Introduction to Product Management

1
Introduction to Product Management

• Professor Carl Mela
• BA 460 Product Management
• Fuqua School of Business

• Brand Management System
• On Building A Brand
• Managing Across Brands

2
Agenda

• Course Overview
• What is a Brand?
• Brand Equity
• Brand Management

3
Course Overview

• Objective
• Structure
• Brand Management System
• On Building A Brand
• Managing Across Brands
• Requirements
• 2 case write-ups, class participation, marketing
  plan, and final exam.

4
Structure

• Part I - The Brand Management System
• Class 1 Class Overview, The Nature of a Brand,
  Brand/Product Management. An application to the
  Pepsi syringe scare.
• Class 2 PG Case. Live commentary from PG.

5
Structure

• Part II - Building Brands
• Class 3 Branding and Price. The case is Kodak.
  Then, Red Hat discusses how its branding strategy
  leads to a price advantage.
• Class 4 Distribution and forecasting. The
  Goodyear case. Video regarding the effect of
  channel on brand.

6
Structure

• Part II - Building Brands (Cont.)
• Class 5 Craig Stacey (VP from IRI) discusses the
  use of information to build brands.
• Class 6 Promotions and Brands Marketing in the
  NHL with live commentary from the Hurricanes
  Director of Communications, Ken Lehrner

7
Structure

• Part II - Building Brands (Cont.)
• Class 7 Advertising and Brands with Intel Inside
  Interactive CDROM. Live Commentary and
  Discussion with Michael J. Ganey, Director,
  Howard, Merrell Partners,Inc.

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Structure

• Part III - Across Brands and Markets
• Class 8 The Marketing Plan Pharmasim. Tom
  OGuinn, Visiting Professor discusses Brand
  Communities.
• Class 9 Product Extensions The Black and Decker
  Case and Video
• Class 10 Global Branding The Heineken Case,
  MTV Worldwide, and The Fuqua MBA with Jim Gray,
  Associate Dean, Fuqua.

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Structure

• Part III - Across Brands and Markets
• Class 11 Branding on the Internet. Deborah
  Kania (Lens Express and author of branding.com)
  and Beth Yakel (Sciquest)
• Class 12 Wrap-up and PharmaSim Summary.

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Agenda

• Course Overview
• What is a Brand?
• Brand Equity
• Brand Management

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What is a Brand?

• Name, term, sign, symbol, or design, or a
  combination of them intended to identify the
  goods and services of one seller or groups of
  sellers and to differentiate them from those of
  competition. - AMA
• Not all products are brands.
• Focus of Court et al. reading

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Why Brand?

• Identify product
• Reduce risk
• Reduce consumer search cost
• Signal quality
• Legal protection
• Create product associations
• Differentiate product

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Agenda

• Course Overview
• What is a Brand?
• Brand Equity
• Brand Management

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Brand Equity

• The marketing effects uniquely attributable to
  the brand - Keller
• Positive brand equity leads to
• Loyalty
• Margins
• Reduced vulnerability to competition
• Enhanced marketing effectiveness
• Brand extensions

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Brand Equity

• Sources of Brand Knowledge
• Brand Awareness
• Brand Image
• Strength of Brand Associations
• Favorability of Brand Associations
• Uniqueness of Brand Associations

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Brand Equity

• Benefits
• Loyalty
• Larger Margins
• Greater Trade Support
• More Efficient Communications
• Licensing Opportunities
• Brand Extension Opportunities
• Coke name worth 39BB, Kodak 11BB (Brand
  Valuation Reading)

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Best Corporate Reputations in America
Source Wall Street Journal / Harris Poll
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Brand Equity

• But how does one develop brand equity?
• The goal of this course is to learn how to manage
  brands (via marketing programs) in order to
  create brand equity - that is, create an enduring
  advantage for your brands.

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Figure 2-9 Building Customer-Based Brand Equity
TOOLS AND OBJECTIVES
KNOWLEDGE EFFECTS
BENEFITS
Choosing Brand Elements (4)
Brand Awareness (3)
Possible Outcome
Depth Recall
Recognition Breadth Purchase Consumption
Brand name Logo
Memorability Symbol
Meaningfulness Character
Transferability Packaging
Adaptability Slogan Protectability

