Manage the Product
Chapter Nine
Chapter Objectives
 Explain the different product objectives and strategies
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a firm may choose
Understand how firms manage products throughout
the product life cycle
Discuss how branding strategies create product
identity
Explain how packaging and labeling contribute to
product identity
Describe how marketers structure organizations for
new and existing product management
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Product Lines
 Product Line: A firm’s total
product offerings designed to
satisfy a single need of the
target market
 Product Line Length: The
number of separate items
within the same category
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The Product Mix
 Product Mix: A firm’s
total products offered for
sale (Proctor & Gamble)
 Product Mix Width: The
number of different
product lines the firm
makes
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Figure 9.1
Steps to Manage Products
Step 1
Step 2
Step 3
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Figure 9.2
1-Objectives for Single & Multiple Products
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1a-Objectives and Strategies
for Individual Products
 Objectives and strategies for individual products:
 Successful introduction of new products
 Taking regional products national
 Breathing new life into mature products while
maintaining brand personality
9-7
1b-Objectives and Strategies
for Multiple Products
 Product line:
Firm’s total product offering designed to satisfy a
single need or desire of target customers
 Product line strategies:
 Full-line vs. limited-line strategies
 Upward, downward, or two-way line stretch
 Filling out or contracting a product line
 Cannibalization is a risk: loss of sales when a new
(similar) item is introduced (iPhone 5S)
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1b-Objectives and Strategies
for Multiple Products
 Product mix strategies:
The total set of products a firm offers for sale
 Product mix strategies:
 Width of product mix must be considered
 Product lines in mix usually have some things in
common
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Quality as a Product Objective:
The Science of TQM
 Product quality is often
an objective
 A philosophy of total
quality management
(TQM) can help achieve
quality objectives
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Quality Guidelines
 ISO 9000:
 Standards for quality management
 ISO 14000:
 Environmental management
 Six Sigma methodology:
 Process allowing no more than 3.4 defects per million
(getting it right
99.9997% of the time)
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2-Design Product Strategies
The Product Life Cycle
The Product Life Cycle: A concept that provides a way to
trace the stages of a product’s acceptance, from its
introduction (birth) to its decline (death).
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A familiar concept in marketing and a useful marketing
management tool.
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The PLC concept can be used to analyze a brand, product
form or product category.
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Some critics have challenged the basis & value of the PLC.
5
Figure 9.4
The Product Life Cycle
9-13
Figure 9.5
Marketing Mix Strategies Through the PLC
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Introductory Stage
 High failure rates
 Little competition
 Frequent product modification
 Limited distribution
 High marketing and production costs
 Negative profits with slow sales increases
 Promotion based on awareness & information
 Communication challenge is to stimulate
primary demand
5
Growth Stage
 Increasing rate of sales
 Entrance of competitors
 Market consolidation
 Initial healthy profits
 Aggressive advertising of the differences
between brands
 Wider distribution
5
Maturity Stage
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Sales increase at a decreasing rate
Saturated markets
Annual models appear
Lengthened product lines
Service and repair assume important roles
Heavy promotions to consumers and
dealers
 Marginal competitors drop out
 Niche marketers emerge
5
Decline Stage
 Long-run drop in sales
 Large inventories of
unsold items
 Elimination of all nonessential
marketing expenses
 “Organized abandonment”
5
3-Creating Product Identity:
Branding Decisions
 Brand:
A name, term, symbol, or any other
unique element that identifies one
firm’s product and sets it apart from
the competition
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What’s in a Name or Symbol?
 A “good” brand name:
 Maintains relationships with customers
 Positions a product by:
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Portraying an image, or
Describing how the product works
 Is easy to say, spell, read, and remember
 Fits the target market, product benefits,
customer’s culture, and legal
requirements
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Trademarks
 Trademark
 The legal term for a brand name, brand mark, or trade
character
 The trademark symbol used in the U.S.
®
 Trademarks legally registered by a government obtain
protection for exclusive use in that country
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Why Brands Matter
 Brand equity:
 A brand’s value to its organization over and above the
value of the generic version of the product
 Brand equity provides competitive advantage
 Brand equity results in brand loyal consumers and
attachment
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Why Brands Matter
 Brand storytelling:
 Marketers seek to engage consumers with
compelling stories about brands
 Characteristics of world class brands
 Brand extensions:
 New products sold with the same
brand name
 Sub-branding:
 Creating a secondary brand within a main brand
that can help differentiate a product line
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Figure 9.6
Branding Strategies
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Branding Strategies
 Individual brands vs.
family brands
 Individual brand: A
unique brand for each
item in the product line
 Family brand: A brand
that a group of products
or brands share
 Campbell’s provides an
umbrella under which
multiple products can
be marketed
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Branding Strategies
 National vs. store brands
 Store brands (private label brands)
are exclusive to a given retailer
 Generic brands
 Licensing:
 One firm sells the right to another to use a legally
protected brand name for a specific purpose and for a
specific period of time
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Branding Strategies
 Co-branding:
 Two brands combine to
create a new product
 Provides greater
recognition or other
strengths than either
could achieve alone
 Ingredient branding is
increasing
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Brand Metrics
 Approaches to measuring brand equity:
 Customer mind-set metrics
 Product-market outcomes metrics
 Financial market metrics
 Revenue premium metric
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Figure 9.7
Functions of Packaging
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Figure 9.7
Functions of Packaging
• Functions of packaging:
• A cover or container for a product
• Helps create a competitive advantage for the brand
• Provides protection during transit
• Facilitates consumer’s handling of the product
• Communicates the brand’s personality via the use
of color, words, shapes, designs, and pictures
• Supplies important information, such as
nutritional information, ingredients, benefits,
recipes, directions, warnings, toll-free phone
numbers, and the UPC code
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Designing Effective Packaging
 Effective packaging
considers:
 Packaging of other
brands in same product
category
 Package should
standout and be
different from the
competition
 Store brands attempt to
mimic other brands as
close as legally possible
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Designing Effective Packaging
 Effective packaging also considers:
 Choice of packaging material and image it projects
 Environmental impact of packaging
 Shape, color and graphic information to be portrayed
 Takes into account labeling regulations
 Federal Fair Packaging & Labeling Act of 1966
 Nutrition Labeling & Education Act of 1990
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