2. Companies that fail to develop new
products are putting themselves
at great risk.
Their existing products are vulnerable to changing
customer needs and tastes, new technologies,
shortened product life cycles and increased foreign &
domestic competition.
3. At the same time new-product
development is risky.
New products are failing at a very high
rate.
What are the reasons to fail ?
4. What is a brand ?
American Marketing Association defines a brand as
follows:
Brand is
• A name
• A term
• A sign
• A symbol
• A design or a combination of all these intended to
identify
and differentiate from competition
5. Branding decision: To brand or not to
brand.
Today hardly anything goes unbranded.
Even salt oranges etc.
6. Brand –Name decisions
1. Individual Names: The strategy permits the firm to search the
best name vfor each new product. Head and Shoulders, Ariel,
Tide
2. Blanket family name: Development cost less and the the
sales will be good if the name is already popular.Tata
3. Separate family name for all products:The Aditya Birla group
uses this approach. Graviera, Grasim, Ultra Tech, Hindalco,
are all their brand names, tagged with a Birla name
4. Company trade name combined with individual product
names:Kelloggs, Sony, HP
7. Devising a branding strategy
Branding strategy reflects the number and nature of common
and distinctive brand elements applied to the different
products sold by the firm.
When a firm uses an established brand to introduce a new
product, then it is a brand extension
Existing brand combines with another, the brand extension
can also be called as sub brand. E.g. Amul Masti Dahi, ICICI
Prudential Life Insurance
The existing brand that lent its name to the extension is a
parent brand. If the parent brand already has extensions then it
becomes a family brand.
8. Brand extensions can be line extensions or category
extensions. Extensions in line can be in the form of colour, size,
added ingredients.
Lifebuoy soap extending into Lifebuoy Gold is a line extension.
A category extension is when the parent brand extends into a
different category from the one it is currently in. Honda lends its
name to different categories of automobiles, other than cars.
A brand line is a combination of all products, line and category
extensions , sold under a particular brand.
A brand mix / brand portfolio is the assortment , a set of all
brand lines that a particular seller makes available to the buyer.
9. Branded variants , are specific brand lines supplied to
specific
retailers or distribution channels. A camera company may
supply low end cameras, to a mass merchandiser, while supply
the high end to specialty stores.
A licensed product is one for which a brand name has been
licensed to that product. Nike a shoe company primarily, has
extended itself to all associated products, like, bags, track pants,
shorts, t-shirts etc. Tata has licensed its name to a whole host of
products.
10. Packaging :
Most physical products have to be
packed and labelled.
Well designed packages can create
convenience value for customers and
promotional value for producers.
In effect it can act as a “Five second
commercials” for produdcts.
11. Labelling
Physical products also require labelling
for identification and possible grading,
description, and product promotion.
Sellers may be required to present
certain information on the label to
protect and inform consumers.
12. Packaging and Labelling :
• Packaging is all the aspects of designing and producing
the container for a product
• Packaging is both an art (design) and a
science(engineering)
• Packaging should fulfill all needs in respect to social and
legal requirements
Labelling :
• A label is a simple tag which designates, gives an identity
to a package
• Labels perform several functions
• Identification
• Grading
• Description
• Promotion
• Legal Compliance
13. Factors influencing the growth of packaging:
• Need for self service is on the rise, given modern
retailing formats. Hence convenience, handling and
attractiveness become important.
• Consumer affluence is more nowadays, what with
the additional disposable incomes. People are willing
to pay more for a properly packed item, even though
it may be a little expensive. Even rice, salt and other
commodities today are preferred in a packaged
format.
14. The company and brand image increases if the
packaging and labeling is done for the product. It
provides more authenticity of source.
• Packaging and labeling provide innovation
opportunity. Many new formats of packaging have
been explored and exploited.
• Juices are packed in terapacks with spouts
• Pickles, Beverages like tea, coffee and malted
drinks are packed in poly pouches
• Ready to eat noodles are packed in cups.
• Reusable jars, is also another concept followed
by many marketers
15. Pricing
Price is all around us.
You pay the price almost any anything and
everything
In fact the income tax you pay is the price for
making money
Throught the history the prices have been
fixed by negotiations between buyers and
sellers.
Price has operated as the major determinant
of buyer choice.
16. Price is the marketing –mix element that
produces revenue; whereas the others
produce cost.
Price is highly fexible. It can be
changed quickly unlike the features of a
product or promotion or place.
Price competition is the number one
problem facing the companies.
17. Pricing is handled in a varied way :
1. In small companies prices are often set by the
companies boss.
2. In large companies, the pricing is handled by
division and product-line managers- the policy of
pricing is set by top management and has to
approve.
3. In industries where pricing is a key factor,
companies will establish a separate department
which collects information for pricing from
marketing finance and top management.
4. Others who exert influence on pricing are sales
managers, production managers, finance
managers, accountants, etc.
18. Setting the price
A firm must set the price for the first
time when it develops a
1. new product,
2. when it introduces its regular product
into a new distribution channel or
geographic area and
3. when it enters bids on new contract
work.
19. The firm must decide where to position its product on
quality and price.
For example in an automobile market eight price points
can be found:
Segment Example
1. Ultimate Roll-Royce
2. Gold Standard Mercedes-Bens
3. Luxury Audi
4. Special needs Volvo
5. Middle Buick
6. Ease/Convenience Ford Escort
7. Me too but cheaper Hyundai
8. Price alone Kia
