Managing the Product

1. Managing the Product

2. Steps in Managing Products

3. Criteria for Effective Objectives • Measurable • Clear • Unambiguous • Time-framed – • Consistent with long-term profitability of organization

4. Product Strategies • A product line is a firm’s total product offering designed to satisfy a single need for target customers (e.g., P&G’s line of dish detergents: Dawn, Ivory, Joy) • A product mix is a firm’s entire range of products (e.g., Gillette offers shaving products, deodorants, writing instruments, toothbrushes…)

5. Quality as a Product Objective • Product quality is the overall ability of a product to satisfy customer expectations • Dimensions of product quality • durability • reliability • precision • ease of use • product safety • aesthetic pleasure

6. Key Aspects of Quality • Level • determined by comparison with other brands in same product category • Consistency • customers experience the same level of quality in product time after time

7. Product Life Cycle

8. Product life cycle for the stand-alone fax machine for business use: 1970-2001

9. Alternative product life cycles

10. Video game console and software life cycles by product class and product form

11. Marketing Mix During Product Life Cycle • The PLC explains how features change over the life of a product • Marketing strategies must change and evolve as a product moves through the PLC

12. How stages of the product life cycle relate to a firm’s marketing objectives and marketing mix actions

13. Introduction • Full-scale launch of new product into marketplace • Sales are low • Little competition • Limited distribution • High marketing and product costs • Promotion focused on product awareness and to stimulate primary demand – “pull strategy” • Intensive personal selling to retailers and wholesalers – “push strategy”

14. Growth • Sales grow at an increasing rate • Many competitors enter market • Large companies may acquire small pioneering firms • Promotion emphasizes brand advertising and comparative ads – “pull strategy” • Wider distribution – “push strategy” • Toward end of growth stage, prices fall • Sales volume creates economies of scale

15. Maturity • Sales continue to increase but at a decreasing rate • Marketplace is approaching saturation • Typified by annual models of products with an emphasis on style rather than function • Product lines are widened or extended • Marginal competitors drop out • Heavy promotions - sales promotions “push” • Prices and profits fall • Production moves to lower cost locations

16. Decline • Signaled by a long-run drop in sales • Rate of decline is governed by how rapidly consumer tastes change or how rapidly substitute products are adopted. • Falling demand forces many out of market • Few specialty firms left

17. Five categories and profiles of product adopters

18. Branding Decisions • A brand is a name, term, symbol, or any other unique element of a product that identifies one firm’s product(s) and sets it apart from competition • Brands should • be memorable • have a positive connotation • convey a certain image

19. Easy to say Easy to spell Easy to read Easy to remember KISS Fit the target market Fit the product’s benefits Fit the customer’s culture Fit legal requirements Good Brand Names

20. Trademarks • Legal term for a brand name, brand mark or trade character • ® is used when registered with the USPTO; ™ is used when a name or mark has not been legally registered but the user is claiming ownership • Trademarks established by the Lanham Act of 1946 and updated by the Trademark Revision Act of 1989 • Only protects in U.S. - if a firm wants multinational recognition, it must register in each country

21. Brand Equity • Brand’s value to its organization • Brand equity provides customer loyalty, perceived quality, brand name awareness, competitive advantage • Brand equity can be used to establish brand extensions • Alka Seltzer, Alka Seltzer Morning Relief

22. Branding Strategies • Individual brands versus family brands • National and store brands (private label) • Generic brands • Licensing • Co-branding

23. Packaging and Labeling Decisions • Packaging functions • Effective packaging designs • Labeling regulations

24. Managing the Product • Role of a Product Manager • Modifying the product • Modifying the market • Finding New Users – exporting is one way • Increasing Use • Creating New Use Situation

25. Four market-product strategies:

26. Managing the PLC • Repositioning the Product • Reacting to a Competitor’s Position – “me too” • Reaching a New Market • Catching a Rising Trend • Changing the Value Offered • Trading up • Trading Down • Downsizing