MKT 320 Class 12 Parts of Chapter 8 (p. 231-248) & 9(p. 288-99)–

1. MKT 320 Class 12 Parts of Chapter 8 (p. 231-248) & 9(p. 288-99)– Today’s objectives: • Address administrative issues • Review objectives of this class: • Review Class Take-A-ways UNCG MKT 320 Roehm

2. Address Administrative Tasks: Next class assignment: UNCG MKT 320 Roehm

3. Product, Services, and Branding Strategy Chapter 8 Note: We will be discussing Branding Strategy later in the course UNCG MKT 320 Roehm

4. Learning Goals • Understand products and the major classifications of products and services • Learn the decisions companies make regarding their products and services UNCG MKT 320 Roehm

5. Produce 7.5 million doughnuts each day Sell more than doughnuts; they sell an experience New store openings are eagerly anticipated in part due to extensive promotion Tim Hortons Case Study Krispy Kreme UNCG MKT 320 Roehm

6. Definitions • Product • Anything offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want. • Service • A form of product that consists of activities, benefits or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. UNCG MKT 320 Roehm Goal 1: Understand products and their classifications

7. What is a Product? • Products, Services, and Experiences • Market offerings may consist of a combination of goods and services • Experiences are used to differentiate offerings • Levels of Product and Services • Core benefit, actual and augmented product • Product and Service Classifications • Consumer products and industrial products UNCG MKT 320 Roehm Goal 1: Understand products and their classifications

8. Convenience Shopping Specialty Unsought Frequent purchases bought with minimal buying effort and little comparison shopping Low price Widespread distribution Mass promotion by producer Candy clothes at convenience store What is a Product? Types of Consumer Products UNCG MKT 320 Roehm Goal 1: Understand products and their classifications

9. Convenience Shopping Specialty Unsought Less frequent purchases More shopping effort for comparisons. Higher than convenience good pricing Selective distribution in fewer outlets Advertising and personal selling Candy clothes at Grocery Target stores What is a Product? Types of Consumer Products UNCG MKT 320 Roehm Goal 1: Understand products and their classifications

10. Convenience Shopping Specialty Unsought Strong brand preference and loyalty, requires special purchase effort, little brand comparisons, and low price sensitivity High price Exclusive distribution Carefully targeted promotions Candy clothes at Godiva Ralph Lauren stores What is a Product? Types of Consumer Products UNCG MKT 320 Roehm Goal 1: Understand products and their classifications

11. Convenience Shopping Specialty Unsought Little product awareness and knowledge (or if aware, sometimes negative interest) Pricing varies Distribution varies Aggressive advertising and personal selling by producers and resellers Candy cloths at Odd lots BigLots stores Type of product Can vary with segments What is a Product? Types of Consumer Products UNCG MKT 320 Roehm Goal 1: Understand products and their classifications

12. Product and Service Classifications • Consumer products • Industrial products • Materials and parts • Capital items • Supplies and services UNCG MKT 320 Roehm Goal 1: Understand products and their classifications

13. Product and Service Classifications • Organizations, persons, places, and ideas • Organizational marketing makes use of corporate image advertising • Person marketing applies to political candidates, entertainment sports figures, and professionals • Place marketing relates to tourism • Social marketing promotes ideas UNCG MKT 320 Roehm Goal 1: Understand products and their classifications

14. Individual Product Product Line Product Mix Product attributes Quality, features, style and design Branding Packaging Labeling Product support services Product and Service Decisions Key Decisions UNCG MKT 320 Roehm Goal 2: Learn decisions companies make regarding products

15. Product line A group of products that are closely related because they may: function in a similar manner be sold to the same customer groups, be marketed through the same types of outlets fall within given price ranges Individual Product Product Line Product Mix Product and Service Decisions Key Decisions UNCG MKT 320 Roehm Goal 2: Learn decisions companies make regarding products

16. Individual Product Product Line Product Mix Product line length Line stretching: adding products that are higher or lower priced than the existing line Line filling: adding more items within the present price range Product and Service Decisions Key Decisions UNCG MKT 320 Roehm Goal 2: Learn decisions companies make regarding products

