Pdm

Product Management 2009 Dr. Jagrook Dawra

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• Base Line: “Worn out Jeans”

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Agency: Enterprise Nexus

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• Base Line: “Shreds from Killer”

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Agency: Enterprise Nexus

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Subhead: Live Life in Xs. XDart Jeans

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Bodycopy: “With hep X-darts across the front. A distinctive finish. Deeper dye. Tight construction. Zero shrinkage. And an incredible signature colour.”

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Baseline: “Founded Kansas, USA, 1989.”

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• Headline: “Atleast the Jeans are a perfect fit”

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Agency: Grey Worldwide

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• Headline: “In 7.8 seconds, I dropped weight! And added Curves” • Bodycopy: “I just zip up once a day. No gyms. No diets” •

Agency: JWT 6

• Headline: “Red Loop” • Subhead: “U in the loop as Yet?”

• Agency: JWT

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• Subhead: “Sandblasted denim jacket with engineered pocket detailing and anthra tint. # JKM-622 Basic white cotton linen shirt. Basic five-pocket jeans with flared hem. # JSM-269 antique blue sandblast.” 8

• Headline: “Renewed 300% Extra Style” • Bodycopy: “Classic Designs. Renewed with 300% extra Style”

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Agency: ANC

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Session 1: Introduction • Can you identify the basis of differentiation of the jeans brands on previous slides?

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• Basis of differentiation: – Emotional – Rational

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Focus of different managers in the marketing team • Brand Manager– – – – –

Awareness Brand Associations Quality Perceptions Brand Loyalty Brand Personality

• Product Manager: Attributes and their levels – New product development

• Sales Manager – Selling – Sales team management

• Advertising manager – Creating a communication message in order to communicate the position of the brand vis-à-vis its 12

Some questions that product management seeks to answer • Why does a consumer buy a product A rather than a product B? • What features/aspects of the product are valuable to customers? • What are the trade-offs that a customer make while buying a product? • How much is a consumer willing to pay for a new feature of my product? • What is the set of attributes that will maximize consumer choice? …

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… • What are the benefit segments in the market place? • What should the product line be to satisfy the desires of the benefit segment? • If my firm offers a product A and prices it Rs. 20.00 and the competitor offers a product B and prices it Rs. 15.00, what is the likely market reaction? • What is the demand for a new product going to be? How can I maximize it? • How can I estimate the demand for a new-to-theworld product? 14

Brand equity: Preference Emotion al Ration al

Bundle of Attributes

Preference due to Attributes

Brand

Preference due to Brand

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• Is the basis of differentiation (rational vs. emotional) dependent on the type of product category? • What products are more likely to be sold on – Rational basis (Attributes)? – Emotional basis (Brand)?

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Customer Focused Product Planning Our marketing actions Product, price

Customers

Competitor’s actions Product, price

Customer preferences

Customer Choices

Multi-attributed view of products (Attribute

Market shares Sales Profits 17

Multi-attributed view of products

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Multi-attributed view of products

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• Overall preference for a product= preference for attribute 1 + preference for attribute 2 + preference for attribute 3…n • Overall worth = sum of part-worths • Conjoint: considered jointly • Part-worths correspond to a single respondent. 20

Part-worth function model

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Part-worth function model

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Which of these products would be more preferred?

More preferred

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• Typically many factors or attributes are included. • Factors/ Attributes often include price and brand name.

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Deciding attributes • Related to consumer choice (based on qualitative market research like FGDs or Interviews) • Distinguish different product offerings. • Managerially relevant.

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Deciding Levels of Attributes • Distinct, mutually exclusive, and collectively exhaustive. • Cover a range of interest (no extrapolation) • Try to keep the range of levels small (say 3 per factor) and equal across factors

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Mo-bike Pump

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Designing conjoint cards • 4 attributes, 3 levels each. 3 x 3x 3 x 3 = 81 possible cards (too many) • Choose a representative subset of say 18 cards. • Fractional Factorial design (conjoint designer software given to you)

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• Arrange the 16 cards given to you in order of your decreasing preference. Keeping the most preferred card on the top. • Also arrange the 4 shaded cards in the order of decreasing preference. • How did you do it?

