CONSUMER BEHAVIOR – Brand Management

What is a Product?
A product is anything that can be offered to a market to satisfy a need or want.
Examples:
 Tangible good: Shoe
 Service: Lecture
 Person: Politician (vote)
 Place: Lahore
 Organization: AIOU
 Idea: Stop smoking
Most tangible goods also include intangible components, such as warranties or guarantees.
Levels and Constituents of a Product
What are the 5 product levels?
1. Core benefit - The fundamental want or need consumers satisfy by using the service or
product. Let’s use processing digital images as an example.
2. Generic product - A generic product is the version of the product that just has the features
or qualities required for it to work. In our example, a generic product to process digital
images could be a free photo editing software.
3. Expected product - The expected product is the group of qualities or traits that customers
often anticipate when they buy a product. For example, they expect their photo processing
software will let them crop, adjust colors, and resize images easily.
4. Augmented product - Augmented products include additional features, advantages,
qualities, or associated services that help set the product apart from its rivals. For example,
a powerful image processing software that’s included for free when someone purchases a
particular computer.
5. Potential product - Potential products cover all future augmentations and modifications a
product might experience. A company must continue to enhance its products to satisfy
customers and maintain their loyalty. For example, you could regularly update the image
processing software with new and practical features.
Image Building Features
1. Branding
Branding is the process of giving a product a distinct identity using a name, symbol, logo,
design, or a combination that helps distinguish it from competitors.

➤ Purpose:
 Creates recognition, trust, and loyalty among consumers.
 Communicates value, quality, and personality.

➤ Types:
 Brand Name: Vocalized part (e.g., Nike, Samsung)
 Brand Mark: Symbol or visual (e.g., Apple’s logo)
 Trademark: Legally protected brand element
 Family Brand: Common name across multiple products (e.g., Nestlé)
 Generic Products: No branding (e.g., plain salt in unmarked packaging)

➤ Examples:
 Apple: Symbol of innovation and quality.
 Nike: “Just Do It” slogan and swoosh logo represent athletic excellence.
 Toyota Corolla: Reliable and fuel-efficient car known by brand reputation.

2. Packaging

➤ Definition:
Packaging involves the designing and producing of the product’s container or wrapper.

➤ Functions:
 Protection: Prevents damage during transport and storage.
 Promotion: Attracts attention and conveys brand message.
 Convenience: Easy to use, carry, or store.
 Information: Displays usage instructions and legal info.

➤ Types:
  Family Packaging: Similar packaging across products (e.g., Colgate toothpastes)
 Eco-friendly Packaging: Made from recyclable materials (e.g., The Body Shop)

➤ Examples:
 Coca-Cola: Signature red can with dynamic logo is instantly recognizable.
 Pringles: Unique cylinder packaging prevents chip breakage and stands out.
 Apple: Minimalist, elegant box enhances premium product perception.

3. Labeling

➤ Definition:
Labeling refers to information displayed on the product packaging, including brand name,
product details, usage instructions, warnings, and nutritional facts.

➤ Functions:
 Identification: Identifies brand and product.
 Description: Provides essential info (ingredients, weight, expiry date).
 Grading: Indicates quality level (Grade A, Organic, etc.)
 Legal Compliance: Meets labeling regulations.

➤ Types of Labels:
 Brand Label: Only brand name (e.g., Honda badge on a car)
 Descriptive Label: Includes detailed product info (e.g., Nestlé Milk Pack)
 Grade Label: Shows quality or ranking (e.g., AAA batteries)

➤ Examples:
 Pepsi Bottle Label: Brand name, volume (500ml), expiry date, barcode.
 Oreo Pack: Descriptive label showing ingredients and nutrition facts.
 Egg Carton: Grade A or Grade B label to show freshness and quality.

Why These Features Matter

Feature Builds... Helps...

Branding Identity & Loyalty Customers recognize and prefer product

Packaging Visual Appeal & Safety Product protection and shelf impact

Labeling Transparency & Trust Informed and confident buying decision

Product Positioning
What is product positioning?
Product positioning is a form of marketing that presents the benefits of a product to a defined
target audience. Through market research and product analysis, marketers use the product
positioning process to determine how to talk about a product and who they should talk to.
A product positioning strategy will also highlight which product benefits are most relevant to
potential customers. Knowing this information helps streamline marketing efforts and
messaging. It also helps differentiate your product or service in the marketplace.
Product positioning is an effective way to define a product and customer base, but you can
produce multiple definitions and audiences. For example, a product might be positioned as the
most convenient option for one target audience while being promoted as the highest-quality
choice to another set of consumers.

