Product Strategy: Strategic Vision

Amity Business School Name of Institution
Product Strategy
Strategic vision
where why how Roadmap
(A) Product line decisions

Product Line Length
Number of Items in the Product Line
Stretching Lengthen beyond current range
Filling
Lengthen within current range
Downward
Upward
(B) Product-Position Strategies
Amity Business School Name of Institution For [a target segment brand], the [concept from individual product features] is the [primary claim / attributes positioned for customers against competitors] because [it is the single most important factor to keep buying or core benefit]
Our product is unique
Our product is different

Our product is similar
e.g. Taj Hotels(oldest in 5 star hotels); Radisson Hotel (pocket friendly 5 star hotel) e.g. Saffola(low in cholesterol) Listerine (kills germs) e.g. Harpic vs Sani-fresh vs Lizol Dove vs Pears vs Camay
By attributes e.g. Singapore Airlines (first class comfort) By benefits e.g. Citibank Credit Card (24/7 availability) By price/quality e.g. Tata Photon plus By usage or application e.g.Red Bull (fluid replenishment in sports) By users e.g. Johnson Baby Shampoo; J&J Affinity Shampoo & hair conditioner for women) By product class e.g. Camay soap (with bath oils By competitors e.g. Dettol against Lifeboy
not just soap)
(C ) Product Repositioning Strategy
Repositioning among existing customers
Repositioning among new users
Dabur repositioned its Brands from a traditional therapeutic remedies to one for preventive health maintenance Bagpiper repositioned as Khoob jamega rang
Repositioning for new uses
Repositioning of Maggi Tomato Ketchup Its different
(D)Product-Overlap Strategy
Company decides to compete against its own brand by using: Competing brands e.g. Gillette Atra, Sensor, Mach 3 Private labeling e.g. Spencers Chilli Sauce, Watson Vitamins OEM e.g. IBM selling magneto-resistance (MR) heads to OEM disk drive developers/manufacturers
(E) Product-Elimination Strategy
Or Cannibilization
How?
Harvesting benefits Line-simplification Total-line divestment
(F) Value-Marketing Strategy
Delivering real product performance with promises: Quality Customer-service Time Example: Dell cuts the duration from order to delivery of most of its products to the minimum
(G) ANSOFF STRATEGY

EXISTING EXISTING
MARKET
NEW
PRODUCT
NEW
(H) EXTENSION STRATEGIES
1. Product line extension: add an item to the existing product line
2. Product category extension: add a new item or line of items for a company e.g.
P&G have Head & Shoulders, Rejoice, and Pantene in the same category
FMCG companies introduced various sizes of the same product e.g. mini-packs for travelers, extra-large size for hospital
3. Brand extension: Product category extension that uses an existing brand name e.g.
Nestle extended its Bear Brand condensed milk by introducing Bear Brand with Honey
Downward stretch by introducing lower range of the products e.g.
Upward stretch by entering the high end of the market e.g.
Shangri-La, a chain of deluxe hotels and resorts in Asia established the Traders Hotels, a sister brand to deliver high value, mid-range, quality accommodation to the business traveler Mercedes introduced the Baby Merz to cater to the upper class mid-sized range of the market
Toyota introduced the Lexus and Nissan introduced the Infiniti
Two-way stretch by filling the whole line e.g.
Toyota has the Starlet at the lower end; the Corolla in the executive range; the Camry in the upper-management range and the Lexus in the luxury range
(I) Generic Strategies
COST USP
(I) Generic Strategies

Broad
Differentiation strategy
Cost leadership strategy
Strategic Target Segment

Focus strategy
Narrow Uniqueness
Low Cost (price)
Source of P&B Advantage
Strategy - FOCUS
Focus
Careful identification of target market (niche)
Cost leadership emphasis or differentiation emphasis
Raymond elite retailing
Constant review of Polo RL clothing customer demand in niche Rolex watches

Nirma washing powder
Strategy - Differentiation
Premium Quality Brand image Technological leadership

Apple - PCs Gillette razors Nike - shoes
Customer service
Strategy - Cost leadership

Tight cost controls

Efficient service, sales force, and advertising
Competitive pricing Discount Tyres Wal-Mart retailing UPS - package delivery
Tyre replacement
1 Low price/low added value

