Managing the Product
Chapter Objectives
• Explain the different product objectives and strategies a
firm may choose
• Explain how firms manage products throughout the
product life cycle
• Discuss how branding creates product identity and
describe different types of branding strategies
• Explain the roles packaging and labeling play in
developing effective product strategies
• Describe how organizations are structured for new and
existing product management
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Real People, Real Choices
• Grendha Shoes Corp. (Angelo Daros)
• Launching the Rider brand in the United States,
Angelo needed a plan to position the brand.
 Option 1: position U.S. Rider the same way as the
Brazilian version
 Option 2: position Rider as an “after sport footwear”
brand
 Option 3: position Rider more specifically as an “after
soccer” brand
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Product Planning:
Taking the Next Step
• Today, successful product management is more
important than ever.
• Products are created, grow, reach maturity, and
decline at faster and faster speeds.
LEXUS HYBRID
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Figure 9.1:
Steps in Managing Products
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Using Product Objectives to
Decide on a Product Strategy
• Objectives must be measurable, clear, unambiguous,
and feasible and must indicate a specific time frame.
• Objectives and strategies for individual products:
--Successful introduction of new products
--Breathing new life into mature products
MINIUSA.COM
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Figure 9.2: Objectives for Single and
Multiple Products
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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 mix: The total set
of all products a firm
offers for sale
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Objectives and Strategies for
Multiple Products
• Product-Line Strategies
 Full-line versus limited-line strategies
 Upward, downward, or two-way line stretch
 Filling out or contracting a product line
• Product-Mix Strategies
 Width of product mix: the number of different product
lines produced by firm
Swiss Army
Video
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Group Activity
• Think of your college or university as an
organization that offers a line of different
educational products.
• Develop alternatives it might consider and
describe how each might be accomplished and
evaluated:




Upward product stretch
Downward product stretch
Two-way stretch
Filling-out strategy
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Quality as a Product Objective
• Product quality: overall ability of product to
satisfy customer’s expectations
• Total Quality Management (TQM): companywide dedication to the development,
maintenance, and continuous improvement of
all aspects of the company’s operations
MALCOLM BRIDGE
AWARD WINNERS!
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ISO Quality Standards
• ISO 9000: voluntary standards for quality
management set by International
Organization for Standardization (ISO)
• ISO 14000: concentrate on environmental
management
• Six Sigma methodology: no more than 3.4
defects per million (getting it right
99.9997% of the time)
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Adding Quality to the Marketing Mix
• Product: improve customer service
• Place: involve suppliers and customers in
improving on-time delivery
• Price: lower costs and improve service at same
time
• Promotion: give customers information when
they want and need it (not when it’s convenient
for firm)
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Dimensions of Product Quality
Figure 9.4
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Group Activity
• Conduct a brief focus group of students
and find out whether consumers complain
to each other about poor product quality.
 --Have they ever used a Web site to express
displeasure over product quality?
 --If so, what was the result?
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Discussion
• Quality can mean different things for
different products. What does it mean for
the following?
 Automobile
 Pizza
 Running shoes
 Hair dryer
 Deodorant
 College education
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Marketing Throughout
the Product Life Cycle
• Product life cycle: the way products go
through four distinct stages from birth to
death -- introduction, growth, maturity, and
decline.
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The Product Life Cycle
Figure 9.5
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The Introduction Stage
• First stage in the product life cycle, in
which slow growth follows the introduction
of a new product in the marketplace.
• --Goal is to get first-time buyers to try
product.
• --Firm does not usually make a profit
during this stage.
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The Growth Stage
• Second stage in the product life cycle,
during which the product is accepted and
sales rapidly increase.
• --Goal is to encourage brand loyalty.
• --Firm introduces product variations to
attract market segments and increase
market share.
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The Maturity Stage
• Third and longest stage in
the product life cycle,
during which sales peak
and profit margins narrow.
--Competition grows intense.
--Firm resorts to price
reductions and reminder
advertising.
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The Decline Stage
• Final stage in the product life cycle, during
which sales decrease as customer needs
change.
• --Market as a whole begins to shrink,
profits decline, fewer product variations
exist, and suppliers pull out.
