Source New Product Management 1989

Author Eberhard E. Scheuing

Name Nicole Lorenz
Date June 2002

Product- Related Marketing Mix

Decisions
Contents

1. Introduction

2. Product Policy

3. Packaging Policy
3.1. Three general types of packaging
3.2. Function of Packaging
3.3. Designing the package

4. Branding Policy
4.1. Introduction to Branding
4.2. Options in New Product Branding

5. Conclusion

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 Product- Related Marketing Mix Decisions

1. Introduction
§ Thanks for your coming
§ Today I’m going to talk about Product-related Marketing Mix decision for introducing a new
product
§ I propose to talk about Product -, Packaging – and Branding Policy

§ I’d like to begin by saying some general things about this topic

§ The elements of the Marketing Mix for introducing products are product-related elements
§ Decision about the product itself, its packaging and the branding are closely connected
§ these three things are forming the “tangible product” (fühlbares Produkt)
§ Only the suitable combination of product, packaging and branding – guided by marketing
research – is able to provide the right basis of marketing

§ First let me say something to the product policy

2. Product Policy
§ Main decisions of Product Policy have to be made throughout the process of developing the
product
§ You have to decide on several fact to produce your new product

§ First the Product materials and components have to be chosen

§ They will mainly fix the benefit of the product on the market

§ It is also important to determine (entscheiden) either the company produces all parts of the
product in its own production or buys certain components or the whole product from another
firm
§ You have to decide on outsourcing – that means, if you might at first have your innovation
manufactured by another supplier

§ Another decision is the dimension of the product mix:

§ Radical innovations should be introduced with a little number of possibilities to choose from
§ The general reaction on your product is, what counts – not the reaction of 10 similar products
§ Only by introducing your product into established markets its important to offer a great selection

§ The next key decision is the relationship of your new product towards current product and
product lines of your company
§ You have to decide on whether you want to displace or complement current products
§ Many companies want to compete with themselves
§ It’s described as the so-called effect of “cannibalization” – migration of customers from an
existing to a new product - Its also described as “survival of the fittest”

§ Another important fact you have to look for, is the time of production
§ It is important to develop the new product even before the latest isn’t effective any more
§ It should be an ongoing process to prepare a company for future challenges – especially
because product life cycles are shortening more and more

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§ The next very interesting and demanding fact, i’ll come to is the packaging policy
§ First i’ll say something about the general types of packaging – there are three things:
§ The first one is the so-called primary package

3. Packaging Policy
3.1. Three general types of packaging
§ Primary package
§ This is the real container of the product
§ It usually exists with the product throughout its whole life time
§ Its often inseparable from and identified with the product itself
§ E.g. tube or bottle

The next one is the ...

§ Secondary package
§ Secondary package is the container around the product’s primary package
§ Its often thrown away after the first use of the product
§ Its function is to protect the product and to promote and display
§ A secondary package is e.g. the box around the tube of toothpaste

The last type of package you have to think about is the so-called ...
§ Shipping package
§ Typical made of very hard material, e.g. cardboard (Pappe)
§ Made to protect the product during transportation
§ It can contain just one product (e.g. a very big one) or even several units (many tubes of
toothpaste)

§ Now i’ll come to functions of the package

3.2. Function of Packaging

§ Package is not only a container
§ Well designed can be a strong motivation to purchase the new product
§ Many products are never noticed, unless special offers or eye-catching packages
§ Functions of package are described as three P’s:
§ Protection
§ Seller wants to protect its product at the way to the consumer, because damaged products
can’t be sold
§ But it’s more important to protect the consumer while handling the product
§ Besides protection of the consumer and the product, package should protect the environment
from pollution and litter
§ AUßERDEM Packages that can be used more than one time have a very great incentive
(Anreiz)

§ Promotion
§ Package should identify a product, communicate its contents, colour, size, warnings, price,
volume and flavour and it has to attract the shopper’s eye as the so-called “silent
salesperson on the shelf”
§ Because of this multiple communication functions the designer have to be very creative

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§ Profit
§ The profit-function include many ways, such as holiday or gift packages
§ Often these offers are so attractive, that the profit of the company increases very extremely
§ Multiple unit packages often cut down costs and increase consumption

§ To fulfil these functions you need a very good designing – that’s the next thing: the designing of
the package

3.3. Designing the package

§ A well designed package increases the value of a product and motivates consumers to purchase
it
§ Any change in package design should add new values to the product – it should make it more
recognizable
§ Package design tasks are classified into three categories

§ Package for a new product

§ Therefor the designer has the greatest freedom and flexibility, especially for a dramatically
different new product
§ He has to develop a unique in shape, material and graphics – in order to communicate the
character and benefit of the new product

§ Package for extension of an established product

§ This is a very simple thing
§ It’s a so-called family packaging policy – the packages of related products are resembling
(ähneln) each other
§ Often there is only a individual thing like a certain flavour or a different colour

§ Redesign of an existing package

§ This is possibly the most difficult type of designing tasks
§ The function is to readjust (neu anpassen) the package to changes in buyer’s lifestyle or
competitive conditions
§ Without the utmost care a damage to the company’s profit and market share can be the
result

§ Another very important fact of package design is the colour of the package
§ Consumers have emotional and symbolic reactions to colour - typical they are not aware of
these reactions
§ Often they associate certain things with the colour – it can symbolize elegance, danger or even
quality – that’s the important fact of colourisation

§ The significance of the colour depends on

§ The frequency of appearance (Auftreten)
§ The symbolic meaning
§ The retention power of your customers

§ Red is a very good signalling colour – often used for toxic products
§ Green or blue symbolize freshness and are often used for aftershave

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§ Silver or gold should be used to express a high quality

§ At last let me come to another important thing: branding policy

§ First some introducing facts

4. Branding Policy
4.1. Introduction to branding
§ Brand can be a name, symbol or a design
§ It’s appointed to identify a product or differentiate it from others
§ Best known is the brand name
§ But also a special logo, colour combination or a special package shape are brands

§ A brand can become a trademark, when it is registered for exclusive use by one seller
§ A respected trademark can have an extremely high value, e.g. Coca-Cola
§ The owner of a brand can make doubtful decisions without losing control over the market

§ A brand can create a difference in customers mind

§ Price differentials are often accepted and can be maintained (aufrechterhalten)

§ Similar to packaging and designing you also have more than one possibility for branding
§ Therefore I will come to the options in new product branding

4.2. Options in New Product Branding

§ In branding a new product, product-managers have two basic options: family branding and
individual branding
§ Both of them have advantages and disadvantages

Family Branding
§ Company places the same name on all products
§ Family branding enjoys the advantage of immediate recognition and the so-called “halo-effect”
§ A new product with this family brand name therefore enjoys credibility (glaubwürd.) and visibility
§ The introduction is often easier by using an existing brand name, but problems with this new one
can have bad consequences for the whole product line
§ Therefore family branding postulates a high quality control to reduce damages for all products

Individual Branding
§ Individual brand names for several products help to restrict the mentioned danger
§ But when the product is presented the first time, this name has no meaning for customers
§ The name bears no association with any other product or category
§ Often a great advertising campaign is necessary to arrest attention

5. Conclusion
§ In conclusion I’d like to say, that the introduction of a new product is a great and important, but
also demanding and sometimes dangerous thing
§ You have to make decisions in the product itself, packaging and branding
§ Often you have many possibilities but also the duty to choose only one of them

§ I hope you got some good information and thank you for your attention
§ Do you have any questions?