high, or when the
firm is not sure of the product or its marketing programme, a lot of test marketing may be
carried out.

8. Commercialisation
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Test marketing has given management the information needed to make the final decision:
launch or do not launch the new product. The final stage in the new product development
process is commercialisation. Commercialisation means nothing else than introducing a new
product into the market. At this point, the highest costs are incurred: the company may need to
build or rent a manufacturing facility. Large amounts may be spent on advertising, sales
promotion and other marketing efforts in the first year.

Generic Product (core product or formula of product)

A generic product is something that is sold on the name of the product i.e. what it actually is,
rather than having a brand name. Such products generally have the name of the local shop
which is selling the product or a lesser known name, but sometimes they don't have any brand
name on them. Generic Competition

Generic Brand
A generic brand is a type of consumer product that lacks a widely recognized name or logo
because it typically isn't advertised. Generic brands are usually less expensive than brand-
name products due to their lack of promotion, which can inflate the cost of a good or service.
Generic brands are designed to be substitutes for more expensive brand-name goods. Generic
brands are especially common in supermarket goods and pharmaceuticals and tend to be
more popular during a recession.

Growth strategy

Strategy aimed at winning larger market share, even at the expense of short-term earnings.
Four broad growth strategies are diversification, product development, market penetration, and
market development, there are various types of growth strategies some of them are as follows

Intensive growth strategy

Intensive growth strategies are business plans designed to improve the business performance
of a company, bringing the highest gains with the least amount of effort and risk. They include
strategies for market penetration, product development and market development.

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Interactive strategy

interactive strategy is an integral aspect of the overall marketing strategy that involves
addressing issues such as channel choice, design aspects that suit various channels,
technology and outreach constraints within the overall plan, usability aspects including UI and
UX design, among other issues

Diversification strategy

Diversification is a corporate strategy to enter into a new market or industry in which the
business doesn't currently operate, while also creating a new product for that new market.

Types of Diversification

The three types of diversification strategies include the concentric, horizontal and
conglomerate. Diversification is a method of risk management that involves the change and
implementation of different investments stated in a specific portfolio

1. concentric diversifications

The concentric diversifications specify that there exists similarities between the industries in
terms of the technological standpoint. It is through this that the firm may compare and apply its
technological knowhow to an advantage. This is through a careful change or alteration in the
marketing strategy performed by the business. This strategy aims to increase the market value
of a particular product and therefore gain a higher profit.

2. horizontal diversification

The horizontal diversification tackles products or services that are in a sense, not related
technologically to certain products but still pique the interest of current customers. This
strategy is more effective is the current clientele is loyal to the existing products or services,
and if the new additions are well priced and adequately promoted. The newest additions are
marketed in the same way that the previous ones were which may cause instability. This is
because the strategy increases the new products’ dependence on an existing one. This

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integration normally occurs when a new business is introduced, however unrelated to the
existing.

3. Conglomerate or lateral diversification

Conglomerate or lateral diversification is where the company or business promotes products or

services with no relation commercially or technologically to the existing products or services,
however still interest a number of customers. This type of diversification is unique to the
current business and may prove quite risky. However, it may also prove very successful since
it independently aims to improve on the profit the company accumulates with regards to the
new product or service

Product portfolio

Product portfolio is the collection of all the products or services offered by a company. Product
portfolio analysis can provide nuanced views on stock type, company growth prospects, profit
margin drivers, income contributions, market leadership, and operational risk. This is essential
for investors conducting equity research by investors or analysts supporting internal corporate
financial planning

Portfolio Analysis is the process of reviewing or assessing the elements of the entire
portfolio of securities or products in a business. The review is done for careful analysis of risk
and return. The analysis also helps in proper resource/asset allocation to different elements in
the portfolio

Advantages of portfolio analysis for any company are:

• Evaluation of the firm’s business by the top management

• It helps to assess the company’s attractiveness

• Raises issues related to cash flow availability

• It helps to assess the competitive strength of the company with respect to market
share, contribution margin, product fit etc.
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 • Communication is facilitated

For portfolio analysis, the company can make use of various models like BCG matrix, GE –
nine cell matrix, Ad Little Model and Shell International Model and also risk return analysis

