Transcript Chapter - courses.psu.edu

J. Paul Peter
•
James H. Donnelly, Jr.
P 6-1
1-1
6th Edition
Marketing
Management
Knowledge and Skills
Chapter 6
P 6-2
Product
Strategy
A. Classes of Consumer Goods-Some Characteristics and
Marketing Considerations
Type of Product
Characteristics
and Marketing
Considerations
Characteristics
Time and effort
devoted by consumer
to shopping
P 6-3
Time spent planning
the purchase
Convenience
Shopping
Specialty
Very little
Considerable
Cannot generalize: consumer
may go to nearby store and buy
with minimum effort or may
have to go to distant store and
spend much time and effort
Very little
Considerable
Considerable
(continued)
SOURCE: Michael J. Etzel, Bruce J. Walker, and William J. Stanton, Fundamentals of Marketing, 11th ed. © 1997, New York, McGrawHill, Inc., pp. 195, 198. Reproduced by permission of the McGraw-Hill Companies.
A. Classes of Consumer Goods-Some Characteristics and
Marketing Considerations
Type of Product
P 6-4
Characteristics
and Marketing
Considerations
Convenience
Shopping
Specialty
How soon was it
satisfied after it arises?
Immediately
Relatively long
time
Relatively long time
Are price and quality
No
compared
Yes
No
Price
Usually low
High
High
Frequency of purchase
Usually frequent
Infrequent
Infrequent
Importance
Unimportant
Often very important
Cannot generalize
(continued)
SOURCE: Michael J. Etzel, Bruce J. Walker, and William J. Stanton, Fundamentals of Marketing, 11th ed. © 1997, New York, McGrawHill, Inc., pp. 195, 198. Reproduced by permission of the McGraw-Hill Companies.
A. Classes of Consumer Goods-Some Characteristics and
Marketing Considerations
Type of Product
P 6-5
Characteristics
and Marketing
Considerations
Convenience
Shopping
Specialty
Marketing considerations
Length of channel
Long
Short
Short to very short
Importance of retailer
Any single store
is relatively
unimportant
Important
Very important
Number of outlets
As many as
possible
Few
Few; Often one in
a market
Stock turnover
High
Lower
Lower
SOURCE: Michael J. Etzel, Bruce J. Walker, and William J. Stanton, Fundamentals of Marketing, 11th ed. © 1997, New York, McGrawHill, Inc., pp. 195, 198. Reproduced by permission of the McGraw-Hill Companies.
A. Classes of Consumer Goods-Some Characteristics and
Marketing Considerations
P 6-6
Type of Product
Characteristics
and Marketing
Considerations
Convenience
Shopping
Specialty
Gross margin
Low
High
High
Responsibility for
advertising
Producer
Retailer
Joint responsibility
Importance of pointof-purchase display
Very important
Less important
Less important
Brand or store name
important
Brand name
Store name
Both
Importance of
packaging
Very important
Less important
Less important
SOURCE: Michael J. Etzel, Bruce J. Walker, and William J. Stanton, Fundamentals of Marketing, 11th ed. © 1997, New York, McGrawHill, Inc., pp. 195, 198. Reproduced by permission of the McGraw-Hill Companies.
B. Classes of Organizational Products-Some
Characteristics and Marketing
Type of Product
Characteristics
Fabricating
and Marketing
Parts and
Consideration Raw Materials Materials
Example
Iron ore
Characteristics
Unit price
Very low
Length of life
Very short
P 6-7
Quantities
purchased
Frequency of
purchase
Installations
Accessory
Equipment
Operating
Supplies
Engine blocks
Blast furnaces Storage racks Paper clips
Very high
Very long
Medium
Long
Low
Short
Large
Low
Depends on
final product
Large
Very small
Small
Small
Frequent
delivery; longterm purchase
contract
Infrequent
purchase,
but frequent
delivery
Very
infrequent
Medium
frequency
Frequent
(continued)
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
B. Classes of Organizational Products-Some
Characteristics and Marketing
Type of Product
Characteristics
Fabricating
and Marketing
Parts and
Consideration Raw Materials Materials
Installations
Standardization Very much;
of competitive grading is
products
important
Quantity of
supply
Very much
Limited supply Usually no
can be inproblem
creased slowly
or not at all
Accessory
Equipment
Operating
Supplies
Very little;
custommade
Little
Much
No problem
Usually no
problem
Usually no
problem
P 6-8
(continued)
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
B. Classes of Organizational Products-Some
Characteristics and Marketing
Type of Product
Characteristics
Fabricating
and Marketing
Parts and
Consideration Raw Materials Materials
Marketing considerations
Nature of
Short; no
channel
middlemen
Negotiation
period
Price competition
Presale/postsale service
Hard to
generalize
Important
Not important
Installations
Short; middle- Short; no
men for small middlemen
buyers
Medium
Long
Important
Important
Not Important
Accessory Operating
Equipment Supplies
Middlemen
used
Middlemen
used
Medium
Short
Not man
factor
Very important Important
Important
Very little
P 6-9
(continued)
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
B. Classes of Organizational Products-Some
Characteristics and Marketing
Type of Product
Characteristics
Fabricating
and Marketing
Parts and
Consideration Raw Materials Materials
Promotional
activity
Very little
Moderate
Sales people
very
important
Generally low High
Important
Not too
important
High
Low
Important
long-term
contracts
used
Not usually
used
Not usually
used
Not usually
used
P 6-10
Brand
None
