Product & Brand
Management-
MR411
Semester IV, KIMDS
McKinsey 7S framework
Strategy, structure and Systems- H/W of success
Style, skills, Staff, Shared Values- S/W for Success
Product Planning- product managers come up with
marketing plan for individual Product lines, brands,
channels, or customer groups
Each Product level- whether product line or brand must
develop a marketing plan for achieving its goals.
Product Management
Product management is an organizational lifecycle function within a company
dealing with the planning, forecasting, or marketing of a product or products at all
stages of the product lifecycle.
The role consists of product development and product marketing, which are different (yet
complementary) efforts, with the objective of maximizing sales revenues, market share,
and profit margins. The product manager is often responsible for analyzing market
conditions and defining features or functions of a product. The role of product
management spans many activities from strategic to tactical and varies based on the
organizational structure of the company. Product management can be a function separate
on its own, or a member of marketing or engineering.
While involved with the entire product lifecycle, the product management's main focus is
on driving new product development.
Depending on the company size and history, product management has a variety of
functions and roles. Sometimes there is a product manager, and sometimes the role of
product manager is shared by other roles. Frequently there is Profit and Loss (P&L)
responsibility as a key metric for evaluating product manager performance. In some
companies, the product management function is the hub of many other activities around
the product. In others, it is one of many things that need to happen to bring a product to
market and actively monitor and manage it in-market.
Product management often serves an inter-disciplinary role, bridging gaps within the
company between teams of different expertise, most notably between engineering-
oriented teams and commercially oriented teams. For example, product managers often
translate business objectives set for a product by Marketing or Sales into engineering
requirements. Conversely they may work to explain the capabilities and limitations of the
finished product back to Marketing and Sales. Product Managers may also have one or
more direct reports who manage operational tasks and/or a Change Manager who can
oversee new initiatives.
Major Responsibilities of Product Management
Functions
A PRODUCT MANAGER‟S POTENTIAL
INTERACTION
Advertising
Agency Media
Manufacturing
Promotion
& distribution
services
Packaging
R&D
Product
Manager
Legal Purchasing
Fiscal Publicity
Market
Sales
Research
PRODUCT Vs. GENERAL
MARKETING MANAGEMENT
Product Management General Marketing
Management
Scope of Narrow: Single product Broad: Portfolio of
Responsibility or product line products
Nature of Decision Mainly tactical Mainly strategic
Making
Time Horizon Short-run (often annual Long run
or shorter)
MARKETING ORGANIZATION:
PRODUCT- FOCUSED ORGANIZATIONS
Head of
company/division
Corporate
Manufacturing Marketing Finance
communications
Marketing Product
Support
research management
Manager of Manager of Manager of
product A product B product C
MARKETING ORGANIZATION: PRODUCT-
FOCUSED ORGANIZATIONS
Advantages
Locus of responsibility is clear
Develop the ability to work with other areas in org.
Advocate for the product
Weaknesses
Focus on one product
Removed from “where the action is”
Too myopic
In-bred competition (product cannibalization)
Product Management- An
Introduction
The Indian Market- Emerging
Panorama
Demographic picture
Rising Income
Consumer Trends
New focus in Marketing
Rural Marketing- aspects
Emerging Marketing Issues
Corporate Strategy and
Product Policy
Assessing New Competition and
Strategic Response
• Strategic response to New Competition
• Entry Strategies of MNC‟s
• Assessing New Competition across
Different product categories
• Strategies for defending Market Position
Assessing New Competition
and Strategic Response
Strategic response to New Competition
Free Trade and Opening of Market
• Increasing turnover and untapped
opportunities
• Consumer getting wider choice due to
increase competition
• Quality of product has improved
• Cost of operation gone up, New ways of
promotion
• Co.'s becoming global
• Speed of Response much higher
New Domestic Competition
Perspective
Emerging Scenario Strategic Focus
Emphasis on Rural New product Variant
Market
New Domestic Modern Trade Identifying and
Competition Capturing New Market
Segments and Sub
segments
Entry of Global Brands Highlighting Brand
Salience
Growth of Premium Face New/ Foreign
Segment Competition
Attract new consuming Improving Customer
class Service
Entry Strategies of MNC‟s
Emerging Strategic Focus
Introduce International Concentrate on core
Brands In India competencies
International Focus on Service Selection of Particular
Competition Consumer Segment
Derive the advantage of Innovate on Marketing
High Technology Resources
Introduce New Product Expand Product
Categories range/line
Withstand Power of Trade Strengthen Distribution
Leverage on financial Develop creative
muscle of MNC advertising
Meet aspiration of Neo Invest In NPD
Rich consumers
Move into premium
category
Upgrade popular brands
Accessing New Competition across
different product categories
Consumer Non Durables
Consumer Durables
Service businesses
Strategies for defending
market position
Pre empting the competition
Filling the gaps
Strengthening the Brand Equity
Synergistic Communication
Increasing Usage and Market expansion
Becoming Futuristic
Mergers and Acquisitions
Strengthening the Distribution Network
Creating Hurdles, Creating Price Gaps
Being Leader in the segment
Selling the Brand Name
Quitting the Premium segment
Offering Gamut of Services
Innovation in Packaging
Multibranding, Exclusive retailing, Rejuvenating Old
Brands
Product Management-
Introduction
L.O Product:
Classification of Consumer Product
FMCG
Product Mix and Line Decision
Growth Strategies for FMCG
Managing Line Extension
Product
Is any tangible or intangible offering
that might satisfy the needs or
aspirations of a consumer.