BCG-Matrix

BCG-matrix, Boston matrix, Boston Consulting Group analysis, portfolio diagram) is a

chart that was created by Bruce D. Henderson for the Boston Consulting Group in 1970 to help
corporations to analyze their business units, that is, their product lines. This helps the company
allocate resources and is used as an analytical tool in brand marketing, product management,
strategic management, and portfolio analysis. Some analysis of market performance by firms
using its principles has called its usefulness into question

 Cash cows is where a company has high market share in a slow-growing industry.
These units typically generate cash in excess of the amount of cash needed to maintain
the business.
 Dogs, more charitably called pets, are units with low market share in a mature, slow-
growing industry. These units typically "break even", generates barely enough cash
Question marks (also known as adopted children or Wild dogs) are businesses
operating with a low market share in a high-growth market. They are a starting point for
most businesses. Question marks have a potential to gain market share and become
stars
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  Stars are units with a high market share in a fast-growing industry. The hope is that
stars become next cash cows

GE-Matrix or GE-Meckincy Model or nine cell matrix

The GE McKinsey Matrix, also known as the McKinsey Nine Box Matrix is a strategic tool used
for business portfolio planning. A business portfolio is a group of businesses that collectively
make up a company GE-matrix or multifactor analysis is a technique used in brand marketing
and product management to help a company decide what product(s) to add to its product
portfolio and which opportunities in the market they should continue to invest in. The GE matrix
helps a strategic business unit evaluate its overall strength.

Harvesting strategy

Harvesting strategy is a business plan for either cancelling or reducing marketing spending on
a product. ... Marketing executives choose a harvesting strategy when a product has reached
the end of its life cycle. They aim to extract maximum profit from any remaining sales3

Divestment strategy or retrenchment strategy

Divestment usually involves eliminating a portion of a business. Firms may elect to sell, close,
or spin-off a strategic business unit, major operating division, or product line. This move often
is the final decision to eliminate unrelated, unprofitable, or unmanageable operations.

Ad Little matrix –model

Arthur D. Little matrix is a portfolio management matrix which helps managers understand their
SBUs strategic position depending upon 2 dimensions-

1. SBU’s life cycle and

2. Competitive position

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Each of these dimensions can be further split up into the following categories to better analyze
a firm and accordingly determine the future strategic actions-

Life cycle stages can be

1. Embryonic
2. Growth

3. Maturity

4. Ageing

Competitive position can also be either of the following

1. Dominant: The position of a company falls into this category if it is a clear market leader or
has a monopoly position. Example , Intel in microprocessors.

2. Strong: In this case, the company might not be a monopoly but definitely has a strong
presence and loyal customers.

3. Favourable: Companies with favourable competitive position usually operate in fragmented

markets and no single one controls all market share.

4. Tenable: Here each company caters to a niche segment defined by a product variety or
segmented demographically.

5. Weak : In this scenario, the company financials are too weak to gain a strong hold in the
market and is expected to die out within a short span of time.

Shell International-Business Portfolio Model : A somewhat similar approach to the GE

matrix. This approach also has two dimensions: company’s competitive capabilities (vertical
axis) and prospects for sector profitability (horizontal axis). The firm’s SBUs or products are
plotted into one of the nine cells and subsequently there is a suggested strategy for each of the
nine cells. The cells represent, starting at the bottom right hand corner:

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  Leader where major resources are focused on the SBU.
 Try harder might be vulnerable over longer periods of time, but OK now.

 Double or quit gamble on potential SBUs for the future.

 Growth grow the market by focusing some resources here.

 Custodial like a cash cow, milk it and do not commit more resources.

 Cash generation milk for expansion elsewhere.

 Phased withdrawal move cash to SBUs with greater potential.

 Divest liquidate or move these assets on as fast as possible.

Risk return analysis

Risk–return analysis seeks “efficient portfolios”, i.e., those which provide maximum return on
average for a given level of portfolio risk. It examines investment opportunities in terms
familiar to the financial practitioner: the risk and return of the investment portfolio.

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 The Main Types of Business Risk
 Strategic Risk.
 Compliance Risk.
 Operational Risk.
 Financial Risk.
 Reputational Risk.

Unit – III

Product Maps, Market Maps and Joint Space Maps

A product map is a graphic representation of the ways people perceive products, in terms of
underlying attributes, as well as an aid in understanding their preferences. ... It shows how the
products are perceived by respondents. Each product occupies a specific point in the space.

