Managing the Product. Steps in Managing Products (Fig.

Managing the Product

Steps in Managing Products (Fig. 10.1)

Objectives and Strategies for Individual Products Strategies for New Products Strategies for Regional Products Strategies for Mature Products

Objectives and Strategies for Multiple Products: Product Line Strategies A Product Line is a Firm’s Total Product Offering Designed to Satisfy a Single Need Joy Ivory Antibacterial Dawn Special Care Length of Product Line

Product Line Extensions Stretching Adding new items to line Filling Adding sizes or styles Downward Upward Product Line Strategies Danger of Cannibalization Contracting a Product Line Dropping items Two-way

Product Mix Strategies Product Mix is the Total Set of all Products a Firm Offers for Sale Beauty Products Health Care Products Laundry & Cleaning Products Width of Product Mix

Quality as a Product Objective Ease of Use Durable Degree of Pleasure Precision Versatile Satisfies Needs Focus on the Level and Consistency of Quality Reliable Product Safety

Product Life Cycle (Fig. 10.3)

Product Single company produces product Introduction Stage of the PLC Goals Sales Profits Pricing Marketing Get first-time buyers to try the product Increase at a steady but slow pace Negative High: recover R&D costs; or Low: attract large number of customers Informing customers Length of Stage Depends on 1) marketplace acceptance, 2) producer willingness to support product

Sales Profits Goals Marketing Strategies Price Advertising Rapid increase in sales Increase and peak Encourage brand loyalty Introduction of product variations Price competition may appear Heavy advertising is used when competitors appear Growth Stage of the PLC

Sales Profits Competition Product Distribution Marketing Strategies Peak , then level off, even decline Margins narrow Grows intense Mostly replacement products Sell through all suitable retailers Firms alter the marketing mix, try to attract new users Maturity Stage of the PLC

Sales Profits Competitors Product Marketing Strategies Declining sales Declining profits Large number with no one having the advantage Should the product be kept? Keep product, phase out gradually, drop product immediately Decline Stage of the PLC

Creating Product Identity: Branding Decisions A Brand is a Name, a Term, a Symbol, or Any Other Unique Element of a Product that Identifies One Firms’ Product(s) and Sets Them Apart From the Competition.

Choosing a Brand Name, Mark, or Character A good brand name must: have a positive connotation & be memorable, help maintain relationships with customers, help position a product in consumer’s minds. How does a firm select a good brand name? It must be: easy to say, easy to spell, easy to read, and easy to remember.

Brand Equity is a Brand’s Value to its Organization and Provides: The Importance of Branding

Branding Strategies are a Major Part of Product Decision Making Family/Umbrella Brand Multiple Items Under the Same Brand Name Individual Brand Separate Unique Brand for Each Product Item Branding Strategies

Retailers Have Several Options When Deciding What Brands to Sell Store Brands Private Label Brands Brands That Are Owned & Sold by a Retailer Sam’s Cola Branding Strategies National Brands Manufacturers’ Brands Coca-Cola

Other Branding Strategies Licensing One firm sells another firm the right to use a brand name for a specific purpose and for a specific period of time. Example: Jurassic Park movie led to Jurassic Park candy, key chains & toys. Co-Branding Agreement between two brands to work together in marketing a new product. Example: Oreo O’s Cereal

Provides Product Protection Facilitates Product Use and Storage Supplies Important Marketing Communication Functions of Packaging Packaging Functions

Product Category Managers Develops a Marketing Plan for all the Brands and Products Within a Product Category Market Managers Develops a Marketing Plan for Products Sold to a Particular Customer Group Brand Managers Team Leaders for a Single Brand Responsible for Positioning the Brand & Developing Brand Equity Management of Existing Products

Organizing for New Product Development A Venture Team is a Group of People Within an Organization Who Work Together Focusing on the Development of a New Product. The Group Might Consist of People from Design, Engineering and Marketing.

Chapter Summary Explain some of the different product objectives and strategies a firm might choose. Explain how firms manage products throughout the product life cycle (PLC). Discuss how branding creates product identity and describe different types of branding strategies. Explain the important part packaging and labeling play in developing effective product strategies. Describe how organizations are structured for new and existing product management.