2 Low price 3 Hybrid 4 Differentiation 5 Focused differentiation 6 Increased price/standard
Likely to be segment specific

Risk of price war and low margins/need to be cost leader Low cost base and reinvestment in low price and differentiation Perceived added value to a particular segment, price premium Higher margins if competitors do not value follow/risk of losing market share
7 Increased price/low value 8 Low value/standard price
Only feasible in monopoly situation

Loss of market share
(K) Communication-Adaptation Based Strategies

Product adaptation communications extension
Product adaptation communicatio ns adaptation
New Product
Existing Product
Product communications extension
Extended product communications adaptation
Existing IMC
New IMC
(K) Communication-Adaptation Based Strategies

Product communications extension very low cost takes the same product and communication strategy into other markets
Extended product - communications adaptation adjustment in marketing communications only low cost strategy, but different product functions have to be identified and communications mix developed
Product adaptation - communications extension product adapted to fit usage conditions but the communication stays the same
Product adaptation - communications adaptation Both product and communication strategies need attention to fit the peculiar need of the market Product invention needs a totally new idea to fit the exclusive conditions of the market. development costs may be high, but the advantages are also very high.
(L) Price/Quality Based Strategies
Price skimming: Introductory price set relatively high, thereby attracting buyers at top of products demand curve. Market penetration pricing: Low price is used as an entering wedge.
(M) Price-Leadership Strategy

Price-leadership strategy: One or a very few firms initiate price changes, with most or all the other firms in the industry following suit. When price leadership prevails, price competition does not exist. The burden of making critical pricing decisions is placed on leading firm(s) and other simply follow the leader.
(N) Competitive Bidding Competitive bidding: Buyer sends inquiries (requests for quotations) to firms able to produce in conformity with requested requirements
Requests for proposals (RFPs) involve the same process, but here buyer is signaling that everything is preliminary and that a future RFQ will be sent once specifics are determined from the best proposals.
(O) BCG SBU Portfolio Strategy

High
Business strength, Growth rate, Cash use

Low
Defend position
Use cash to make into star
Nurture to feed cash to? High
Fix or abandon Low
Industry attractiveness, Market share, Cash generation
Repositioning by Redefining Axes

Bottom line:
(Q) New- Product Development Strategy
New product strategy Idea generation Idea screening Concept development and testing Marketing strategy Business analysis Product development Test Marketing Commercialisation
New products are critical to survival New-product development (NPD) is essential for companies seeking growth What is a new product?
It should be an on-going, well organized NPD process having top-management support From a firm's perspective, a new product is a product that it is unfamiliar in any way
1. Products new to the world: usually revolutionary products resulting from product innovation When Creative Technology first introduced the Sound-blaster When disposable cameras were first introduced When Seiko introduced the Seiko Kinetic Relay, a watch that can go into suspended animation
2. Products new to the firm Improvements to existing products e.g. Clinic Plus --------Clinic All Clear Additions to existing lines e.g. Clinic all clear hair oil Costs reductions and re-positioning
Example--Logitech
Logitech, the world's biggest maker of
computer mouse, has come up with a mouse that allows the user to feel what is seen on the screen. This mouse is called the iFreeMouseMan
(S) Strategies for PLC
INTRODUCTION
GROWTH
MATURITY
DECLINE
Product Strategy
Limited models, frequent changes
More models, frequent changes
Large number of models
Eliminate unprofitable models Target Laggards
Basic Product
Awareness, stimulate demand, sales promotion
Brand Product Extensions, USP, Extension, service, warranty Brand switching Aggressive ads, Reduce SP Advertise, promote heavily
Phase out promotion
1.Introduction - 3D TVs 2.Growth - Blueray discs/DVR 3.Maturity - DVD 4.Decline - Video cassette
INTRODUCTION
GROWTH
MATURITY Personal Computers Faxes
DECLINE Typewriters
Third generation Portable DVD mobile phones Players E-conferencing Email
Handwritten letters
Breathable All-in-one racing synthetic skin-suits fabrics Iris-based personal identity Smart cards cards
Cotton t-shirts Shell Suits Cheque books
Credit cards
(T) Types of Platform Strategies:
1. Product Platform Strategy & Open Interface

