MANAGING PRODUCTS, SERVICES, AND BRANDS

1. CHAPTER MANAGING PRODUCTS, SERVICES,AND BRANDS

2. Product Life Cycle Introductory Stage Growth Stage Maturity Stage Decline Stage Sales Profits Dollars 0 Time

3. Introductory Stage Full-Scale Launch of New Products • High failure rates • Little competition • Frequent product modification • Limited distribution • High marketing and production costs • Negative profits • Promotion focuses on awareness and information • Intensive personal selling to channels

4. Increasing rate of sales Entrance of competitors Market consolidation Initial healthy profits Promotion emphasizes brand ads Goal is wider distribution Prices normally fall Development costs are recovered Growth stage Offered in more sizes, flavors, options

5. Declining sales growth Saturated markets Extending product line Stylistic product changes Heavy promotions to dealers and consumers Marginal competitors drop out Prices and profits fall Niche marketers emerge Maturity Stage Many consumer products are in Maturity Stage

6. Long-run drop in sales Large inventories of unsold items Elimination of all nonessential marketing expenses Decline Stage Rate of decline depends on change in tastes or adoption of substitute products

7. GROWTH MATURITY DECLINE INTRODUCTION Product Strategy Limited models Frequent changes More models Frequent changes. Large number of models. Eliminate unprofitable models LimitedWholesale/retail distributors Expanded dealers. Long- term relations Phase out unprofitable outlets Extensive. Margins drop. Shelf space Distribution Strategy Promotion Strategy Phase outpromotion Advertise. Promote heavily Awareness. Stimulate demand.Sampling Aggressive ads. Stimulatedemand Pricing Strategy Fall as result of competition &efficient produc- tion. Higher/recoupdevelopment costs Prices fall (usually). Prices stabilize at low level. How stages of the product life cycle relate to firm’s marketing objectives & marketing mix actions

8. MANAGING THE PRODUCT LIFE CYCLE • Modifying the Product • Alter product quality • Enhance performance • Change appearance • Modifying the Market • Finding New Users • Increase use • Create new use situations

9. EXTENDING THE PRODUCT LIFE CYCLE- Repositioning • Reacting to a Competitor’s Position-never compete head on • Catching a Rising Trend-baby aspirin is now low dose aspirin to reduce heart attacks • Changing the Value Offered • Trading Up-add bells & whistles to raise price • Trading Down- remove bells & whistles to lower price • Downsizing-reduce contents but maintain price

10. FIGURE 11-3 Alternative product life cycles Why the different shapes?

11. Early Majority 34% Late Majority 34% Percentage of Adopters Early Adopters 13.5% Laggards 16% Innovators 2.5% Time Five categories of product adopters

12. Five Profiles of Product Adopters

13. Brand Name That part of a brand that can be spoken, including letters, words, and numbers. Brand Mark The elements of a brand that cannot be spoken. Brand Equity • The value brand names give to a product beyond the functional benefits provided. i.e.-why you pay more for Versache BRANDING

14. Value of Brand Equity • Listed as an intangible asset when computing company worth. Makes brand name companies sell for more than unbranded companies • Can command larger licensing fees because the product is a definite seller • Can sell the use brand name on non-core products like Ralph Lauren paint or Harley Davidson clothing

15. BRANDING ANDBRAND MANAGEMENT Brand No Brand Manufacturer’s Brand Private Brand IndividualBrand Family Brand IndividualBrand Family Brand Multi-brand multi-product multi-brand multi-product

16. Multi- product Toro makes snow blowers, Toro lawn mowers and Toro garden hoses Multi- brand Proctor and Gamble makes Tide, Cheer, Ivory Snow and Bold Mixed brand • Michelin makes Michelin tires and Sears tires Branding Strategies

17. BRANDING ANDBRAND MANAGEMENT • Picking a Good Brand Name • Suggest the Product Benefits • Be Memorable, Distinctive, and Positive • Fit the Company or Product Image • Have No Legal or Regulatory Restrictions • Be Simple and Emotional • International: Be Nonmeaningful

18. Contain and Protect Functions of Packaging Inform – nutrition and instructions for use Facilitate Storage, Use, and Convenience Create perception of item- Gold bow on perfume bottle CREATING CUSTOMER VALUE THROUGH PACKAGING AND LABELING

19. Product Life Cycle The product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline.

20. Private Brand Often called store brand, a private brand is a manufacturer brand of product sold under the name of the retailer.

21. Manufacturer Brand Manufacturer brands are often called national brands and are carry the brand name of a maker of the goods.