•Product Planning –
Involves making decisions about the production
& sale of a businesses products
oDecisions relate to:
Design
Labeling
Branding
Deleting old products
Creating campaigns
 Packaging
 Warranty
 Product mix
•Product Mix –
Includes all the different products that a
company makes or sells
Large manufacturer may have hundreds of
products in one product mix
Product Line –
oGroup of closely related products
manufactured and/or sold by a business
Example:
•
Cereral
Pop Tarts
Waffles
Product Items –
oSpecific model, brand, or size of a product
within a product line
Example:
Product Width –
# of different product lines a business
manufacturers or sells
Example:
Line
Line
Line
Line
Line
Line
#1
#2
#3
#4
#5
#6
– Cereal
– Crackers
– Pop tarts
– Waffles
– Fruit Snacks
- Cookies
Product Depth –
# of product items offered within each
product line
Example:
Cereal
4 PRODUCT MIX STRATEGIES
1. DEVELOP NEW PRODUCT
2. EXPAND PRODUCT LINE
3. MODIFY PRODUCT LINE
4. DELETE PRODUCT LINE
DEVELOPING NEW PRODUCT
SIX STEPS
1. GENERATE IDEAS
• CUSTOMERS, COMPETITORS, EMPLOYEES
2. SCREEN IDEAS
• IDEAS ARE SCREENED AND EVALUATED; ELIMINATION; LEFT WITH
ONE IDEA
3. DEVELOPING
• TAKES PHYSICAL SHAPE – PROTOTYPE IS CREATED
• MILLIONS SPENT ON THIS STAGE
• CAN BE LONG DELAYS
4. TESTING
• TESTED IN ONE GEOGRAPHICAL AREA
• TESTED IN LABS/BY POTENTIAL CONSUMERS
5. INTRODUCING PRODUCT
• COSTS ARE HIGH; ADVERTISED, DISTRIBUTED, TRAINING
6. EVALUATE CUSTOMER ACCEPTANCE
• STUDY SALES; PREPARE FOR FUTURE CHANGES
2. EXPAND PRODUCT LINE
1. BUILD ON PRODUCT IMAGE
• SONY = INNOVATOR
2. INCREASE SALES/PROFITS
3. APPEAL TO NEW MARKETS
3. MODIFY PRODUCT LINE
1. PRODUCT MODIFICATION
• ALTERATION IN A COMPANY’S EXISTING PRODUCT
• NEW SIZES, COLORS, SHAPES
2. LOW RISK, QUICK, EASY, INEXPENSIVE
4. DELETE PRODUCT LINE
1. OBSOLETE
• CHANGING INTERESTS/TECHNOLOGY
2. LOST APPEAL
• TASTES CHANGE
• POGS, CRAZY BONES, TAMAGACHI PETS
3. DOES NOT MATCH COMPANY OBJECTIVE
• SEARS – SOLD CALDWELL BANKER
4. MAKE ROOM FOR OTHER PRODUCTS
• LIMITED SHELF SPACE
5. NO LONGER PROFITABLE
• FAST MOVING/PROFITABLE PRODUCTS
• PET ROCKS
6. CONFLICTS WITH OTHER PRODUCTS IN SAME PRODUCT LINE
• WHITE CLOUD COMPETING WITH CHARMIN