Product positioning statement

A product positioning statement concisely describes a product’s unique value to a specific
audience. It includes a target market, key product benefits, and competitive advantages.
A well-written positioning statement acts as an internal guide for marketing and sales, keeping
communications consistent.
Product vs. brand vs. market positioning
Positioning is a key concept across your business, not just for individual products. Here’s how
brand and market position differ from product positioning:

Brand positioning
Instead of defining a space for a product, brand positioning looks at how elements of your brand
affect consumer interactions. It’s about defining what your brand stands for, its values, and how
it’s different from competitors.
Another way of understanding brand position is to consider what consumers associate with your
business. For instance, when you think of Tesla, you might associate it with innovation and
sustainability. Or Nike with accessible performance. For instance:
Apple positions itself as the world leader in user experience.
 McDonald’s is synonymous with affordable, fast, and satisfying meals.
 Red Bull’s brand says adventure, excitement, and energy.
 Rolex is positioned to communicate prestige and exclusivity.
Brand positioning focuses on a business’s strengths and ignores its flaws. The high price point of
Apple devices and the questionable nutritional value of McDonald’s recipes aren’t addressed by
the brand positioning statement.
Market positioning
Market positioning, meanwhile, is a broader look at how a vertical or an entire business interacts
with a market sector. Beyond product and brand considerations, market positioning analysis will
help decide product lines, pricing, acquisitions, partnerships, and the platforms and sales
channels through which your business reaches potential customers.
Product positioning examples
You can see product positioning at work in advertising, marketing content, sponsorships,
taglines, packaging, pricing, and other business-to-consumer channels.
Experimenting with those channels can help you validate your position. Let’s say market
research reveals that a product—a hypoallergenic baby lotion—is popular among new mothers.
To better position this product for its consumers, we need to know what new mothers appreciate
about the lotion.
Classification of Consumer Products
1. Convenience products
2. Shopping products
3. Specialty products
4. Unsought products
Convenience Products
Convenience products are bought the most frequently by consumers. They are bought immediately
and without great comparison between other options. Convenience products are typically low-
priced, not-differentiated among other products, and placed in locations where consumers can
easily purchase them. The products are widely distributed, require mass promotion, and are placed
in convenient locations.
Sugar, laundry detergent, pencils, pens, and paper are all examples of convenience products.
Characteristics of Convenience Products
 Purchased frequently
 At a low price point
 Easily available
 Not commonly compared with other products
Shopping Products
Shopping products are bought less frequently by consumers. Consumers usually compare
attributes of shopping products, such as quality, price, and style, between other products.
Therefore, shopping products are more carefully compared, and consumers spend considerably
more time, as opposed to convenience products, comparing alternatives. Shopping products
require personal selling and advertising and are located in fewer outlets (compared to convenience
products) and selectively distributed.
Airline tickets, furniture, electronics, clothing, and phones are all examples of shopping products.
Characteristics of Shopping Products
 Purchased less frequently
 At a medium price point
 Commonly compared among other products
Specialty Products
Specialty products are products with unique characteristics or brand identification. Consumers of
such products are willing to exert special effort to purchase specialty products. Specialty products
are typically high priced, and buyers do not use much time to compare them against other products.
Rather, buyers typically spend more effort in buying specialty products compared to other types
of products.
Take, for example, a Ferrari (a specialty product). Purchasers of a Ferrari would need to spend
considerable effort sourcing the car. Specialty products require targeted promotions with exclusive
distribution; they are found in select places.
Sports cars, designer clothing, exotic perfumes, luxury watches, and famous paintings are all
examples of specialty products.
Characteristics of Shopping Products
 With unique characteristics or brand perception
 Purchased less frequently
 At a high price point
 Seldom compared between other products
 Only available at select/special places
Unsought Products
Unsought products are products that consumers do not normally buy or would not consider buying
under normal circumstances. Consumers of unsought products typically do not think about these
products until they need them. The price of unsought products varies. As unsought products are
not conventionally thought of by consumers, they require aggressive advertising and personal
selling.
Diamond rings, pre-planned funeral services, and life insurance are all examples of unsought
products.
Classifying Business Products
Products bought by businesses or institutions for use in making other products are called business
products. These products can be commercial, industrial, or services products. A commercial
product would be an 18-wheeler truck used by a major transportation company as part of the
business. An industrial product might be a major robotics installation in a state-of-the-art
manufacturing facility. A services product (for business) might be telecommunications consulting
for a large corporation setting up offices in Singapore. Business products are classified as either
capital products or expense items. Capital products are usually large, expensive items with a long
life span. Examples are buildings, large machines, and airplanes. Expense items are typically
smaller, less expensive items that usually have a life span of less than a year. Examples are printer
cartridges and paper. Industrial products are sometimes further classified in the following
categories:
1. Installations: These are large, expensive capital items that determine the nature, scope, and
efficiency of a company. Capital products such as General Motors' truck assembly plant in
Fort Wayne, Indiana, represent a big commitment against future earnings and profitability.
Buying an installation requires longer negotiations, more planning, and the judgments of
more people than buying any other type of product.
2. Accessories: Accessories do not have the same long-run impact on the firm as installations,
and they are less expensive and more standardized. But they are still capital
products. Minolta photocopy machines, HP laptops, and smaller machines such as Black
& Decker table drills and saws are typical accessories. Marketers of accessories often rely
on well-known brand names and extensive advertising as well as personal selling.
3. Component parts and materials: These are expense items that are built into the end
product. Some component parts are custom-made, such as a drive shaft for an automobile,
a case for a computer, or a special pigment for painting U.S. Navy harbor buoys; others are
standardized for sale to many industrial users. Intel's Pentium chip for PCs and cement for
the construction trade are examples of standardized component parts and materials.
4. Raw materials: Raw materials are expense items that have undergone little or no
processing and are used to create a final product. Examples include lumber, copper, and
zinc.
5. Supplies: Supplies do not become part of the final product. They are bought routinely and
in fairly large quantities. Supply items run the gamut from pencils and paper to paint and
machine oil. They have little impact on the firm's long-run profits. Bic pens, Champion
copier paper, and Pennzoil machine oil are typical supply items.
6. Services. These are expense items used to plan or support company operations - for
example, janitorial cleaning and management consulting services.
New Product Development

