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LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 11, YOU SHOULD BE ABLE TO:
LO 11-1
Explain the product life-cycle concept.
LO 11-2
LO 11-3
LO 11-4
Identify the ways that marketing executives manage a product ’ s life cycle.
Recognize the importance of branding and alternative branding strategies.
Describe the role of packaging, labeling, and warranties in the marketing of a product.
11-2

GATORADE: BRINGING SCIENCE TO
SWEAT TO WIN FROM WITHIN
 Creating the
Gatorade Brand
 Building the
Gatorade Brand
11-3

FIGURE 11-1 How stages of the product life cycle relate to a firm ’ s marketing objectives and marketing mix actions
11-4

FIGURE 11-1A Stages of the product life cycle and its total industry sales and total industry profit
11-5

FIGURE 11-1B How stages of the product life cycle relate to a firm ’ s marketing objectives and marketing mix actions
11-6

LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
INTRODUCTION STAGE
 Product Life Cycle
 Trial
 Primary Demand
 Selective Demand
 Skimming Pricing
 Penetration Pricing
11-7

FIGURE 11-2 Product life cycle for the standalone fax machine for business use: 1970-2014
11-8

LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
GROWTH STAGE
 Rapid Sales Growth
 More Competitors
 Repeat Purchasers
 New Features
 Broad Distribution
11-9

LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
MATURITY STAGE
 Industry/Product Sales Slow
 Profit Declines
 Product Differentiation
 Fewer Competitors
11-10

LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
DECLINE STAGE
 Industry/Product Sales Drop
 Environmental Changes
 Deletion
 Harvesting
11-11

LO 11-1
Chevy Spark and Amazon Kindle
Which stage of the product life cycle?
11-12

LO 11-1
Soft Drinks and Fax Machines
Which stage of the product life cycle?
11-13

LO 11-1
MARKETING MATTERS
Will E-mail Spell Extinction for Fax Machines?
11-14

LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS OF THE PRODUCT LIFE CYCLE
 Length of the Product Life Cycle
 Shape of the Product Life Cycle
• Generalized Life Cycle
• High-Learning
Product
• Low-Learning product
• Fashion
Product
• Fad
Product
11-15

FIGURE 11-3 Alternative product life cycle curves based on product types
11-16

LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS OF THE PRODUCT LIFE CYCLE
 The Product Level: Class and Form
• Product Class
• Product Form
11-17

FIGURE 11-4 Prerecorded music product life cycles by product form
11-18

LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS OF THE PRODUCT LIFE CYCLE
 The Life Cycle and Consumers
• Diffusion of Innovation
 Innovators
 Early Adopters
 Early Majority
 Late Majority
 Laggards
11-19

FIGURE 11-5 Five categories and profiles of product adopters (diffusion of innovation)
11-20

LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS OF THE PRODUCT LIFE CYCLE
 The Life Cycle and Consumers
• Barriers to Adoption
 Usage
 Value
 Risk
 Psychological
11-21

LO 11-2
MANAGING THE PRODUCT LIFE CYCLE
ROLE OF THE PRODUCT/BRAND MANAGER
 Responsible for the Following:
• Product Life Cycle
• New Product Development
• Marketing Program Implementation
• Data Analysis
 CDI  BDI
11-22

LO 11-2
USING MARKETING DASHBOARDS
Knowing Your CDI and BDI
Category Development Index (CDI) and Brand Development Index (BDI)
CDI =
æ
èç
% of a Product Category's Total U.S. Sales in a Market Segment
ö
% of the Total U.S. Population in a Market Segment
ø÷
´
100
BDI =
æ
èç
% of a Brand's Total U.S. Sales in a Market Segment
ö
% of the Total U.S. Population in a Market Segment
ø÷
´
100
11-23

