Page |1
Marketing 301
Chapter 11 Outline
Managing Products and Brands
The Product Lifecycle
Products, like people, have been viewed as having a lifecycle
The Product Lifecycle describes the stages a new product goes through in the marketplace
-
Introduction
Growth
Maturity
Decline
Figure 11-1 (pg. 237)
Introduction Stage of PLC
-
Marketing Objective
Competition
Product
Price
Promotion
Place (distribution)






Gain Awareness
Few
One
Skimming or Penetration
Inform, Educate
Limited






Stress Differentiation
More
More versions
Gain market share, deal
Stress Points of Difference
More Outlets






Maintain Brand Loyalty
Many
Full Product Line
Defend market share, profit
Reminder Oriented
Maximum Outlets
Growth Stage of PLC
-
Marketing Objective
Competition
Product
Price
Promotion
Place (distribution)
Maturity Stage of PLC
-
Marketing Objective
Competition
Product
Price
Promotion
Place (distribution)
Page |2
Decline Stage of PLC
-
Marketing Objective
Competition
Product
Price
Promotion
Place (distribution)






Harvesting, Deletion
Reduced
Best Sellers
Stay Profitable
Minimal promotion
Fewer outlets
Types of Demand
Primary Demand – desire for the product class, rather than for a specific brand, when there are no
competitors with the same product. (Introduction stage)
Selective Demand – demand for a specific brand
Dimensions of the PLC
Length:
1) Consumer products have shorter PLCs than industrial products
2) Mass communication informs consumers faster & shortens PLC
3) Products affected by technological change tend to have shorter PLC’s
Shape (figure 11-3, pg. 241)
-
-
-
High Learning Product – slow growth at first followed by a small hump
o Significant education of the customer is required and there is an extended introductory
period. Ex. Convection ovens
Low Learning Product – fast growth that rounds off
o Sales begin immediately, but product can be easily imitated by competitors, so the
marketing strategy is to broaden distribution quickly. Ex. Gillette’s Mach3
Fashion Product – growth goes up and down as time goes on with trends
o Introduced, Declines, then seems to return ex. Hemline lengths on skirts
Fad Product – high growth at first that drops off drastically
o Experiences rapid sales on introduction than equally rapid decline
Dimensions of the PLC at the Product Level
1) Product Brand – specific version of a product offered by a company
2) Product Class - refers to entire product category or industry such as video games
3) Product Form – pertains to variations within the product class
Page |3
Factors affecting Diffusion of an Innovation
1)
2)
3)
4)
Usage Barriers – the product is not compatible with existing habits
Value barriers – the product provides no incentive to change…not that much better
Risk barriers – risk can be physical, social or economic/financial
Psychological barriers – which can be the result of cultural differences or image
Figure 11-4 – 5 Categories and Profiles of Product Adopters
Innovators:
-
Venturesome
Higher Educated
Use multiple information sources
Early Adopters:
-
Leaders in social setting
Slightly above average education
Early Majority:
-
Deliberate
Many informal social contacts
Late Majority:
-
Skeptical
Below average social status
Laggards:
-
Fear of debt
Neighbors and Friends are information sources
The Product (Brand Manager) – manage the marketing efforts for a close-knit family of products or
brands
Responsibilities:
-
Developing & Executing a marketing program for the product line described in an annual
marketing plan
Approving Ad Copy, media selection, and package design
A role in planning, implementing, & controlling marketing strategy
Page |4
Product Modification – altering a products characteristics: quality, performance, appearance, to try to
increase and extend the products sales.
-
Changing the products characteristics to give the sense of a revised product can be
accomplished by new features, new package, new scents etc.
Market Modification is utilized when companies try to:
1) Increase the products use among existing customers
2) Create new use situations
3) Find new customers
Repositioning the Product – changing the place a product occupies in a consumer’s mind relative to
competitive products.
-
A firm can reposition a product by changing 1 or more of the 4 marketing mix elemends
Four Factors That Trigger Product Repositioning
1)
2)
3)
4)
Reacting to a Competitor’s Position
Reaching a New Market
Catching a Rising Trend
Changing the Value Offered
