DECA PREP Product Planning

1. DECA PREPProduct Planning Product Mix & Product Development Chapter 3 Marketing, Glencoe

2. Why It’s Important? • Product planning allows a business to make or sell products that are wanted by customers. • Product planning also is used to design appropriate marketing programs that help create increased salesand profit opportunities.

3. Product Product planning Product mix Product line Product width Product depth Product modification Product Life Cycle Nontraditional Product Life Cycle- fads, trends, niche & seasonal items Product Positioning Key Terms

4. Product • A product is anything a person receives in an exchange. A product can be a tangible item (car), a service (haircut), an idea (a good education)

5. Product Planning • Product planning involves making decisions about those features that are needed to sell a business’s products, services, or ideas. • These decisions relate to product features, such as packaging, labeling, and branding, as well as the services, such as product warranties, necessary to support the produce.

6. Product Mix • Product mix includes all the different products that a company makes or sells. • Stores need to offer a good selection of merchandise. Adding more products, though, may not result in increased sales in those products can take away from existing sales.

7. Product mix includes all the different products that a company makes or sells. A company like Frito Lay is able to succeed while carrying a large product mix. Product Mix

8. Product Items and Lines • A product line is a group of closely related products manufactured and/or sold by a business. • Examples include all the car models produced by the Saturn division of General Motors, , all the cereals produced by Kellogg’s, and all the computers produced by IBM.

9. What is my Target Market? • Similar businesses often have different images and serve different market. Because of this, they also offer different product mixes. • What is the primary target market for this store?

10. Product MixThe width and depth of product lines define product mix. Product Depth of product line

11. Product width refers to the number of different product lines a business manufactures or sells. A retailer that sells several brands of jeans such as Levi’s and Guess? is demonstrating product width. Product depthrefers to the number of product items offered within each product line. Product Width &Product Depth

12. Product Mix Strategies • A product mix strategyis the plan for how the business determines which products it will make or stock. • Some businesses develop completely new products to add to their existing product lines. Others expand or modify their current product lines. • To make these decisions, a business must take and objective look at sales as well as other factors such as current trends.

13. The Steps in New Product Development • Developing new products involves several key steps. • Generating Ideas • Screening Ideas…(etc)… • Testing the product • Introducing the product • Evaluating customer acceptance…

14. Sustaining Product Sales The Product Life Cycle A product like cycle represents the stages that a product goes thorough during its life. • There are four(five) stages of the life cycle: introduction, growth, maturity, and decline(decision point). • As each stage in the product life cycle is reached, marketers must adjust their product mix and their marketing strategies to ensure continued sales.

15. A Typical Product Life Cycle

16. A Typical Product Life Cycle Products tend to go through five stages: • Introduction • Growth • Maturity • Decline • Decision Point Note: New product development is very expensive ,no sales revenue, losses

17. A Typical Product Life Cycle Introduction stage • cost high • sales volume low • no/little competition - competitive manufacturers watch for acceptance/segment growth • losses • demand has to be created • customers have to be prompted to try the product

18. A Typical Product Life Cycle Growth stage • costs reduced due to economies of scale • sales volume increases significantly • profitability • public awareness • competition begins to increase with a few new players in establishing market • prices to maximize market share

19. A Typical Product Life Cycle • Mature stage • costs are very low as you are well established in market & no need for publicity. • sales volume peaks • increase in competitive offerings • prices tend to drop due to the proliferation of competing products • brand differentiation, feature diversification, as each player seeks to differentiate from competition with "how much product" is offered • very profitable

20. A Typical Product Life Cycle • Decline or Stability stage • costs become counter-optimal • sales volume decline or stabilize • prices, profitability diminish • profit becomes more a challenge of production/distribution efficiency than increased sales • Decision Point –Drop product?

21. Fads Trends Niche Markets Seasonal Markets Nontraditional Product Life CycleSome products do not align with those in the traditional product life cycle.

22. Nontraditional Product Life Cycle A fadis a product, service or idea that is extremely popular for a very brief period of time, and then becomes unpopular just as quickly. Example -Pogs A nicheis a small section of the market that a busines dominates. Because this market is so small, there is little competition. Example-Bakery that only sells glutten free items. A trendis a mass movement toward a style or value and can result in a number of products that take on a traditional product life cycle. Example- People want healthier foods For seasonal itemsthe consumer demand changes with the time of year. Sales will peak in one season and decline at other times.These seasonal shifts do not align with those in the traditional product life cycle. Examples- Halloween costumes are not popular in December. Christmas trees and snow blowers are not popular in August.

23. Product Positioning • The goal of product positioning is to set the product apart from the competition. • Product positioning refers to the efforts a business makes to identify, place, and sell its products in the marketplace. • It is an attempt to create an image of a product that appeals to customers. • To position their products, businesses identify customers’ needs and determine how their product compares to the competition.

24. Product Positioning A number of strategies are used to position products in the marketplace. • Positioning by Price and Quality • Positioning by price and quality stresses high price as a symbol of quality or low price as an indication of value. • Positioning by Features and Benefits • For example, Rockport shoes are positioned as comfortable shoes, whether dress or casual. • Positioning in Relation to the Competition Example- Listerine made a mintier Listerine called Cool Mint to compete with Scope. • Positioning in Relation to Other Products in a Line • Binney & Smith introduced washable crayons and positioned them as a specialty item in the company’s Crayola crayon line.

25. Prep Work • Go to Mr/ Devlin’s Prep Work folder and check if you have done the assignments. • Review the handouts & materials distributed at the meetings • Try the comprehensive exam for your category and read the comments in the solution. Use the internet to find meanings for terms that are new to you. Try www.quickMBA.com and other business sites. Ask your business teacher for a business text that you can borrow. • Look at the performance indicators in your category. Go to www.deca.org/celisting.html Review & understand each indicator. • Practice role plays with a friend or in the mirror. • BE PREPARED. BE CONFIDENT. BE ON TIME. • DRESS IN BUSINESS ATTIRE. Bring a pen & a folder for your papers. • GOOD LUCK!!!!!!!!!!