Product Management Lesson 2 - Product Line Decisions and Branding
This series explains some of the marketing jargon used frequently in the field of Product Management.
Product Mix – If a company is having variety of products, then the complete range of products within than company is called Product Mix.
Product Line – If a particular company is offering a series of related products for sale (each individually), then it’s called Product Line. Maruti Suzuki selling a series of cars can be considered as an example for this product line. Or Microsoft selling a series of products (each individually) can be considered as product lines. For eg:- Their Operating system, Mobile Phone, Gaming Section, Office suites etc. are separate product lines. All the products which are part of a product line generally serve a similar purpose. If a company is selling several products combined into one, then it’s called Product Bundling. An example for a Product Bundling could be a combo meal offered at KFC or the office suite from Microsoft.
Product Mix of a company is described using FOUR terms – Length, Depth, Width and Consistency.
Length – This reflects the total number of products getting sold in all the product lines.
Depth – Depth refers to the total number of variations to a product. If Maruti is selling 3 car types (Swift, Alto & Ertiga), each having a Petrol and Diesel variant and both Petrol and Diesel have got 3 categories (Lxi, Vxi, Zxi for Petrol and Ldi, Vdi and Zdi for Diesel) – then the length of the product is 3*2*3=18.
Width – Total number of different product lines sold by a company. Suppose, if a company is manufacturing 3 different types of toothpastes and 4 types of toothbrush – then the product width is considered as 2. Here the length will be 3 + 4 = 7
Line Consistency – This reflects, how closely related are the products that form a product line of a company. If a company is selling a series of soaps, their consistency is fairly strong. Consistency can be with usage, production and distribution.
Line Vulnerability - The percentage of sales or profits that are derived from only a few products in the line.
Line Stretching - Introducing new products into a product line. (Eg: In case of Maruti, adding one more car model into an existing product line (certain car)
Line Filling - Adding a new product within the current range of an incomplete line.
A diagrammatic explanation of the Product Mix by taking Microsoft suite of products as an example. Here there are 4 product lines in this example. Line Depth is 3 for the Office Suite line. Line Length for the Mobile line is 6.
Product Branding Terminologies
Brand : A name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service. Let’s take the example of Apple. By hearing the term Apple, before the actual fruit, iPhone, iPad, Mac, Steve Jobs etc. are coming to many of our minds. That’s the power of a successful brand. Similarly google is used as an alternative for the term search, though bing, yahoo search and other search engines are available in the market.
Brand Identity Name, term, symbol or design intended to signify the goods or services of seller(s) to differentiate them from competitors. If you consider Amazon’s logo as a brand, there is a line (smiley) going from letter ‘a’ to ‘z’ which explains that you will get anything (a to z) at amazon and after the purchase, there will be a smile on your face. Flipkart recently modified their logo, which is having a shopping bag with its first letter ‘f’ written and if we look closely, there also we can see one smiley, though it is the handle of that shopping bag.
Branding - The process involved in making a brand is called branding. This involves creating, maintaining, protecting, and enhancing products and services. Branding could be done with advertisements, promotions or any branding technique. Joe Marconi, the author of ‘The Brand Marketing Book’ suggests the following factors while naming a brand –
- The name should suggest stability and integrity
- It should avoid negativity
- Should avoid acronyms
- Should avoid anything generic sounding.
Another technique could be having a name which speaks for itself regarding the core business. Housing.com is a good example for this. They paid 5 Million dollars for getting that domain name.
Brand Positioning – Refers to the reason why a user is choosing a particular brand against the other available options. Understanding what the brand stands for…its associations, assets, personality…to whom it is directed and in what competitive context it exists. Brand Positioning must make sure that the product is unique in its own way when compared with its competitors, it’s solving a problem for the target customers and the product helps in making monetary benefits for the parent organization.
Brand Equity - is the value that a customer attaches to any brand. One advantage is the ability to have a premium pricing. Consider the example of ‘Pizza hut’ as a brand. Because of the successful branding over the years, it can afford to have a premium pricing when compared with dominos. Earlier(couple of decades ago), ONIDA televisions used to enjoy this kind of a brand equity and their TV sets used to sell at a premium price when compared to it’s competitors (Videocon, BPL, Philips etc.) People used to consider it as a pride in owning ONIDA.
Brand equity of a product cannot be known until & unless the product is branded and well known in the market. For a brand to be successful, it has to acquire new customers and retain the existing customers over time.
Brand Value – Putting some money on the brand is termed as brand value. In India, generally Maruti vehicles are having a better resale value because of it’s brand value. The reasons could be multiple –
- it’s a value for money car
- We will get service stations almost everywhere.
- Servicing/Maintenance cost is less.
- Decent mileage