Mastering Product Strategy: From Policy to Positioning
1. Product policy is the starting point of the business strategy because without the right product to stimulate demand, it’s impossible to effectively carry out any other commercial activity.
2. Product decisions are long-term due to the higher management level involved, resulting in longer decision-making times.
3. The product concept must begin with the business addressing two fundamental questions: What does the company sell? and What business is it? After this, there are two approaches:
* Focus on the product itself: a product is a sum of characteristics or physical attributes.
* Focus on customer needs: people buy products not just for themselves, but for the problems they solve.
4. The tangibility of a product includes formal aspects such as quality, brand, packaging, style, and design. In contrast are the intangible services offered to the buyer, including financing, delivery, warranty, etc.
5. * Product Portfolio: the range or set of products that a company offers.
* Product Line: A set of homogeneous products.
* Amplitude: Measured by the number of different lines that make up a portfolio.
* Depth: Number of models, sizes, and variations offered within each product line.
* Length: The total number of products manufactured or sold.
6. Extending the product line involves launching a new variety of a commodity within the same product category and under the same brand.
7. Product elimination is the process of withdrawing or abandoning a product range. Criteria for elimination include declining sales, technological obsolescence, out-of-fashion status, competitive overtaking, launch of a substitute product, or cessation of profits.
8. Product differentiation is a marketing strategy that highlights substantial or accessory features to make a product perceived as unique. Differentiation can be achieved through brand, packaging, advertising, pricing, distribution, or added services. The advantage is a competitive edge, but the disadvantage is that this distinction can be imitated by competitors in a broader market.
9. Differentiation differs from segmentation. Differentiation refers to distinguishing a company’s offer from competitors, while segmentation involves subdividing potential customers into homogeneous groups.
10. Quality in product differentiation can be objective and subjective, encompassing technical, measurable aspects and consumer evaluations.
11. A brand is defined as a name, term, symbol, design, or a combination thereof, identifying goods or services of one seller or group and differentiating them from competitors.
12. A brand has two key components:
* Name: The pronounceable part, identifying a specific product from a company.
* Logo: The graphics used to distinguish the brand, product, company, or organization, which may include a specific font.
13. Brand marketing supports business strategy, as a product’s perception varies depending on the brand. 14. A brand can positively or negatively impact product acceptance and sales. It should be appropriate, consist of pleasing words without derogatory double meanings, and avoid trivialization or mockery in target markets.
15. Brands can be classified according to:
* Name Characteristics: Meaningless name, common word unrelated to the product, word suggesting a benefit, word suggesting the product’s offering, foreign word, founder’s name, celebrity name, literary name, number, short name, middle name, names derived from a foundation.
* Component Parts: Brand as name only, brand as a combination of name, symbols, and designs, brand including a slogan.
* Coverage or Scope: For one, several, or all products of a company, a number of homogeneous products from different companies, specifying the product or company’s activities.
16. Brand value is the added value a brand gives to a product as perceived by the consumer.
17. There are five basic branding options:
a) Single brand: Using the same brand for all company products.
b) Multiple brands: Using different brands for each product, sometimes resulting from mergers.
c) Second brands: Brands belonging to companies with major brands, targeting market expansion.
d) Alliance brands: Complementary agreements to strengthen brand image and quality perception.
e) Dealer brands: Private labels and retailer-owned brands of generic products, aiming for greater market control by the distributor.
f) Vertical brand: Combines strong brand identification with the product and store concept.
18. A model identifies different products or variants of a commodity within a brand.
19. Packaging objectives are: to contain, protect, promote, and differentiate the product.
20. Packaging impacts consumer purchasing behavior and product usage. Larger packages may encourage greater consumption.
21. Labels can promote a product, especially brand labels. They provide a distinctive factor contributing to product and business image. Informational labels provide details such as product name, manufacturer, composition, usage period, content units, essential features, batch, and origin.
22. Product image is a mental representation of perceived attributes and benefits. It’s a multidimensional phenomenon depending on how these attributes and benefits are perceived.
23. Brand identity is the dimension that distinguishes a brand over time, developing customer promises and defining desired associations. It makes the brand unique and singular.
24. Positioning refers to the place a product or brand occupies in consumers’ minds relative to competitors or an ideal.
25. Product or brand position is determined by consumer perceptions of other products and preference hierarchies.
26. Effective positioning allows a product or brand to occupy a unique preference niche consistent with the marketing strategy. 27. Six possible positioning actions are:
a) Product characteristics: price, durability, robustness.
b) Problems solved or benefits.
c) Use or usage occasions.
d) Type of users.
e) In relation to other products: comparative advertising.
f) Unbundling from the product class: distinguishing from competitive products.