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The learning objectives

The learning objectives. Product Product classification Product life-cycle strategies New-product Development Product-line decision Brands decisions. 1. What is product?.

ronaldcollins
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The learning objectives

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  1. The learning objectives • Product • Product classification • Product life-cycle strategies • New-product Development • Product-line decision • Brands decisions

  2. 1. What is product? • Anything that can be offered to a market for attention,acquisition,use,or consumption that might satisfy a want or need.

  3. Value-based prices Product features and quality Services mix and quality Components of theMarket Offering Attractiveness of the market offering

  4. 2. Product classifications • Consumer products • Industrial products

  5. Consumer product • Convenience products • Shopping products • Specialty products • Unsought products

  6. Convenience Products Shopping Products Unsought Products Specialty Products Consumer-Goods Classification • Buy frequently & immediately • Low priced • Many purchase locations • Includes: • Staple goods • Impulse goods • Emergency goods • Buy less frequently • Gather product information • Fewer purchase locations • Compare for: • Suitability & Quality • Price & Style • Special purchase efforts • Unique characteristics • Brand identification • Few purchase locations • Products consumers don’t demand normally. • Require much advertising & personal selling

  7. Industrial Product • Material and parts • Capital items • Supplies and services

  8. 6.Product-line decision • Product mix • Product-line analysis • Product –line length

  9. Product mix(assortment) • The set of all products and items that a particular seller offers for sale. • A company’s product mix has a certain width,length,depth, and consistency.

  10. Product Mix Concepts: • Width:how many different product lines. • Length:the total number of items. • Depth:how many variants are offered of each product in the line. • Consistency:how closely related the various product lines are in end use,production requirement,distribution channels, or some other way.

  11. Product Mix & Product Line- HUL Personal wash Personal wash : Lux , lifebuoy , Liril , Hamam , Breeze , Dove , Pears , Laundry Laundry : Surf Excel , Rin , Wheel Skin Care Skin Care : Fair and Lovely , Ponds Hair Care Hair Care: Sunsilk , Clinic Plus Oral care Oral care : Pepsodent , Close Up Color Cosmetic Color Cosmetic : Lakme Beverage Tea : Broke Bond , Lipton Coffee: Bru Foods Foods: Kissan , Knorr Annapurna Ice-Cream Quality Walls

  12. Product Mix - all the product lines offered Consistency Product Mix Width - number of different product lines Length - total number of items within the lines Depth - number of versions of each product

  13. Product-line analysis • Sales and profit • Market profile

  14. Product-Line Length • Line Stretching • Downmarket (TATA Nano) • Upmarket (Maruti 800 to Maruti SX4) • Two-way • Line Filling • Line Modernization • Line Featuring & Line Pruning

  15. Trading Up and Trading Down • Trading up:Adding a higher-priced product to a line to attract a higher-income market and improve the sales of existing lower-priced products. • Trading down:Adding a lower-priced item to a line of prestige products to encourage purchases from people who cannot afford the higher-priced product, but want the status.

  16. 3.Product Life Cycles (PLC) • The course of a product’s sale and profit over it lifetime.It involves five distinct stages:product development,introduction,growth,maturity,and decline.

  17. Sales&profits Introduction Growth Maturity Decline Time Sales & Profit Life Cycles

  18. Product Life Cycle Stages • Introduction—most risky and expensive. • Growth—both sales and profits rise, often rapidly. • Maturity—sales increase at a decreasing rate and profits decline. • Decline—demand drops, often because of another product development.

  19. Strategic Implications of the Stages • introductory stage: developing the market, creating awareness, reaching the innovators • growth stage: competition begins, sales grow quickly, profits peak, market penetration • maturity stage: competition is intense, sales slow down, differentiated product offerings, customers are brand loyal, few new entrants • decline stage: customers move to other options, competitors leave, profits are low, consider exit

  20. Characteristics of Introduction Stage • Low sales • High cost per customer • Zero or Negative profits • Create product awareness and trial • Offer a basic product • Use cost-plus • Build selective distribution • Awareness building advertising

  21. Promotion High Low High Price Low Four IntroductoryPrice-Promotion Strategies Rapid- skimming strategy Slow- skimming strategy Rapid- penetration strategy Slow- penetration strategy

