Product Planning
Chapter 30
Vocabulary Terms
• 1. Product Mix
• 2. Product Line
• 3. Product Item
• 4. Product Depth
• 5. Product Width
Objectives
Describe the steps in product planning
Explain how to develop, maintain, and
improve a product mix
Product Planning
Making decisions about what features should
be used in selling a business’s products,
services, or ideas.
Decisions relate to features such as:
Packaging, labeling, and branding
Warranties and support services
Product Planning Allows Businesses To:
Coordinate existing
products and
features
Add new products
Delete products that
no longer appeal to
customers
Product Mix
All of the different products that a company
makes or sells.
A retailer’s product mix is made up of all the
different products the store sells.
Click on products to see Proctor and Gambles extensive product mix!
Product Mix
Kraft is another great example!
– Hundreds of products in 5 areas:
•
•
•
•
•
Snacks
Beverages
Cheese
Groceries
Convenience Meals
– Kraft’s key brands include: Kraft,
Kool-Aid, Maxwell House, Nabisco,
Oscar Mayer, and Post.
Product Mix
Adding more products, may not result in
increase sales, sometimes it can take away sales
from existing products.
– Pepsi One takes away from Diet Pepsi sales
The type and number of products that a retail
store offers must be based on the image the
business is trying to project and the market
they are trying to reach
Product Line
A group of closely related
products manufactured or
sold by a business.
– related products of various
sizes, types, colors, qualities,
or prices.
• Example: range of desktop
and laptop computers
manufactured by Dell.
• Apple’s Product Line Secret
Product Item
A specific model, brand or size of a product
within a product line.
– Retailers generally carry several product items for
each product line they sell
• Macy’s carries many styles and sizes of Guess Jeans for
men, women, and kids
Product Width
The number of different product lines a
business makes or sells
– A retailer that sells three brands of jeans (Levi’s
Lee, and Guess) has a product width of three
Product Depth
Number of product items offered with in each
product line
– Red Lobster specializes in seafood dinners and has
great depth within a narrow product line. You can
order shrimp prepared 16 different ways.
Width and Depth
Product Width
Kohl’s Department store stocks several
brands of jeans: Lei, Levi’s, J-Lo, & Wrangler
which demonstrates product width.
Product Depth
The product depth is the number of sizes,
price ranges, colors, and styles for each
brand of jeans (Lei jeans have boot cut,
flare, low rise, ankle etc).
Gillette Product Mix
PRODUCT
L I N E S ………….P R O D U C T
LINES
Blades
And Razors
Toiletries
Writing
Instruments
Lighters
MACH 3
Sensor
Trac II
Atra
Swivel
Double-Edge
Lady Gillette
Super Speed
Twin Injector
Techmatic
Series
Adorn
Toni
Right Guard
Silkience
Soft and Dri
Foamy
Dry Look
Dry Idea
Brush Plus
Paper Mate
Flair
Cricket
S.T. Dupont
I
T
E
M
S
Determining a Product Mix
To determine its product mix, a business must:
– Identify its target market
– Identify its competitors
– Decide on the image it wants to project
Product Mix Strategies
The plan for how the business determines which
products it will make or carry
1) Develop new product lines or add new products
to existing lines
2) Expand or modify current lines
3) Drop existing products
Key Steps in Product Development
Step 2
Screen
Ideas
Step 5
Test
Product
Step 3
Develop
Business
Proposal
Step 6
Introduce
Product
Step 4
Develop
Product
Step 7
Evaluate
Customer
Acceptance
Developing Existing Products
Two ways of developing existing products are:
– line extensions
– product modifications
Line Extensions
A different product that appeals to different
consumers
Line extensions add new product lines, items,
or services.
– Tylenol Flu, Tylenol Cold, and Tylenol Allergy Sinus
are line extensions of the original Tylenol Product.
Line Extension
Product Modifications
An alteration in a company’s existing product
Modified products may be offered in new and
different varieties, formulations, colors, styles,
features or sizes.
Write down as many Oreo product
modifications you can think of.
Sign up to bring an Oreo product modification
to the next class!
Deleting a Product or Product Line
Obsolescence
Loss of appeal
Conflict with current company objectives
Replacement with new products
Lack of profit
Conflict with other products in the line
What products can you think of that are obsolete or
have a loss of appeal?
Activity
Case Study
– New Coke
– Work with your table group to find an article online that discusses
the introduction of this product and then answer the following
questions:
1.
2.
3.
4.
Why did Coca-Cola introduce New Coke and what were they hoping to
accomplish?
Explain the impact New Coke had on Coca-Cola Classic in the
marketplace.
What type of product mix strategy was Coke employing by adding this
product to Coke’s product mix?
Explain the success/failure/surprises encountered during this campaign.
– Write down the questions and your responses.
– Be prepared to discuss your responses as a class!
– We will move next door and talk about this at 1:00.