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Product & Service Strategies

Product & Service Strategies. Jeremy Kees, Ph.D. The Basics…. What is a product… Anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.

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Product & Service Strategies

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  1. Product & Service Strategies Jeremy Kees, Ph.D.

  2. The Basics… • What is a product… • Anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas. • Do we market products and services in the same manner???

  3. Distinguishing Factors • Intangibility • Inseparability • Requirement ofinteraction between buyer and seller • Perishability • Difficulty of standardization / variability in service offering

  4. Types of Consumer Products • Convenience Products • Inpluse Items • Staples • Emergency Items • Shopping Products • Homogeneous • Heterogeneous • Specialty Products • Unsought Products

  5. Consumer Product Classification

  6. The Product Mix Using AB as an example… • Product Mix (or Assortment) • Product lines (beer, specialty beer, imports, specialty malt beverages…) • Product types (Within “beer”, AB has the “Bud family”, “Michelob family”, “Busch family”…) • Items (Bud Light, Mic Ultra, Bacardi Silver)

  7. The Product Mix –Width, Length, and Depth • Width = # of product lines • Length = # of products within the line(s) • Depth = # of variants of each product • http://www.jnj.com

  8. Product Mix Decisions: Product Line Analysis • Evaluate sales and profits associated with each item in product line • Evaluate line positioning relative to competition • Decide whether to build, maintain, harvest, or divest

  9. Product Mix Decisions: Product Line Analysis • Depending on success of various lines versus the competition, we can…. • Stretch the Line • Up-stretching: AB acquiring Imports and Microbrews • Down-stretching: AB developing Natural Light • Prune the Line • Goal: volume (market share) objectives • If the goal is profitability, then shorter lines might be a more viable strategy

  10. Product Mix Decisions: Product Line Analysis • When extending lines, an important consideration is consistency and capitalizing on equity built in the original brand • Michelob Light • Mic Ultra • Mic Ultra Amber

  11. New Product Development

  12. http://www.youtube.com/watch?v=jVb8EC1Y2xM

  13. New Product Development • Where do product ideas come from?? • Customers • Organizations • Experts • Government • Private labs • Research institutions • Suppliers • Retailers • Partners • Etc….

  14. New Product Development

  15. Product Adoption Process Awareness Interest Evaluation Trial Adoption

  16. Product Adoption Process

  17. Product Adoption Process • Innovators – venturesome, educated, high socio-economic status • Early adopters – social leaders, popular, educated • Early majority – deliberate, many informal social contacts • Late majority – skeptical, traditional, lower socio-economic status • Laggards – neighbors and friends are main info sources, fear of debt

  18. Have you adopted…. • Iphone? • GPS? • Blackberry?

  19. Product Life Cycle: Key Decisions at Each Stage • Draw on Board • Sales • Profits • Prices

  20. Product Life Cycle: Key Decisions at Each Stage • Introduction • Inform potential customers • Introduce product trial • Examples for low and high end products?? • Secure retail distribution

  21. Product Life Cycle: Key Decisions at Each Stage • Growth • Improve quality, add new features, and improve styling • Add new models and flanker products • Enter new segments • Increase distribution coverage and enter new channels • Shift from product-awareness to product-preference advertising • Lower prices to attract the next layer of price-sensitive buyers

  22. Product Life Cycle: Key Decisions at Each Stage • Maturity • Market modification • Product modification • Marketing program modification

  23. Product Life Cycle: Key Decisions at Each Stage • Decline • Harvest • Divest • Liquidate

  24. Product Life Cycle: Key Decisions at Each Stage • Strategies for extending the PLC…

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