A market map is a diagram that identifies all the products in the market using two key
features. A market map showing a gap in the market. The diagram above shows how four
local cafés are competing in terms of price and quality.

The market map illustrates the range of "positions" that a product can take in a market based
on two dimensions that are important to customers.
Examples of those dimensions might be:
 High price v low price
 Basic quality v High quality

 Low volume v high volume

 Necessity v luxury

Joint Space Maps. A common approach to perceptual mapping is to integrate both the
consumer's perceptions of the various competing brands along with the preferred/ideal needs
for the different consumer segments in the market. This style of perceptual mapping is usually
referred to as a joint space map. A typical perceptual map is a two-dimensional graph with a

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vertical axis (Y) and a horizontal axis (X). Each axis consists of a pair of opposite attributes at
each end

Idea screening : Idea screening is a process that evaluates and contrasts new product ideas
to get the most promising ones for your business. Not every idea is relevant to your company.
through a successful idea screening process, it helps in focusing the whole product
development process with a higher possibility of achieving success. The screening step is a
critical part of the new product development process. Product ideas that do not meet the
organization's objectives should be rejected. Two problems that may arise during the
screening stage are the acceptance of a poor product idea, and the rejection of a viable
product idea

Concept Generation

Success of any product based company is governed by New Product Development which is
driven by generation of pool of Innovative Ideas which take the form of concepts.Concept
Generation involves collection of available New Product Concepts that fit the selected high
potential opportunity and generate new ones as well.

Concept selection

Concept selection is one of early stages in product development in which proposed

concept are evaluated to select the best concept that best fulfil the decision making criteria.
Concept development refers to the basic understanding that is necessary to make sense of
one's world. This includes ideas about the self and others, objects, and the environment. This
foundational understanding is crucial to communication, travel, and independence

Concept testing

Concept testing is done both with surveys as well as qualitative research (such as focus
groups or in-person interviews). Base your concept test methodology on both who you need to
include in the research as well as whether your concept lends itself to being presented
graphically or verbally, without rational explanation or discussion. In either case, the research
investment conducted at the concept testing phase is minimal compared to launching a new

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product that does not meet sales goals or one that needs extensive re-tooling or re-marketing
post-launch.

1. To develop the original idea further..

2. To estimate the concept’s market potential.

3. To eliminate lower-potential concepts..

4. To determine the value of concept features and benefits

5. To identify the highest potential customer segments..

6. To estimate of sales or trial rate. To identify optimal messaging and inform marketing
plans for launch.

Product Architecture. • It is the scheme by which the. functional elements of the product are
arranged. into physical chunks and by which the chunks. Product Architecture is concerned
with how the function of any product is organized into physical parts, such as assemblies and
components. As mentioned earlier, the overall function of the product is reviewed and a
number of sub-functions are identified, which need to take place in order to achieve the overall
function. Likewise, assemblies and parts must be assigned to carry out these sub-functions
and in-turn the whole function. There are principally two types of product development
architecture – integral design and modular design.

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 Unit – IV

Market structure is best defined as the organisational and other characteristics of a market.
We focus on those characteristics which affect the nature of competition and pricing – but it is
important not to place too much emphasis simply on the market share of the existing firms in
an industry.

Preference segmentation

The market segmentation can be characterized in different ways, and one of the basic kinds is
through Preference segments, such as: Homogeneous Preferences: When the customers
have relatively the same kind of preferences in terms of their needs and wants, the market
shows no natural segments. The preference segmentation is like that of benefit segmentation

Perceptual Mapping

Perceptual mapping is a diagrammatic technique used by marketers in an attempt to visually

display the perceptions of customers or potential customers. Typically the position of a product,
product line, brand, or company is displayed relative to their competition.

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Choice Modelling

It’s a method by which certain conditions can be reproduced to more effectively predict a
person’s choice when confronted with several options. Choice modelling is about much more
than trying to find out which product fares the best against a sea of competitors; it’s a market
research tool that gives better insight into customer behaviour patterns, as well as the trade-off
between cost and value. Choice modelling predicts actual economic decisions that can help
you better plan your next move.