2. Product Line Strategy
3. Leveraged Expansion
4. Sustained Differentiation
5. First-to-Market vs. Fast-Follower Strategy
1. Product Platform Strategy Platform is an architecture of the common elements implemented across a range of products One element in the platform represents a defining technology Dictates life cycle, capabilities, limitations The choice of defining technology is the most critical strategic decision that a hi-tech company makes
Product Platforms
Product 3 Segment A Product 1B Product 1 Product 1A Product 1C
Segment B
Product 5
Unique product elements and common channel elements of product line
Product 2
Segment C
Feature A
Feature B
Feature C
Common Platform Elements
Benefits of Platform Strategy
Focuses management on key decisions at the right time Enables rapid & consistent product development Encourages a long-term view on product strategy Can leverage operational efficiencies Manufacturing costs Design costs Marketing support easier
Example of Product Platforms:
Apple Computer Platform:

Mac OS Motorola processors Easy-to-use GUI Supporting and Defining Technologies?
Open Interface in Product Platforms

A product portfolio based on open interface allows other manufacturers to participate Gives the company a smaller portion of the entire market, but makes the market significantly bigger
To enlarge a market where you are a rather strong player yourself
A piece of a big cake may well be a lot bigger than the small cake!
2. Product Line Strategy
A time-phased plan for developing products from a common platform, each product targeting a specific market segment.
The true potential of a platform strategy is extracted with an effective product line strategy
Product Line Strategy (contd.)
Covers all targeted market segments Each product offering should be sufficiently focused Time-phased scheduling / sequencing All products cannot be released simultaneously Prioritization Similar product lines are coordinated To avoid rework and confusion in marketing and among customers
Product Line Examples
3. Leveraged Expansion
The success of expansions to new product markets depends highly on ability to leverage: Existing market knowledge Technical Product skills
Examples of Leveraged Expansion
Adobe: Acrobat Microsoft

DOS Windows Windows + Internet Internet Explorer & MSN
4. Sustained Differentiation is achieved with vectors of differentiation that are significant to the customer One very prominent unique feature or An appealing combination Eg- Technolgy
High-Tech Differentiation
1. 2. 3. 4. 5. 6.
Unique features Measurable benefits Ease of use Improved productivity Unique fundamental characteristics Design
1. Unique features
Most commonly used An easy strategy Endlessly adding new features does not give sustained differentiation Can contradict ease of use
2. Measurable benefits
Reduced eletricity bill Longer recording time Faster Internet access
3. Ease of use
A very important vector of differentiation Sometimes technology advances do not deliver enhanced productivity, because of usability problems A big challenge in an era when everything is integrated in a single device (mobile phone)
4. Improved Productivity
Longer battery life Better quality (of voice communications) More responsive UI Technology advances complemented with good usability Often a crucial factor in buyers decision making process
5. Unique Fundamental Characteristics
Example: The imaging method of Polaroid cameras Often protected by patents

If based on a special technology
6. Design
More and more important in maturing markets

such as mobile phones!
Hardware Design & User Interface Design
4. First-to-Market Strategy
Market share advantage Earlier market & customer experience Influence on markets and standards Possibility to build entry barriers Image benefits, a glamorous strategy Big risks!
5. Fast-Follower Strategy
Wait until market is clarified Avoid market education costs Nearer in time to eventual market, easier to predict Ability to use newer technology Fast means fast! Advantages of being fast: Jump ahead and stay ahead
(U) Other Global Strategies
1. A Global Strategy It treats the world as a single market Eg: Matsushita has performed better than GE and Philips in consumer electronics market 2. A Multinational Strategy It treats the world as a portfolio of national opportunities Eg: In food & cleaning products, Unilever as a better performer than P&G as Unilever grants more decision-making autonomy 3. A Glocal Strategy It standardizes certain core elements and localizes other elements. Eg: Erricsson (Telecommunications) - each nation requires some adaptation but the company can also standardize some core components Most successful Glocal ABB
BRANDS
A rose by any name smells as sweet. True or false? Would you go vacationing on Disney Island? Why are Coca-Cola, McDonalds and Kentucky Fried Chicken (KFC) successful?
Buildings age and become dilapidated. Machines wear out. Cars rust. But what lives on are brands.
Source: The Economist, 2010
The Branding Process

