chap008 developing & mnging offerings

7/28/2019 Chap008 Developing & Mnging Offerings

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McGraw-Hill/Irwin Copyright 2009 by the McGraw-Hill Companies, Inc. All rights reserved.


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Business Marketing

Programming

Part Three


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Part Three

Business Marketing Programming

Chapter 8 Developing and Managing Products

Chapter 9 Business Marketing Channels

Chapter 10 Creating Customer Dialogue

Chapter 11 Communicating via Advertising,

Trade Shows, and PR

Chapter 12 The One-to-One Media

Chapter 13 Sales and Sales Management

Chapter 14 Pricing and Negotiating for Value


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Chapter 8

Developing and Managing Offerings:

What do Customers Want?


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THE OFFERING CONCEPT

COMPETITIVEADVANTAGE:

PRODUCT: A Bundle of Benefits and a Collection

of Solutions to Needs and Wants

How the Product or Service Satisfies

a Need

BENEFIT:

A Benefit That Satisfies a CustomerBetter than a Competitors Product

Benefits

8-5


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ACTIVITIES IN MANAGING PRODUCTS

UNDERSTAND THE PRODUCT LIFE

CYCLE (PLC) AND APPLY IT TO PRODUCT

STRATEGY

UNDERSTAND THE CONCEPT OF

PRODUCT PORTFOLIOS

KNOW WHEN TOHARVEST A PRODUCT

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PRODUCT LIFE CYCLE DECISION POINTS

Rapid expansion of distributors

Product line expansion

Niche marketing

Continued heavy promotion

Sales force incentives andmanagement

Search for new sources for

supply

Need to balance supply and

demand

Stock-out and back-order

damage control

Development Introduction Growth Maturity Decline Time

Strongly defend home-market

niches

Prune product lines

Emphasize gross contribution

rather than market share and

sales volume

Review logistics: prune costs

Reduce pioneering sale force

effort, more telemarketing

More trade than consumer

promotion

Introduce flankers, private

labels, genericsReinvest in market research

& R&D

Use promotions to increase

heavy-user loyalty

Freeze investment in plant

Productivity review

Special trade promotions to

keep channels happy

Focused attacks on vulnerable

competitors

Long-term price reduction or

at least a short-term price

promotion

Keep plant at maximum

capacity and subcontract

excess

Cut low-gross-margin products

from the line

Withdraw from channels in order

of their unprofitability

Freeze R& D and product

modifications

Freeze advertising and

promotions

Attempt to maintain price to the

end

Buy back remaining stock and

redistribute

Maintain spare parts and serviceConsider divesting while it is a

going concern

Redirect focus & promotionInvest in expanding production

Build inventory

Expand distributor network

Train expanded sales force

Institute marketing controls

Invest heavily in advertising

Target on best prospects:

innovators and enthusiasts

Use most loyal distributors

Use free samples

Use public demonstrationsand trade shows

Use publicity and endorsements

Use specialist media & catalogs

Sales

Exhibit 8-28-7


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THE BCG MATRIX: MEASURING MARKET GROWTH

AND MARKET SHARE

Market Growth

Rate

Stars

Cash

CowsDogs

Question

Marks

Market Share Relative to Nearest Competitor

BCG Matrix

Exhibit 8-3

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GE MATRIX MEASURING MARKET

ATTRACTIVENESS AND BUSINESS STRENGTH

Market Attractiveness

Growth

Diversity

Competitive

StructureChange

Technology Change

Social Environment Business Strength Size of Market &

Share

Company GrowthRate

Profit

Margins

Technology Platform

Image

People

GE Matrix

Exhibit 8-3

Unattractive

Weak

Strong

Attractive

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Exhibit 8-4

PRODUCT DEVELOPMENT PROCESS:

A NEW LOOK

EVALUATION

LAUNCH

BETA TESTING

PRODUCT DEVELOPMENT

SPECIFYING FEATURES

SCREENING AND PRELIMINARYINVESTIGATION

IDEA GENERATION

8-10


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QUALITY FUNCTION DEPLOYMENT

Exhibit 8-5

Customers

desired

benefits

Linked to

product

characteristics

Broken down

into

componentpart

characteristics

Process

Characteristics

Production

Controls

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MAKING A PRODUCT SUCCESSFUL

1. HAVE CLOSE TIES WITH A WELL DEFINED MARKET TOANTICIPATE CUSTOMER NEEDS.

2. COMPANY IS HIGHLY INTEGRATED AND MARKET-ORIENTED

3. COMPANY HAS A COMPETITIVE ADVANTAGE INTECHNOLOGY AND PRODUCTION CAPABILITY

4. COMPANY HAS A STRONG MARKETING PROFICIENCY

5. STRONG FINANCIAL SUPPORT

Exhibit 8-8

8-12


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KEYS TO PRODUCT INNOVATION

AN INNOVATIVE COMPANY MUST HAVE

A CORPORATE CULTURE THAT SUPPORTS

INNOVATIONa desire for growth, improvement

A FOCUS ON OPPORTUNITY RISK INSTEAD OF

INVESTMENT RISK

A VISION OF WHAT THE NEW PRODUCT IS TO

ACCOMPLISH A STRUCTURED DEVELOPMENT PROCESS

A LONG-TERM PERSPECTIVE

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KEY PRODUCT

MANAGEMENT DECISIONS

1. WHICH PRODUCT TO INTRODUCE

2. WHICH PRODUCTS TO KEEP

3. WHICH PRODUCTS TO PROMOTE

4. WHAT LEVEL OF PROMOTION TO

PROVIDE (LOW TO HIGH)

5. WHAT PRODUCTS TO CONTINUE ORDELETE

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WINNING THE NEW PRODUCT CONTEST

FOCUS ON CORE COMPETENCY

(WHAT YOU DO BEST FOR A

COMPETITIVE ADVANTAGE)

PLUS

PROVIDE GREATEST VALUE TO

CUSTOMER

EQUALS

SUCCESSFUL PRODUCT

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