  22. Characteristics of the Growth Stage • Rapidly rising sales • Average cost per customer • Rising profits • Offer product extensions • Target new market segments

  23. Characteristics of Maturity stage • Peak sales and profits • Increased advertising and trade and consumer promotion. • Frequent markdowns • Market nicher develops. • Market Modification Strategy • Marketing Mix Modification Strategy

  24. Characteristics of Declining Stage • Declining sales& Profits • Phase out unprofitable outlets • Cut on promotional expenditure • Liquidating, Divesting and Harvesting the business

  25. Special categories of PLC (Style, Fashion, Fad) • Style is a basic/distinctive mode of expression appearing in a field of human endeavors.-Once a style is invented, it can last for generations. • Fashion is a currently accepted/popular style in a given field. • Fads are fashion that comes quickly into the public eye, are adopted with great zeal, peak easily and decline fast

  26. 5.new-product development • What is new product? • Major stages in new product development

  27. What is new product? • Original products • Product improvements • Product modifications • New brands that the firm develops through its own research and development efforts

  28. Major stages in new product development • Idea generation • Idea screening • Concept development and testing • Marketing strategies • Business analysis • Product development • Test marketing • Commercialization

  29. Marketing Strategy Development Business Analysis Concept Development and Testing Product Development Idea Screening Market Testing Commercialization New Product Development Process Idea Generation

  30. Probability of economic success given commercialization Probability of commercialization given technical completion X X = Overall probability of success Probability of Success Probability of technical completion

  31. 1. Develop Product Ideas into Alternative Product Concepts 2. Concept Testing - Test the Product Concepts with Groups of Target Customers 3. Choose the Best One Concept Development & Testing

  32. Expensive High price/oz. Brand C Cold cereal Bacon and eggs Quick High in calories Slow Low incalories Pancakes Instant breakfast Brand B Hot cereal Brand A Inexpensive Lowprice/oz. Product & Brand Positioning (a)Product-positioning map (breakfast market) b)Brand-positioning map (instant breakfast market)

  33. Brand name Retail Price -- -- -- -- -- -- -- -- -- -- 1.0 1.0 Utility Utility | | | K2R Glory Bissell | | | $1.19 $1.39 $1.59 0 0 Money-Back Guarantee? Good Housekeeping Seal? -- -- -- -- -- -- -- -- -- -- 1.0 1.0 Utility Utility 0 | | No Yes | | No Yes 0 Conjoint Analysis

  34. Consumer-Goods Market Testing Controlled Test Market A few stores that have agreed to carry new products for a fee. Simulated Test Market Test in a simulated shopping environment to a sample of consumers. Sales- Wave Research Test offering trail to a sample of consumers in successive periods. Standard Test Market Full marketing campaign in a small number of representative cities.

  35. 34% Late majority 34% Early majority 13 1/2% Early adopters 16% Laggards 2 1/2% Innovators Adopter Categorization of the Basis of Relative Time of Adoption of Innovations Time of adoption innovations

  36. 6.Brand Decision • What is brand? • Band decision

  37. What is brand? • Brand is a name,term,sign,symbol,or design,or a combination of them,intended to identify the goods or services of one seller or group of sellers and differentiate them from those of competitors.

  38. What is a Brand? User Culture Personality Attributes Benefits Values

  39. Brand- Repositioning Decision Brand- Sponsor Decision Brand- Name Decision Brand- Strategy Decision Branding Decision • Brand • No brand • Manu- • facturer • brand • Distribu- • tor • (private) • brand • Licensed • brand • Individual • brand • names • Blanket • family • name • Separate • family • names • Line • extension • Brand • extension • Multi- • brands • New • brands • Cobrands • Reposi- • tioning • No • reposi- • tioning An Overview ofBranding Decisions

  40. Good Brand Names: Lack Poor Foreign Language Meanings Distinctive Suggest Product Qualities Suggest Product Benefits Easy to: Pronounce Recognize Remember

  41. Product Category Line Extension Brand Extension Existing New Existing Multibrands BrandName New Brand Strategies New Brands

  42. Why Package Crucial as a Marketing Tool • Self-service • Consumer affluence • Company & brand image • Opportunity for innovation

  43. Labels Promote Describe Identify

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