A product is an embodiment of technology, and the technology in fact satisfies the need.

The need
for document was first satisfied by mud tablets, palm leaves, copper leaves, paper and now
electronic pages. You would agree that the succeeding technologies normally satisfy the need
better than the predecessor. Once you consider the need for multiple copies of the same
information, the modern technology would suggest use of carbon papers, cyclostyling,
photocopying, printing and so on.

Developing Product Strategies

As a starting point to develop a product development strategy, the company must determine its primary
strategic orientation. A company must recognize that it cannot be all things to all people and that it
must focus on what will distinguish it in the market place. There are six primary product development
strategic orientations:
1. Time-to-Market
2. Low Product Cost
3. Low Development Cost
4. Product Performance, Technology & Innovation
5. Quality, Reliability, Robustness
6. Service, Responsiveness & Flexibility
Time-to-Market: This involves an orientation to getting a product to market fastest. This is typical of
companies involved with rapidly changing technology or products with rapidly changing fashion.
Pursuit of this strategy will typically will lead to trade-offs in optimizing product performance, cost
and reliability. Technology development must occur on an independent path from product
development and technologies inserted on a “modular” basis, often with frequent product upgrades to
make this strategy work.
Low Product Cost: This orientation is focused on developing the lowest cost or highest value
product. This is typical of companies with commodity type products, products reaching a mature phase
in their life cycle, or where there is consolidation or a shrinking market. This orientation typically
will require additional time and development cost to optimize product cost and the manufacturing
process.
Low Development Cost: This orientation focuses on minimizing development cost or developing
products within a constrained budget. While this orientation is not as common as the other
orientations, it occurs when companies are developing products under contract for other parties, where a
company has severely constrained financial resources, or where a “stealth” development effort is being
undertaken on a “shoestring”. This orientation is somewhat compatible with time-to-market, but
involves trade-offs with product performance, innovation, cost and reliability.
Product Performance, Technology & Innovation: This orientation focuses on having the highest level
of product performance, the highest level of functionality or functions and features, the latest
technology or the highest level of product innovation. This orientation can be pursued by
companies in many industries or many products except commodity products. Pursuit of this
strategy involves higher risks with newer technologies and accepts a trade-off of time and cost to
pursue these objectives.
Quality, Reliability, Robustness: This orientation focuses on assuring high levels of product
quality, reliability and robustness. This orientation is typical of industries requiring high quality
because of the significant costs to correct a problem (e.g., recalls in the automotive or food
processing industries), the need for high levels of reliability (e.g., aerospace products), or where
there are significant safety issues (e.g., medical devices, pharmaceuticals, commercial aircraft,
nuclear plants, etc.). This orientation requires added time and cost for planning, testing, analysis and
regulatory approvals.
Service, Responsiveness & Flexibility: This orientation focuses on providing a high level of service,
being very responsive to customer requirements as part of development, and maintaining flexibility to
respond to new customers, new markets and new opportunities. This orientation requires additional
resources (and their related costs) to provide this service and responsiveness.

Product Life Cycle

You are aware that a product or brand goes through several phases from birth until its death. Firstly
a product is launched; it grows, attains maturity, then starts declining and finally is ironed out.
Accordingly the product life cycle is explained by the following stages:
1. Introductory stage
2. Growth stage
3. Maturity stage
4. Decline stage.

Introductory Stage

The introductory stages of a product are believed to be relatively slow, even after its technical
problems have been ironed out, due to a number of marketing forces and consumer behaviour
factors. The major marketing obstacle to rapid introduction of a product is often distribution. Retail
outlets are often reluctant to introduce new products, and may prefer to wait until a track record
has been established before including them. In their stock.
Consumer acceptance of new products tends to be relatively slow. The newer the product, the
greater the marketing effort required to create the demand for it. The length of the introductory
period depends on the product’s complexity, its degree of newness, its fit into consumer needs, the
presence of competitive innovations of one form or another, and the nature, magnitude and
effectiveness of the introductory marketing effort.
At this stage it is usually assumed that there are no competitors, the market structure is defined as
‘Virtual Monopoly’. But there are very few really radical innovations with no existing substitutes.
Most new products and services face considerable competition from existing products, and also
experience severe competitive pressure from other new products.
There are many cases where two firms introduce similar products almost at the same time, which is
possible if the two companies are working on similar technological developments. On noticing
success of test market conducted by one company others may follow suit with similar products. If
two or more firms introduce products at about the same time, the result is likely to be a shorter
introductory period. The length of the introductory period is a crucial aspect of PLC. From managerial
point of view, shorter this stage the better.
The consumers who buy the product in the introductory stage itself are called innovators, and those
who buy later are called late adopters or laggards. This may be misleading, for example, a buyer
who hears about a product for the first time two years after its introduction buys it at once. Can this
individual be considered a laggard?