preference
Advance buying Important
contract
long-term
contracts
used
Installations
Accessory Operating
Equipment Supplies
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Elements of Brand Equity
Name
awareness
Perceived
Quality
Brand
loyalty
Brand
associations
Brand equity
Name
symbol
Provides value to customer
by enhancing customer’s:
Interpretation/processing
of information
Figure 6-1
Other
proprietary
brand assets
Provides value to firm by
enhancing:
Efficiency and
effectiveness of
marketing programs
Brand loyalty
Prices/margins
Brand extensions
Confidence in the
purchase decision
Trade leverage
P 6-11
Competitive advantage
Use satisfaction
SOURCE: David A. Aaker, Managing Brand Equity. © 1991, New York, by David A. Aaker. Reprinted with the permission of The Free
P 6-12
The Product Life Cycle
Irwin/McGraw-Hill
Figure 6-2
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Marketing Strategy Implications of the Product Life
Cycle
Life-Cycle Stage
P 6-13
Strategy
Dimension
Introduction
Growth
Maturity
Decline
Basic Objectives Establish a market
for product type;
persuade early
adopters to buy
Build sales and
market share;
develop
preference for
brand
Defend brand’s
share of market;
seek growth by
luring customers
from competitors
Limit costs or
seek ways to
revive sales and
profits
Product
Provide high
quality; add
services to
enhance value
Improve quality;
add features to
distinguish
brand from
competitors
Provide high
quality; select a
good brand;
get patent
or trademark
protection
Continue providing high quality
to maintain
brand’s reputation; seek ways to
make the product
new again.
(continued)
SOURCE: Gilbert A. Churchill, Jr., and J. Paul Peter, Marketing: Creating Value for Customers, rev. ed. (Burr Ridge, IL: Richard D.
Irwin, 1998), p. 238.
Marketing Strategy Implications of the Product Life
Cycle
Life-Cycle Stage
P 6-14
Strategy
Dimension
Introduction
Growth
Maturity
Decline
Pricing
Often high to recover development costs;
sometimes
low to build
demand rapidly
Somewhat high
because of
heavy demand
Low; reflecting
heavy
competition
Low to sell off
remaining
inventory
or high to serve
a niche market
Channels
Limited number
of channels
Greater number
of channels to
meet demand
Greater number
of channels and
more incentives
to resellers
Limited number
of channels
(continued)
SOURCE: Gilbert A. Churchill, Jr., and J. Paul Peter, Marketing: Creating Value for Customers, rev. ed. (Burr Ridge, IL: Richard D.
Irwin, 1998), p. 238.
Marketing Strategy Implications of the Product Life
Cycle
Life-Cycle Stage
Strategy
Dimension
Introduction
P 6-15
Communication Aimed at early
adapters; messages designed to
educate about
product type’
incentives such as
samples and
coupons to
induce trial
Growth
Maturity
Decline
Aimed at wider
audience;
messages focus
on brand benefits;
for consumer
products, emphasis on
advertising
Messages focus Minimal, to keep
on differentiating costs down
brand from its
competitors
heavy use of
incentives such
as coupons to
induce buyers
to switch brands
SOURCE: Gilbert A. Churchill, Jr., and J. Paul Peter, Marketing: Creating Value for Customers, rev. ed. (Burr Ridge, IL: Richard D.
Irwin, 1998), p. 238.
Some Requirements for the Effective Use of Cross-Functional
Teams in Product Management and New Product Development
A growing number of organizations have begun utilizing cross-functional teams for
product management and new product development. Having representatives from
various departments clearly has its advantages; but most important, effective teams
must have the nurture and support of management. Some requirements for effective
teams are
P 6-16
1. Commitment of top management and provision of clear goals. Organizations that
successfully use cross-functional teams in product management or development
have managers who are deeply committed to the team concept. As a result, high
performance teams have a clear understanding of the product management and
development goals of the organization. The importance of these goals
encourages individuals to defer their own functional or departmental concerns to
team goals.
2. Trust among members. For cross-functional teams to work, a high level of trust
must exist among members. The climate of trust within a team seems to be
highly dependent on members’ perception of management's trust of the group as
a whole.
(continued)
Irwin/McGraw-Hill
Figure 6-3
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Some Requirements for the Effective Use of Cross-Functional
Teams in Product Management and New Product Development
3. Cross-functional cooperation. If a team is to take responsibility and assume the
risk of product development, its members will need detailed information about
the overall operation of the organization. It often requires that the functional
units be willing to share information that previously was not shared with other
departments.
P 6-17
4. Time and training. Effective cross-functional teams need time to mature. They
require massive planning and intense and prompt access to resources, financial
and other. Because members have to put aside functional and departmental
loyalties and concerns training is usually necessary.
Irwin/McGraw-Hill
Figure 6-3
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.