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Next Class • Case: Sunbeam

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Consumer choice • Choice Share • Market Share

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Airstick makes a change

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What would happen if a new company Relistick were to

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Case 1: Sunbeam

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Brand Line

HLL

Breadth D e pt

Product Line

Brand Family

Brand 38 Portfolio

Redesigning of product lines • Mature • Redesign the product lines to make them more responsive to needs and dictates of its markets. • To optimize market share of each product category. • Goals: – What models should be in the line? – What should their physical appearance be? – What should their performance characteristics be? 39

Process • Consumer usage and attitude survey. • Consumer attribute and benefit survey. • A conjoint analysis survey. • Product line simulations.

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• What were the different attributes of a food processor that were considered? • What were the levels of these attributes? • How many distinct processor combinations are possible with these attributes and levels? • How many were chosen for the 41

• Mathematics behind Conjoint – Linear Programming. • Was there a qualitative study that preceded the conjoint study? What was the major objective for this study? • How were the huge number of configurations reduced to 27? 42

• What data was collected? • What was the relevance of each data item to the study? • How was the data collected? • Notice how the job of sorting was made easy for the respondents.

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• What were the important attributes? • What is the benefit of having importance data? • What were the segmentation results? • How do you think they were found out? • Simulations?

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• What makes you say that the results of the exercise were valid (or not valid)? • What is base case simulation? • Assumptions during simulations. • Simulating “what if” scenarios. • What is the benefit of simulations? • How reliable are these simulations? 45

How does the software estimate this? • Uses linear programming • E.g. Card 11 > Card 7 • S(bookbag) + T(10 min) + E(Medium) + P(500) > S(bookbag) + T(0.5 min) + E(Difficult) + P(2000) • 18C2 = 153 such pairs • S(bookbag) + T(10 min) + E(Medium) + P(500) = S(bookbag) + T(0.5 min) + E(Difficult) + P(2000) + Z1

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Deciding attributes • Related to consumer choice (based on qualitative market research like FGDs or Interviews) • Distinguish different product offerings. • Managerially relevant.

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Deciding Levels of Attributes • Distinct, mutually exclusive, and collectively exhaustive. • Cover a range of interest (no extrapolation) • Try to keep the range of levels small (say 3 per factor) and equal across factors

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Designing conjoint cards • 4 attributes, 3 levels each. 3 x 3x 3 x 3 = 81 possible cards (too many) • Choose a representative subset of say 18 cards. • Fractional Factorial design (conjoint designer software given to you)

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• Assignment

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Designing Cards

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Estimating part-worth utilities • Using Linmap • Estimated for each respondent • Enter data in a notepad in the following format – RES1 6 4 15 9 5 8 16 10 13 2 3 11 7 14 12 1 20 19 18 17

• Change the extension from .txt to .dat 52

Assignment 2 • Rearrange the cards and rank order them. • Input them into a text file and change its extension from .txt to .dat • Check for mistakes using the program checkdat.exe • What is the factor that you laid most importance on? Is it consistent with your findings from the analysis? • Use Linmap.exe to get utility curves and misorders • Input the data of your friends. • Use linmap.exe to get group utility curves. 53

Caution… • Adding (or subtracting) the same constant to all partworths of an attribute does not alter the relative values of overall preference. • The fact that part-worth for 0.5 min is positive and 10 min is negative does not mean that the respondent ‘likes’ 0.5 min and ‘dislikes’ 10 min. zero point on the partworth scale is arbitrary. • It is not meaningful to compare the part-worth of the level of one factor with some partworth of some other factor. • Units of measurements are arbitrary. Transformations can be done. But they should be done to all partworths of all attributes.

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Other simulations and analyses • Sensitivity of market share to other product attributes. • “Optimizing” product bundle • Competitive price reactions • Price equilibrium calculations • Product line simulations • Competitive product improvements • Entry of new competitive products • Cross tabulation of results against different segments

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Word of caution • Market Share vs. Profits • Run simulation for different concepts. • Estimate costs of tooling/ manufacturing each concept. • Compare profitability of alternative concept.

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Limitation of Conjoint Attribute list is not complete. Aesthetics, smell, taste, etc difficult to capture. Measurement, sampling errors are present. Does not include the effect of an innovative attribute or level. • How much does a consumer really value an attribute? • • • •

– May vary from time to time and situation to situation.

