manage the product
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Manage the Product. Chapter Nine. Chapter Objectives. Explain the different product objectives and strategies a firm may choose Understand how firms manage products throughout the product life cycle Discuss how branding strategies create product identity - PowerPoint PPT PresentationTRANSCRIPT
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Manage the Product
Chapter Nine
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Chapter ObjectivesExplain the different product objectives and
strategies a firm may chooseUnderstand how firms manage products
throughout the product life cycleDiscuss how branding strategies create
product identityExplain how packaging and labeling
contribute to product identityDescribe how marketers structure
organizations for new and existing product management
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Product LinesProduct Line: A firm’s
total product offerings designed to satisfy a single need of the target market
Product Line Length: The number of separate items within the same category
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The Product MixProduct Mix: A firm’s
total products offered for sale (Proctor & Gamble)
Product Mix Width: The number of different product lines the firm makes
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Figure 9.1Steps to Manage Products
Step 1
Step 3
Step 2
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Figure 9.21-Objectives for Single & Multiple Products
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1a-Objectives and Strategies for Individual Products
Objectives and strategies for individual products:Successful introduction of new productsTaking regional products nationalBreathing new life into mature products
while maintaining brand personality
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1b-Objectives and Strategies for Multiple Products
Product line: Firm’s total product offering designed to satisfy a single need or desire of target customers
Product line strategies:Full-line vs. limited-line strategiesUpward, downward, or two-way line
stretch Filling out or contracting a product line
Cannibalization is a risk: loss of sales when a new (similar) item is introduced (iPhone 5S)
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1b-Objectives and Strategies for Multiple Products
Product mix strategies:The total set of products a firm offers for sale
Product mix strategies:Width of product mix must be consideredProduct lines in mix usually have some
things in common
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Quality as a Product Objective: The Science of TQM
Product quality is often an objective
A philosophy of total quality management (TQM) can help achieve quality objectives
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Quality GuidelinesISO 9000:
Standards for quality management ISO 14000:
Environmental managementSix Sigma methodology:
Process allowing no more than 3.4 defects per million (getting it right 99.9997% of the time)
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The Product Life Cycle: A concept that provides a way to trace the stages of a product’s acceptance, from its introduction (birth) to its decline (death).
A familiar concept in marketing and a useful marketing management tool.
The PLC concept can be used to analyze a brand, product form or product category.
Some critics have challenged the basis & value of the PLC.
2-Design Product Strategies The Product Life Cycle
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Figure 9.4The Product Life Cycle
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Figure 9.5Marketing Mix Strategies Through the PLC
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Introductory Stage High failure rates Little competition Frequent product modification Limited distribution High marketing and production costs Negative profits with slow sales increases Promotion based on awareness &
information Communication challenge is to stimulate
primary demand
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Growth Stage Increasing rate of sales Entrance of competitors Market consolidation Initial healthy profits Aggressive advertising of the
differences between brands Wider distribution
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Maturity Stage Sales increase at a decreasing rate Saturated markets Annual models appear Lengthened product lines Service and repair assume important
roles Heavy promotions to consumers and
dealers Marginal competitors drop out Niche marketers emerge
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Decline Stage Long-run drop in sales Large inventories of
unsold items Elimination of all nonessential
marketing expenses “Organized abandonment”
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3-Creating Product Identity:Branding Decisions
Brand: A name, term, symbol, or any other unique element that identifies one firm’s product and sets it apart from the competition
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What’s in a Name or Symbol?A “good” brand name:
Maintains relationships with customersPositions a product by:
Portraying an image, orDescribing how the product works
Is easy to say, spell, read, and remember
Fits the target market, product benefits, customer’s culture, and legal requirements
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TrademarksTrademark
The legal term for a brand name, brand mark, or trade character
The trademark symbol used in the U.S. ®Trademarks legally registered by a government
obtain protection for exclusive use in that country
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Why Brands MatterBrand equity:
A brand’s value to its organization over and above the value of the generic version of the product
Brand equity provides competitive advantageBrand equity results in brand loyal
consumers and attachment
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Why Brands MatterBrand storytelling:
Marketers seek to engage consumers with compelling stories about brands
Characteristics of world class brandsBrand extensions:
New products sold with the same brand name
Sub-branding:Creating a secondary brand within a main
brand that can help differentiate a product line
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Figure 9.6Branding Strategies
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Branding StrategiesIndividual brands vs.
family brands
Individual brand: A unique brand for each item in the product line
Family brand: A brand that a group of products or brands share
Campbell’s provides an umbrella under which multiple products can be marketed
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Branding Strategies
National vs. store brandsStore brands (private label brands)
are exclusive to a given retailerGeneric brandsLicensing:
One firm sells the right to another to use a legally protected brand name for a specific purpose and for a specific period of time
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Branding StrategiesCo-branding:
Two brands combine to create a new product
Provides greater recognition or other strengths than either could achieve alone
Ingredient branding is increasing
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Brand MetricsApproaches to measuring brand equity:
Customer mind-set metricsProduct-market outcomes metricsFinancial market metricsRevenue premium metric
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Figure 9.7Functions of Packaging
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Figure 9.7Functions of Packaging
• Functions of packaging:• A cover or container for a product• Helps create a competitive advantage for
the brand• Provides protection during transit• Facilitates consumer’s handling of the
product• Communicates the brand’s personality via
the use of color, words, shapes, designs, and pictures
• Supplies important information, such as nutritional information, ingredients, benefits, recipes, directions, warnings, toll-free phone numbers, and the UPC code
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Designing Effective PackagingEffective packaging
considers: Packaging of other
brands in same product category
Package should standout and be different from the competition
Store brands attempt to mimic other brands as close as legally possible
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Designing Effective PackagingEffective packaging also considers:
Choice of packaging material and image it projects
Environmental impact of packagingShape, color and graphic information to be
portrayed
Takes into account labeling regulationsFederal Fair Packaging & Labeling Act of 1966 Nutrition Labeling & Education Act of 1990
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