Product Management 10 - Product Positioning and Branding

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In Short…

Innovate beyond the product.
Balance brand positioning, pricing and distribution.
Build differentiated brands in sectors like FMCG markets, fintech services and consumer durables.
Understand the role of marketing and brand strategy in enhancing brand equity

Product/Brand Positioning, Pricing, and Distribution

Brand positioning which is dependent on meeting customer needs cannot be separated from pricing strategy and distribution strategy

Typically brand positioning is relative to the market/customer segment being targetted and also to the competitors in the same market/customer segment

Brand positioning wrt Pricing Strategy:

Mass market – low price
Niche market – high price

Both these pricing strategies would lead to a different perspective of the brand in the minds of the customer

Brand positioning wrt Distribution Strategy:

Product available in small store
Product available in a mall

Both these distribution channels would lead to a different perspective of the brand in the minds of the customer

Also, customer engagement and satisfaction is important for brand positioning

Brand benefits are different across the value chain:

Manufactures/Service partners are interested in:

Customer Loyalty
Price protection from brand
Shareholder value

Retailers/Distributors are interested in:

Velocity/Turnover
Better margins
Return on Investment

Customers are interested in:

Trust/Reputation
Choice and service
Quality and Performance

Objectives of Marketing Managers: Brand Strength and Customer Value

Awareness, image, reputation
Perceived risk
Trust
Product and Service Quality

Objectives of Brand Managers: marketing performance and customer consequences

Price premium vs share premium
Customers’ willingness to wait
Customer loyalty and retention
Trial of extensions to other products
Speed of market penetration (time premium)
Referrals

Objectives of Corporate Managers: Brand Value and Financial Value

Cash flows and profits
Risk and vulnerability
Barrier to competition

Innovating Beyond the Product

Innovation efforts are majorly focused on Product Performace. But other factors should be also in focus since Product Performace has the least impact on Brand Positioning

Success factors of Products:

Brand value, customer engagement, and distribution channels have to be in focus to improve customer experience

Building Brand

Communicate the value to the customer
Build trust with the customer
Customers should get peace of mind while interacting with the brand

For example, Tanishq build trust by providing a certificate of authentication and a return policy, thus derisking the customer’s decision

Brand Triangle:

Four Pillars of Brand Health:

Differentiation: A brand’s ability to capture attention in the cultural landscape. Relates to premium margins and pricing power
Relevance: How appropriate and meaningful a brand is to consumers. Relates to market penetration.
Esteem: How highly regarded a brand is. Relates to brands delivery on its promise
Knowledge: The depth of understanding people have of a brand. Relates to customers’ experience

Differentiation and Relevance are correlated

Esteem and Knowledge are correlated

The BAV Calculator is a tool that you can play around with and map different companies to notice where they belong within the pillars of branding.

Example: Building the brand of ESPN and how they changed their price with improvement in their branding value