• Cannot be used when the product category is so radically new that customers don’t even know how they may use the product. • Cannot be used in image driven, holistic products (e.g. perfumes, paintings) • Full profile conjoint does not take into effect the interaction effect between attributes. • Gilligan Island Syndrome 57

Primary uses of conjoint • Product line planning • New product evaluation (concept testing) • Competitive analysis • Pricing • Benefit segmentation

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New developments in conjoint • • • • • • • • •

Full profile conjoint Regression based conjoint Trade – off tables Paired comparison Self explicated conjoint Hybrid methods Choice based conjoint Adaptive conjoint HB Conjoint 59

Brand equity • Preference for the attribute “Brand”

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Some suggested products for your projects • Hostel mess food. • Hostels • Students activity clubs • Mobile phones • Mobile services • 2 wheelers • Cars • MP3 players

• • • •

Electric irons Computers i-phone Students canteen

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Case 2: Clark material handling

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Segmentation

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Segmentation • What is the relevant basis for segmentation in product management? • Benefit Segments

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Benefit SegmentsComputers* • The Germans – “We want the best” • The Indians – “We want the best today and tomorrow” • The Taiwanese – “We want it cheap with a name” • The Americans – “We want service too” *Customer-focused product planning: Personal Computers in India Jagrook Dawra, Kanupriya Katyal, Vishal Mishra,

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Cluster Analysis • Segment.exe • SPSS/ SAS • Basis: – Euclidian distance

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How many segments?

• Dendogram – How many cluster? • 27? 4? 2? 1?

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How many clusters?

• B= between segment variation • W= within segment variation • K= no. of segments • N= sample size • tr= trace of the matrix • Tr[B]= variation summed

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• What are the benefit segments that you have got for bicycle pump? • What are the advantages of benefit segmentation? • How is it relevant to product management?

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Product planning in different Shorter inter-purchase cycle Lower prices, “softer” attributes

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Product planning in different product Shorter inter-purchase cycle categories Lower prices, “softer” attributes

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Multidimensional Scaling: Perceptual mapping

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MDS Map (Mental map) Going to church

Outside Oriented Doing voluntary service

Going to a beauty parlor

Famil y

Baking a cake

Sunbathing

Powdering the baby

Person al

Relaxing in a bath Using a room freshener Using fabric softener

Wearing soft clothes Smelling flowers

Windows to air out the room Cooking dinner

Home Oriented

Smoothening on a hand lotion

Moisturizing face with a cream

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Typical MDS questionnaire

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• Brands may also form a part of the attributes. • SPSS or SAS may be used.

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Exercise • Eg. Toothpastes – Germ killing – Fresh breath – Calcium – Strong teeth – White teeth – Colgate – Close up – Pepsodent 76

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How does rotation of axis help in MDS

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PRODUCT DEVELOPMENT

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• Product Design • Product Innovation

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Idea generation

Is the idea worth considering?

Idea screening

Concept development and testing Which of the alternative products would customers be willing to try?

Marketing strategy development

D R O P

Is the idea compatible with the company’s objectives strategies, and resources?

STP, 4 Ps

Business Analysis

Will this product meet our profit goal?

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Product development

Market testing

Send the idea back for product Development?

Commercialization

Modify the product or marketing Program?

Have sales met the expectations?

Are sales meeting the expectations?

D R O P

Is the product technically and commercially sound?

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Generating new ideas • The largest single hurdle to new product development is the paucity of Ideas!!!

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Idea Generation Techniques

Attribute listing •Forced relationships •Morphological analysis •Reverse assumption analysis •New contexts •Mind mapping •

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Attribute listing • List features of a product and improve each and every feature oneby-one. – Improving patient experience.

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0min

2-

1min

6-

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Some solutions

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Forced Relationships • While on the move a person needs to: – Stay connected – Listen to music – Stay organized – Know where (s)he is – Capture interesting instances – Etc…

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Morphological analysis • Identify need • Designing a storage cabinet for Children – Ikea

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Reverse assumption analysis • Consumers have very strong assumptions – High price means high quality – High power means low safety – High power also means low fuel efficiency – Something user friendly is for amateurs only. – Anything that tastes good must be oily/ cheesy (not healthy)

• Subway 94

New contexts • Washing machines

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• Toilet papers – Mexico

Mind Mapping

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Creativity imperatives • Small is the new big – God is in the details.

• Empathy – Person out vis-à-vis Organization in

• Finding yourself in the margins – Seeing things afresh – Having a beginners mind.

• Pick battles big enough to matter, small enough to win.

