copyright 2000 prentice hall10-1 chapter 10 managing the product
TRANSCRIPT
Copyright 2000 Prentice Hall10-1
Chapter 10
Managing the Product
Copyright 2000 Prentice Hall10-2
Steps in Managing Products (Fig. 10.1)
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Objectives and Strategies for Individual Products
Strategies for Strategies for New New
ProductsProducts
Strategies for Strategies for New New
ProductsProducts
Strategies forStrategies forRegionalRegionalProductsProducts
Strategies forStrategies forRegionalRegionalProductsProducts
Strategies forStrategies forMatureMature
ProductsProducts
Strategies forStrategies forMatureMature
ProductsProducts
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Objectives and Strategies for Multiple Products:
Product Line Strategies
A Product Line is a Firm’s Total Product Offering Designed to Satisfy a Single Need
JoyJoyIvoryIvory
AntibacterialAntibacterial
DawnDawn
SpecialCare
SpecialCare
Length of Product Line
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Product Line ExtensionsProduct Line ExtensionsProduct Line ExtensionsProduct Line Extensions
StretchingStretching
Adding new items to line
FillingFilling
Adding sizes or styles
Downward
Upward
Product Line Strategies
Danger of Cannibalization
Contracting aContracting aProduct LineProduct Line
Dropping items
Contracting aContracting aProduct LineProduct Line
Dropping items
Two-way
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Product Mix Strategies
Product Mix is the Total Set of all Products a Firm Offers for Sale
Beauty Products
Beauty Products
Health CareProducts
Health CareProducts
Laundry & Cleaning Products
Laundry & Cleaning Products
Width of Product Mix
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Quality as a Product Objective
Ease of UseEase of Use
DurableDurableDegree of PleasureDegree of Pleasure
PrecisionPrecision
VersatileVersatileSatisfies NeedsSatisfies Needs
Focus on the Level and
Consistency of Quality
ReliableReliableProduct SafetyProduct Safety
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Product Life Cycle (Fig. 10.3)
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ProductProduct Single company produces productSingle company produces product
Introduction Stage of the PLC
GoalsGoals
SalesSales
ProfitsProfits
PricingPricing
MarketingMarketing
Get first-time buyers to try the productGet first-time buyers to try the product
Increase at a steady but slow paceIncrease at a steady but slow pace
NegativeNegative
High: recover R&D costs; or Low: attract large number of customers
High: recover R&D costs; or Low: attract large number of customers
Informing customersInforming customers
Length of StageLength of Stage Depends on 1) marketplace acceptance, 2) producer willingness to support
product
Depends on 1) marketplace acceptance, 2) producer willingness to support
product
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SalesSales
ProfitsProfits
GoalsGoals
Marketing StrategiesMarketing Strategies
PricePrice
AdvertisingAdvertising
Rapid increase in sales Rapid increase in sales
Increase and peakIncrease and peak
Encourage brand loyaltyEncourage brand loyalty
Introduction of product variationsIntroduction of product variations
Price competition may appearPrice competition may appear
Heavy advertising is used when competitors appear
Heavy advertising is used when competitors appear
Growth Stage of the PLC
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SalesSales
ProfitsProfits
CompetitionCompetition
ProductProduct
DistributionDistribution
Marketing StrategiesMarketing Strategies
Peak , then level off, even declinePeak , then level off, even decline
Margins narrowMargins narrow
Grows intenseGrows intense
Mostly replacement productsMostly replacement products
Sell through all suitable retailersSell through all suitable retailers
Firms alter the marketing mix, try to attract new users
Firms alter the marketing mix, try to attract new users
Maturity Stage of the PLC
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SalesSales
ProfitsProfits
CompetitorsCompetitors
ProductProduct
Marketing StrategiesMarketing Strategies
Declining salesDeclining sales
Declining profitsDeclining profits
Large number with no one having the advantage
Large number with no one having the advantage
Should the product be kept?Should the product be kept?
Keep product, phase out gradually, drop product immediately
Keep product, phase out gradually, drop product immediately
Decline Stage of the PLC
Copyright 2000 Prentice Hall10-13
Creating Product Identity: Branding Decisions
A Brand is a Name, a Term, a Symbol, or Any Other Unique Element of a Product
that Identifies One Firms’ Product(s) and Sets Them Apart From the
Competition.
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Choosing a Brand Name, Mark, or Character
A good brand name must:– have a positive connotation & be memorable,– help maintain relationships with customers,– help position a product in consumer’s minds.
How does a firm select a good brand name? It must be:– easy to say, easy to spell, easy to read, and
easy to remember.
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High CustomerLoyalty
High CustomerLoyalty
Perceived Quality
Perceived Quality
Brand NameAwareness
Brand NameAwareness
Brand Equity is a Brand’s Value to its Organization and Provides:
The Importance of Branding
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Branding Strategies are a Major Part of
Product Decision Making
Branding Strategies are a Major Part of
Product Decision Making
Family/Umbrella BrandMultiple Items Under the
Same Brand Name
Family/Umbrella BrandMultiple Items Under the
Same Brand Name
Individual Brand Separate Unique Brand for
Each Product Item
Individual Brand Separate Unique Brand for
Each Product Item
Branding Strategies
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Retailers Have Several Options When
Deciding What Brands to Sell
Retailers Have Several Options When
Deciding What Brands to Sell
Store BrandsPrivate Label Brands
Brands That Are Owned & Sold by a RetailerSam’s Cola
Store BrandsPrivate Label Brands
Brands That Are Owned & Sold by a RetailerSam’s Cola
Branding Strategies
National BrandsManufacturers’ Brands
Coca-Cola
National BrandsManufacturers’ Brands
Coca-Cola
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Other Branding Strategies Licensing
– One firm sells another firm the right to use a brand name for a specific purpose and for a specific period of time.
– Example: Jurassic Park movie led to Jurassic Park candy, key chains & toys.
Co-Branding– Agreement
between two brands to work together in marketing a new product.
– Example: Oreo O’s Cereal
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Provides ProductProvides ProductProtectionProtection
Provides ProductProvides ProductProtectionProtection
Facilitates ProductFacilitates ProductUse and StorageUse and Storage
Facilitates ProductFacilitates ProductUse and StorageUse and Storage
Supplies ImportantSupplies ImportantMarketing Marketing
CommunicationCommunication
Supplies ImportantSupplies ImportantMarketing Marketing
CommunicationCommunication
Functions ofFunctions ofPackagingPackaging
Functions ofFunctions ofPackagingPackaging
Packaging Functions
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Product Category ManagersDevelops a Marketing Plan for all
the Brands and Products Within a Product Category
Product Category ManagersDevelops a Marketing Plan for all
the Brands and Products Within a Product Category
Market ManagersDevelops a Marketing Plan for
Products Sold to a Particular Customer Group
Market ManagersDevelops a Marketing Plan for
Products Sold to a Particular Customer Group
Brand ManagersTeam Leaders for a Single Brand
Responsible for Positioning the Brand &
Developing Brand Equity
Brand ManagersTeam Leaders for a Single Brand
Responsible for Positioning the Brand &
Developing Brand Equity
Management of Existing Products
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Organizing for New Product Development
A Venture Team is a Group of People Within an Organization Who
Work Together Focusing on the Development of a New Product.
The Group Might Consist of People from Design, Engineering and
Marketing.
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Chapter Summary Explain some of the different product objectives and
strategies a firm might choose. Explain how firms manage products throughout the
product life cycle (PLC). Discuss how branding creates product identity and
describe different types of branding strategies. Explain the important part packaging and labeling
play in developing effective product strategies. Describe how organizations are structured for new
and existing product management.