Greater loyalty Less vulnerability to
competitive marketing actions and
crises Larger margins More elastic response to
price increases More inelastic response to
price increases Increased marketing communica-
tion efficiency and effectiveness Possible
licensing opportunities More favorable brand
extension evaluations
Developing Marketing Programs (5 6)
Product Functional symbolic benefits Price Val
ue perceptions Distribution channels Integrate
Push Pull Communications Mix and match
options
Brand Associations (3)
Strong Relevance Consistency Favorable Desirable
Deliverable Unique Point of parity Point of
difference
Leverage of Secondary Associations (7)

Company Country of origin Channel of
distribution Awareness Other brands Meaningfulnes
s Endorsor Transferability Event
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Agenda

• Course Overview
• What is a Brand?
• Brand Equity
• Brand Management

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Brand Management

• Brand management is the act of designing and
  implementing marketing programs to build and
  maintain brand equity.
• Product
• Price
• Distribution
• Communications

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The Role of a Brand or Product Manager

• Prepare Marketing Plan
• Develop Copy, Programs, and Campaigns
• Stimulate Sales and Distribution
• Market Intelligence
• Product Improvements

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The Role of a Brand or Product Manager

• Pluses
• - Cost effective mix, quick market reaction,
  attention for small brands, good training for
  executives
• Minuses
• - Conflict and frustration (responsibility and
  no authority), administrative work with executive
  expectations, learns products not functions,
  short horizon, costs of associates and assistants
  

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A Product Manager - Computer Software Firm

• Background
• Undergrad in architecture, became director of
  marketing for architecture firm
• Received MBA
• International marketing manager for sporting
  goods company
• Founded a toy company

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A Product Manager -Computer Software Firm

• Typical day
• Meetings - new product line, marketing mix,
  marketing staff, organizational design and
  integration
• E-mail/Phone - 3rd party developers, sales force,
  product support
• Marketing planning - drafting the marketing plan

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A Product ManagerComputer Software Firm

• Marketing mix - recommends price to corporate
  committee, manages advertising, conducts focus
  groups for product positioning and development,
  decides on channels

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A Product Manager - Consumer Packaged Goods Firm

• Background
• Medical equipment sales after undergraduate
• Received MBA
• Assistant Brand Manager at large CPG Company
• Switched firms, promoted several times to product
  manager.
• Switched firms again to as senior product manager

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A Product Manager -Consumer Packaged Goods Firm

• Typical day
• 75 fighting fires, 25 planning
• Marketing planning - key is volume forecasting
  since unsold inventory is perishable
• Mix - 1/3 on pricing issues (list trade), 20
  on consumer promotions, president handles ads,
  15 on distribution, little on sales and service

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A Product ManagerComputer Software Firm

• Marketing mix - recommends price to corporate
  committee, manages advertising, conducts focus
  groups for product positioning and development,
  decides on channels.

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The Marketing Department
VP Marketing
Marketing Administration
New Products
Advertising Promotion
Existing Products
Sales
Market Research
Design the Department!!! Matrix or Tree?
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Brand Management Issues
Media
Purchasing
Packaging
Promotion Services
Salesforce
Product Manager
Distribution
RD
Fiscal
Manufacturing
Legal
Publicity
Market Research
Advertising Agency
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The Nature of the Job
Department Their Emphasis Marketings
Emphasis RD Basic Research, Intrinsic
Quality, Applied Research, Perceived Functional
Features Quality, Sales Features Engineering Long
Design Lead Times, Few Short Lead Times, Many
Models, Models, Standard Components Custom
Components Purchasing Narrow Lines, Standard
Parts, Price Broad Lines, Nonstandard Parts, of
Material, Large Infrequent Lots Quality of
Material, Small Lots Manufacturing Long Lead
Times, Long Runs, Few Short Lead Times, Short
Runs, Models Revisions, Standard Orders, Many
Models, Custom Orders, Ease of Fabrication,
Average Quality Fine Appearance, Tight
Quality Finance Strict Rationale for Spending,
Hard Intuitive Arguments for Spending, and Fast
Budgets, Pricing Covers Flexible Budgets, Pricing
to Costs Market Developments Accounting Standard
Transactions, Few Reports Special
Terms/Discounts Credit Full Disclosures, No
Risk, Tough Minimum Disclosure, Some Risk,
Terms, Tough Collection Easy Credit, Easy
Collection
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A Key Trend in Product/Brand Management

• Salaries and bonus for product marketers are up
  65 in the last two years (Marketing News, Nov.
  99)

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Brand Management Prognostications

• Future of brand management
• Customer management vs. product management
• Cuts across brands and products
• Managers organized by portfolios of customers

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Summary

• Brand Equity
• Awareness
• Associations
• Created by the mix
• It is the role of a product manager to manage the
  mix to create equity
• The brand management system