Growth Stage

The growth stage begins when demand for the new product starts increasing rapidly. Innovators are
satisfied with the trial, they move to repeat purchase. They then influence others by word-of- mouth,
which is often considered the most effective mode of communication. The product availability and
visibility in distribution and in use (e.g., new cars on the road) tend to bring new tries into the
market. At this stage, the entry of competitors increase the total demand for the product through
their advertising and promotional efforts.

Maturity Stage

The maturity or saturation stage occurs when distribution has reached its planned or unplanned peak
and the percentage of total population that is ever going to buy the product has been reached.
Volume (reflecting the number of customers, quantity purchased, and frequency of purchase) is
stable. At this stage it becomes difficult to maintain effective distribution, and price competition is
quite common.

Decline Stage

Changes in competitive activities, consumer preferences, product technology and other

environmental forces tend to lead to the decline of most mature products. If decline is for a product
and not brand, producers may withdraw from that product category. The typical reason for a product
decline is the entry of new products and decreased consumer interest in the specific product. One of the
few options left for keeping a brand alive is price reduction and other drastic means that depress
the profit margin and leads to product withdrawal.
Product decline occurs even when most customers no longer buy the product, only few loyal
customers remain. The latter continue buying the product in spite of no advertising or promotional
campaign. The company may decide to follow a ‘milking strategy’ i.e., retain the product with
meager marketing support as long as it generates some sales. But this requires maintaining
distribution of the product, which becomes less profitable.

Product Development

Product development is a specialised activity, which may result in the creation of new products or
in the modification of the existing production process to produce the same product. Developing new
products and processes is risky. So, developing a new product is a major task which considers various
factors. Development is necessary to fulfill the old and new wants as well as to adjust with the
changes in the customers’ demands or with an object of greater production efficiency and more
profits. In other words, the aim of product development is:
1. Production of goods to meet market demand.
2. Adjusting with the variation in quantity required.
3. Right Pricing of the products

Categories of Product Development

Product development can be divided into mainly two categories:

1. Introduction of new products
2. Improvement of existing products
To Introduce New Products: There should be sufficient market research and development work before
introducing any product in the market. It is essential because the chances of a new product failing
in the market are very high. The company should properly evaluate the potential market for the
product. The behavioural pattern of the market, viz. shift, change in technology, etc. should be
carefully assessed for effective production planning. The new product should have the capability to
replace the existing product/s. Proper designing and development of the product can accomplish
this.
Improvement of Existing Product: Change is the law of nature. Similarly, every manufacturer
continuously endeavours to bring about changes and improvements in his product. For example, around
1920, there were two-wheeler brakes like in sedans rood esters, etc. which were replaced within a short
period, by four wheeler brakes with self starter. Gradually, by the 1950s, power brakes, power
steering and stream lining were introduced. Over a period of time, a number of developments in the
automobile industry took place. Air-conditioned cars with improved tires came into use. Similarly,
refrigerators with larger freezing units; typewriters and quickly detachable bars and other
electronic equipments developed with the passage of time. Probably, the most important factor
contributing towards product development is the work going into the improvement of the existing
product by way of improved ideas, systems, techniques, etc.

Stages of Product Development

Product development comprises of following stages:

Find Consumer Desire: Product development depends on the consumers’ attitudes and desires
with regard to the products. The product designer should keep this fact in mind while developing a
new product.
Analysing Feasibility: The technical, operational and economical feasibility of developing the
product should be considered while preparing plans for product development.
Design: The design of the product depends on the consumers’ needs and it is also based on the
report submitted by the research department.
Selection of Process and Production Systems:The type of process and production systems basically
depend on the nature of the product.

Process Development: In this stage, the company has to select a suitable process by using different
systems like production and control systems.
There are several general categories of new products. Some are new to the market (e.g. DVD players
into the home movie market), some are new to the company (e.g. Game consoles for Sony), some are
completely novel and create totally new markets (e.g. the airline industry). When viewed against a
different criteria, some new product concepts are merely minor modifications of existing products
while some are completely innovative to the company. These different characterizations are
displayed in the following diagram.

