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CHAPTER 9

CHAPTER 9. PRODUCT STRATEGY. PRODUCT STRATEGY. Developing New Products Product Life Cycle Branding Strategy. DEVELOPING NEW PRODUCTS. New Product Process New Product Failures. NEW PRODUCT PROCESS. Creative Ideas. Creative Business Ideas. Development and Testing. Introduce New Product.

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CHAPTER 9

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  1. CHAPTER 9 PRODUCT STRATEGY

  2. PRODUCT STRATEGY • Developing New Products • Product Life Cycle • Branding Strategy

  3. DEVELOPING NEW PRODUCTS • New Product Process • New Product Failures

  4. NEW PRODUCT PROCESS Creative Ideas Creative Business Ideas Development and Testing Introduce New Product Time

  5. SEARCH FOR CREATIVE IDEAS • Create cross-functional committees • Collect stakeholder ideas • Listen to customers

  6. TYPES OF CREATIVE IDEAS • Never been done before • Improved product technology • Creative twist of an existing idea

  7. CREATIVE IDEAS EXAMPLES • Charles Schwab • Ralph Lauren Polo Shirts • Houston National Bank • Blue Chip Forecast

  8. Ralph Lauren Polo Shirt for Dogs

  9. CREATIVE BUSINESS IDEAS • Company Fit • Financial Analysis - Feasibility study - Business Plan

  10. COMPANY FIT • Existing Production Fit • Existing Distribution Fit • Product Strategy Fit

  11. FEASIBILITY STUDIES Studies of potential new products, with evaluations of resources and time in screening creative ideas

  12. FEASIBILITY STUDY PROCESS Potential New Products Financial Viability Time and Resources Proceed or Drop Creative Idea

  13. PRODUCT DEVELOPMENT AND TESTING • Product development - Types of new products - Product design • Testing - Beta testing - Store audits

  14. COMMERCIALIZATION • Launch new product • Design and place promotions • Fill distribution pipeline

  15. NEW PRODUCT FAILURES • Failure to define target market • Lack of customer knowledge • Poor product performance

  16. NEW PRODUCT FAILURE EXAMPLES • Betamax • Harley Davidson Perfume • Susan B Anthony Dollar

  17. PRODUCT LIFE CYCLE Sales Introduction Growth Maturity Decline Time

  18. STAGES OF PRODUCT LIFE CYCLE StageSalesProfits Introduction Low Negative Growth Climbing Rising Maturity Stable Peaking Decline Dropping Declining

  19. CHARACTERISTICS OF THE INTRODUCTION STAGE • Negative Profits • Heavy Promotion Cost • Heavy Distribution Cost

  20. INTRODUCTION STAGE EXAMPLES • Electric vehicles • Life Straw • Astrata

  21. ASTRATA THEFT BOX • Stops motor on stolen trucks • Locks doors remotely, trapping thieves • Programmed to notify police

  22. CHARACTERISTICS OF THE GROWTH STAGE • Increasing Revenue • Experience Curve • Increasing Profits

  23. GROWTH STAGE EXAMPLES • Kindle • Greek Yogurt • Smart Phones • Zip Lines • Audio Books

  24. SALES OF KINDLES 2009 2 million 2011 12 million

  25. AUDIO BOOK SALES 1997 $480 Million 2013 $1,200 Million

  26. CHARACTERISTICS OF THE MATURITY STAGE • Intense Competition • Maintain Promotion • Layering Strategy

  27. MATURE STAGE EXAMPLES • Crayola • Baby carrots • Campbell soup

  28. CONCEPT OF LAYERING Sales Time

  29. LAYERING EXAMPLES • Chicken Soup for the Soul • Movies • Dental Services

  30. MOVIE EXAMPLES OF LAYERING • Shrek • Star Trek • Halloween

  31. LAYERING OF DENTAL SERVICES • Cosmetic • Straighten Teeth • Bonding Teeth • Whiten Teeth

  32. DECLINE STAGE STRATEGIES • Simplify Product Line • Minimize Promotional Cost • Discontinue Product Line • Sell Product Line

  33. DECLINE STAGE EXAMPLES • Hostess Brands • Kodak • Yellow Pages • PC Decline

  34. YELLOW PAGES REVENUE • 14 Billion 2011 9 Billion

  35. BRANDING STRATEGY • Product Names • Major Types of Branding • Multiple Branding Strategy • Brand Extension

  36. PRODUCT NAMES Commodity Any company can use Grade Defined by government Brand Owned by a company

  37. COMMODITY EXAMPLES • Aspirin • Gasoline • Nylon

  38. GRADING EXAMPLES • Grade AA eggs • Choice beef • Organic foods

  39. MAJOR TYPES OF BRANDING • National Brands by Manufacturers • Store Brands by Retailers

  40. MANUFACTURING BRANDS ARE LOSING TO STORE BRANDS • Mass media universe has shattered • Mass channel universe has consolidated • High gross margins for store brands

  41. MULTIPLE BRANDING STRATEGY • BLANKET BRANDS - Same brand name • INDIVIDUAL BRANDS - Different brand names

  42. EXAMPLES OF BLANKET BRANDS • IBM • Whole Foods (365) • Costco (Kirkland)

  43. EXAMPLES OF INDIVIDUAL BRANDS • Yum Brands • Sears

  44. YUM BRANDS • Pizza Hut • Taco Bell • Kentucky Fried Chicken

  45. SEARS RETAIL BRANDS • Kenmore • Craftman • Diehard

  46. BRAND EXTENSION A company with a well-known brand uses that brand to market to a different product category.

  47. BRAND EXTENSION SUCCESSES • Visio • JELL-O pudding • IAMS pet insurance

  48. BRAND EXTENSION FAILURES • New Coke • BIC pantyhose • Hooter’s airline

  49. MOST POWERFUL BRANDS IN 2013 #1) Apple #2) Microsoft #3) Coca Cola #4) IBM #5) Google

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