Product Strategies ch12 - xa.yimg.comxa.yimg.com/kq/groups/22485914/611248889/name/SM... · Product...
Transcript of Product Strategies ch12 - xa.yimg.comxa.yimg.com/kq/groups/22485914/611248889/name/SM... · Product...
Product Strategies
chapter 12chapter 12
strategic marketingstrategic marketing(PGDBM 339) BIM Bangalore
ranganath iyengar
SIIPL ERRC
discussion context
• Introduction• Dimensions of product strategies• Product positioning strategy• Product repositioning strategy• Product overlap strategy
P d t t t• Product scope strategy• Product design strategy
Product elimination strategy• Product elimination strategy• Diversification strategy• Value marketing strategy• Value marketing strategy
Introduction – Dimensions of Product Strategies
Product strategy specifies market needs • Product strategy specifies market needs that may be served by different product offerings offerings
• Product strategy <> linked to market strategystrategy
• Deals with number and diversity of d t d t i ti products, product innovations, scope,
design etc.
• Needs proper coordination from other functions – finance, research &
tcorporate
Product positioning strategy
• Positioning – Placing a brand in that part of the market where g g pit will receive a favorable reception compared to competing products
Pointers Examples for discussion
-Ideally, match product to
segment
P d t h ld t d t
-Dr. Batra’s
-Calcium Sandoz-Product should stand apart
-Positioning should
communicate what product
Calcium Sandoz
-Clinic herbal vs. Meera
Ch i K ll 'stands for
-Achieved by using marketing
mix variables
-Champion vs. Kellogg's
Types of positioning-By attributemix variables
-Positioning is more visible in
consumer than industrial goods
y-By price / quality-wrt use / application-wrt product user
-Single vs. multi brand strategy
Beverage vs. Personal care
p-wrt product class-wrt competition
Product re-positioning strategy
• Re-positioning – done owing to competitor entry, consumerp g g p y,preference change, new customer preference clusters, mistake is made in the original positioning
Pointers Examples for discussion
-To prevent market share or
brand erosion
T f h th d t i
-Lux
-Coca Cola vs Pepsi-To freshen the product image
and perception
-Based on consumer perception
Coca Cola vs. Pepsi
-Lacoste
H li k-Horlicks
Types of re-positioning-For existing users
ClassyDistinctiveArrow
Louis PhilippeZodiac g-For new users-For new marketsPerformance
Segment appealConservativeTraditional
Raymond's Color Plus Digjam
Perception mapPracticalAffordable
Peter EnglandVimal
ScullersCambridge
Product overlap strategy
• Overlap – Compete against own brand with each brandp p gbehaving aggressively to outdo others in the market place
Pointers Examples for discussion
-To maximize capacity, products
are created at close price points
l i th l f
-Colgate range of toothpaste
-Marutileveraging the same sales force
-To gain larger market share
especially when market is not
Maruti
-Eureka Forbes water purifiers
Tit t hclearly delineated
-Competing brands work as a
short term phenomenon
-Titan watches
Types of overlap-Competing productsshort term phenomenon
-Each brand has its own SBU
and brand manager
p g p-Private label-OEM products
-Can also be used to create
channel specific products
Product scope strategy
• Scope – Deals with the product mix and number of productp p plines and the number of products or SKUs
Pointers Examples for discussion
-Involves long term
commitment
Sh ld b li d t th
-Printers
-Life Insurance products-Should be aligned to the
business unit mission
-Single product is not conducive
Life Insurance products
-Home Theater systems
Dito market share
-Multi products – value
proposition needs to be clear
-Diapers
-Travel services
proposition needs to be clear
-System of products – range
of products / services that
Types of scope strategies-Single product-Multi product
are linked -System of products
Product design strategy
• Design – Deals with standard vs. custom products, g p ,personalization etc.
Pointers Examples for discussion
-Linked to capability of
organization to deliver
St d d d t
-Dell vs. Connoisseur
-Car / Bike Prokits-Standard products are more
amenable to experience
effect
Car / Bike Prokits
-Car – trim levels
St l B ti-Customization comes with
different price points
Customization is linked to
-Stanley Boutique
-Designer clothes
-Customization is linked to
quality and customer spec
-Mass customization (subway)
Types of design strategies-Standard products-Customized products
-Industrial products – tooling
and fixtures are customized
-Standard products with customization
Product elimination strategy
• Elimination – Deals with sick or unviable products. p
Pointers
-Low profitabilityExamples for discussion
Low profitability
-Continued support is no longer
justifiable
-Chevrolet Aveo
-Fiat Uno-Stagnant or declining sales volume
-Risk of obsolescence
-Declining phase of product
Fiat Uno
-Bata Ambassador shoes
CDMA hDeclining phase of product
life cycle
-Poor fit with business unit
-CDMA phones
-Nilgiri supermarkets
strategy of declared mission
-Harvesting – used in a slow
decline situation
Elimination approaches
-Harvesting
-Line simplification – cutting
down the variants
-Line simplification
-Total line divestment
New product strategy
• New product – For seeking growth. p g g
Pointers
-Sustain competitive presence
-Technology innovation
Examples for discussionTechnology innovation
-Product failures are high especially
when laterally diversifying
-Needs to be led through clear
-Moto Razr
-Walkmaneeds o be ed oug c ea
policies and directions
-New products can be imitations
-They can be entirely new packages
-Dictaphones
-Wagon R > Ritzy y p g
-Performance levels can be different
-Focus on cost reduction during
new product introduction
-Boutique hotels
New product alternativesNew product alternatives
-Product improvement / modify
-Product imitation
Expensive
Inferior
Valueengineer
Price / PromoValue engineer
-Product innovationBetter
Cheaper
Cover it upUpgrade Leave it alone
Product diversification strategy
• Diversification – Seeking unfamiliar products or markets or bothg p
Pointers
-Requires substantially different
k l d thi ki
Examples for discussion
knowledge or thinking
-Risky strategy and is viable only
when other options are closed &
-Blueray disk technology
-Digital SLR
there is adequate cash
-Can be done through M&A or
through integration
-Electric vehicles
-Mopiersg g
-Can take place at corporate or at
business unit level
-3 essential tests – attractiveness
-Tower fans
New product alternatives3 essential tests attractiveness,
cost of entry and better off
(competitive advantage)
C t i d t l d
New product alternatives
-Vertical diversification
-Horizontal diversification -Concentric does not lead company
into an entirely new space-Concentric diversification
Value marketing strategy
• Value marketing – Product performance focusValue marketing Product performance focus
Pointers
-Emphasis on value is part
t h i i d
Examples for discussion
atmospherics, economics and
demographics
-Value is for the customer and
-High end cars
-Lawrence & Mayo / Ziess
the company
-Top-management support,
customer need understanding,
-Bose music systems
-Hayabusag,
business process and short cycle
time is key
-Quality – catching up pulling
-Cradle
New product alternativesQuality catching up, pulling
ahead and leapfrogging
-Service focus creativity
Ti b d t ti t k t
New product alternatives
-Quality strategy
-Customer service strategy -Time based – cut time to market
-Requires radical work practices
and culture
-Time based strategy
Summary – Q&A
Summary
Various types of product
Discussion
Cannibalism amongst
strategies
Product positioning strategy
Ca a s a o gs
competing brands.
Viable position for a brand in Product repositioning strategyProduct overlap strategyProduct scope strategy
Viable position for a brand in
the market
Why is a product eliminated?Product scope strategyProduct design strategyProduct elimination strategyDiversification strategy
Why is a product eliminated?
Diversification strategyValue marketing strategy