AIM: What is a Product Mix?

1. AIM:What is a Product Mix? Do Now: What do all t he products on display have in common? Complete our entrance slip for your chance to earn a SELFIE WITH LIEB$$$!

2. What do all of the products have in common? • They are all produced and distributed by PepsiCo • Fun Fact: “Pepsi” (the soft drink) is only a very small fraction of the PepsiCo product line • PepsiCo is considered the Parent Company • A corporation that controls, manages and operates several different brands, which are all a part of one majority owner

3. Product Mix: • All the different products that a company makes or sells

5. How can you organize Pepsico’s product mix?

6. Product Line • A group of closely related products produced by a business Oatmeal Energy Drinks Juices Cereal Sport Drinks/Water Granola Bars Soft Drinks Snacks

7. Energy/Coffee Beverages Juices

8. Cereal Snacks

9. Soft Drinks Sport Drinks/Water

10. Breakfast Bars/Granola Bars

11. Check out all of PepsiCo’s top brands

12. Further Distinctions…. Product Width • The number of different product lines a business sells • The CATEGORIES of products Product Depth • The number of product items offered within each product line • The VARIETY within each category

13. Width and Depth of the Gillette Product Mix

14. Activity: La Piazza Product Mix • Working in your group, complete the La Piazza Product Mix assignment. Be prepared to present to class.

15. AIM:How can new products help/hurt a business? Do Now: Hand in homework.

16. Why do businesses introduce new/improved products? • Line Expansion • A company adds width • May or may not be related to current products • May expand target market • Line Extension • A company adds depth (more options) of products • Related to current products, adds variety • Done to keep up with trends; psychographics

17. Line Expansion: Tylenol • What product lines does Tylenol have? • Tylenol introduced different categories of medicine to satisfy the needs of their consumers

18. Line Extension: Tylenol • Tylenol has added variety within their product lines • How does this line extension show that Tylenol tries to adapt to consumer’s lifestyles/wants/psychographics? TYLENOL COLD AND SINUS Rapid Release Gelcaps Citrus Burst ™ Liquid Gelcaps Coolburst Caplets

19. 3. Product Modifications • Altering a company’s existing product • Old product is phased out • A relatively easy and inexpensive way to add new products to a company’s product line Examples: • Nintendo

20. Omaha Steak Study • Take Out The Omaha Steak Article • Answer Part A • You will be given a partner, combine your answers for Part A. • Start Part B • You will be given another set of partners (Answer Part B) • Turn in One Set of Answers and Chart

21. Project Ideas

22. Marketing Story of the Day • https://www.youtube.com/watch?v=kXAngeGDZwY

23. TUG OF WAR • Part 1: Individually, come up with 3 ways to support your stance you were provided. (Write them on your note sheet) • Part 2: In your assigned group, each person will share what they have come up with. • Part 3: Take all ideas that were shared and as group, come you with your top 3 reasons to support the stance you were provided with. Write each reason on a separate post-it. • Part 4: Choose a spokesperson to come up, place your post-its along the tug of war and explain your reasoning. Remember, the strongest point is closest to the middle of the rope!

24. AIM:Do New Ideas For Products/Product Expansions Help or Harm a Business? Do Now: Tug – Of – War

26. Do New Ideas For Products/Product Expansions Help or Harm a Business? Help Hurt • Can be costly (inventory, promotion, storage, distribution, training) • Take sales away from existing products • Can hurt image (Apple Maps) • Build on an established image • Better their image • Appeal to new markets • Capitalize on new trends • Increase sales and profits

27. Analyzing Apple’s Development

28. AIM:What steps go into the development of new products? Do Now: Nike (Save Coke Article For Another Day) http://www.cbsnews.com/news/30-years-ago-today-coca-cola-new-coke-failure/ https://www.youtube.com/watch?v=QkfFdQ1yaqs https://www.youtube.com/watch?v=8_hvOBnsirI

29. Nike has just come to you for help!!! They want to develop a new product to add on to one of their existing product lines. • What type of product should Nike add? • What product line would it be a part of? • Why should they add this product?

