Product Planning – Involves making decisions about the production

1. Product Planning – • Involves making decisions about the production • & sale of a businesses products • Decisions relate to: • Design  Packaging • Labeling  Warranty • Branding  Product mix • Deleting old products • Creating campaigns

2. Product Mix – • Includes all the different products that a • company makes or sells • Large manufacturer may have hundreds of • products in one product mix

3. Product Line – • Group of closely related products • manufactured and/or sold by a business Example: • Cereral Pop Tarts Waffles

4. Product Items – • Specific model, brand, or size of a product • within a product line Example:

5. Product Width – # of different product lines a business manufacturers or sells Example: • Line #1 – Cereal • Line #2 – Crackers • Line #3 – Pop tarts • Line #4 – Waffles • Line #5 – Fruit Snacks • Line #6 - Cookies

6. Product Depth – # of product items offered within each product line • Example: • Cereal

7. 4 PRODUCT MIX STRATEGIES DEVELOP NEW PRODUCT EXPAND PRODUCT LINE MODIFY PRODUCT LINE DELETE PRODUCT LINE

8. DEVELOPING NEW PRODUCT SIX STEPS • GENERATE IDEAS • CUSTOMERS, COMPETITORS, EMPLOYEES • SCREEN IDEAS • IDEAS ARE SCREENED AND EVALUATED; ELIMINATION; LEFT WITH ONE IDEA • DEVELOPING • TAKES PHYSICAL SHAPE – PROTOTYPE IS CREATED • MILLIONS SPENT ON THIS STAGE • CAN BE LONG DELAYS • TESTING • TESTED IN ONE GEOGRAPHICAL AREA • TESTED IN LABS/BY POTENTIAL CONSUMERS • INTRODUCING PRODUCT • COSTS ARE HIGH; ADVERTISED, DISTRIBUTED, TRAINING • EVALUATE CUSTOMER ACCEPTANCE • STUDY SALES; PREPARE FOR FUTURE CHANGES

9. 2. EXPAND PRODUCT LINE • BUILD ON PRODUCT IMAGE • SONY = INNOVATOR • INCREASE SALES/PROFITS • APPEAL TO NEW MARKETS

10. 3. MODIFY PRODUCT LINE • PRODUCT MODIFICATION • ALTERATION IN A COMPANY’S EXISTING PRODUCT • NEW SIZES, COLORS, SHAPES • LOW RISK, QUICK, EASY, INEXPENSIVE

11. 4. DELETE PRODUCT LINE • OBSOLETE • CHANGING INTERESTS/TECHNOLOGY • LOST APPEAL • TASTES CHANGE • POGS, CRAZY BONES, TAMAGACHI PETS • DOES NOT MATCH COMPANY OBJECTIVE • SEARS – SOLD CALDWELL BANKER • MAKE ROOM FOR OTHER PRODUCTS • LIMITED SHELF SPACE • NO LONGER PROFITABLE • FAST MOVING/PROFITABLE PRODUCTS • PET ROCKS • CONFLICTS WITH OTHER PRODUCTS IN SAME PRODUCT LINE • WHITE CLOUD COMPETING WITH CHARMIN