LINE EXTENSIONS

Line extension strategy has enjoyed considerable support of the managers. In most of the product
categories including fast moving consumer goods, consumer durables and services, line extension has
been the name of the game. It is an expansionist move. The firms seem to seek growth more
vigorously. What lies behind the aggressive pursuit of line extensions? The following seven
prominent reasons could be identified as to why firms seem to favour line extensions.
Customer Segmentation: The key difference between the marketing of yesteryear and today is that
customer aggregation is becoming more and more difficult to hold and operate upon. Marketers are
forced to climb down from mass marketing orientation to individual customer orientation.
hat is, aggregate markets are now getting manifest into finer segments. It is relatively easier now to
find segments on a more sophisticated basis. The marketing research allows so, and advances in
marketing techniques allow easy operationalization of the same. In such a scenario, marketers find
it easy to meet the needs of various emerging customer segments by line extensions. Line
extension is a low cost and low risk strategy to more effectively meet the needs of customer
segments. For instance, Colgate is able to focus on the herbal and children segments by launching
Colgate Herbal and Colgate Strong Teeth (calcium) variants.
Customer Need for Variety: The emergent market conditions are at work to promote consumer
promiscuity. Product standardization, and consistency in quality, is encouraging customers to try
new products or brands. It is the result of a desire to get stimulations and break away from
boredom. So if a customer has been using the Lux brand of toilet soap, he would now be tempted
to look for ‘something new’ in a bid to get stimulated. Accordingly, he or she would look for
‘something new’ that he has not been exposed to. In such a situation, a company is likely to benefit
which provides this customer with this option (‘new’), or else the customer would be lost to
competition. Line extensions come in handy to meet such challenges.
A firm by providing a number of variants under the same umbrella is better positioned to keep their
loyal customers by meeting their desires to try something new.

Example: A customer having got satiated with ‘Cinthol Lime’ may look out for ‘cologne’
fragrance. So ‘Cinthol Cologne’ would fill the need without losing this customer to competition.
Pricing Breadth: Some time ago, Videocon launched ‘Bazoomba’ and BPL launched its ‘QPF’
series. What does this indicate? This exhibits marketers’ desire to ‘move up’ the customers to a
higher price point. Such a move allows the firm to generate more sales and profit per customer.
The conditions propelling these extensions are the slowing down of volume growth in the colour
television market. Hence, extensions provide excellent opportunities for profit increase and
revenue multiplication by launching products at higher price points. In the same fashion, the
marketer may launch a product at a lower price point than its core offering. For instance, Videocon
once had its ‘turbo’ range. The idea behind this kind of extension would be to make its product
available to customers in the lower price brand.
This kind of representation across various price brands is common in the credit card market. The cards
line would usually consist of Platinum, Gold, Silver and Classic. Line extension therefore, provides
greater pricing flexibility and opportunity to enjoy representation across a wider spectrum of
consumers.
Capacity Utilization: Sometimes, firms are driven by the economic logic of building plant
capacities which are efficient or world class. The investment in plant increases the fixed cost of
operations. Accordingly, pressures emerge to maximize plant utilization in order to quickly recover
the fixed costs and achieve efficient cost of operations. Sometimes marketers may seek refuge in
extensions as a means of utilizing excess capacity. By effecting minor changes in the product and
plant, the company can substantially improve its capacity and make up for the high fixed cost
element in its operations.
Quick Gains: Line extensions provide an opportunity to achieve quick gains in sales performance.
Launching a new brand may cost a firm five to six times the amount needed to launch an
extension. Moreover, creation involves a lot of uncertainty and risk. It is a long drawn out process.
Hence, managers see line extensions as a vehicle to generate more sales quickly and relatively
inexpensively. The path of line extension is far more predictable. Unlike brand creation, line extensions
depend less on cross functional integration.
Managers favour line extensions because dismantling or competing against existing brands is
difficult for the staying power they enjoy. The cost of new brand launches tends to be
phenomenally high; new brands have dismal success rates, and the technologies have matured and
are accessible to everybody. These perceptions favour line extension strategy to achieve quick
rewards without assuming the relatively greater risk of launching an entirely new product.
Competitive Reasons: A marketer with a more extensive product line up is usually in a better position
to get access to the shelf space. This is the case with Hindustan Lever. You walk into any store and
discover how much retail space is occupied by a brand which offers a number of variants in different
forms, shapes, sizes and flavours. This obviously comes at to the expense of the competition: rival
firms find it difficult to make their presence felt, putting their brand’s future in jeopardy. Line
extensions fill the whole spectrum. Under such conditions, new entrants and smaller firms usually find
it difficult to make a successful foray into the market. The price of the minimum entry ticket goes up.
The firm must offer some minimum line merely in order to get noticed. This is sometimes beyond the
reach of many existing or new players.
Trade Demands: Marketing environment has seen the emergence of new forms of trade partners and
retail channels. The trade partners often exert pressures on marketers to extend the line by
developing products which meet their unique marketing strategy needs. They may place demands for
bulk packages, multi-packages, customized and derivative models. For example, once channel or store
specialization occurs, a simple trouser manufacturer may be asked to develop different items in the
line to meet special needs of premium stores, mass stores, speciality stores, custom stores line-ups,
designer stores and frill-free (bargain basement) stores. The demand to extend the line may stem
from the trade partners.
Counter Competition: Sometimes, a firm may be forced to extend the line because of competitive
conditions. That is, extending the line may become imperative to counter competition. For instance,
when a company launches free flow or sodium free salt like Captain Cook, the other company would
need to counter this by adding these variations to its line or else it stands to lose.
A spirit to counter competition by and large guides the existing proliferation of line extensions in
FMCG sector. In fact the moves tend to be so neck-to-neck that overnight variants are copied with
an intention to neutralize competition. Colgate added Colgate Gel in order to meet the competitive
challenge posed by the rising popularity of Close Up, and further it introduced Colgate Herbal to
counter HLL’s Aim. Image Benefits: Line extensions can recharge the image of the brand. If there is
danger associated with unbridled extensions, there are gains which could be reaped by careful
extensions. There is very real opportunity to build a positive image and renew it. A well-managed
extension can bring enormous benefits. For example, Mercedes launched its 190 model in the
‘eighties. This model allowed the company to reach the sub-luxury segment. Far from degrading
the Mercedes image, the extension imbued its entire line with excitement and youthfulness. Similar
benefits were achieved for Gallo name, when it introduced premium varieties under the same
name. Gallo’s original association with lower price did reduce the variety’s line appeal, but the
new line also rubbed off on Gallo positively.