Anatomy of a Product
Augmented Product
Tangible Specifications
Core Benefits
TOTAL PRODUCT CONCEPT / LEVELS OF PRODUCT
AUGMENTED PRODUCT
pre sale Tangible Specification
features
warranty
Core Benefit
functions
benefits
quality
brand equity packaging
delivery
relationships
After sales service financing
Classification of Consumer
Products
Durable and Non Durable
Non Durable- FMCG
• Consumer product for personal family or
household use classified into three types:
• Convenience
• Shopping
• Specialty
FMCG- Fast Moving Consumer
goodds usually refers to non durable
products
FMCG subdivided into three
Staples
Impulse Goods
Emergency Goods
Characteristic of FMCG
Frequent Purchase
Low Involvement
Low Price
High Volume
Low margin
Extensive distribution network
High stock turnover
Product Mix and Line
Decisions
Product Mix :
The assortment of products that a company
offers to a market
Width – how many different product lines
Length – the number of items in the product mix
Depth – The no. of variants of each product . .
offered in a product line
Consistency – how closely the product lines are
related in usage
Product Line
Product Line - is a group of products closely
related due to similar function, targeted at same customer
group and marketed through same channels.
• Line stretching
• Upward stretch
• Downward stretch
• Line Filling
• Line Modernisation
• Line Featuring
Growth Strategies for FMCG
Multibrand Strategy
Product Flanking
Brand Extension
Building Product Lines
New Product Development
Innovations in core product
Long Term Outlook
Extending the PLC
Expanding Market by Usage
Wide Distribution Network
Monitoring the pulse of consumers
Advertising and Media Coverage
Sales Promotion
Managing Line Extension
Customer segmentation
Consumer Desires
Pricing Breadth
Excess Capacity
Short term gain
Competitive intensity
Trade pressure
Energizing a brand
Exploitation of variety fulfillment
Expanding brand’s core promise to new users
Managing true innovation
Managing a dynamic environment
Testing ground for National launch
Product life cycle and strategies
Product life cycle
Weakness of PLC concept
Ansoff‟s classic model of Growth
Strategies
Product Life Cycle
Product Life Cycle – shows the
stages that products go through from
development to withdrawal from the
market
Product Life Cycle (PLC):
Each product may have a different life cycle
PLC determines revenue earned
Contributes to strategic marketing planning
May help the firm to identify when a product
needs support, redesign, reinvigorating,
withdrawal, etc.
May help in new product development
planning
May help in forecasting and managing cash
27 flow
A new product progresses through a
sequence of stages from introduction to
growth, maturity, and decline....impacting the
marketing strategy and the marketing mix
The Stages of the Product Life Cycle:
Development/ Pre Introduction
Introduction/Launch
Growth
Maturity
Saturation
Decline
Withdrawal
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Product Life Cycles
Sales
Development Introduction Growth Maturity Decline
Time
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Product Life Cycle
The Development Stage:
Initial Ideas – possibly large number
May come from any of the following –
Market research – identifies gaps in the market
Monitoring competitors
Planned research and development (R&D)
Luck or intuition – stumble across ideas?
Creative thinking – inventions, hunches?
Futures thinking – what will people be using/wanting/needing
5,10,20 years hence?
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Product Life Cycles
Introduction/Launch:
Advertising and promotion campaigns
Target campaign at specific audience?
Monitor initial sales
Maximise publicity
High cost/low sales
Length of time – type of product
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Product Life Cycles
Growth:
Increased consumer awareness
Sales rise
Revenues increase
Costs - fixed costs/variable costs, profits
may be made
Monitor market – competitors reaction?