30. New Product Development • The process used to be a lot longer (1-2 years) than it is now (6 months to 1 year) • Why do you think this is? • Competition is fierce • Technology continues to develop rapidly • Consumer’s preferences are constantly changing • Changing external landscape (environmental issues) • Ex: Increasing fuel costs  Development of hybrid cars

31. Product Development Process • Generating Ideas • Customers • Competitors • Employees • Focus groups • Identify changes in the market • Screening Ideas • Products are matched against company objectives • “What can we do to take advantage of this opportunity?” • Focus Groups • Likes vs. Dislikes

32. Product Development Process (cont) • Business Proposal • Evaluate: size of market; potential sales; costs; profit potential; technological trends; competition; risk; efficiency of production • Identify all contributing factors • Developing the Product • Prototypedeveloped • Marketing strategy developed • Packaging, Promotion, Labeling, Distribution… • How will we get our target market to notice the new product? • Can you really produce the product in mass quanitites?

33. Product Development Steps (cont) • Test the Product • Determine a test market • Can be based on geographics, demographics • Apple vs. Google • Introduce the Product • Full market introduction = commercialization • High costs (Advertising, Distribution, Training) • Small/lesser known companies usually introduce regionally first • Apple Maps • Evaluate Customer Acceptance • Sales information • Surveys

34. AIM:What is the product life cycle? Do Now: Classic board games like Monopoly and Candyland have been replaced by hi-tech video games that can be played on the Wii and Xbox gaming systems. What has happened/what have the board game companies done to reintroduce these games to today’s youth generation? Do you think it will work?

35. Product Life Cycle • The stages a product goes through during its life • Marketers adjust the product mix and marketing strategies at each stage to ensure continued sales of their products

36. Introduction Stage • Focus on promotion and production • Special Promotions/Free Trials • Advertising focused on product awareness and benefits • Main Goal = gain customer attention/usage Is this considered the MOST or LEAST profitable stage?

37. Growth Stage • Start to increase sales and profits • Most of target market knows about and buys product • Consumer satisfaction is most important • You want them to return as customers = customer loyalty • Sometimes companies conduct Product Modifications (to improve features) • Some small companies are bought out by bigger ones

38. Maturity Stage • Sales level off/slow down in comparison to growth stage • Most of target market owns product • Face extreme competition… WHY? • Marketing to fight off competition = Increased marketing expenses • Decisions must be made about the future

39. Decline Stage • Sales Fall • Profits < Costs Options: • Delete Product/Product Line • Obsolescence = change of interests, new technology • Loss of Appeal = consumer tastes and trends change • Conflict With Objectives • Replaced With New Product • Lack of Profit • Conflict with Other Products in Line

40. Decline Stage- Options (cont.) • Sell or License Product • Recommit to the Product Line • Discount the Product • Regionalize the Product • Modernize/Alter Product Offering

41. Fad Life Cycle Product Life Cycle Quirks • Not every product fits nicely into the same cycle 1. There is not a definitive line dividing each stage • The stage is determined by the characteristics that the product is experiencing 2. There is no set time period for each stage • Ex: Successful products can spend years in the maturity stage 3. Some markets/types of products have completely altered life cycles • Fads • Fashion Fashion Life Cycle

42. iPad Debate – Kahoot It • Debate Question - What phase of the product life cycle is the iPad in? • As a group, you have 5 minutes to explain why you feel the iPad is in that specific category of the product life cycle. Your group will come up and state your reasoning. • In order to make a strong case, you need to: • Make 3 points that back up your answer. • Be Convincing!

43. AIM:How do companies position their products? Do Now: Take out your homework – CVS article Be prepared to discuss.

44. Activity • Based on the article you were assigned, answer the following questions: • What do you think it means to position a product in the market? • Name of brand and specific product (if relevant) • How was the product positioned BEFORE the ad campaign? Describe the target market. • How is the product being repositioned? Describe the new target market. • Will this repositioning be a success? Explain.

45. Barbie Positioning

46. Chevy Malibu

47. General Mills

48. Product Positioning • The image a product projects • How do consumers view your brand vs. a competitor • Goal = set your product apart from the competition • Create a product identity • Placement • Marketing Strategy • Selling Techniques HOW???

49. Positioning: Price and Quality • Economy, Mid-Priced, or Luxury • High Price = High Quality • Low Price = High Value

50. The Car Market Honda Accord $21,860 VS. Audi Q5 BMW X6 $13,950 Honda Fit $54,250 $72,800