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Categories of New Products • • • • • •

Cost reductions Repositionings Improvements to products Additions to product lines New product lines New-to-the-world

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A framework and terminology for thinking about and discussing projects. •

Scope Team size Budget Duration, etc

BREAKTHROUGHS Completely new products Building products and process capabilities for

PLATFORMS Integrating new and existing components and processes into a Systems solution. DERIVATIVE Incremental change to existing platform or process

MAINTAINENCE Minor modifications: Product

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Less

Process change

More

More

Product change

BREAKTHROUGH Completely new Product and Processes required Creativity

Less

Ri sk

PLATFORM Systems solution to a product challenge. Crossfunctional DERIVATIVE Develop- Incremental change ment to existing product Re required One or two tu functional rn MAINTAI s NENCE Sustaining Routine processes 100

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Readings for the next class Case: Kirkham instruments 01 Conjoint note 02 Perceptual maps 03 christensen 03 enlightened experimentation 03 new product commercialization mistakes • 03 new product development imperitive • • • • • •

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Forecasting Penetration “The art of prophecy is very difficult – especially with respect to the future” - Mark Twain

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Forecasting for existing products – Trend analysis – Moving averages – Exponential smoothing techniques – Time series analysis – Advanced econometric models • ARMA, ARIMA, Box-Jenkins, etc.

• All the above techniques need past data to predict!!!

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How do you forecast for a newto-the-world product? • “The world has a potential market of five computers” – Thomas Watson, Chairman IBM

• There is no past data available!!

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Why do we need to predict penetration of new-to-the• Total market potential – Capacity of the plant

• Rate of adoption – Investment decisions

• Arvind mills • Kellogs, India

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Forecasting new-to-theworld products

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How do you forecast for a newto-the-world product? • Diffusion Models • Bass Diffusion Model – Predict penetration based on the sales of a similar product.

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m = market potential = maximum number of consumers who will eventually adopt •p = parameter denoting innovative tendency to adopt. •q = parameter denoting imitative tendency to adopt •Y t-1 = cumulative sales at t-1 •

Ft-1 = fraction who have adopted at the end of

•

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Estimation

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• Calculate values of m, p, q for different products meant for different customer segments. 115

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Example: Satellite radio • Calculate market size (m) – Through an elaborate market research involving 80 questions, 6000 respondents. – 30 million

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Calculating p and q by analogy Decide criteria to similarity of to the new product Step Establish Step2: 1: Identify obtain scores some p establish and onpbasis products/ q for of thesimilarity products markets/ from segments the new previous product similar to after the Calculate final weighted and to existing research products and give weights. New-to-the-world thorough studies product q

Calculate a weighted score using the method given below

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m = market potential = maximum number of consumers who will eventually adopt •p = parameter denoting innovative tendency to adopt. •q = parameter denoting imitative tendency to adopt •Y t-1 = cumulative sales at t-1 •

Ft-1 = fraction who have adopted at the end of

•

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To be able to do the exercise, you need to read: •

•

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“Forecasting the adoption of a new product” example on page 6 to 8 The exercise on e-books can be done on the same lines as the above example.

Market potential (m)

= 111.3 M households X 67.8%internet penetration X 28% consumers who read recreational material on e-book device •

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=21M 121

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Nestle Contadina BASES Model

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Johnson wax

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Test marketing using ASSESSOR • Objectives: – To test the potential of the new product (acceptability, market share) – To test the effectiveness of proposed marketing strategy (advertising, positioning, trial rate, repeat purchase rate, etc.)

• Key decision to take: – Should the product be launched? – Should the attribute(s) of the product be changed? – Does the marketing program require any change?

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ASSESSOR: 5 Tests 1. 2. • 6. 7. 8.

Initial Questionnaire – evoked set Preference questionnaire – Conjoint Ad was shown Ad recall Laboratory purchasing Brand ratings

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1. Results: Market structure – What were the factors that emerged? – How were these factors arrived at? – How was enhance positioned? – How was agree positioned? – Was cannibalization likely?

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2. Results: Advertising Recall • What is recall? • How is it measured? • What attributes was Enhance associated with?

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3. Results: Trial •

What was Enhance’s trial rate?

•

What was Agree’s trial rate?

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Was it sufficient?

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What was Agree’s trial rate at ASSESSOR stage?

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How do you increase trial? – Advertising – Increasing brand association with an successful existing product. 133

4. Results: Repeat purchase estimation • Did Enhance live up to expectation? • How did it compare with Agree? • How do you increase repeat purchase?