• --Firm’s major decision is whether to keep
product at all.
OLDTIMECANDY.COM
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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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A Good Brand Name:
• Creates a positive connotation.
• Is memorable.
• Positions a product by conveying image or
personality (Ford Mustang) or describing how it
works (Drano).
• 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
• Legal term for a brand name, brand mark, or trade
character
--Trademarks legally registered by a government obtain
protection for exclusive use in that country.
--Symbol in the U.S.: ®
--Common-law protection: the firm has used the name and
established it over a period of time.
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The Importance of Branding
• Brand equity: a brand’s value to its organization
over and above the value of the generic version
of the product
• Brand meaning: the beliefs and associations a
consumer has about the brand
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Figure 9.7:
The Brand Equity Pyramid
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The Importance of Branding (cont’d)
• Brand equity provides competitive advantage:
the power to capture and hold onto a larger
share of the market and to sell at prices with
higher profit margins
• Brand extensions: new products sold with the
same brand name
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Discussion
• Brand equity means a brand enjoys
customer loyalty, perceived quality, and
brand-name awareness.
 --What brands are you loyal to?
 --What element of the product creates brand loyalty
and thus brand equity?
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Discussion
• What are some examples of brand
extensions that have damaged the parent
brand’s equity? What are some that have
enhanced it?
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Branding Strategies
• Individual brands vs. family brands
• National and store brands
• Generic brands: no branding
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Branding Strategies (cont’d)
• Licensing: one firm sells
the right to use a legally
protected brand name for
a specific purpose and for
a specific period of time
• Co-branding: combines
two brands
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Creating Product Identity:
Packaging and Labeling Decisions
• Package: the covering or container for a product
that provides product protection, facilitates
product use and storage, and supplies important
marketing communication
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Packaging and Labeling Decisions
(cont’d)
• Universal Product Code (UPC): set of
black bars or lines printed on the
side/bottom of most items sold in stores;
creates a national system of product
identification
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Designing Effective Packaging
Effective packaging
considers:
• Packaging of other brands
in same product category
• Choice of packaging
material
• Environmental impact
• Shape and color
• Graphic information
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Labeling Regulations
• Federal Fair Packaging and Labeling Act
of 1966 aims at making labels more
helpful to consumers by providing useful
information.
• Food and Drug Administration requires
food labels to tell how much fat, saturated
fat, cholesterol, calories, carbohydrates,
protein, trans fats, and vitamins are in
each product serving.
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Group Activity
• For each of the following, discuss any problems
you have with the packaging of the brand you
use. Think of ways to improve the package.






Dry cereal
Laundry detergent
Frozen orange juice
Gallon of milk
Potato chips
Loaf of bread
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Organizing for Effective Product
Management
• Management of Existing Products
 Brand managers
 Product category managers
 Market managers
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Organizing for New-Product
Development
• Venture teams: specialists in different
areas who work together to focus on newproduct development
• “Skunk works”: small and isolated group in
remote location that functions with minimal
supervision
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Real People, Real Choices
• Grendha Shoes Corporation
(Angelo Daros)
• Angelo chose option 2:
position Rider as an “after
sport footwear” brand
Grendha adapted the same strategy in
over 85 countries around the world
and now sells millions of pairs
globally.
GRENDA SHOE CORPORATION
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Marketing Plan Exercise
• Dr. Pepper is the oldest soft-drink brand in
the United States.
 What are some product-line strategies Dr. Pepper
might consider?
 How important is TQM, and product quality in general,
to a brand like Dr. Pepper?
 What realistic opportunities for brand extensions exist
for Dr. Pepper?
 Does Dr. Pepper have high brand equity? What can
it do to enhance its brand equity?
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Marketing in Action Case:
You Make the Call
• What is the decision facing Sony?
• What factors are important in
understanding this decision situation?
• What are the alternatives?
• What decision(s) do you recommend?
• What are some ways to implement your
recommendation?
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Keeping It Real: Fast Forward to Next Class
Decision Time at Universal Studios
• Meet Robyn Eichenholz, senior brand
manager at Universal Orlando.
• Upcoming Donna Summer concert would
attract many customers
• The decision: How to plan for the Donna
Summer concert
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