LO 11-2
MANAGING THE PRODUCT LIFE CYCLE
MODIFYING THE PRODUCT OR MARKET
 Product Modification
• Product
Bundling
• New
Characteristics
 Market Modification
• Finding New
Customers
• Increasing a
Product ’ s Use
• Creating a New
Use Situation
Dockers
Ad
11-24

LO 11-2
MANAGING THE PRODUCT LIFE CYCLE
REPOSITIONING THE PRODUCT
 Product Repositioning
 Reacting to a Competitor ’ s
Position
 Reaching a New Market
 Catching a Rising Trend
 Changing the Value Offered
• Trading Up • Trading Down • Downsizing
11-25

MAKING RESPONSIBLE DECISIONS
LO 11-2
Consumer Economics of Downsizing —Got Less, Pay More
Price for both is the same!
11-26

LO 11-3 BRANDING AND BRAND MANAGEMENT
 Branding
 Brand Name
• Logotype (Logo)
 Trade Name
 Trademark ® ™
SM
• Product Counterfeiting
11-27

LO 11-3
BRANDING AND BRAND MANAGEMENT
BRAND PERSONALITY AND BRAND EQUITY
 Brand Personality
 Brand Equity
• Provides a Competitive Advantage
• Consumers Willing to Pay a Higher Price
11-28

FIGURE 11-6 The customer-based brand equity pyramid
11-29

LO 11-3
BRANDING AND BRAND MANAGEMENT
BRAND PERSONALITY AND BRAND EQUITY
 Creating Brand Equity
• Develop Positive Brand Awareness
• Establish a Brand ’ s Meaning
• Elicit the Proper Consumer Response
• Create Intense Brand Loyalty
11-30

LO 11-3
BRANDING AND BRAND MANAGEMENT
BRAND PERSONALITY AND BRAND EQUITY
 Valuing Brand Equity
• Provides a Financial Advantage
• Brand Licensing
11-31

LO 11-3
BRANDING AND BRAND MANAGEMENT
PICKING A GOOD BRAND NAME
 Should Suggest Product Benefits
 Should Be Memorable and Positive
 Should Fit the Company or Product Image
 Should Have No Legal/Regulatory Restrictions
 Should Be Simple and Emotional
 Should Have Positive Phonetics/Semantics
11-32

LO 11-3
MARKETING INSITE
Have an Idea for a Brand Name? Check First!
11-33

FIGURE 11-7 Alternative branding strategies
11-34

LO 11-3
BRANDING AND BRAND MANAGEMENT
BRANDING STRATEGIES
 Multiproduct Branding
(Family or Corporate Branding)
• Product Line Extensions
• Subbranding
• Brand Extensions
• Co-Branding
11-35

LO 11-3
BRANDING AND BRAND MANAGEMENT
BRANDING STRATEGIES
 Multibranding
• Fighting Brands
 Private Branding (Private Labeling or Reseller Branding)
 Mixed Branding
11-36

LO 11-3
Kimberly-Clark ’ s Huggies
Which branding strategy is used?
11-37

LO 11-3
Black & Decker and Dewalt Tools
Which branding strategy does each use?
11-38

LO 11-4
PACKAGING AND LABELING PRODUCTS
CUSTOMER VALUE AND COMPETITIVE ADVANTAGE
 Packaging
 Label
• Communication Benefits
• Functional Benefits
• Perceptual Benefits
11-39

LO 11-4
MARKETING MATTERS
Pez Heads Dispense More Than Candy
11-40

LO 11-4
PACKAGING AND LABELING PRODUCTS
CHALLENGES AND RESPONSES
 Connecting with Customers
 Environmental Concerns
 Health, Safety, and Security Issues
• Shelf Life
 Cost Reduction
11-41

LO 11-4 PRODUCT WARRANTY
 Warranty
• Express Warranties
• Limited Coverage Warranties
• Full Warranties
• Implied Warranties
11-42

P&G ’ S SECRET DEODORANT: FINDING
INSPIRATION IN PERSPIRATION
11-43