BRAND EXTENSIONS
Brand Extensions

Line extension strategy involves launching various product variants in the same category under the
same brand name. The brand extension, on the other hand, involves using an existing brand name to
launch a product in a different category. The key difference between the two strategies is the product
category. In the extensions, product category remains constant whereas in brand extensions product
category is a variable.

The companies in the western part of the world differed from their eastern counterparts, especially
Japanese and South Korean with respect to branding policies. Procter & Gamble, Hindustan Lever
and Reckitt & Coleman, etc., all favoured the branding policy by which individual products carried
their own names. It was a product-branding strategy, whereas eastern companies seemed to favour
some sort of umbrella branding. This involved launching different products under a common
banner. Companies favouring this policy included Japanese giants like Mitsubishi, Toyota, Honda,
and Korean Companies like Samsung, and Lucky Gold Star (now LG). But now the companies
which followed product branding seem to be moving towards a policy of hanging products
belonging to different categories on one brand name peg. Once supreme examples of product
branding, Hindustan Lever and Procter & Gamble seem to have jumped onto the brand extension
bandwagon.
Brand extension strategy has found favour in the modern marketing world because of the
advantages it has over the other new product launch options. The important benefits that it
promises to deliver are as follows:
Cost of New Launches: The marketing environment of today is characterized by ups and downs. These
shifts necessitate frequent introductions in the marketplace both as a defense against competition
and desire to grow. A new brand costs anywhere between 50 to 100 million dollars to develop,
hence the huge investments required to develop and launch a new brand act as a major deterrent.
Brand extensions, therefore, present irresistible options in such situations. By extending a brand,
the marketer can bring the costs down substantially while increasing the probability of success.
Promotional Efficiency: What happens when a company needs to support a large number of
individual brands? Its promotion cost structure goes up. Also, investment in one brand does not
help the other brands. When the Dettol brand of soap is advertised, it indirectly benefits other
brands which share the same name. The extensions enhance promotional efficiency.
Besides, at the time of new product launches, the marketer’s task is reduced because the name
awareness already exists. The brand awareness allows easy access to the mind, whereas when one
needs to launch a brand name, the task is more difficult and complex. Evidence suggests that brand
extensions need less advertising support in comparison with new brand launches.
Consumer Benefits: From the customer’s point of view, brand extensions offer a less risky route to
a new product category. What happens when a customer is familiar with a brand, e.g., Kelvinator?
In such situations, the customer knows what to expect from the brand and can easily conclude the
likely make up and performance delivery of the brand. This is based on what the customers already
know about the brand. So when Kelvinator launches a new product, e.g., a microwave oven,
customers would be more comfortable in the context of information, expectations and inferences.
Familiarity with a brand name reduces the risk perceived by the prospect in a brand buying
situation. Accordingly, customers may be more predisposed to typing a brand extension than a
completely new brand.
Feedback Effects: Brand extensions are justified not only for what they deliver in terms of
promotional efficiencies and consumer benefits, they also help the parent brand in many ways, the
first benefit being the clarity in brand meaning that an extension can bring. Extension can broaden
the product meaning.

