Transcript Managing the Product

Managing the Product
Steps in Managing Products
Criteria for Effective Objectives
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Measurable
Clear
Unambiguous
Time-framed –
Consistent with long-term profitability of
organization
Product Strategies
• A product line is a firm’s total product
offering designed to satisfy a single need for
target customers (e.g., P&G’s line of dish
detergents: Dawn, Ivory, Joy)
• A product mix is a firm’s entire range of
products (e.g., Gillette offers shaving
products, deodorants, writing instruments,
toothbrushes…)
Quality as a Product Objective
• Product quality is the overall ability of a
product to satisfy customer expectations
• Dimensions of product quality
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durability
reliability
precision
ease of use
product safety
aesthetic pleasure
Key Aspects of Quality
• Level
– determined by comparison with other brands in
same product category
• Consistency
– customers experience the same level of quality
in product time after time
Product Life Cycle
Product life cycle for the standalone fax machine for business use: 1970-2001
Alternative product life cycles
Video game console and software life cycles by product
class and product form
Marketing Mix During Product Life Cycle
• The PLC explains how features change over
the life of a product
• Marketing strategies must change and
evolve as a product moves through the PLC
How stages of the product life cycle relate to a firm’s
marketing objectives and marketing mix actions
Introduction
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Full-scale launch of new product into marketplace
Sales are low
Little competition
Limited distribution
High marketing and product costs
Promotion focused on product awareness and to
stimulate primary demand – “pull strategy”
• Intensive personal selling to retailers and
wholesalers – “push strategy”
Growth
• Sales grow at an increasing rate
• Many competitors enter market
• Large companies may acquire small pioneering
firms
• Promotion emphasizes brand advertising and
comparative ads – “pull strategy”
• Wider distribution – “push strategy”
• Toward end of growth stage, prices fall
• Sales volume creates economies of scale
Maturity
• Sales continue to increase but at a decreasing rate
• Marketplace is approaching saturation
• Typified by annual models of products with an
emphasis on style rather than function
• Product lines are widened or extended
• Marginal competitors drop out
• Heavy promotions - sales promotions “push”
• Prices and profits fall
• Production moves to lower cost locations
Decline
• Signaled by a long-run drop in sales
• Rate of decline is governed by how rapidly
consumer tastes change or how rapidly substitute
products are adopted.
• Falling demand forces many out of market
• Few specialty firms left
Five categories and profiles of product adopters
Branding Decisions
• A brand is a name, term, symbol, or any
other unique element of a product that
identifies one firm’s product(s) and sets it
apart from competition
• Brands should
– be memorable
– have a positive connotation
– convey a certain image
Good Brand Names
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Easy to say
Easy to spell
Easy to read
Easy to remember
KISS
• Fit the target market
• Fit the product’s
benefits
• Fit the customer’s
culture
• Fit legal requirements
Trademarks
• Legal term for a brand name, brand mark or trade
character
• ® is used when registered with the USPTO; ™ is
used when a name or mark has not been legally
registered but the user is claiming ownership
• Trademarks established by the Lanham Act of
1946 and updated by the Trademark Revision Act
of 1989
• Only protects in U.S. - if a firm wants
multinational recognition, it must register in each
country
Brand Equity
• Brand’s value to its organization
• Brand equity provides customer loyalty,
perceived quality, brand name awareness,
competitive advantage
• Brand equity can be used to establish brand
extensions
– Alka Seltzer, Alka Seltzer Morning Relief
Branding Strategies
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Individual brands versus family brands
National and store brands (private label)
Generic brands
Licensing
Co-branding
Packaging and Labeling Decisions
• Packaging functions
• Effective packaging designs
• Labeling regulations
Managing the Product
• Role of a Product Manager
• Modifying the product
• Modifying the market
– Finding New Users – exporting is one way
– Increasing Use
– Creating New Use Situation
Four market-product strategies:
Managing the PLC
• Repositioning the Product
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Reacting to a Competitor’s Position – “me too”
Reaching a New Market
Catching a Rising Trend
Changing the Value Offered
• Trading up
• Trading Down
• Downsizing