Product development frameworks

Although product development is creative, it requires a systematic approach to guide the processes
required to develop, test and get new products to market. Organizations such as the Product
Development and Management Association as well as the Product Development Institute help
businesses select the best development framework for a new product or service. This framework
helps structure the actual development of the product.
Development frameworks, such as the fuzzy front end (FFE) approach, define the steps that should
be followed early in the development process, but leave it up to the product development team to
decide in which order the steps make the most sense for the specific product that's being developed.
The five elements of FFE product development are as follows:
Identification of design criteria. Brainstorming exercises are used to identify possible new
products.
Idea analysis. A closer evaluation of the product concept includes market research and concept
studies to determine if the idea is feasible and within a business context that's relevant to the
company or to the consumer.
Concept genesis. This involves turning an identified market opportunity into a tangible concept.
Prototyping. A rapid prototype for a product concept is created.
Product development. This is the actual creation of the product.
Other frameworks, such as design thinking, have iterative steps that are designed to be followed
in a particular order to promote creativity and collaboration. The five steps of design thinking are
as follows:
Empathize. Learn more about a problem from multiple perspectives.
Define. Identify the scope and true nature of the problem.
Ideate. Brainstorm solutions to the problem.
Prototype. Weed out unworkable or impractical solutions.
Test. Solicit feedback.
How to create a product development plan
How product development is done varies depending on the organization creating it. However, a
general plan should include the following steps:
Identify a product need and business case. Using practices such as test marketing and surveys,
organizations can gauge interest in a product. This ensures the product has a strong reason to be
created given the business model it's based on.
Create a product vision. This covers determining the purpose of the product, what it does, who
it's for and what the product design is. Having these details in place also determines the scope of
the project and helps project managers craft the guiding principles for the work.
Draft a roadmap. Once the project has been envisioned conceptually, an actual roadmap or
detailed plan of action can be created. The roadmap aids in identifying what goals should be met
when. Implementation teams create schedules, break down significant portions of the project into
sprints and generate iterations of the product.
Implement the roadmap. With a roadmap in hand, iterations of the product can be made,
reviewed and improved upon. This identifies weak areas of the product as well as helps
development teams fix and improve it.
Continue with development and assessments. Development teams work on enhancements and
changes to the product. In this step, customer feedback is gathered to improve the product based
on customer input.
Stakeholder input should also be gathered and included in these steps to ensure their needs and
requirements are being met.

New product development stages

The new product development process consists of the following stages:
Idea generation
The continuous and systematic quest for new opportunities includes updating or changing an
existing product. The goal is to generate ideas for new products or services -- or improvements to
products or services -- that address a gap in the market.
Idea screening
This step weeds out flawed or less desirable new product ideas through objective consideration,
early testing and feedback from consumers and other stakeholders.
Concept development and testing
The product concept and functionality are tested on a customer base. Further development of the
concept is done based on the feedback. For example, at this stage in car manufacturing, developers
create concept vehicles out of clay that are shown at auto shows to elicit consumer feedback.
Market strategy and business analysis
The optimal way to market and sell a product or service is determined. It might vary depending on
if it's a new market or an existing one for the company involved. Market strategy is comprised
of the four Ps of marketing: product, price, promotion and place.
Product. A service or good is designed to satisfy the demand of a target audience.
Price. Pricing decisions affect everything, including profit margins, supply and demand, and
market strategy.
Promotion. This step involves presenting the product or service to the target audience with the
aim of increasing demand and illustrating the product's value proposition. It includes
advertisements, public relations and marketing campaigns.
Place. Not all transactions are online. However, in the digital economy, customers are often
engaged and converted on the internet. Products can be provided in a traditional brick-and-mortar
business setting, online only or with an omnichannel approach. This is especially true if the
targeted potential customers are to become actual customers.
Feasibility study
Information critical to a product's success is gathered. This entails organizing groups to beta test a
version or prototype of the product and then evaluate their experience in a test panel. This feedback
communicates target users' level of interest in the product. It also determines if the product in
development has the potential to be attainable, viable and profitable.

