Chapter 10 Chapter Objectives_1 Chapter Objectives _2 Product
advertisement
Chapter Objectives_1 Chapter 10 Explain the different product objectives and strategies a firm may choose Managing the Product Explain how firms manage products throughout the product life cycle Discuss how branding creates product identity and describe different types of branding strategies ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 10- 0 Explain the roles packaging and labeling play in developing effective product strategies Describe how organizations are structured for new and existing product management Marketing: Real People, Real Choices 3rd edition 10- 2 A product line is a firm’s total product offering designed to satisfy a single need for target customers (e.g., P&G’s line of dish detergents: Dawn, Ivory, Joy) Possible line strategies: – full line versus limited line – line stretch: upward, downward, or two-way – filling-out versus contracting Marketing: Real People, Real Choices 3rd edition 10- 1 Firms must plan for its entire product portfolio – Product line strategies – Product mix strategies ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 10- 3 Product Mix Strategies Product Line Strategies ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition Objectives and Strategies for Multiple Products Chapter Objectives _2 ©2003 Prentice Hall, Inc ©2003 Prentice Hall, Inc 10- 4 A product mix is a firm’s entire range of products (e.g., Gillette offers shaving products, deodorants, writing instruments, toothbrushes…) Strategic mix decisions usually relate to the width of the product mix - how many different product lines are produced by the firm ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 10- 5 1 Quality as a Product Objective Key Aspects of Quality Product quality is the overall ability of a product to satisfy customer expectations Level Dimensions of product quality – determined by comparison with other brands in same product category – durability – reliability – precision – ease of use – product safety – aesthetic pleasure ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition Consistency – customers experience the same level of quality in product time after time 10- 6 ©2003 Prentice Hall, Inc Marketing Throughout the Product Life Cycle Marketing: Real People, Real Choices 3rd edition Introduction Full-scale launch of new product The PLC explains how features change over the life of a product Sales are low, high failure rate Little competition Marketing strategies must change and evolve as a product moves through the PLC Frequent product modification The PLC relates to a product category Focus on awareness and primary demand ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 10- 7 Limited distribution High marketing and product costs Intensive personal selling to channel members 10- 8 ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 10- 9 Maturity Growth Many competitors enter market Sales continue to increase but at a decreasing rate Profits are healthy Marketplace is approaching saturation Promotion emphasizes brand advertising and comparative ads New models emphasize style, not function Wider distribution Marginal competitors drop out Sales grow at an increasing rate Toward end of growth stage, prices fall Heavy promotions - sales promotions Sales volume creates economies of scale ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition Product lines are widened or extended Prices and profits fall 10- 10 ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 10- 11 2 Branding Decisions Decline Signaled by a long-run drop in sales Rate of decline is governed by how rapidly consumer tastes change or how rapidly substitute products are adopted. Falling demand forces many out of market Marketing: Real People, Real Choices 3rd edition 10- 12 Brand’s value to its organization Brand equity provides customer loyalty, perceived quality, brand name awareness, competitive advantage Brand equity can be used to establish brand extensions – Alka Seltzer, Alka Seltzer Morning Relief Marketing: Real People, Real Choices 3rd edition ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 10- 13 Branding Strategies Brand Equity ©2003 Prentice Hall, Inc Brands should – be memorable – have a positive connotation – convey a certain image Few specialty firms left ©2003 Prentice Hall, Inc A brand is a name, term, symbol, or any other unique element of a product that identifies one firm’s product(s) and sets it apart from competition Individual brands versus family brands National and store brands Generic brands Licensing Co-branding 10- 14 Packaging and Labeling Decisions ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 10- 15 Management of Existing Products Brand Manager - responsible for positioning of brands, developing brand equity Packaging functions Effective packaging designs Product Category Managers - responsible for coordinating the mix of product lines within the more general product category Labeling regulations Market Managers - focus on customer groups rather than on the products made by the firm ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 10- 16 ©2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 10- 17 3
