Product Planning

1. Product Planning Chapter 10

2. Life Cycle Management • From cradle to grave management of the product • Fine-tuning strategy • Defending against competitors • Continuously innovating the product, if possible

3. Product Life Cycle • Similar to S-curve for product diffusion • Four distinct stages of a product’s life • Introduction • Growth • Maturity • Decline • Different development costs, sales, and marketing costs in each stage (Kahn, p. 183) • Different marketing mix strategies for each stage (Exhibit 10.2, p. 184)

4. Maturity Stage Considerations • Three basic strategic options • Maintenance – fine tune marketing mix for optimal profitability • Defense – focus on a key marketing element important to the customer base • Innovation – use line extensions, flankers, or new markets to extend the life of the product

5. Product Families and Platforms • Expanding beyond a single product in a category • Platforms typically have an underlying foundation of common design elements • Product families are “products that share a common platform” but are customized for specific user requirements (Dodge Durango versus Chrysler Aspen)

6. Mapping the Product Mix • Visual representation of the different products • List the current product, and group by product line • Possibly utilize a time element of product introduction • Group product lines by common platform elements • Identify possible overlaps or gaps in the lines

7. Brand Management • Brand is a promise from the company to the buyer about certain inherent characteristics of the product • Mercedes brand promise is extreme quality • Wal-Mart brand promises lowest price • Over time, brands develop equity – the difference between assets and liabilities on the balance sheet

8. Brand Equity Framework • Aaker says brand equity is five key components • Brand loyalty – degree of repeat purchases • Brand awareness – consideration set • Perceived quality of the brand • Brand associations – signals connected to the brand (memorable events, memories, etc.) • Other proprietary brand assets – patents, trademarks, channel relationships, etc. • Example in Exhibit 10.4, page 190

9. Brand Equity Measurement • Brand Loyalty • Price premium • Customer satisfaction • Brand Awareness • Salience • Perceived Quality • Expectations and performance met • Leadership in category • Brand Associations • Perceived value • Brand personality • Organizational associations • Market Behavior • Market share • Market price • Distribution coverage

10. Brand Decision Framework • Five major decisions regarding a brand • Branding decision – to brand or not to brand • Brand sponsor decision – manufacturer, distributor, or licensed brand • Brand name decision – individual names, blanket family name, separate family name, company/individual name • Brand strategy – line extension, brand extension, multi-brands, new brands, co-brands • Brand repositioning decision – reposition or not

11. Brand Switching Matrix • Switching behavior from former brand to current brand • Based on consumer input • Identifies for a specific brand the source (former brand) of their new customers and the destination (new brand) of some of their existing customers • Example in Exhibit 10.6, page 197