manage the product chapter nine. 9-2 © 2012 pearson education, inc. publishing as prentice-hall....
TRANSCRIPT
Manage the ProductManage the Product
Chapter NineChapter Nine
9-2© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
Chapter ObjectivesChapter Objectives
Explain the different product objectives and Explain the different product objectives and strategies a firm may choosestrategies a firm may choose
Understand how firms manage products Understand how firms manage products throughout the product life cyclethroughout the product life cycle
Discuss how branding strategies create product Discuss how branding strategies create product identityidentity
Explain how packaging and labeling contribute Explain how packaging and labeling contribute to product identityto product identity
Describe how marketers structure organizations Describe how marketers structure organizations for new and existing product managementfor new and existing product management
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Real People, Real Choices: Real People, Real Choices: Decision Time at General CorporationDecision Time at General Corporation
How should General Mills position the How should General Mills position the Fiber One cereal brand in order to Fiber One cereal brand in order to reinforce a consistent and desirable reinforce a consistent and desirable brand meaning? brand meaning? • Option 1:Option 1: Own the position of “Fiber Own the position of “Fiber
Superiority”Superiority”
• Option 2:Option 2: Own the position of “Great Own the position of “Great Tasting High Fiber”Tasting High Fiber”
• Option 3:Option 3: Own the position of Own the position of “Digestive Health”“Digestive Health”
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Figure 9.1Figure 9.1Steps to Manage ProductsSteps to Manage Products
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Figure 9.2Figure 9.2Objectives for Single and Objectives for Single and
Multiple ProductsMultiple Products
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Objectives and Strategies for Objectives and Strategies for Individual ProductsIndividual Products
Objectives and strategies for individual Objectives and strategies for individual products:products:
• Successful introduction of new Successful introduction of new productsproducts
• Taking regional products nationalTaking regional products national
• Breathing new life into mature products Breathing new life into mature products while maintaining brand personalitywhile maintaining brand personality
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Importance of Product PlanningImportance of Product Planning
New products owe their success to well-executed product planning and management.
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Objectives and Strategies Objectives and Strategies for Multiple Productsfor Multiple Products
Product line:Product line: Firm’s total product offering designed to Firm’s total product offering designed to satisfy a single need or desire of target satisfy a single need or desire of target customers customers
Product line strategies:Product line strategies:
• Full-line vs. limited-line strategiesFull-line vs. limited-line strategies
• Upward, downward, or two-way line stretch Upward, downward, or two-way line stretch
• Filling out or contracting a product lineFilling out or contracting a product line
Cannibalization is a riskCannibalization is a risk
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Objectives and Strategies Objectives and Strategies for Multiple Productsfor Multiple Products
Product mix strategies:Product mix strategies:The total set of products a firm offers The total set of products a firm offers for sale for sale
Product mix strategies:Product mix strategies:
•Width of product mix must be Width of product mix must be consideredconsidered
• Product lines in mix usually have some Product lines in mix usually have some things in commonthings in common
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Quality as a Product Objective: Quality as a Product Objective:
The Science of TQMThe Science of TQM Product quality is Product quality is
often an objectiveoften an objective A philosophy of A philosophy of
total quality total quality management management (TQM) can help (TQM) can help achieve quality achieve quality objectivesobjectives
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Quality GuidelinesQuality Guidelines
ISO 9000: ISO 9000: • Standards for quality management Standards for quality management
ISO 14000: ISO 14000: • Environmental managementEnvironmental management
Six Sigma methodology: Six Sigma methodology: • Process allowing no more than 3.4 Process allowing no more than 3.4
defects per million (getting it right defects per million (getting it right 99.9997% of the time)99.9997% of the time)
Watch a YouTube video: TQM at Motorola
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Figure 9.3Figure 9.3Product QualityProduct Quality
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Figure 9.4Figure 9.4The Product Life CycleThe Product Life Cycle
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Figure 9.5Figure 9.5Marketing Mix Strategies Marketing Mix Strategies
Through the Product Life CycleThrough the Product Life Cycle
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Introduction Phase of PLCIntroduction Phase of PLC
New products that are offshoots of well-known brands have an advantage.
Many products don’t make it out of the introduction phase; poor or insufficient advertising is often the cause.
New product failures
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Introduction and Growth Introduction and Growth StagesStages
Growth stage of the PLCGrowth stage of the PLC• The product is accepted and sales The product is accepted and sales
rapidly increaserapidly increase Maturity stage of the PLCMaturity stage of the PLC• Sales peak, profit margins narrowSales peak, profit margins narrow
Decline stage of the PLCDecline stage of the PLC• Sales decrease as Sales decrease as
customer needs customer needs changechange
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Marketing Mature ProductsMarketing Mature Products
Marketers need to keep giving consumers new reasons to buy products in the mature stage
This may be accomplished by finding new uses for an existing product, moving into new markets, changing the product’s attributes or by introducing variations to keep consumer interest
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Creating Product Identity:Creating Product Identity:Branding DecisionsBranding Decisions
Brand: Brand: A name, term, symbol, or A name, term, symbol, or any other unique element any other unique element that identifies one firm’s that identifies one firm’s product and sets it apart product and sets it apart from the competitionfrom the competition
What Brands Do The Logos Represent?
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What’s in a Name or What’s in a Name or Symbol?Symbol?
A “good” brand name:A “good” brand name:• Maintains relationships with customersMaintains relationships with customers
• Positions a product by:Positions a product by:Portraying an image, orPortraying an image, orDescribing how the product worksDescribing how the product works
• Is easy to say, spell, read, and rememberIs easy to say, spell, read, and remember
• Fits the target market, product benefits, Fits the target market, product benefits, customer’s culture, and legal customer’s culture, and legal requirementsrequirements
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It’s DebatableIt’s DebatableClass Discussion QuestionClass Discussion Question
How do V8 and How do V8 and the Skinny Cow the Skinny Cow Truffle Bar Truffle Bar brand names brand names stack up against stack up against the criteria that the criteria that distinguish a distinguish a “good” brand “good” brand name?name?