'Brand Aid' = Brand + celebrity aid + Cause

Brand Aid is the combined meaning of “aid to brands” and “brands that provide aid.” It is aid to
brands, a mechanism that helps selling products, profiling a brand in the media, and building
brand value. It is also aid financing that is provided through branding. It is a marketing-mix
Model used by the marketing departments of the organisations. Consumers, partnering with
corporations and celebrities, are forming new alliances in international development through
what we call 'Brand Aid' initiatives. It is online model for assembling marketing decision
elements to describe the market and evaluate strategies. The structure is modular so that

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individual decision areas can be added or deleted at will. The model is of the aggregate
response type model in which all the responses are considered as a single response

Defender model of market strategy (Hauser and Shagun-1983)

A competitive strategy in which a business concentrates on its existing products or services

and attempts to protect (rather than expand) its market share by offering superior quality, low
prices, and strong customer service. Such a policy requires firm cost control and is usually only
successful in an established, stable market where there is little scope for innovation

Defenders are companies that do not aggressively pursue markets. They look for relatively
stable markets and seek to maintain their positions in these markets.

Such companies usually keep their prices low, and do not incur much expenditure on
advertising and promotion. They offer a limited range of products and focus more on better
quality of products and good customer service. They are slow in decision making and commit
themselves to a decision only after thorough research and analysis. They do not go for early
market entry and focus more protecting their position in the market.

This model is based on the following assumptions

 Existing brand can be positioned in a multi attribute space in the market

 Consumer ties to maximise the utilities from the brand

 Usually the consumer utility is monotonous from the brand

 Awareness and distribution are concave functions of advertising (increase in the ad

spent may decrease value some time it is concave )

(PREFMAP) PREFERENCE MAPPING

Preference Mapping is used in market research to gain deep insight into product analysis. It is
used by the company by implementing a software called excel XLSTAT statistical software.

These preference mapping techniques is used to analyse products (the objects) and to answer
questions such as:
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  How is our product positioned compared with the competitors' products?

 Which product is the closest to ours?

 Which type of consumer prefers my product?

 Why are the competitors' products positioned as such?

 How can I reposition my product so that it fits better my target group?

 What success can I expect from my product?

 Which new products should I encourage the R&D department to create?

Preference mapping provides a powerful approach to optimizing product acceptability.

Flowcharts and concepts

A flowchart describes the steps software takes to process information, from the beginning
data inputs, through processing and logical decisions, to the point where the program ends.
Software developers use flowcharts to plan out how computer applications work before
programmers write the code.

The three most commonly used types of flowcharts include:

 Process Flowchart.

 Data Flowchart.

 Business Process Modelling Diagram.

Cost-behaviour learning curve

This curve is very important in cost analysis, cost estimation and efficiency studies. This curve
is called the learning curve. The learning curve shows that if a task is performed over and over
than less time will be required at each iteration. Learning curves are also known as
experience curve, cost curves, efficiency curves and productivity curves. These curves
help demonstrate the cost per unit of output decreases over time with the increase in
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experience of the workforce. Learning curves and experience curves is extensively used by
organization in production planning, cost forecasting and setting delivery schedule

Learning curve is relevant in taking following decision:

 Pricing decision based on estimation of future costs.

 Workforce schedule based on future requirements.

 Capital requirement projections

 Set-up of incentive structure

A learning curve is a concept that graphically depicts the relationship between the cost
and output over a defined period of time, normally to represent the repetitive task of an
employee or worker. The learning curve is used as a way to measure production
efficiency and to forecast costs. The learning curve also is referred to as the experience
curve, the cost curve, the efficiency curve, or the productivity curve. companies know
how much an employee earns per hour and can derive the cost of producing a single
unit of output based on the number of hours needed. A well-placed employee who is set
up for success should decrease the company's costs per unit of output over time.

Innovation Diffusion and Adoption process

Diffusion is the process by which an innovation is communicated through certain channels,

over time, among the members of a social system. Diffusion of innovations is a theory that
seeks to explain how, why, and- at what rate new ideas and technology spread. The four main
elements that influence the diffusion of a new idea are the innovation itself, communication
channels, time, and a social system. The categories of adopters are innovators, early
adopters, early majority, late majority, and laggards

Five stages of the adoption process

Stage Definition

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 The individual is first exposed to an innovation, but lacks information about the
Knowledge innovation. During this stage the individual has not yet been inspired to find out
more information about the innovation.

The individual is interested in the innovation and actively seeks related

Persuasion
information/details.