17. Individual Product Product Line Product Mix Product mix Also known as product assortment Consists of all the product lines and items that a particular seller offers for sale Product and Service Decisions Key Decisions UNCG MKT 320 Roehm Goal 2: Learn decisions companies make regarding products

18. Individual Product Product Line Product Mix Product mix width: Number of different product lines carried by company Product mix depth: Number of different versions of each product in the line Product mix consistency www.crest.com Product and Service Decisions Key Decisions UNCG MKT 320 Roehm Goal 2: Learn decisions companies make regarding products

19. New-Product Development and Life-Cycle Strategies Chapter 9 Note: Focusing on Product-Cycle today UNCG MKT 320 Roehm

20. Learning Goals • Know the stages of the product life cycle • Realize how marketing strategies change during the product’s life cycle UNCG MKT 320 Roehm

21. Product Life-Cycle Strategies • The Product Life Cycle (PLC) has Five Stages • Product Development, Introduction, Growth, Maturity, Decline • Products fight follow this cycle in at faster rates: • Fads Styles Fashions Sales Units Time PLC stage UNCG MKT 320 Roehm Goal 3: Know the stages of the product life cycle process

22. Product Life-Cycle Strategies • The product life cycle concept can be applied to a: • Product class (soft drinks) • Product form (diet colas) • Brand (Diet Dr. Pepper) • Using the PLC to forecast brand performance or to develop marketing strategies is problematic UNCG MKT 320 Roehm Goal 3: Know the stages of the product life cycle process

23. Product development Introduction Growth Maturity Decline Begins when the company develops a new-product idea Sales are zero Investment costs are high Profits are negative Product Life-Cycle Strategies PLC Stages UNCG MKT 320 Roehm Goal 4: Realize how marketing strategies change during the product life cycle

24. Product development Introduction Growth Maturity Decline Low sales High cost per customer acquired Negative profits Innovators are targeted Little competition Product Life-Cycle Strategies PLC Stages UNCG MKT 320 Roehm Goal 4: Realize how marketing strategies change during the product life cycle

25. Marketing Strategies: Introduction Stage • Product – Offer a basic product • Price – Use cost-plus basis to set price • Distribution – Build selective distribution • Advertising – Build awareness among early adopters and dealers/resellers • Sales Promotion – Heavy expenditures to create trial UNCG MKT 320 Roehm Goal 4: Realize how marketing strategies change during the product life cycle

26. Product development Introduction Growth Maturity Decline Rapidly rising sales Average cost per customer Rising profits Early adopters are targeted Growing competition Product Life-Cycle Strategies PLC Stages UNCG MKT 320 Roehm Goal 4: Realize how marketing strategies change during the product life cycle

27. Marketing Strategies: Growth Stage • Product – Offer product extensions, service, warranty • Price – Penetration pricing • Distribution – Build intensive distribution • Advertising – Build awareness and interest in the mass market • Sales Promotion – Reduce expenditures to take advantage of consumer demand UNCG MKT 320 Roehm Goal 4: Realize how marketing strategies change during the product life cycle

28. Product development Introduction Growth Maturity Decline Sales peak Low cost per customer High profits Middle majority are targeted Competition begins to decline Product Life-Cycle Strategies PLC Stages UNCG MKT 320 Roehm Goal 4: Realize how marketing strategies change during the product life cycle

29. Marketing Strategies: Maturity Stage • Product – Diversify brand and models • Price – Set to match or beat competition • Distribution – Build more intensive distribution • Advertising – Stress brand differences and benefits • Sales Promotion – Increase to encourage brand switching UNCG MKT 320 Roehm Goal 4: Realize how marketing strategies change during the product life cycle

30. Product development Introduction Growth Maturity Decline Declining sales Low cost per customer Declining profits Laggards are targeted Declining competition Product Life-Cycle Strategies PLC Stages UNCG MKT 320 Roehm Goal 4: Realize how marketing strategies change during the product life cycle

31. Marketing Strategies: Decline Stage • Product – Phase out weak items • Price – Cut price • Distribution – Use selective distribution: phase out unprofitable outlets • Advertising – Reduce to level needed to retain hard-core loyalists • Sales Promotion – Reduce to minimal level UNCG MKT 320 Roehm Goal 4: Realize how marketing strategies change during the product life cycle

32. Next class we will talk about… UNCG MKT 320 Roehm