From commodity to product e.g. air travel From product to brand e.g. Singapore Airlines From brand to experience e.g. Romance in the air From experience to the heart e.g. A Great Way to Fly
brand hierarchyfrom top to bottommight be as follows: 1.Corporate (or company) brand (e.g., General Motors) 2.Range brand (e.g., Chevrolet) 3.Individual brand (e.g.. Lumina) 4.Modifier (designating item or model) (e.g., Ultra)
What is a brand? Six levels of meaning: Attributes e.g. High resale value Benefits e.g. Safety Values e.g. Brand loyalty Culture e.g. Organized and Efficient Personality e.g. Serious Type of users e.g. by occupation
Brand Strategies
1. No brand identity Small firms with unknown brands e.g. small tailoring outfits 2. Private brands Retailers with established brand names e.g. Fairprice 3. Corporate brands Family name e.g. Tata
4. Product line extension Create cost advantage e.g. Jagdish Store collection of an extensive range of furniture at reasonable price 5. Specific product Individual brand e.g In addition to the JS brand, it also carry the Stanlay brand of Italian designed furniture 6. Combination e.g. JS Collection, JS&S Beach Collection and the White Collection
Old Brands Strategy
Old brands survive due to emotional bond with the consumer For slow moving brands either revive it with marketing money or kill it Growing interest in old brands because brand names carry value that is getting more expensive and risky to create When re-promoting old brands, do not ignore younger consumers
BRAND VALUE
Differentiation Satisfaction Loyalty Perceived Quality Leadership or Popularity Perceived Value Brand Personality Organizational Associations Brand Awareness Market Share Market Price Distribution Coverage
Branding on the Web
Profile of Gen-N How to harness the Internet for brand-building? By rewarding brand loyalty and updating your site etc. Decision-influence factor Conventional branding => image Online branding => customer experience The issue of trust in a brand
Task 2: Assess threats and opportunities

Task 1: Develop mission and goals Task 3: Assess strengths and weaknesses
Product Strategy Process Review

Task 5: Develop strategic plan
Task 4: Formulate strategies
Task 8: Repeat planning process
Task 7: Control and assess results
Task 6: Develop tactical plans

Product Strategy: Strategic Vision

Uploaded by

Copyright:

Available Formats

You might also like

Product Strategy: Strategic Vision

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Product Strategy: Strategic Vision

Uploaded by

Copyright:

Available Formats

Amity Business School Name of Institution

(A) Product line decisions

Amity Business School Name of Institution

Number of Items in the Product Line

Stretching Lengthen beyond current range

(B) Product-Position Strategies

Our product is unique

Our product is different

Amity Business School Name of Institution

not just soap)

(C ) Product Repositioning Strategy

Amity Business School Name of Institution

Repositioning among existing customers

Repositioning among new users

Repositioning for new uses

Repositioning of Maggi Tomato Ketchup Its different

Amity Business School Name of Institution

Amity Business School Name of Institution

(E) Product-Elimination Strategy

Harvesting benefits Line-simplification Total-line divestment

Amity Business School Name of Institution

(F) Value-Marketing Strategy

(G) ANSOFF STRATEGY

Amity Business School Name of Institution

(H) EXTENSION STRATEGIES

1. Product line extension: add an item to the existing product line

Amity Business School Name of Institution

Amity Business School Name of Institution

Downward stretch by introducing lower range of the products e.g.

Upward stretch by entering the high end of the market e.g.

Toyota introduced the Lexus and Nissan introduced the Infiniti

Amity Business School Name of Institution

Two-way stretch by filling the whole line e.g.

Amity Business School Name of Institution

(I) Generic Strategies

(I) Generic Strategies

Cost leadership strategy

Strategic Target Segment

Low Cost (price)

Source of P&B Advantage

Amity Business School Name of Institution

Careful identification of target market (niche)

Cost leadership emphasis or differentiation emphasis

Raymond elite retailing

Constant review of Polo RL clothing customer demand in niche Rolex watches

Premium Quality Brand image Technological leadership

Strategy - Cost leadership

Tight cost controls

Competitive pricing Discount Tyres Wal-Mart retailing UPS - package delivery

Amity Business School Name of Institution

1 Low price/low added value

Likely to be segment specific

7 Increased price/low value 8 Low value/standard price

Only feasible in monopoly situation

(K) Communication-Adaptation Based Strategies

Product adaptation communications extension

Product adaptation communicatio ns adaptation