Concept of Brand

The concept of brand in its present form is recent. Creating brand is the ultimate aim of marketing
endeavour. The AMA defines it as: “A brand is a name, term, sign, symbol, or design, or a
combination of them, intended to identify the goods or services of one seller or group of sellers and
to differentiate them from those of competitors.” There are three aspects of this definition. Firstly,
it focuses on ‘What’, of the brand. Secondly, it emphasises on what the brand ‘does’. A brand can
be any combination of name, symbol, logo or trade mark. Brands do not have fixed lifetimes.
Under the trade mark law, the users are granted exclusive rights to use brand names in perpetuity.
The economists view of branding “various brands of a certain article which in fact are almost
exactly alike may be sold as different qualities under names and labels, which will induce rich and
snobbish buyers to divide themselves from poorer buyers.”
A brand name is used by the marketers because of the roles it can perform. It identifies the product
or service. This helps consumers to specify, reject or recommend brands. This is how string brands
become part and parcel of a consumer’s life. Secondly, brands help in communication. Brands
communicate either overtly or subconsciously. For instance, the brand ‘Fair and Lovely’
communicates what the product does. Similarly, a brand like Johnson and Johnson is a symbol of
expression of a mother’s love. Finally, a brand becomes an asset or property which only the owner
has the right to use. The brand property is legally protected. All the registered names are the valuable
assets of the owners. Coca-Cola brand name is perhaps the most valued asset of Coca-Cola
Corporation.
Conventionally brands were viewed myopically. They were seen to perform identification and
differentiation functions. But mere identification may not be a sufficient condition for survival in a
competitive marketplace. For instance, the brand Premier identified the automobiles with the
Premier Automobiles Limited very well. At the same time the ‘Premier’ brand distinguished these
cars from rest of the competitors like Hindustan Motor’s Ambassador, Maruti, and others. Yet the
brand went out of the market. Now Premier cars are not even manufactured. What is essentially
missing in the conventional brand concept is consumer. Brands do not exist for the sake of
identification and differentiation.
They exist because of and for customers. The value dimension is key to any kind of brand to be
there in the marketplace. Branding must not be confined to the process of passively assigning a
name or symbol to a product. Branding done in this manner may not be able to lift the product into
a higher plain. The product may be equal to brand and brand may be equal to product. The purpose
of branding is to transform the product. It must add value that consumers covet. Transforming a
commodity like product into customer satisfying value added propositions is the essence of
branding.

What is a Brand?

According to American Marketing Association (AMA) a brand is a “name, term, sign, symbol or
design or a combination of them, intended to identify the goods and services of one seller or group
of sellers and to differentiate them from those of competitioners”.
A brand in short is an identifier of the seller or the maker. A brand name consists of words, letters
and/or numbers that can be vocalized. A brand mark is the visual representation of the brand like a
symbol, design, distinctive colouring or lettering. Mercedes Benz is a brand name and the star with
it is a brand mark.
A good brand name should:
1. be protected (or at least protectable) under trademark law
2. be easy to pronounce
3. be easy to remember
4. be easy to recognize
5. be easy to translate into all languages in the markets where the brand will be used
6. attract attention
7. suggest product benefits (e.g., Easy-Off) or suggest usage (note the tradeoff with strong
trademark protection)
8. suggest the company or product image
9. distinguish the product’s positioning relative to the competition
10. be super attractive
11. stand out among a group of other brands < like that one compared to the others.

Selecting a Brand Name

Criteria for choosing a name:

1. Easy for customers to say, spell and recall (inc. foreigners)
2. Indicate products major benefits
3. Should be distinctive
4. Compatible with all products in product line
5. Used and recognized in all types of media
6. Single and multiple words Bic, Dodge Grand Caravan, IBM PC (letters), or a
combination Mazda RX7
7. Availability, already over 400 car “name plates”, this makes it difficult to select a new
one.
8. Use words of no meaning to avoid negative connotation, Kodak, Exxon
9. Can be created internally by the organization, or by a consultancy.
Service-usually the company name must be flexible enough to encompass activity of current
services as well as new ones in the future (Southwest Airlines).
Frequently use symbols, AT&Ts globe, Travellers insurance umbrella.
Naming process goes from idea generation to idea evaluation to legal evaluation. Should define
objectives–what value to the product should the name provide.