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5. Results: Product acceptance • What was wrong with Enhance ads

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6. Results: Market share prediction • Trial and Repeat model • Preference Model • Why were two models used for market share estimation? – Convergent Validity

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Trial and Repeat Model

M=Market share T=ultimate cumulative trial rate (penetration) S= Ultimate repeat purchase rate among buyers who ever made a trial purchase of the brand (retention)

TRIAL AND REPEAT MODEL

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Calculating T FKD

CU

T=FKD+CU-(FKD x CU) F= trial rate in ACCESSOR testultimate trial rate that would happen if all consumers were aware of the Ad. K=long run probability that a consumer will become aware of the Enhance D=Proportion of stores that will carry Enhance C=proportion of the target market that receives the samples. U=proportion of those receiving 138

Calculating S

1st

100

81

100-81= 19

0

0

2nd

81

81% 65.6 of 81=

81-65.6= 15.4

19

56.2

13.2

20% of 3.8 19 =

15.4+15.2= 30.6 6.1

24.5

50.5

11.8

37.7

30.2

3rd 4th Etc…

65.6+3.8 69.4 =

62.3

7.5

0 19-3.8= 15.2

100 people tried a product. 81% repeat rate 20% switchback rate 139

Calculating S

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Calculating S

S=retention rate SB= switchback rate R=repeat purchase rate

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Calculating market share using Preference model • Conjoint to calculate preference • Probability of choosing a brand given the preference for the brand and preference for competing brands • Market share= proportion of consumers for whom brand j is in the evoked set * average probability of purchase of brand j 143

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7. Results: Cannibalization • Using Conjoint. – No significant cannibalization effect.

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Key question!!! • Should Enhance be launched in the present for in the present way? • Given the fact: – Enhance MDS’ results were not exciting. – Brand association results. – Market share predictions were also not very exciting.

• What should be done? – Change: • • • •

Attributes Ads Positioning strategy Something else (Brand, etc)

– Drop the product 146

• Was ASSESSOR helpful in taking an appropriate: – Product decision? – Strategic decision?

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Integrating competence, customer needs and competition with Product

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Quality Function Deployment • Method to transform user demands into design quality, • To deploy the functions forming quality, • To deploy methods for achieving the design quality into subsystems and component parts, and ultimately to specific elements of the manufacturing process 149

Roof: This is the Correlation matrix. It shows how the HOWs Customer conflict with one requirements: "voice another This section of customer." It focuses on represents thedesign improvement. "what's" of the It focuses on negative system. relationships in the This section lists how design Targets: It the company summarizes thewill meet the customer conclusions of the requirements planning matrix. •Top-level solution•Technical priorities independent metrics (relative importance of • Product/service each technical requirements requirement) •Product/service •Competitive features or(relative benchmarks capabilities position of the existing product) •Targets (engineering target values to be met by the new product design)

Customer Competitive Assessment. It Provides customers’ views on existing products. This matrix uses questionnaires to elicit information Relationship Matrix: It occupies the middle portion of the HOQ diagram which is the largest portion. It uses the prioritization matrix. It shows how well customer requirements are addressed by product features

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Car Door

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All features are not equally important

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Customers evaluate competition

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Delivering/ Matching Features

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How engineering decisions/ Features impact

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Measurement is important

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Features could be correlated

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Establish costs and Targets

Competition

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Levels of competition • What is our market? • What is the market of Coke? – Cola? – Soft-drinks? – Thirst-quenching drinks?

• What is the market of Harley Davidson? – Bikes? – Swimming pools?

• What was the market of: – – – –

Floppy diskettes? CD? DVDs? Flash drives?

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1st Level of competition • Product form competition – Companies offering a similar product or service to the target market, utilizing a similar technology, and exhibiting similar degrees of vertical integration. – Same features/ values, appealing to one segment of the market. – Diet Coke, and Diet Pepsi

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2nd Level of competition • Product category competition – All the companies in the same product or service category – Similar features/ values, some differentiated features appealing to different segments of the market. – Diet Coke, Diet Pepsi; regular Coke, Pepsi, Thums-up.

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3rd Level of competition • Generic Competition – All the products satisfying a particular need – Diet Coke, Diet Pepsi; regular Coke, Pepsi, Thums-up; Nimbu pani, juices, concentrates, other beverages.

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4th Level of competition • Budget Competition – Competing for the customer’s purse. – Diet Coke, Diet Pepsi; regular Coke, Pepsi, Thums-up; Nimbu pani, juices, concentrates, other beverages; Icecream, Fast food, etc.

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Newcomers to a market 1. They already sell to your customers, but expand their participation to include new customer functions – Intel starts making hard disks – Toothpaste manufacturer enters mouthwash segment.

