CHAPTER 5

PRODUCT STRATEGIES
PRODUCT, PRICE,
PLACE, PROMOTION
LESSON 1:
NEW PRODUCT
STRATEGY
 CREATING THE BUSINESS MODEL

refers to the
mode by which the product
concept seeks to make
money so that it can have a
sustainable operation.
 CREATING THE BUSINESS MODEL

Here are some alternative forms of revenue

generation that may be considered:
ADVERTISING
SPONSORSHIP
DONATIONS
RENT OR LEASE
SUBSCRIPTION
 THE BUSINESS PLAN

The serves as the

road map for bringing the product
idea to life and it specifies the
details that would help to make
the selected business “model
work”.
 THE BUSINESS PLAN
A business plan would best contain the following at the very
least:
STATEMENT OF OPPORTUNITY. This refers to the identified market
opportunity that the proposed business seeks to address.
ENVIRONMENTAL ANALYSIS. Key issues and trends in the
environment.
MARKET ESTIMATES AND MARKET SEGMENTS. Estimated size of the
total potential market.
COMPETITIVE ANALYSIS. A roundup of the existing competition.
 THE BUSINESS PLAN
BUSINESS STRATEGY. Details of the proposed business.
RISK ANALYSIS. List of things that could go wrong.
FINANCIAL FORECASTS. Estimates of financing required for
initial capitalization
 COMPETITIVE STRATEGIES

There are generic competitive strategies that

you can consider when developing your
business idea. These are (1) least cost, (2)
differentiation, and (3) niche strategies.
(Wright 1986)
 COMPETITIVE STRATEGIES
Least cost. This strategy involves producing goods or
services at the least possible cost.
Differentiation. This strategy involves a lot of brand-building.
Niche. A marketing approach for a good or service with
features that appeal to a particular minority market
subgroup.
LESSON 2:
SERVICE
STRATEGY
 GOODS VS. SERVICES

Goods refer to tangible products that

consumers can actually observe with their senses.

Services intangible offerings that are abstract in

nature and cannot be observed with our senses. In fact,
a key characteristic of services is that the act of
delivery itself is the product.
 GOODS VS. SERVICES
Here are some distinctions of services from goods:
• While customers get to own goods, they do not gain ownership of a service.
• The customer is typically and active participant in the production of the service.
• There is a greater variability in the inputs and the outputs of a service.
• It is typically difficult for customers to evaluate the quality of the service itself.
• Time is significant factor for assessing service quality.
• Consumers are either procuring the service.
• They are getting the service for pampering and indulgence.
 TYPES OF SERVICE PROCESSES
DIRECTED AT DIRECTED AT
PEOPLE POSSESSIONS

TANGBILE PEOPLE POSSESSION

ACTS PROCESSING PROCESSING

INTANGIBLE MENTAL STIMULUS INFORMATION

ACTS PROCESSING PROCESSING
 BUILDING UP THE SERVICE EXPERIENCE

Good customer engagement matters.

The following are service elements that should be taken into
consideration in order to build and excellent overall
customer experience:
Personnel Selection and Training
User Interface
Point of Contact
Tangible Mementos
LESSON 3:
BRANDING
 WHAT IS IN A BRAND?

A is a mark of distinction that can

be sensed usually in the form of names or
terms, signs or symbols, design elements,
or even a combination of these, and is
utilized for the purpose if identifying and
distinguishing the goods or services of one
provider from another.
 FUNCTIONS OF A BRAND

It identifies the product or service.

It communicates messages
It functions as a legal property
 ORIGINS OF BRANDING

During the Medieval Europe it was a common

practice to claim ownership of cattle and
other chattel by branding or marking them
with a hot iron.
Brand means burn in German.
 ELEMENTS OF THE BRAND

TRADE NAME SOUNDS

GENERIC CATEGORY SCENTS
LOGO TASTES
TAGLINE
VISUAL CUES
SHAPES
COLORS
 ELEMENTS OF LOGO DESIGN

KEEP IT SIMPLE FOCUS ON ONE THING

MAKE IT RELEVANT
INCORPORATED
TRADITION
AIM FOR DISTINCTION
COMMIT TO MEMORY
THINK SMALL
 LEVELS OF MEANING

ATTRIBUTES
BENEFITS
VALUES
CULTURE
PERSONALITY
USER
 BRAND EQUITY

refers to the value of the brand.

Brand equity can be calculated using the following ingredients:
• Present value (PV)
• Customer Lifetime Value (CLV)
• Market Size (MS)
• Average Growth Rate (G)
• Lifespan (LS)
 BRAND VALUATION

is non-monetary measures of brand value.

Brand valuation can be helped by knowing the progressive levels of brand
equity:
• Brand awareness
• Brand acceptability
• Brand preference
• Brand loyalty
LESSON 4:
DEVELOPING THE
BRAND
 DEVELOPING A NEW BRAND

are registered via the

Intellectual Property Office (IPO) of the
Department of Trade and Industry.
Before you proceed to the trade name
registration, quite a few things must first
be done (Joachimsthaler 2000).
 DEVELOPING A NEW BRAND
STEP 1. DEVELOP BRAND
STRATEGY
• Product information
• Market information
• Trademark criteria
• Brand name objectives
STEP 2. DEVELOP THE
CREATIVE THEME
The element in this step are:
• Brand Personality
• Inferences and connotations
• Color palette and style sheets
• Font
• Visual cues
• Acceptable uses and
materials
• Retail Placement.
 DEVELOPING A NEW BRAND
STEP 3. CREATE THE NAME • Descriptive
• Abbreviations or
Tips in creating the name:
portmanteaus
• Keep it short
• Symbolic or image-driven
• Make it easy to pronounce
• Synthetic
and remember
• It should translate well in STEP 4. TEST THE NAME
target markets. STEP 5. SCREEN FOR
Brand names can be: TRADEMARK AVAILABLITY
• Eponyms
LESSON 5:
BUILDING
PRODUCT
PORTFOLIOS
 GOING BEYOND ONE PRODUCT

Economies of Scope. Reduction in long-run average

and marginal costs, due to the production of similar
or related goods or services where the output or
provision of an item 'A' reduces the cost of item 'B.‘
Economies of Scale. The reduction in long-run
average and marginal costs arising from an
increase in size of an operating unit.
 THE PRODUCT MIX

The product mix is the set of all products that a

business offers for sale and is categorized along the
following dimensions:
• LENGTH- the length of the product line.
• WIDTH- the number of different product lines carried.
• DEPTH- the number of variants per product in a line.
 LINE IMAGING AND LINE FEATURING

Having a flagship product among the

products in a line is called line imaging.

A different approach would be to

aggressively promote a product that offers
great value. This is known as line featuring.