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Copyright 2005 by South-Western, a division of Thomson Learning, In! "## rights reserved!

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Product StrategiesProduct Strategies

MN 3052 Industrial Management & Marketing

Lecture No-03

Dr. G.D SamarasingheDepartment of Management of Technology

University of Moratuwa


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Product StrategyProduct Strategy Productbundle of physical, service,

and symbolic attributes designed toenhance buyers want satisfaction.

!ncluded in this broad definition are

considerations of pac"age design,brand names, warranties, and productimage

People dont buy things #e.g., $% drill

bits&, they purchase what those thingswill provide them with #e.g. $% holes&


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Product StrategyProduct Strategy

Classifying Goods and Services

Products can be broadly categori(edas either consumer products orbusiness products depending on whopurchases them for what reasons

Classifying Consumer Goods

and ServicesClassifying Business Goods

Classifying Services


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*ar"eting !mpacts of +onsumerProduct +lassifications


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Classifying Business Goods

-hey are classified based upon howcustomers use them as well as their

basic characteristics+apital or /pense !tems

Installations

Accessory equipmentComponent parts and materials

Raw materials

Supplies


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Classifying Services

i"e tangible goods, services can bedistinguished on the basis of their buyers

and the ways they use the products

Services can also be convenience,shopping, or specialty products dependingon the buying patterns of consumers


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Product Lines and Product Mi

Product Linegroup of related productsthat are physically similar or are intended

for the same mar"et.

Product Micompanys assortment of

product lines and individual offerings.



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Product Mi



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Product Life CycleProduct Life Cycle

Product Life Cyclefour basic stagesthrough which a successful productprogresses.

!ntroduction5rowth

*aturity

6ecline



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Stages in t!e Product Life Cycle



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Stages of t!e Product Life Cycle

Introduction

8irm attempts to build demand for its

new offeringPromotional campaigns concentrateon features,uses, and benefits

8inancial losses are common due to low

initial sales and heavy promotional costs



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Growt!Sales climb 9uic"ly

8irm usually begins to reali(e profits dueto higher sales volume

*ar"eting efforts continue to focus onestablishing the product in the mar"etand building brand awareness

ater in the growth stage, the strategy

shifts to building loyalty:dditional spending on productadaptation, promotion and distribution,along with lower prices may be necessary



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Stages of t!e Product Life CycleMaturity

!ndustry sales continue to grow,but eventually reach a plateau

+ompanies emphasi(e mar"etsegmentation often resulting inan oversupply of the product

+ompetition intensifies, and profitsbegin to decline

Some firms reduce prices and;or

spend heavily on promotion



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"ecline!nnovations or shifts in consumerpreferences cause an absolute declinein industry sales

!ndustry as a whole does not generateprofits, though some firms can prosper

Prices tend to hold steady if a loyalmar"et segment continues to buy the

product!f the firm is selling to consumers whoare loyal, they can s"ip most of theusual advertising



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Mar#eting Strategy Implications of t!eProduct Life Cycle

Product life cycle concept is an invaluablemanagement tool for designing amar"eting strategy at different life



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*ar"eting Strategy !mplications ofthe Product ife +ycle



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$ew Product "evelopment$ew Product "evelopment

Stages in $ew%Product"evelopment

=ew products are

the lifeblood ofany organi(ation

8irms must

periodically addnew products toassure continuedprosperity



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Stages in $ew%Product "evelopmentGenerating $ew%Product Ideas

=ew product ideas come from manysources including>

+ustomersSuppliers

mployees

?esearch scientists

*ar"eting researchers

@utside inventors

+ompeting products




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Stages in $ew%Product "evelopment

Screening

*ar"eters evaluate ideas commercial

potential+hec"lists of development standardscan be helpful at this stage

-his stage often involves

representatives of different functionalareas




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Concept "evelopment BusinessAnalysis

valuation of whether the idea fitswith the firms product, distribution,and promotional resources

*ar"eters also assess potential sales,profits, growth rate, and competitivestrengths



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Product "evelopment

+onverting an idea into a physical

product

?e9uires interaction betweendevelopment engineers and mar"eters

Prototypes may go through manymodifications



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Stages in $ew%Product"evelopment

&est mar#eting

-rial introduction of a new

product, supported by a completemar"eting campaign, to aselected area with a populationtypical of the total mar"et

Some firms s"ip this stage,moving directly to full


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Commerciali'ation

!n this stage, the firm offers its newproduct in the general mar"etplace

-he firm establishes mar"etingprograms, production facilities, andac9uaints its sales force,intermediaries, and potential

customers with the new product



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Product IdentificationProduct Identification

Brandname, term sign, symbol, design,or some combination that identifies theproducts of a firm and distinguishes themfrom competitive offerings.

Brand namethe part of a brandconsisting of words or letters that form aname that identifies and distinguishes anoffering from those of competitors

&rademar#brand with legal protection

against another companys use #caninclude pictorial designs, slogans,pac"aging elements, and productfeatures&


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Selecting an (ffective Brand $ame

Should communicate appropriateproduct images

*ust be easy to pronounce, recogni(e,and remember

Aest if Short

Should :ttract :ttention


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Brand Categories

Manufacturer)s *or national+,rands brand offered andpromoted by a manufacturer or

producer

Private *or store+ ,randidentifies

a product that is not lin"ed to themanufacturer, but instead carries thelabel of a retailer or wholesaler


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Brand Categories

-amily Brandsingle brand name thatidentifies several related products

Individual Brandsgiving a differentbrand name to each product within a

product line


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Pac#ages and La,els

Pac"aging helps to achieve severalgoals>

Protects against damage, spoilage,and pilferage

:ssists in mar"eting the product

+ost


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Pac#ages and La,els

La,eldescriptive part of a productspac"age that lists the brand name or

symbol, name and address of themanufacturer or distributor, productcomposition and si(e, nutritionalinformation for food products, and

recommended uses

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