 Questions to be answered during feasibility analysis include the following:

 Do you have the labor and materials required?
 What's the price of production, delivery and promotion?
 Do you have access to the right distribution channels?
Technical design and roadmap
This stage integrates the results of the feasibility analyses and feedback into the product. It turns
prototypes and concepts into workable market offerings, ironing out technical difficulties and
prepping business groups for the product launch. This includes research and development, finance,
marketing, production and operations. This step should also consist of creating a product roadmap
that teams will follow to develop the new product.
Test marketing
Market testing validates the entire concept under development, from marketing angles to
packaging, advertising and distribution. Test marketing typically involves offering the product to
a random sample of the target market. By testing the entire package before launch, an organization
can review the reception of its product before a full go-to-market strategy is made.
Market entry and commercialization
This is the stage in which the product is introduced to the target market. It's made available to
everyone, and the product lifecycle begins. The life of the product is shaped by the reception of
the target market, the competition and similar products it's up against, and subsequent
enhancements to the product.
Product development is an ever evolving and fluid process. In some organizations, there's a
dedicated startup team that researches and tests new products. Smaller organizations might
outsource the NPD process to a separate design business. In larger organizations, the product
manager is often the person in charge of product development. Regardless of which framework is
used and who oversees new product development, this is just one aspect of the entire product
lifecycle management.
Product Life Cycle
Stages in the Product Life Cycle
The four stages in the product life cycle are:
1. Introduction
2. Growth
3. Maturity
4. Decline
1. Introduction Stage
When a product first launches, sales will typically be low and grow slowly. In this stage, company
profit is small (if any) as the product is new and untested. The introduction stage requires
significant marketing efforts, as customers may be unwilling or unlikely to test the product. There
are no benefits from economies of scale, as production capacity is not maximized.
The underlying goal in the introduction stage is to gain widespread product recognition and
stimulate trials of the product by consumers. Marketing efforts should be focused on the customer
base of innovators – those most likely to buy a new product. There are two price-setting strategies
in the introduction stage:
 Price skimming: Charging an initially high price and gradually reducing (“skimming”) the
price as the market grows.
 Price penetration: Establishing a low price to quickly enter the marketplace and capture
market share, before increasing prices relative to market growth.
2. Growth Stage
If the product continues to thrive and meet market needs, the product will enter the growth stage.
In the growth stage, sales revenue usually grows exponentially from the take-off point. Economies
of scale are realized as sales revenues increase faster than costs and production reaches capacity.
Competition in the growth stage is often fierce, as competitors introduce similar products. In the
growth stage, the market grows, competition intensifies, sales rise, and the number of customers
increases. Price undercutting in the growth stage tends to be rare, as companies in this stage can
increase their sales by attracting new customers to their product offerings.
3. Maturity Stage
Eventually, the market grows to capacity, and sales growth of the product declines. In this stage,
price undercutting and increased promotional efforts are common as companies try to capture
customers from competitors. Due to fierce competition, weaker competitors will eventually exit
the marketplace – the shake-out. The strongest players in the market remain to saturate and
dominate the stable market.
The biggest challenge in the maturity stage is trying to maintain profitability and prevent sales
from declining. Retaining customer brand loyalty is key in the maturity stage. In addition, to re-
innovate itself, companies typically employ strategies such as market development, product
development, or marketing innovation to ensure that the product remains successful and stays in
the maturity stage.
4. Decline Stage
In the decline stage, sales of the product start to fall and profitability decreases. This is primarily
due to the market entry of other innovative or substitute products that satisfy customer needs better
than the current product. There are several strategies that can be employed in the decline stage, for
example:
 Reduce marketing efforts and attempt to maximize the life of the product for as long as
possible (called milking or harvesting).
 Slowly reducing distribution channels and pulling the product from underperforming
geographic areas. Such a strategy allows the company to pull the product out and attempt
to introduce a replacement product.
 Selling the product to a niche operator or subcontractor. This allows the company to dispose
of a low-profit product while retaining loyal customers.