product strategy. what is a product? anything that can be offered to a market for attention,...
TRANSCRIPT
Product Strategy
What is a Product? Anything that can be offered to a market for
attention, acquisition, use or consumption. Satisfies a want or a need. Includes:
Physical Products Services Persons Places Organizations Ideas Combinations of the above
Product
A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or some other unit of value
Product Line
A product line is a group of products that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same type of outlets, or fall within a given price range
Product Mix
The product mix is the number of product lines offered by a company
Product ItemProduct Item
Product LineProduct Line
Product MixProduct Mix
A specific version of an organization’s products.A specific version of an organization’s products.
A group of closely-related product items.
A group of closely-related product items.
All products that an organization sells.
All products that an organization sells.
Product Items, Lines, and Mixes
Levels of ProductLevels of Product
BrandName
QualityLevel
Packaging
Design
Features
Delivery& Credit
Installation
Warranty
After-Sale
Service
CoreBenefit
orService
CoreBenefit
orService
ActualProduct
ActualProduct
CoreProduct
CoreProduct
AugmentedProduct
AugmentedProduct
Classifying Products
Type of Use Consumer goods Business Goods
Degree of Tangibility Nondurable Good-used up in a few uses Durable Good-lasts over many uses
Consumer Goods
Consumer goods are products purchased by the final consumer
Business Goods
Business goods are products that assist directly or indirectly in providing products for resale.
Services
Services are intangible activities or benefits that an organization provides to consumers in exchange for money or something else of value
ConvenienceProduct
A relatively inexpensive item that requires little shopping effort.
ShoppingProduct
A product that requires comparison shopping, because it is usually more expensive and found in fewer stores.
SpecialtyProduct
A particular item that consumerssearch extensively for and are reluctant to acceptsubstitutes
UnsoughtProduct
A product unknown to the potential buyer or a known product that the buyer does not actively seek
Product ClassificationsConsumer Products
Shopping ProductsShopping Products
Buy less frequentlyGather product informationFewer purchase locationsCompare for:
• Suitability & Quality • Price & Style
Convenience ProductsConvenience Products
Buy frequently & immediatelyLow pricedMany purchase locationsIncludes:
• Staple goods• Impulse goods• Emergency goods
Specialty ProductsSpecialty Products
Special purchase effortsUnique characteristicsBrand identificationFew purchase locations
Unsought ProductsUnsought Products
New innovationsProducts consumers don’t want to think aboutRequire much advertising & personal selling
Product ClassificationsConsumer Products
Product ClassificationsOther Marketable Entities Organizations - Organizations - Profit (businesses) and
nonprofit (schools and churches).
Person - Person - Political and sports figures, entertainers,
doctors and lawyers. Place - Place - Cities and tourism. Social -Social - Reduce smoking, clean air,
Individual Product Decisions
Product Attributes (Quality, Features, Style and Design)
Branding Packaging Labeling Product Support Services
New-Product Process
The new-product process consists of seven stages a firm goes through to identify business opportunities and convert them to a salable good or service
New Product Development
Idea Generating Screening and Evaluation Business Analysis Development Market testing Commercialization
Reasons for New Product Failures
Bad Timing Too Little Market Attractiveness Poor Marketing Mix No Access to Buyers Insignificant Point of Difference Poor Product Quality Insensitivity to Customer Needs on
Critical Factors
Product Life Cycle
The product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline
Time
Profits
Sales
IntroductoryIntroductoryStageStage
GrowthGrowthStageStage
MaturityMaturityStageStage
DeclineDeclineStageStage
0
Product Life Cycle
Dollars
Introductory Stage High failure rates Little competition Frequent product modification Limited distribution High marketing and production costs Negative profits Promotion focuses on awareness and
information Intensive personal selling to channels
Growth stage Increasing rate of sales Entrance of competitors Market consolidation Initial healthy profits Promotion emphasizes brand ads Goal is wider distribution Prices normally fall Development costs are recovered
Maturity Stage Declining sales growth Saturated markets Extending product line Stylistic product changes Heavy promotions to dealers and
consumers Marginal competitors drop out Prices and profits fall Niche marketers emerge
Decline Stage
Long-run drop in sales Large inventories of
unsold items Elimination of all nonessential
marketing expenses
How stages of the product life cycle relate to firm’s marketing objectives & marketing mix actions
INTRODUCTION GROWTH MATURITY DECLINE
ProductStrategy
DistributionStrategy
PromotionStrategy
PricingStrategy
Limited modelsFrequent changes
More modelsFrequent changes.
Large number of models.
Eliminate unprofitable
models
LimitedWholesale/
retail distributors
Expanded dealers. Long-term relations
Extensive.Margins drop.Shelf space
Phase out unprofitable
outlets
Awareness. Stimulate
demand.Sampling
Aggressive ads.Stimulatedemand
Advertise. Promote heavily
Phase outpromotion
Higher/recoupdevelopment
costs
Fall as result ofcompetition &
efficient produc-tion.
Prices fall (usually).
Prices stabilize at low level.
Brand
A name, term, sign, symbol, or design, or combination of these intended to identify the goods or services of one seller or group of sellers and differentiate them from those of competitors
Branding
Brand Name
That part of a brand that can be spoken, including letters, words, and numbers
BrandMark
The elements of a brand that cannot be spoken
Brand Equity
The value brand names give to a product beyond the functional benefits provided. i.e.-why you pay more for Versache
Private Brand
Often called store brand, a private brand is a manufacturer brand of product sold under the name of the retailer
Manufacturer Brand
Manufacturer brands are often called national brands and are carry the brand name of a maker of the goods
Value of Brand Equity Listed as an intangible asset when
computing company worth. Makes brand name companies sell for more than unbranded companies
Can command larger licensing fees because the product is a definite seller
Can sell the use brand name on non-core products like Ralph Lauren paint or Harley Davidson clothing
Branding andBrand Management
Picking a Good Brand Name Suggest the Product Benefits Be Memorable, Distinctive, and
Positive Fit the Company or Product Image Have No Legal or Regulatory
Restrictions Be Simple and Emotional International: Be Nonmeaningful
LineExtension
Multibrands
BrandExtension
NewBrands
Bra
nd
Nam
e
Existing New
Product Category
Existing
New
Brand Strategy
Packaging Competitive Advantages Sales Tasks Product Safety Identifies Describes Promotes