Branding Challenges and Opportunities

Although brands may be important as ever to consumers, brand management may be more difficult
than ever. The challenges for brand managers are discussed below:
1. Savvy Customers: Increasingly, consumers and business have
become more experienced with marketing and more knowledgeable about how it works. A well-
developed media market has resulted in increased attention paid to the marketing actions and
motivations of companies. Many believe that it is more difficult to persuade consumers with traditional
communications than it was in years gone by.
Other marketers believe that what consumers want from products and services and brands has changed.
For example, Kevin Roberts of Saatchi and Saatchi argues that companies must transcend brands
to create “trust marks”- a name or symbol that emotionally binds a company with the desires and
aspirations of its customers.
2. Brand Proliferation: Another important change in the branding
environment is the proliferation of new brands and products, by the rise in line and brand extensions. As
a result, a brand name may now be identified with a number of different products of varying degrees of
similarity. Procter & Gamble’s original Crest toothpaste, has been joined by a series of line extensions
such as Crest Mint, Crest for kids, Crest Baking Soda, Crest Multi care Advanced Cleaning.
3. Media Fragmentation: An important change in the marketing
environment is the fragmentation of traditional advertising media and the emergence of interactive
and non traditional media, promotion and other communication alternatives.
The commercial breaks on network TV have become more cluttered as advertisers increasingly
have decided to advertise with 15 second spots rather than the traditional 30 or 60 second spots.
Marketers are spending more on non traditional forms of communication and new emerging forms of
communication such as interactive, electronic media, sports and events sponsorship, in -store
advertising, mini bill boards in transit vehicles and in other locations.
4. Increased Competition: Both demand side and supply side factors
have contributed to the increase in competitive intensity. On the demand side, consumption for many
products and services has fattened and hit the maturity stage, or even the decline stage of the product
life cycle. As a result, sales growth for brands can only be achieved at the expense of competing
brands by taking away some of their market share.
5. Increased Costs: As the competition is increasing, the cost of
introducing a new product has also increased. It makes it difficult to match the investment and
level of support that brands were able to receive in previous years.
6. Greater Accountability: Stock analysts value strong and
consistent earnings reports as an indication of the long-term financial health of a firm. As a result,
marketing managers may find themselves in the dilemma of having to make decisions with short-
term benefits but long-term costs.
Moreover, many of these same managers have experienced rapid job turn over and promotions and
may not anticipate being in their current positions for very long. These different organizational
pressures may encourage quick-fix solutions with perhaps adverse long-run consequences.

Identifying and Establishing Brand Positioning and Value

The strategic brand management process starts with a clear understanding as to what the brand is to
represent and how it should be positioned with respect to competitors. Kotler defines brand
positioning as the “act of designing the company’s offer and image so that it occupies a distinct
and valued place in the target customer’s mind”. The goal is to locate the brand in the minds of
consumers such that the potential benefits to the firm are maximized. Competitive brand positioning
is all about creating brand superiority in the minds of customers, fundamentally, positioning involves
convincing consumers of the advantages of a brand vis-à-vis competitors, while at the same
alleviating concerns about any possible disadvantages.
Positioning often involves a specification of the appropriate core brand values and brand mantra. Core
brand values are those set of abstract associations (attributes and benefits) that characterize a brand. To
provide further focus as to what a brand represents, it is often useful to define a brand mantra, also
known as a brand expression of the most important aspects of a brand and its core brand values. It can
be seen as the enduring “brand DNA” the most important aspect of the
brand to the consumer and the company. Core brand values and a brand mantra are thus an
articulation of the heart and soul of the brand.
Benefits of a Strong Brand

The benefits of strong brand are:

1. A strong brand influences the buying decision and shapes the ownership experience.
2. Branding creates trust and an emotional attachment to your product or company. This
attachment then causes your market to make decisions based, at least in part, upon emotion – not
necessarily just for logical or intellectual reasons.
3. A strong brand can command a premium price and maximize the number of units that
can be sold at that premium.
4. Branding helps make purchasing decisions easier. In this way, branding delivers a very
important benefit. In a commodity market where features and benefits are virtually
indistinguishable, a strong brand will help your customers trust you and create a set of expectations
about your products without even knowing the specifics of product features.
5. Branding will help you “fence off” your customers from the competition and protect
your market share while building mind share. Once you have mind share, you customers will
automatically think of you first when they think of your product category.
6. A strong brand can make actual product features virtually insignificant. A solid
branding strategy communicates a strong, consistent message about the value of your company.
A strong brand helps you sell value and the intangibles that surround your products.
A strong brand signals that you want to build customer loyalty, not just sell product. A strong
branding campaign will also signal that you are serious about marketing and that you intend to be
around for a while. A brand impresses your firm’s identity upon potential customers, not necessarily to
capture an immediate sale but rather to build a lasting impression of you and your products.
8. Branding builds name recognition for your company or
product.
9. A brand will help you articulate your company’s values and
explain why you are competing in your market.