The individual takes the concept of the change and weighs the
advantages/disadvantages of using the innovation and decides whether to
Decision adopt or reject the innovation. Due to the individualistic nature of this stage,
Rogers notes that it is the most difficult stage on which to acquire empirical
evidence.[11]

The individual employs the innovation to a varying degree depending on the

Implementatio
situation. During this stage the individual also determines the usefulness of the
n
innovation and may search for further information about it.

The individual finalizes his/her decision to continue using the innovation. This
Confirmation stage is both intrapersonal (may cause cognitive dissonance) and
interpersonal, confirmation the group has made the right decision.

Adopter
Definition
category

Innovators are willing to take risks, have the highest social status, have financial
liquidity, are social and have closest contact to scientific sources and interaction
Innovators
with other innovators. Their risk tolerance allows them to adopt technologies that
may ultimately fail. Financial resources help absorb these failures. [41]

Early These individuals have the highest degree of opinion leadership among the
adopters adopter categories. Early adopters have a higher social status, financial liquidity,
advanced education and are more socially forward than late adopters. They are
more discreet in adoption choices than innovators. They use judicious choice of

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 adoption to help them maintain a central communication position. [42]

They adopt an innovation after a varying degree of time that is significantly longer
Early than the innovators and early adopters. Early Majority have above average social
Majority status, contact with early adopters and seldom hold positions of opinion
leadership in a system (Rogers 1962, p. 283)

They adopt an innovation after the average participant. These individuals

approach an innovation with a high degree of skepticism and after the majority of
Late
society has adopted the innovation. Late Majority are typically skeptical about an
Majority
innovation, have below average social status, little financial liquidity, in contact with
others in late majority and early majority and little opinion leadership.

They are the last to adopt an innovation. Unlike some of the previous categories,
individuals in this category show little to no opinion leadership. These individuals
Laggards typically have an aversion to change-agents. Laggards typically tend to be focused
on "traditions", lowest social status, lowest financial liquidity, oldest among
adopters, and in contact with only family and close friends.

Demand analysis

Demand analysis is a research done to estimate or find out the customer demand for a
product or service in a particular market. Demand analysis helps firm forecast the
market which is of importance in the modern business activities. It helps to design the
appropriate pricing policy. The Demand Analysis is a process whereby the
management makes decisions with respect to the production, cost allocation,
advertising, inventory holding, pricing, etc. Although, how much a firm produces
depends on its production capacity but how much it must endeavor to produce depends
on the potential demand for its product.

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First and repeat purchase

A first purchase is an investment made to own something in business, it is for the

purchasing of a product the first time, usually the customer shows this behavior after
excellent marketing communication and clear message by the companies

A repeat purchase is the purchase by a consumer of a same-brand product as bought

on a previous occasion. A repeat purchase is an indicator of a degree of customer
loyalty to a brand. In order to ensure repeat purchase by the customers the company
can take up these measure

1. Stay in touch with the customers

2. Assume they won't remember you and keep on reminding

3. Keep the experience fresh and relevant all the times

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 4. Surprise them with new offers and promotions

5. Collaborate with customers in terms of opinions

6. Have the right people on the front-line, and train the employees

7. Make it easy for customers to reach you improve accessible points

8. Listen to them beyond their needs and wants

Trial and Repeat purchase

Product trial is where a customer samples a product for the first time. Repeat purchase
is where consumers regularly purchase a brand. Trial and repeat purchase are the two
metrics we need to closely monitor to assess a new FMCG product’s market potential.
For the product to succeed, it needs to establish a base of regular consumers who
continue to buy it. It must generate appeal so that a substantial number of consumers
try it. Once they experience it, an adequate number of them should be willing to
continue buying it. A repeat purchase is the purchase by a consumer of a same-brand
product as bought on a previous occasion. A repeat purchase is an indicator of a
degree of customer loyalty to a brand. It is also an opportunity for marketers to
establish long-term customer relationships. A high number of repeat purchases
indicates a satisfied and “well-retained” customer, which reduces new-customer
acquisition costs and increases overall profitability. The business’ repeat purchase rate
may be increased using web and social media promotions, digital loyalty programs, and
exceptional customer service.