a. Trading Up – adding value through additional features or higher quality materials
b. Trading Down – reducing the number of features, quality, or price, can be via
downsizing- reducing the content of packages without changing the package size and
maintaining or increasing the package price
Branding
Branding involves an organization using a name, phrase, design, symbols, or a combo of these to identify
its products and distinguish them from competitors
A Brand Name is any word “device” (design, sound, shape, color) or combination of these used to
distinguish a sellers goods or services
A Trade Name is a commercial, legal name under which a company does business. Ex. Campbell soup co.
A Trademark identifies that a firm has legally registered its brand name or trade name so the firm has
exclusive use, thereby preventing others from using it.
Brand Equity – the added value a given brand name gives to a product beyond the functional benefits
provided.
This value has 2 distinct advantages:
Page |5
1) Provides a competitive advantage, ex. Sunkist label implies quality fruit
2) Consumers are often willing to pay a higher price for a product with brand equity
Considered an Intangible asset, however it has economic value to the manufacturer
-
Can increase in value when managed correctly
Can lose value when managed ineffectively
4 Criteria for picking a good brand name; a good brand name should…
1)
2)
3)
4)
Describe product benefits
Be memorable, distinctive, and positive
Fit the company or product image
Have no legal restrictions
Figure 11-6 (Pg. 249) – Alternative Branding Strategies
-
-
-
-
-
-
Multiproduct Branding – a company uses one name for all its products in a product class.
Sometimes called family branding or corporate branding
o Toro Snowblowers
o Toro Lawnmowers
o Toro Garden Hoses
o Toro Sprinkler Systems
Takes advantage of brand equity and allows for line extensions, or the practice of using a current
brand name to enter a new market segment in its product class
Some companies employ subbranding which combines a corporate or family brand with a new
brand
Strong brand equity also allows for brand extension, the practice of using a current brand name
to enter a completely different product class
Multibranding Strategy – involves giving each product a distinct name.
o Useful when each brand is intended for a different market segment
o A-B makes; Budweiser, Bush, Michelob, Wurtburgr, Hofbrau
Fighting Brands - Multibrand companies introduce new product brands as defensive moves to
counteract competition.
o Chief purpose is to confront competitor brands
Private Branding – often called private labeling or reseller branding – used when a company
manufactures products but sells them under the brand name of a wholesaler or retailer.
o Radio Shack, Sears, Kmart, Kroger all have their own brand names
Mixed Branding –a firm markets products under its own name and that of a reseller because the
segment attracted to the reseller is different from their own market.
o Michelin makes – Sears Tires, Michelin Tires
Generic Branding Strategy – No branding, no identification other than the contents of the
product
Page |6
o
Dog food, peanut butter, green beans, paper towels, aspirin, cola
Packaging
Packaging – component of a product that refers to any container in which it is offered for sale and on
which information is conveyed
-
To a great extent, the customer’s first exposure to a product is the package
Expensive and important part of marketing strategy
Benefits of Packaging:
-
-
-
Communication Benefits – information on it conveyed to the customer
o Directions on how to use product
o Composition of the product
o Warnings & other info necessary to satisfy legal requirements of product disclosure
Functional Benefits
o Storage – coke fridge packs
o Convenience – squeeze bottles, microwave popcorn
o Protection – tamper-resistant containers
o Product Quality – Pringles – uniform chips, minimal breakage, better value
Perceptual Benefits – Can connotation status, economy, and/or product quality
9 Methods for New Product Success:
1)
2)
3)
4)
5)
6)
7)
8)
9)
Take something out of your product – Fat
Put something into your product – vitamin C in milk
Answer Consumer Gripes – easier, faster
Visible Difference – Doritos new package
Make the task easier – Remote Car Start
Use Products in a new way – Snickers are also good to snack on
Product Substitutability – OJ Anytime
Just Be Creative
Look at International Products
Page |7