Most Powerful Brands in the World

Here we discuss the ten most powerful brands in the world, which takes into account the measure of
brand equity combined with the performance of the company. According to the report, the top five
remained the same, with all the five companies showing an increase in brand valuation between 15%
and 30% when compared to 2007, but there are several changes with the rest of the list.
1. Google: As expected, Google tops the list. Google is the most
powerful brand in the world with a current brand value estimated at $86 billion, and it has achieved all
this in just ten short years. This global search engine giant had its beginnings in 1996 and was just a
research project started by Larry Page and Sergey Brin, two Stanford University Ph.D. students. The
incorporation of Google Inc. took place on September 7, 1998 at their friend’s garage in California. The
company experienced stupendous growth in a short time and went public on Aug 19, 2004. Google’s
rank is based on the equity value and the fantastic financial performance.
2. General Electronics (GE): GE is a giant US multinational
engaged in technology and services industries. It has its headquarters in Fairfield, Connecticut. It is
now the second largest company in the world, in terms of market capitalization. The brand value of
this company is estimated at $71.4 billion.
3. Microsoft Corporation: Microsoft is the world’s largest software company and the
third most powerful brand on the globe, with annual revenue of $44.28 billion and a brand value of
$70.89 billion. This veteran software company was started by Bill Gates and Paul Allen in 1975
and has its headquarters in Washington. The company went public in 1986. It manufactures
computer technology for business and personal computing, offering a wide range of software
products.
4. Coca-Cola: Coca-Cola makes carbonated soft drinks and has a brand value of $58.2
billion. It was started in 1885 as a patent medicine by Dr. John Stith Pemberton in Covington,
Georgia. It was named Pemberton’s French Wine Coca back then.
5. China Mobile: This is the world’s largest mobile phone operator with the maximum
number of subscribers (about 296 million). Vodafone owns 3.3 percent of the China Mobile. This
company has a 65% share of the most competitive Chinese mobile market and commands a brand value
of $57.2 billion.
6. IBM: IBM once had the distinction of being the largest computer company in the world but
Hewlett-Packard took that spot in 2006. However, IBM is currently the largest information technology
employer in the entire world. Its brand value is reported to have shown a 65% increase to $55.3
billion and this moved the company up to sixth place.
7. Apple: Apple Computer Company was formed in the year 1977 by Steve Jobs, Steve
Wozniac and Ronald Wayne. It was initially called Apple Computer Inc. but then the world
“computer” was dropped from its name in keeping with the expansion from a computer maker to
consumer electronics and software. The well-known Apple creations and designs are Mac laptop
and desktop computers, iPod and iTunes, the OS X operating system and the very popular iPhone.
The company has seen a 123% rise in its brand value because of these innovative products. Fortune
magazine called Apple the most admired company in the United States and it has a brand value of
$55 billion.
8. McDonalds: The fast food giant McDonald’s brand value grew more than 49% and is
currently estimated to be at $49.49 billion. This restaurant chain is one of the most recognizable on
earth being the most popular food outlet in the world. It had the most basic beginnings when Dick
and Mac McDonald created the brand. But the story goes that much of the success is owed to a
salesman of a milk-shake maker, Ray Croc, who made a trip to California to check out
McDonald’s hamburger stand, only to enter into a well- known business relationship with the
McDonald brothers.
9. Nokia: Nokia Corporation is a Finnish multinational company with its headquarters in
Keilaniemi, Espoo. This communications company is focused on wired and wireless
telecommunications. It is the world’s largest manufacturer of mobile telephones and employs
thousands of people worldwide. It has achieved its goal of connecting the world and has a brand
value of $43.9 billion.
10. Marlboro: Marlboro had its share of problems initially and reaped rewards after the
introduction of a new cowboy image for the brand. With this change, sales shot up by 5000 percent
with an estimated brand value of $39.2 billion, which is an increase in value by 2 percent from
last year.
It is interesting to note that all these powerful brands had humble beginnings but soon reached the
top with their imaginative and innovative approaches to business, customer satisfaction and to
achieving their goals.
11.

