Managing the Product Steps in Managing Products

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 Dawn Ivory Antibacterial Special Care Length of Product Line Joy

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

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

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

Product Life Cycle (Fig. 10. 3)

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

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

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

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

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.

The Importance of Branding Brand Equity is a Brand’s Value to its Organization and Provides: High Customer Loyalty Brand Name Awareness Perceived Quality

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

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

Packaging Functions P ro vi d es P ro d u ct P r o te c ti o n F a c i l i ta te s P r o d u c t U s e a n d S to r a g e S u p p l i e s I m p o r ta n t Ma r k e ti n g C o m m u n i c a ti o n F u n c ti o n s o f P ackag i n g

Management of Existing Products Brand Managers Team Leaders for a Single Brand Responsible for Positioning the Brand & Developing Brand Equity 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

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 n n n 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.