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TrademarksTrademarks
TrademarkTrademark The legal term for a brand name, brand The legal term for a brand name, brand mark, or trade charactermark, or trade character• Trademarks legally registered by a Trademarks legally registered by a
government obtain protection for government obtain protection for exclusive use in that country exclusive use in that country
• ® is the trademark symbol used in the ® is the trademark symbol used in the U.S.U.S.
Visit the United States Patent and Trademark Office
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Why Brands MatterWhy Brands Matter
Brand equity:Brand equity: A brand’s value to its organization over A brand’s value to its organization over and above the value of the generic and above the value of the generic version of the productversion of the product
Brand equity provides competitive Brand equity provides competitive advantageadvantage
Brand equity results in brand loyal Brand equity results in brand loyal consumers and attachmentconsumers and attachment
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Table 9.1Table 9.1Dimensions of Brand MeaningDimensions of Brand Meaning
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Why Brands MatterWhy Brands Matter
Brand storytelling:Brand storytelling:
• Marketers seek to engage consumers with Marketers seek to engage consumers with compelling stories about brandscompelling stories about brands
Characteristics of world class brandsCharacteristics of world class brands Brand extensions: Brand extensions:
• New products sold with the same New products sold with the same brand namebrand name
Sub-branding:Sub-branding:
• Creating a secondary brand within a main Creating a secondary brand within a main brand that can help differentiate a product linebrand that can help differentiate a product line
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Figure 9.6Figure 9.6Branding StrategiesBranding Strategies
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Branding StrategiesBranding Strategies
Individual brands Individual brands vs. family brandsvs. family brands• Family brands Family brands
such as such as Campbell’s Campbell’s provide an provide an umbrella under umbrella under which multiple which multiple products can be products can be marketed marketed
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Branding StrategiesBranding Strategies
National vs. store brandsNational vs. store brands
• Store brands (private label brands) are Store brands (private label brands) are exclusive to a given retailerexclusive to a given retailer
Generic brandsGeneric brands Licensing: Licensing:
• One firm sells the right to another to One firm sells the right to another to use a legally protected brand name for a use a legally protected brand name for a specific purpose and for a specific specific purpose and for a specific period of timeperiod of time
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Branding StrategiesBranding Strategies
Co-branding: Co-branding:
• Two brands combine Two brands combine to create a new to create a new productproduct
• Provides greater Provides greater recognition or other recognition or other strengths than either strengths than either could achieve alonecould achieve alone
• Ingredient branding Ingredient branding is increasingis increasing
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Brand MetricsBrand Metrics
Approaches to measuring brand equity:Approaches to measuring brand equity:
• Customer mind-set metricsCustomer mind-set metrics
• Product-market outcomes metricsProduct-market outcomes metrics
• Financial market metricsFinancial market metrics
• Revenue premium metricRevenue premium metric
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Figure 9.7Figure 9.7Functions of PackagingFunctions of Packaging
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Designing Effective Designing Effective PackagingPackaging
Effective Effective packaging packaging considers: considers:
• Packaging of Packaging of other brands other brands in same in same product product categorycategory
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Designing Effective PackagingDesigning Effective Packaging
Effective packaging also considers: Effective packaging also considers:
• Choice of packaging material and image Choice of packaging material and image it projectsit projects
• Environmental impact of packagingEnvironmental impact of packaging
• Shape and color influences on imageShape and color influences on image
• Graphic information to be portrayedGraphic information to be portrayed
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Labeling RegulationsLabeling Regulations
Federal Fair Packaging and Labeling Act of Federal Fair Packaging and Labeling Act of 1966: 1966:
• Aims at making labels more helpful to Aims at making labels more helpful to consumers by providing useful informationconsumers by providing useful information
Nutrition Labeling and Education Act of 1990Nutrition Labeling and Education Act of 1990
• Require food labels to state how much fat, Require food labels to state how much fat, saturated fat, cholesterol, calories, saturated fat, cholesterol, calories, carbohydrates, protein, and vitamins are in carbohydrates, protein, and vitamins are in each product servingeach product serving
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Figure 9.8Figure 9.8Three Types of Product Three Types of Product
ManagementManagement
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Organizing for New-Product Organizing for New-Product DevelopmentDevelopment
Venture teams: Venture teams:
• Specialists in different areas who work Specialists in different areas who work together to focus on new-product together to focus on new-product development development
““Skunk works”: Skunk works”:
• Small and isolated group in remote Small and isolated group in remote location that function with minimal location that function with minimal supervisionsupervision
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Real People, Real Choices: Real People, Real Choices: Decision Made at General MillsDecision Made at General Mills
David chose option 2 David chose option 2
•Why do you think that David chose to Why do you think that David chose to position Fiber One as a great-tasting, position Fiber One as a great-tasting, fiber product?fiber product?
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Keeping It Real:Keeping It Real: Fast-Forward to Fast-Forward to Next Class Decision Time at 76ersNext Class Decision Time at 76ers
Meet Lara Price, Sr. VP of Business Meet Lara Price, Sr. VP of Business Operations for the Philadelphia 76ersOperations for the Philadelphia 76ers
The 76ers are a professional basketball The 76ers are a professional basketball team within the NBAteam within the NBA
The decision to be made: The decision to be made: What method should be used to What method should be used to compile more detailed information compile more detailed information about the customer base? about the customer base?
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