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Product Life Cycles
Maturity:
Sales reach peak
Cost of supporting the product declines
Ratio of revenue to cost high
Sales growth likely to be low
Market share may be high
Competition likely to be greater
Price elasticity of demand?
Monitor market – changes/amendments/new
strategies?
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Product Life Cycles
Saturation:
New entrants likely to mean market is „flooded‟
Necessity to develop new strategies becomes more pressing:
Searching out new markets:
• Linking to changing fashions
• Seeking new or exploiting market segments
• Linking to joint ventures – media/music, etc.
Developing new uses
Focus on adapting the product
Re-packaging or format
Improving the standard or quality
Developing the product range
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Product Life Cycles
Decline and Withdrawal:
Product outlives/outgrows its usefulness/value
Fashions change
Technology changes
Sales decline
Cost of supporting starts to rise too far
Decision to withdraw may be dependent on
availability of new products and whether
fashions/trends will come around again?
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Product Life Cycles
Sales
Development Introduction Growth Maturity Decline
Time
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Product Life Cycles
Sales/Profits PLC and Profits
PLC
Profits
Time
Losses
Break Even
37
Product Life Cycle:
Implications for Business Strategy
Stage of the product life cycle
Introduction Growth Maturity Decline
Sales revenue
Total industry
or profit
sales revenue
Total industry profit
+
0
–
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Introduction Stage of the PLC
Sales Low sales
Costs High cost per customer
Profits Negative
Create product awareness
Marketing Objectives
and trial
Product Offer a basic product
Price Use cost-plus
Distribution Build selective distribution
Advertising Build product awareness among
early adopters and dealers
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Growth Stage of the PLC
Sales Rapidly rising sales
Costs Average cost per customer
Profits Rising profits
Marketing Objectives Maximize market share
Offer product extensions,
Product
service, warranty
Price Price to penetrate market
Distribution Build intensive distribution
Advertising Build awareness and interest in
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the mass market
Maturity Stage of the PLC
Sales Peak sales
Costs Low cost per customer
Profits High profits
Marketing Objectives Maximize profit while defending
market share
Product Diversify brand and models
Price to match or best
Price competitors
Distribution Build more intensive distribution
Advertising Stress brand differences and
41
benefits
Decline Stage of the PLC
Sales Declining sales
Costs Low cost per customer
Profits Declining profits
Marketing Objectives Reduce expenditure and milk
the brand
Product Phase out weak items
Price Cut price
Go selective: phase out
Distribution unprofitable outlets
Advertising Reduce to level needed to retain
hard-core loyal customers
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Shapes of PLC
Classical bell
shaped curve
Growth-slump
maturity pattern
Style
Fashion
Fad
PLC- Important Observations
Individual brands may not follow this pattern
Sometimes a product may crash and not get to the maturity stage
Product Life Cycle - length of time at each stage - varies
depends on the products
can be a few months in each stage
or it can be years
Generally speaking, due to the
Competitive Environment
Technological Environment
The PLC is getting shorter
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Extending Product Life Cycle
Market Modification:
Increase Frequency of use by Present
Customers
Add New Users
Find New Users
Product Modification:
Change Product Quality or Packaging
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Intro Stage
Competitive Situation
Monopoly or Monopolistic Competition
- your company has no competition because you
originated the product first and are the first to get
customers
Product:
One or a few number of people selling the product
Place:
Try to find good channels to get exposure
- maybe offer exclusive distribution rights
Promotion:
AIDA begins
- informative type ads
Price:
skimming or
46 penetration pricing
Growth Stage
Competitive Situation
Monopolistic Competition or Oligopoly
- once the market grows, other vendors will want to get
involved so you will lose your monopoly position
Product:
There are several companies selling so there is
competition to make the "best" product -many companies
at this stage will add variations, color changes, and new
FABs to the product to make it more competitive
- companies in the lead will also work to develop brand
familiarity
Promotion:
Competitive ads
Price:
"meet the competition" pricing or price cutting
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Maturity/ Decline Stage
Competitive Situation
Monopolistic Competition or Oligolpoly or Pure
Competition
- more and more vendors get involved as more
companies learn to make the product and people try to
"cash in" on the original idea
- because there are so many vendors, the supply/demand
situation will cause the price to drop and eventually the
price will be so low, nobody will want to make the product
anymore because it will be unprofitable
Product:
Several companies make the product
- it will become a battle of the brands
Promotion:
Discount price oriented ads
Price:
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Some companies drop out if they cannot afford to compete
at a lower price
PLC stage
