Transcript Chap011

McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 11, YOU SHOULD BE ABLE TO:
LO1
Explain the product life cycle concept.
LO2
Identify ways that marketing
executives manage a product’s life
cycle.
LO3
Recognize the importance of branding
and alternative branding strategies.
11-2
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 11, YOU SHOULD BE ABLE TO:
LO4
Describe the role of packaging and
labeling in the marketing of a product.
LO5
Recognize how the four Ps framework
is expanded in the marketing of
services.
11-3
GATORADE: QUENCHING
THE ACTIVE THIRST WITHIN YOU
11-4
FIGURE 11-1 How stages of the product life
cycle relate to a firm’s marketing objectives
and marketing mix actions
11-5
FIGURE 11-1A Stages of the product life
cycle and its total industry sales and total
industry profit
11-6
FIGURE 11-1B How stages of the product
life cycle relate to a firm’s marketing
objectives and marketing mix actions
11-7
LO1
CHARTING THE PRODUCT LIFE CYCLE
INTRODUCTION STAGE

Product Life Cycle

Primary Demand

Selective Demand

Skimming Strategy

Penetration Pricing
11-8
FIGURE 11-2 Product life cycle for the
stand-alone fax machine for business use:
1970-2012
11-9
LO1
CHARTING THE PRODUCT LIFE CYCLE
GROWTH STAGE

Rapid Sales Growth

More Competitors

Repeat Purchasers

New Features

Broad Distribution
11-10
LO1
CHARTING THE PRODUCT LIFE CYCLE
MATURITY STAGE

Industry/Product
Sales Slow

Profit Declines

Product Differentiation

Fewer Competitors
11-11
LO1
CHARTING THE PRODUCT LIFE CYCLE
DECLINE STAGE

Industry/Product
Sales Drop

Environmental Changes

Deletion

Harvesting
11-12
LO1
MARKETING MATTERS
Will E-Mail Spell Extinction for Fax Machines?
11-13
LO1
CHARTING THE PRODUCT LIFE CYCLE
THREE ASPECTS OF THE PLC

Length of the Product Life Cycle

Shape of the Product Life Cycle
• Generalized Life Cycle
• High-Learning
Product
• Fashion
Product
• Low-Learning
product
• Fad
Product
11-14
FIGURE 11-3 Alternative product life cycle
curves based on product types
11-15
LO1
CHARTING THE PRODUCT LIFE CYCLE
THREE ASPECTS OF THE PLC

The Product Level: Class and Form
• Product Class
• Product Form
11-16
LO1
CHARTING THE PRODUCT LIFE CYCLE
THREE ASPECTS OF THE PLC

The Life Cycle and Consumers
• Diffusion of Innovation
 Innovators
 Late Majority
 Early Adopters
 Laggards
 Early Majority
11-17
FIGURE 11-4 Five categories and profiles of
product adopters (diffusion of innovation)
11-18
LO1
CHARTING THE PRODUCT LIFE CYCLE
THREE ASPECTS OF THE PLC

The Life Cycle and Consumers
• Barriers to Adoption
 Usage
 Value
 Risk
 Psychological
11-19
LO2
MANAGING THE PRODUCT LIFE CYCLE
ROLE OF A PRODUCT MANAGER

Product/Brand Manager Responsibilities
• Product Life Cycle
• New Product Development
• Marketing Program Implementation
• Data Analysis
 CDI
 BDI
11-20
LO2
USING MARKETING DASHBOARDS
Knowing Your CDI and BDI
Category Development Index (CDI) and Brand Development Index (BDI)
 % of a Product Category's Total US Sales in a Market Segment 
CDI = 
  100
% of the Total US Population in a Market Segment

 % of a Brand's Total US Sales in a Market Segment 
BDI = 
 100
 % of the Total US Population in a Market Segment 
11-21
LO2
MANAGING THE PRODUCT LIFE CYCLE
MODIFYING THE PRODUCT OR MARKET

Product Modification
• Altering Characteristics

Market Modification
• Finding New
Customers
• Increasing a
Product’s Use
• Creating a New
Use Situation
11-22
LO2
MANAGING THE PRODUCT LIFE CYCLE
REPOSITIONING THE PRODUCT

Product Repositioning
• Reacting to a Competitor’s Position
• Reaching a New Market
• Catching a Rising Trend
• Changing the Value Offered
 Trading Up
 Trading Down/Downsizing
11-23
MAKING RESPONSIBLE DECISIONS
LO2
Consumer Economics of Downsizing—
Get Less, Pay More
11-24
LO3
BRANDING AND BRAND MANAGEMENT

Branding

Brand Name
• Logotype (Logo)

Trade Name

Trademark
® ™
11-25
LO3
BRANDING AND BRAND MANAGEMENT
BRAND PERSONALITY AND BRAND EQUITY

Brand Personality

Brand Equity
• Provides a Competitive Advantage
• Consumers Willing to Pay a Higher Price
11-26
LO3
Oro and Degree Fragrances
What are their brand personalities?
11-27
FIGURE 11-5 The customer-based brand
equity pyramid
11-28
LO3
BRANDING AND BRAND MANAGEMENT
BRAND PERSONALITY AND BRAND EQUITY

Creating Brand Equity
• Develop Positive Brand Awareness
• Establish a Brand’s Meaning
• Elicit the Proper Response
• Create Intense Brand Loyalty
11-29
LO3
BRANDING AND BRAND MANAGEMENT
BRAND PERSONALITY AND BRAND EQUITY