2. They already satisfy customer functions that you satisfy, but expand into your market.

– Intel makes chips for CNC machines

3. They already operate in upstream/ downstream businesses. – Intel starts manufacturing PCs or HP starts manufacturing its own chip

4. Enter an unrelated business

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Enacting barriers for entry • ‘Unique’ attribute or feature. • Excellent quality perceptions for your product. • Patents and trademarks. • Innovation driven product management.

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Differentiate the product on emotional level: Branding

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• Basis of differentiation: – Rational – Emotional

Building Preference Em otio Ra

tion

nal

al

Bundle of Attributes

Preference due to Attributes

Brand

Preference due to Brand

Washing machines • Voltas • LG • Samsung

• “Two cars come off the same assembly line, in the same American pant. A Japanese nameplate goes on one [Mitsubishi Eclipse], an American nameplate goes on the other [Plymouth Laser or Eagle Talon], and people prefer the Japanese version.”

• Voltas Ltd. manufactures not just its own refrigerators in its factory, but has also signed OEM contracts with LG and Samsung to make refrigerators in their Hyderabad plant. Therefore the same plant is manufacturing 3 different brands of refrigerators, but consumers have different preferences for the 3 brands Source: Business Standard, “Voltas Inks two – year OEM fridge deal with Samsung”, October 14, 2003

Is there a difference between the tastes of: • • • •

Coke Pepsi Thums – Up? Results of the blind taste test.

How does branding help? • • • • •

Awareness Associations Loyalty Perceived quality Brand Personality – self concept congruence

When to brand? • • • • • • • • • • •

To create awareness Impulse/ low involvement products When scope for rational differentiation is limited. Entry barriers for competitors. Inelastic consumer response to price increases. Larger margins Greater trade cooperation and support Possible licensing opportunities Additional brand extension opportunities Greater customer loyalty Less vulnerability to competitor actions

Portfolio analysis

BCG Matrix

Market Growth Rate

Question Marks

?

STARS

Dogs

Cash Cow

0 0.1x

1x Relative Market Share

10x

GE Matrix

High Attractiveness Strong Competitive Position • Provide maximum investment • Diversify • Consolidate your position to focus your resources • Accept moderate nearterm profits to build share

High Attractiveness Average Competitive Position • Build selectively on strength • Define the implications of challenging for market leadership • Fill weaknesses to avoid vulnerability

Medium Attractiveness Strong Competitive Position • Invest heavily in selected segments, • Establish a ceiling for the market share you wish to achieve • Seek attractive new segments to apply strengths

High Attractiveness Weak Competitive Position • Ride with the market growth • Seek niches or specialization • Seek an opportunity to increase strength through acquisition

Medium Attractiveness Average Competitive Position • Segment the market to find a more attractive position • Make contingency plans to protect your vulnerable position

Low Attractiveness Strong Competitive Position • Defend strengths • Shift resources to attractive segments • Examine ways to revitalize the industry • Time your exit by monitoring for harvest or divestment timing

Medium Attractiveness Weak Competitive Position • Act to preserve or boost cash flow as you exit the business • Seek an opportunistic sale • Seek a way to increase your strengths

Low Attractiveness Average Competitive Position • Make only essential commitments • Prepare to divest • Shift resources to a more attractive segment

Low Attractiveness Weak Competitive Position • Harvest or divest

Size of the market

Market Share

Brand Line

HLL

Breadth D ep th

Product Line

Brand Family

Brand Portfolio

Breadth of Product Mix • 3 sets of factors that determine the inherent attractiveness of a product category: – Aggregate market factors • Large, fast-growing, in the growth stage of PLC, relatively high and steady profit margins.

– Category factors • Low entry barriers, low bargaining power of buyers, low levels of competition, few close substitutes

– Environmental factors • Technological, political, legal, social factors

Depth of product mix • Different market segments based on considerations: – Different price segments – Different geographical regions – Different channels of distributions – To attract customers seeking variety – To yield economies of scale – To increase internal competition

Some other roles of new brands in a product portfolio • To enter a particular market not being covered currently by other brands of the firm • To serve as a flanker and protect the flagship brand • To serve as a cash cow and be milked for profits • To serve as a high end prestige product to add prestige and credibility to the entire brand portfolio

PLC and Product management

Product Life Cycle

New variants, divestment. “prefer my brand”

“try my product”

Price and differentiated features become more important

• Tomorrow's case: INTEL • Deadline for finishing the project: 22nd aug

200