product
DESCRIPTION
All types of Product Information and it Strategy..TRANSCRIPT
7-1
Product Decisions
• Product is critical element of marketing mix; Anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a want or need.– Physical object, service,
person, place, organization, idea
7-2
Unique Characteristics of Servicesand Resulting Marketing Challenges
Exhibit 7.6
7-3
Product Decisions Involve…
• Product mix- total group of products offered by company
• Product lines-group of closely related product items– Depth-number of items in line
• Brands-combination of name, symbol, term, or design that identifies specific product
• Packaging and labeling• Positioning
7-4
Positioning Decision
• Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the target market’s mind.
7-5
Steps In The Positioning Process
1. Identify relevant set of competitive products serving target market2. Identify the set of determinant attributes that define the “product
space”.3. Collect information from a sample of customers and potential customers
about perceptions of each product on the determinants4. Determine the product’s current positioning.5. Determine the customers’ most preferred combination of determinant
attributes.6. Examine the fit between preferences of market segments and current
position of products.7. Write positioning statement to guide development of marketing
strategy.
7-6
Positioning Map: Automobiles For Generation Yers
More “Edgy”
Less “Edgy”
ExpensiveInexpensive
Scion
Kia Sorrento
$13k
Cube
Civic$20K
7-7
Trout and Ries suggest a six-step question framework for successful
positioning:1. What position do you currently
own?2. What position do you want to
own? 3. Whom you have to defeat to own
the position you want. 4. Do you have the resources to do
it? 5. Can you persist until you get
there? 6. Are your tactics supporting the
positioning objective you set?
7-8
• How is the Ford Mustang positioned? How has Ford achieved this positioning? Has its positioning changed over time?
7-9
• Differentiation Strategies – Create differences in the firm’s product offering that sets it apart from competing offerings based on– Product features– Advantages– Benefits
Product Differentiation
7-10
Using Product Descriptorsfor Product Differentiation
Exhibit 6.7
7-11
How is Venus positioned/differentiated from other razors?
7-12
Stages of the Product Life Cycle
Exhibit 7.2
7-13
Marketing Strategy Duringthe Product Life Cycle
Exhibit 7.3
7-14
• Begins when development is complete• Ends when customers widely accept the product• Marketing strategy goals during this stage:
– Attract customers by raising awareness and interest– Induce customers to try and buy– Engage in customer education activities– Strengthen or expand channel and supply
relationships– Build on availability and visibility– Set pricing objectives
Introduction Stage
7-15
• Be ready for sustained sales increases
• Rapid increase in profitability early in the growth stage that decreases at the end of this stage
• Length depends on nature of product and competitive reactions
• Two strategies:– (1) Establish a strong, defensible marketing position– (2) Achieve financial objectives
Growth Stage (1 of 2)
7-16
• Marketing strategy goals in this stage:– Leverage the product’s perceived differential advantages
– Establish a clear product and brand identity
– Create unique positioning
– Maintain control over product quality
– Maximize availability of the product
– Maintain or enhance the product’s profitability to partners
– Find the ideal balance between price and demand
– Keep an eye focused on the competition
Growth Stage (2 of 2)
7-17
• Few, if any, new firms will enter the market
• Still an opportunity for new product features and variations
• Typically the longest stage in the product life cycle
Maturity Stage (1 of 2)
7-18
• Four general goals in this stage:– (1) Generate Cash Flow– (2) Hold Market Share– (3) Steal Market Share– (4) Increase Share of Customer
• Four options to achieve these goals:– (1) Develop a new product image– (2) Find and attract new users to the product– (3) Discover new applications for the product– (4) Apply new technology to the product
Maturity Stage (2 of 2)
7-19
• Two options:– (1) Attempt to postpone the decline– (2) Accept its inevitability
• Harvesting• Divesting
• Factors to be considered during this stage:– Market segment potential– The market position of the product– The firm’s price and cost structure– The rate of market deterioration
Decline Stage
7-20
Product-Mix Width Procter & Gamble Example
Disposable Diapers
Detergents Bar Soap
Toothpaste
Paper Tissue
Pampers Ivory Snow Ivory Gleem Charmin
Luvs Dreft Kirk’s Crest Puffs
Tide Lava Banner
Cheer Camay Summit 1100’s
Oxydol Zest
Dash Safeguard
Bold Coast
Gain Olay
Era
7-21
Product Lines andProduct Mixes at Gillette
Exhibit 7.1
7-22
Product Mix Decisions
• Def.: Set of all products and items that a particular seller offers to buyers.
• Decisions include selection of width, length, depth, and consistency
7-23
Product Line Decisions
• Line stretching– Downward – enter on the low end– Upward – enter on the high end– Two-way – enter both directions– Line-filling – add more items
• Line Modernization – update to reflect current trends, themes
• Line-Featuring-select one or a few items in the line to feature
• Line-Pruning – select item(s) to cut
7-24
What is a Brand?
• A brand is a name, term, sign, symbol, or design, or a combination of them intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.
7-25
7-26
The World’s Twenty-FiveMost Valuable Brands
Exhibit 7.5
7-27
Branding Decisions
• Brand Name– Individual (General Mills- Bisquick, Gold Medal, Betty Crocker;
P&G)
– Blanket family name (Heinz, Campbell)
– Separate family names (Sears-Kenmore for appliances, Craftsman for tools)
– Company plus individual names (Kellogg Rice Krispies)
7-28
Product Category
Line Category
Existing New
Existing Line Extension – additional items in the same product category under the same brand name, new flavors, package sizes, added ingredients, e.g. Heinz Green Ketchup
Brand Extension – Use existing brand name to launch new products in other categories, e.g. Hondo lawn mowers, marine engines
New Multibrands – Additional brand in the same product category, Pampers, Luvs
New Brands – launches new products in new categories, e.g. Barbie Bedding
Branding Decisions
7-29
Good Brand Names
• Distinctive• Lack Poor Foreign Language Meanings• Suggest Product Qualities• Suggest Product Benefits• Easy to Pronounce, Recognize, Remember
– Zit (Chocolate from Germany)– Koff (Beer)
7-30
Packaging Decisions
• Design, materials, size
• Critical as marketing tool– Self-service– Company & brand image– Opportunity for brand innovation
7-31
Factors Influencing Product Strategy Decisions
• Classification of Products– Convenience– Shopping– Specialty– Unsought Products
• Product Life Cycle
7-32
Product Classification (1 of 3)
• Consumer Product Classifications– Convenience Products
• Routinely purchased, require little or not time searching
• Make them widely available
7-33
– Shopping Products• Spend considerable time making the purchase; seek info on
price, features, service• Product differentiation very important• Have strategy to guarantee and reduce consumer
satisfaction
7-34
– Specialty Products • Unique, shoppers expend considerable time,
effort, money to acquire; accept no substitutes
7-35
– Unsought Products• (1) Products of which consumers are
unaware
• (2) Products that consumers do not consider purchasing until a need or emergency arises
7-36
New Product Development
• Six strategic product development options:– (1) New-to-the-world products (discontinuous
innovations)– (2) New product lines– (3) Product line extensions– (4) Improvements or revisions of existing
products– (5) Repositioning– (6) Cost reductions
• Customer perception of differentiation is critical
7-37
• No sales revenue during this stage
• Components of the product concept:– An understanding of desired uses and benefits– A description of the product– The potential for creating a complete product line– An analysis of the feasibility of the product concept
• Customer needs should be discerned before developing marketing strategy
Development Stage