Valuing Brand Equity
• Provides a Financial Advantage
• Brand Licensing
11-30
LO3
BRANDING AND BRAND MANAGEMENT
PICKING A GOOD BRAND NAME

Should Suggest the Product Benefits

Should Be Memorable and Positive

Should Fit the Company or Product Image

Should Have No Legal or Regulatory
Restrictions

Should Be Simple and Emotional
11-31
FIGURE 11-6 Alternative branding strategies
11-32
LO3
BRANDING AND BRAND MANAGEMENT
BRANDING STRATEGIES

Multiproduct Branding
(Family or Corporate Branding)
• Product Line Extensions
• Subbranding
• Brand Extension
11-33
LO3
BRANDING AND BRAND MANAGEMENT
BRANDING STRATEGIES

Multibranding
• Fighting Brands

Private Branding (Private Labeling
or Reseller Branding)

Mixed Branding
11-34
LO3
Kimberly-Clark’s Huggies
What branding strategy is used?
11-35
LO3
Marriott
What branding strategy is used?
11-36
LO3
Black & Decker and DeWalt Tools
What branding strategy does each use?
11-37
PACKAGING AND LABELING PRODUCTS
LO4

CREATING CUSTOMER VALUE AND
COMPETITIVE ADVANTAGE
Packaging

Label
• Communication Benefits
• Functional Benefits
• Perceptual Benefits
11-38
MARKETING MATTERS
LO4
Creating Customer Value Through Packaging—
Pez Heads Dispense More Than Candy
11-39
LO4
“?” and Heinz Ketchup
What are the packaging benefits for each?
11-40
LO4
Lay’s STAX, Pringles and Celestial Seasonings
What are the packaging benefits for each?
11-41
PACKAGING AND LABELING PRODUCTS
LO4
PACKAGING AND LABELING
CHALLENGES AND RESPONSES

Connecting with Customers

Environmental Concerns

Health, Safety, and Security Issues
• Shelf Life

Cost Reduction
11-42
LO5
MANAGING THE MARKETING OF SERVICES
THE EIGHT Ps OF SERVICES

Eight Ps of Services Marketing

Product (Service)
• Branding

Productivity
• Capacity Management
11-43
LO5
MANAGING THE MARKETING OF SERVICES
THE EIGHT Ps OF SERVICES

Price
• Off-Peak Pricing

Place (Distribution)

Promotion
• Publicity
• Public Service Announcements (PSAs)
11-44
LO5
MANAGING THE MARKETING OF SERVICES
THE EIGHT Ps OF SERVICES

People
• Customer Experience Management (CEM)

Physical Environment

Process
11-45
VIDEO CASE 11
PHILADELPHIA PHILLIES, INC.:
SPORTS MARKETING 101
11-46
VIDEO CASE 11
PHILADELPHIA PHILLIES
11-47
VIDEO CASE 11
PHILADELPHIA PHILLIES
1. (a) What is the “product” that
the Phillies market? (b) What
“products” are the Phillies
careful not to market?
11-48
VIDEO CASE 11
PHILADELPHIA PHILLIES
2. How does the “quality” dimension
in marketing the Philadelphia
Phillies as an entertainment
service differ from that in
marketing a consumer product
such as a breakfast cereal?
11-49
VIDEO CASE 11
PHILADELPHIA PHILLIES
3. In terms of social network
marketing strategy (a) what are
the likely characteristics of the
Phillies fans and (b) what should
the Phillies’ Facebook fan page
contain?
11-50
VIDEO CASE 11
PHILADELPHIA PHILLIES
4. Considering all five elements of the
promotional mix (advertising, personal
selling, public relations, sales
promotion, and direct marketing),
what specific promotional activities
should the Phillies use? Which
should be used off-season? During
the regular season?
11-51
VIDEO CASE 11
PHILADELPHIA PHILLIES
5. What kind of special promotion
gift days (with premiums) and
event days (no premiums) can
the Phillies use to increase
attendance by targeting these
fan segments: (a) 14 and under,
(b) 15 and over, (c) other special
fan segments, and (d) all fans?
11-52
Product Life Cycle
A product life cycle describes the
stages a new product goes
through in the marketplace:
introduction, growth, maturity,
and decline.
11-53
Branding
Branding is a marketing decision
by an organization to use a name,
phrase, design, or symbols, or
combination of these to identify
its products and distinguish them
from those of competitors.
11-54
Brand Name
A brand name is any word, device
(design, shape, sound,
or color), or combination of these
used to distinguish a seller’s
goods or services.
11-55
Brand Personality
Brand personality is a set of
human characteristics associated
with a brand name.
11-56
Brand Equity
Brand equity is the added value
a brand name gives to a product
beyond the functional benefits
provided.
11-57
Multiproduct Branding
Multiproduct branding is a
branding strategy in which a
company uses one name for all
its products in a product class.
11-58
Multibranding
Multibranding is a branding
strategy that involves giving each
product a distinct name when
each brand is intended for a
different market segment.
11-59
Eight Ps of Services Marketing
The eight Ps of services
marketing expands the four Ps
framework to include productivity,
people, physical environment, and
process.
11-60
Capacity Management
Capacity management
integrates the service component
of the marketing mix with efforts
to influence consumer demand.
11-61
Off-Peak Pricing
Off-peak pricing involves
charging different prices during
different times of the day or days
of the week to reflect variations
in demand for the service.
11-62
Customer Experience Management
(CEM)
Customer experience
management (CEM) is the
process of managing the entire
customer experience within the
firm.
11-63