B2B 5e Chapter 7

Managing Products and Brands for

Business Markets
Learning Objectives
LO1.Understand what an industrial product is.
LO2. Discuss the need for adopting a dynamic strategy for industrial
products.
LO3.Explain industrial product life cycle and marketing strategies for
each stage of the life cycle.
LO4. Learn how to develop product strategies for existing products.
LO5. Illustrate branding of industrial products, building a strong brand.
LO6. Outline brand strategy and auditing.
Definition of an Industrial Product
• It is a physical thing and also a complex set of
economic, technical, legal, and personal
relationship between a buyer and a seller
From a customer’s point view there are three
levels of a product
 Basic properties (i.e. fundamental benefits)
 Enhanced properties (i.e. tangible benefits)
 Augmented properties (i.e. intangible benefits)

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Three levels of a Product
Core Competence
A core competence is an unique combination of important skills and
knowledge an organization possesses to do something successfully.
A core competence should
a. Make a significant contribution to the benefits that customers
perceive in the company’s end-product.
b. Have a breadth of applications to a wide variety of markets.
c.Be difficult for competitors to imitate.
Dynamic Strategy for Industrial
Products
• A product strategy is dynamic
• Firms change product strategy
because of changes in :
• Customer needs
• Technology
• Government policies / regulations
• Product life-cycle

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Industrial Product Life-cycle and Strategies
A typical product life cycle is depicted below
Product Life Cycle
• The behavior of the product life-cycle depends on three factors
(i) Changing needs of customers
(ii) Changes in technology, and
(iii) Changing competition
• The product life-cycle concept highlights
a. The need for different marketing strategies at different stages of the
life cycle of the product.
b. The importance of long-term planning for a new product.
PLC and Marketing Strategies
 Introduction stage
• Focus on market development by creating awareness among buyers
• Position the product based on its value proposition
• Establish effective distribution channels
• Pricing should be related to positioning strategy
Growth Stage
• Add additional features/benefits to the product for wider market coverage
• Do Promotion to remind and reinforce
• Increase distribution to cover more segments
• Reduce price to penetrate the market
PLC and Marketing Strategies
Maturity Stage
• Focus on product differentiation (e.g. superior quality of product and service ).
• Intensify distribution for entering new markets.
• Reduce costs to keep prices competitive.
Decline Stage
• Harvest, divest / withdraw the product, or develop a substitute product.
• Minimize promotion and distribution to reduce costs.
• Satisfy existing customers better than competitors.
• As price competition is severe, cut price.
Developing Product Strategies for Existing
Products
Following steps are involved:
• Evaluate existing products’ performance.
• Use perceptual mapping for assessing the relative strengths and
weaknesses of existing products via-a-vis competitors .
• Decide product strategies from the following alternatives.
• Continue the product and marketing strategy
• Modify the product and / or change marketing strategy
• Drop the product
• Add new product or product lines

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Branding in Business Markets
What is a Brand?
• It is a name, symbol, design, or combination, intended
to identify the goods and services of one seller and
differentiate them from those of the competitors.
• In short, a brand identifies the seller.
What is a brand equity?
• It is the value (or worth) of a brand.
Purpose of branding
• To identify and differentiate a product / service /
business organization from its competitors.
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Brand Equity :Preferential Actions by Customers

High brand equity results in the following preferential actions from

customers:
• Customers are willing to pay a higher price.
• Customers give higher share of their purchase requirements.
• Customers take less time to decide the orders.
• Less likelihood of customers switching to competitors’ offerings.
Building a Strong Brand
A strong brand is an asset even in business markets and offers a
competitive advantage.
 Brand strength : Is a factor of
• Brand awareness
• Quality of the offering
• Customer’s positive beliefs about the brand(also known as associations)
• Perceived value
• Other brands linked to the brand
Building a Strong Brand
 Building Associations :The most powerful associations come from customers’
direct experience.
Marketers have to ensure that
• Messages communicated through sales people, advertisements, and other
communication tools are consistent(Integrated Marketing Communications).
• Customers’ usage experiences is as positive as possible.
 Other Proprietary Brand Assets : Patents, trademarks and channel
relationships.
Aaker’s Model of Brand Equity
3 Ps of Branding:Purpose,Process and
Planning&Analysis
Purpose of branding:
• Brands differentiate the products, services, and businesses from the competitors
• Brands communicate the value and guarantee quality and performance
Process of Branding:
The first decision to be made is “To brand or not to brand?”
The main factors to be considered are,
• High pressure on prices
• Complexity in market offerings
• Availability of a large number of similar products and services.
Branding Process
Branding process is depicted below
Branding Process
Most important brand functions (in terms of relevance and
importance)
• Risk reduction
• Easy access to information
• Image creation
Branding process has to adequately address the above
Brand Planning &Analysis
Key factors in brand planning
(1) Involvement of all
• Everyone in the company should live the brand
• Companies should invest on internal marketing so that employees understand
and deliver on the brand promise.
(2) Brand continuity
• Companies should not change their brands for the sake of change
• Customers’ trust is built based on their long-term association with the brand.
Brand Analysis
The first step towards creating a brand is a detailed brand analysis that
involves
• Customer analysis
• Competitor analysis
• Company analysis
• Environmental analysis
Marketing research should be carried out to understand
• What is important to the company’s target customers?
• How the company’s target customers differentiate the company and its
products/services from those of competitors?
• What is important to the company?
• What the company would like to be in 5–7 years from now?
Brand Strategy and Auditing
Brand Hierarchy: Four levels
(1) Corporate brand
(2) Family brand
(3) Individual (product) brand , and
(4) A combination of above
Brand Positioning :Create a unique and clear position, which should be
different from competing brands.
Brand Strategy
Brand extensions: Using the existing, well-established brand names to
introduce new products.
Advantages:
• Chances of survival for a new product is more;
• Minimizing marketing costs of brand building
Multi-brand Strategy :Protecting the major brand by setting up other brands
(Example :Taj and Ginger : two hotel chains owned by Tata group)
Co-branding:Two or more well-known brands are combined in a product or
service (Example:Intel inside )
Brand Strategy
Fighter brands:When a competitor threatens to cut into the market share of a
company’s main brand fighter brands are introduced to combat competition.
(Example: Celeron introduced by Intel to fight AMD)
Global branding:
• Global branding is beneficial for companies, because it can reduce marketing
costs, obtain higher volumes, and provide a long-term growth.
• The objective in global brand strategy should to achieve standardization and
consistency as much as possible.
Brand Audit
Objective: To find periodically the brand’s strengths and weaknesses.
Brand score card :Measures the performance of the brand in relation to the
target customers’ expectations.
There are four components of the brand score card
• The functional performance of the brand.
• The ease and convenience of accessing the brand.
• The personality of the brand (i.e. it describes the brand as if it was a human
being)
• The brand value, including pricing.
Brand Audit
Companies should track the performance of their brands on the following
attributes:
• The brand should deliver the benefits customers truly desire.
• The brand should stay relevant, by being in touch with current market
conditions.
• The pricing strategy of the brand should be based on customers’
perceptions of value.
• The brand should have consistent messages sent through various channels
of communication.
• The brand equity should be monitored, against a written description of the
meaning and equity of the brand.
End of the PPt