A variety of brand elements can be chosen that inherently enhance brand awareness or facilitate the
formation of strong, favorable, and unique brand associations.
1. Brand names
2. URLs
3. Logos and symbols
4. Characters
5. Slogans
6. Packaging

Brand Names

The brand name is a fundamentally important choice because it often capture the central theme or
key associations of a product in a very compact and economical fashion. Brand names can be an
extremely effective shorthand means of communication. Whereas the time it takes consumers to
comprehend marketing communications can range from a half a minute to potentially hours, the
brand name can be noticed and its meaning registered or activated in memory within just a few
second.
Like any brand element, brand names must be chosen with the six general criteria of memorability,
meaningfulness, likability, transferability, adaptability, and protectability in mind.
The name of a brand is the first and probably the greatest expression or “the face” of a product.
The huge complexity of names and their associations has led to a new profession of naming
companies, products, or services. All names usually have some kind of associated image, whether it is
cultural, linguistic or personal. Brand names should be chosen very carefully since they convey
important information to stakeholders. This is especially true for brands that intended to cross
geographic and cultural boundaries; it is a very challenging task to find the right name for different
audiences.
A well-chosen name for a company, product, or service can be a valuable asset, just like the brand
itself. The name directly affects the perception of the brand. We hear and read various brand names
many times every day, in emails, business cards, brochures, websites, and product packages. The
brand name will be used in every form of communication between a company and its prospective
customers. An ineffective brand name can hinder marketing efforts, because it can lead to
miscommunication if people can’t pronounce it or remember it. Ultimately, the brand name is the
expression that conveys all the values and promises of a company. In order to build a brand it is
essential to continually keep the name present.
Certain factors should be considered before selecting a brand name. They are as follows:
1. Distinguish the product from competitive brands
2. Memorable and easy to pronounce
3. Easy to say, spell and pronounce
4. It should allude to the product
5. Negative or offensive references should be avoided
6. Evoke positive mental image
7. Evoke positive emotional reaction
8. Suggest product function or benefits
9. Simple
10. Sound appropriate
11. Be unique
12. Possibly, translate well in other languages too.
Naming Guidelines: Selecting a brand name for a new product is certainty an art and a science.
This section provides some general guidelines for choosing a name. It focus on developing a
completely new brand name for the product. Box 11.2 display the different types of possible brand
names according to identify experts Landor Associates. As with any brand element, brand names
must be chosen with the six general in mind.

Integrated Marketing Communication

Integrated Marketing Communications is a term used to describe a holistic approach to marketing

communication. It aims to ensure consistency of message and the complementary use of media.
The concept includes online and offline marketing channels. Online marketing channels include
any e-marketing campaigns or programs, from Search Engine Optimization (SEO), pay-per- click,
affiliate, email, banner to latest web related channels for webinar, blog, micro-blogging, RSS,
podcast, and Internet TV. Offline marketing channels are traditional print (newspaper, magazine),
mail order, public relations, industry relations, billboard, radio, and television. A company
develops its integrated marketing communication programme using all the elements of the marketing
mix (product, price, place, and promotion).
Integrated marketing communication is integration of all marketing tools, approaches, and
resources within a company which maximizes impact on consumer mind and which results into
maximum profit at minimum cost. Generally marketing starts from “Marketing Mix”. Promotion is
one element of Marketing Mix. Promotional activities include Advertising (by using different
medium), sales promotion (sales and trades promotion), and personal selling activities. It also
includes internet marketing, sponsorship marketing, direct marketing, database marketing and
public relations. And integration of all these promotional tools along with other components of
marketing mix to gain edge over competitor is called Integrated Marketing Communication.

Growing Importance of IMC

Several shifts in the advertising and media industry have caused IMC to develop into a primary
strategy for marketers:
1. From media advertising to multiple forms of communication.
2. From mass media to more specialized (niche) media, which are centered around
specific target audiences.
3. From a manufacturer-dominated market to a retailer-dominated, consumer-controlled
market.
4. From general-focus advertising and marketing to data-based marketing.
5. From low agency accountability to greater agency accountability, particularly in
advertising.
6. From traditional compensation to performance-based compensation (increased sales or
benefits to the company).
7. From limited Internet access to 24/7 Internet availability and access to goods and services.

Tools of Integrated Marketing Communication

The basic tools of integrated marketing communication help for brand building are:
1. Advertising: This tool can get your messages to large audiences efficiently through such
avenues as radio, TV, Magazines, Newspapers (ROP), Internet, Billboards and other mobile
technological communication devices. This method can efficiently reach a large number of
consumers, although the costs may be somewhat expensive.
1. Sales Promotion: This tool is used through coupons, contests,
samples, premiums, demonstrations, displays or incentives. It is used to accelerate short-term sales, by
building brand awareness and encouraging repeat buying.
2. Public Relations: This integrated marketing communications
tool is initiated through public appearances, news/press releases or event sponsorships, to build trust
and goodwill by presenting the product, company or person in a positive light.
3. Direct Marketing: This tool will utilized email, mail, catalogs,
encourage direct responses to radio and TV, in order to reach targeted audiences to increase sales and
test new products and alternate marketing tactics.
4. Personal Selling: Setting sales appointments and meetings,
home parties, making presentations and any type of one-to-one communication, to reach your
customers and strengthen your relationship with your clients, initiate this IMC tool.