Consumer state
Unaware

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 Aware

Trail

1st repeat

2nd repeat

Model of purchase

The repeat purchase is nothing but the customer retention by the company; it can be
obtained by means of the following measures, In business world retention is always
challenging and to obtained this the company needs be very much focused and

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attentive, by adopting following strategies the company can ensure certain amount of
repeat purchase by the customers.

Unit-V

Product launch and guidelines for launching

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A product launch is when a company decides to launch a new product in the
market. Product launch can be of an existing product which is already in the market or it
can be a completely new innovative product which the company has made A successful
product launch depends on careful planning and preparation. It is the final stage in
the product development process, which represents a significant investment in future
revenue and profit for your small business. Every product launch needs to be under
certain guidelines and principles, some of the most important guidelines for product
launch are

1. Define Your Target Audience

Defining your target audience gives you direction in for marketing decisions it

2. Know How to Reach Your Audience

Understand the target audience and how to reach them effectively, both with the ad and
mentally. Get in the mind of your target audience and understand where the best place
to reach

3. Know the Problem You're Solving

Always stay focused on your "who" and "why." Test it with your personas, talk to them
about it, and know it is something that will fulfill an unmet need first

4. Understand the Buying Journey : The buying process forms the foundation of all
marketing and sales activities. You need to have an intimate understanding the buyer's
pain points, where they get their information and who influences the purchase

5. Validate Your Product

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By means of validating the product, the company tries to make the customers
understand that the product is ideal for their needs and satisfaction and tries to create
image for the product

6. Know Your Competition and Be Different

7. Create A Free Trial Or Demo

8. Lay Out A Comprehensive Strategic Plan

9. Get Everyone On The Same Page

10. Offer Early Use Incentives

11. Keep Testing It

Pre testing and Test-Marketing

The pre testing and test marketing are the important aspects of product launch strategy,
by means of these two aspects the company decides about the timing and situations
under which the product will be launched

The test marketing is a stage in product development process where the product and
its marketing plan are exposed to a carefully chosen sample of the population for
deciding if to reject it before its full scale launch. Test marketing is an experiment
comprising of actual stores and real-life buying situations, without the buyers knowing
they are participating in an evaluation exercise. It simulates the eventual market-mix to
ascertain consumer reaction. Depending on the quality and quantity of sales data
required for the final decision, test marketing may last from few weeks to several
months. These steps are useful for the following points

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  Determine if, or verify that, the requirements of a specification, regulation,
or contract are met

 Decide if a new product development program is on track: Demonstrate proof of

concept

 Provide standard data for other scientific, engineering, and quality

assurance functions

 Validate suitability for end-use

 Provide a basis for technical communication

 Provide a technical means of comparison of several options

 Provide evidence in legal proceedings: product liability, patents, product claims

 Help solve problems with current product

Marketing Mix Allocations

For effective marketing mix allocation the company uses modelling called marketing
mix modelling, this modelling is an analytical approach and uses historic information,
such as syndicated point-of-sale data and companies’ internal data, to quantify the
sales impact of various marketing activities. MMM (marketing mix modelling) defines
the effectiveness of each of the marketing elements in terms of its contribution to sales-
volume, effectiveness. These learnings are then adopted to adjust marketing tactics
and strategies to optimize the marketing plan and also to forecast sales while
simulating various scenarios.

The output can be used to analyse the impact of the marketing elements on various
dimensions. The contribution of each element as a percentage of the total plotted year

36
on year is a good indicator of how the effectiveness of various elements changes over
the years. This analysis tells the marketing manager the incremental gain in sales that
can be obtained by increasing the respective marketing element by one unit.

The marketing mix modelling not only helps the company in finding out the best fit for
the elements of marketing but also helps in the following

 Contribution by marketing activity

 ROI by marketing activity

 Effectiveness of marketing activity

 Optimal distribution of spends

 Learnings on how to execute each activity better

Organisation for product management

Product management is an organizational lifecycle function within a company dealing

with the planning, forecasting, and production, or marketing of a product or products at
all stages of the product lifecycle. ... Product management also involves elimination
decisions. The strategic role of product management is to be “messenger of the
market,” delivering market and product information to the departments that need facts
to make decisions. ... For technology companies, particularly those with enterprise or
B2B products, the product management job is very technical.

Product managers are responsible for guiding the success of a product and leading
the cross-functional team that is responsible for improving it. It is an important
organizational role — especially in technology companies — that sets the strategy,
roadmap, and feature definition for a product or product line

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