Product Decisions. Product is critical element of marketing mix; Anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a want or need. Physical object, service, person, place, organization, idea.
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
Product Decisions • Product is critical element of marketing mix; Anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a want or need. • Physical object, service, person, place, organization, idea
Unique Characteristics of Servicesand Resulting Marketing Challenges Exhibit 7.6
Product Decisions Involve… • Product mix- total group of products offered by company • Product lines-group of closely related product items • Depth-number of items in line • Brands-combination of name, symbol, term, or design that identifies specific product • Packaging and labeling • Positioning
Positioning Decision • Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the target market’s mind.
Steps In The Positioning Process • Identify relevant set of competitive products serving target market • Identify the set of determinant attributes that define the “product space”. • Collect information from a sample of customers and potential customers about perceptions of each product on the determinants • Determine the product’s current positioning. • Determine the customers’ most preferred combination of determinant attributes. • Examine the fit between preferences of market segments and current position of products. • Write positioning statement to guide development of marketing strategy.
Positioning Map: Automobiles For Generation Yers More “Edgy” Kia Sorrento Scion Cube Inexpensive Expensive $13k $20K Civic Less “Edgy”
Trout and Ries suggest a six-step question framework for successful positioning: 1. What position do you currently own? 2. What position do you want to own? 3. Whom you have to defeat to own the position you want. 4. Do you have the resources to do it? 5. Can you persist until you get there? 6. Are your tactics supporting the positioning objective you set?
How is the Ford Mustang positioned? How has Ford achieved this positioning? Has its positioning changed over time?
Product Differentiation • Differentiation Strategies – Create differences in the firm’s product offering that sets it apart from competing offerings based on • Product features • Advantages • Benefits
Stages of the Product Life Cycle Exhibit 7.2
Marketing Strategy Duringthe Product Life Cycle Exhibit 7.3
Introduction Stage • Begins when development is complete • Ends when customers widely accept the product • Marketing strategy goals during this stage: • Attract customers by raising awareness and interest • Induce customers to try and buy • Engage in customer education activities • Strengthen or expand channel and supply relationships • Build on availability and visibility • Set pricing objectives
Growth Stage(1 of 2) • Be ready for sustained sales increases • Rapid increase in profitability early in the growth stage that decreases at the end of this stage • Length depends on nature of product and competitive reactions • Two strategies: • (1) Establish a strong, defensible marketing position • (2) Achieve financial objectives
Growth Stage(2 of 2) • Marketing strategy goals in this stage: • Leverage the product’s perceived differential advantages • Establish a clear product and brand identity • Create unique positioning • Maintain control over product quality • Maximize availability of the product • Maintain or enhance the product’s profitability to partners • Find the ideal balance between price and demand • Keep an eye focused on the competition
Maturity Stage(1 of 2) • Few, if any, new firms will enter the market • Still an opportunity for new product features and variations • Typically the longest stage in the product life cycle
Maturity Stage(2 of 2) • Four general goals in this stage: • (1) Generate Cash Flow • (2) Hold Market Share • (3) Steal Market Share • (4) Increase Share of Customer • Four options to achieve these goals: • (1) Develop a new product image • (2) Find and attract new users to the product • (3) Discover new applications for the product • (4) Apply new technology to the product
Decline Stage • Two options: • (1) Attempt to postpone the decline • (2) Accept its inevitability • Harvesting • Divesting • Factors to be considered during this stage: • Market segment potential • The market position of the product • The firm’s price and cost structure • The rate of market deterioration
Product Lines andProduct Mixes at Gillette Exhibit 7.1
Product Mix Decisions • Def.: Set of all products and items that a particular seller offers to buyers. • Decisions include selection of width, length, depth, and consistency
Product Line Decisions • Line stretching • Downward – enter on the low end • Upward – enter on the high end • Two-way – enter both directions • Line-filling – add more items • Line Modernization – update to reflect current trends, themes • Line-Featuring-select one or a few items in the line to feature • Line-Pruning – select item(s) to cut
What is a Brand? • A 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 to differentiate them from those of competitors.
The World’s Twenty-FiveMost Valuable Brands Exhibit 7.5
Branding Decisions • Brand Name • Individual (General Mills- Bisquick, Gold Medal, Betty Crocker; P&G) • Blanket family name (Heinz, Campbell) • Separate family names (Sears-Kenmore for appliances, Craftsman for tools) • Company plus individual names (Kellogg Rice Krispies)
Good Brand Names • Distinctive • Lack Poor Foreign Language Meanings • Suggest Product Qualities • Suggest Product Benefits • Easy to Pronounce, Recognize, Remember • Zit (Chocolate from Germany) • Koff (Beer)
Packaging Decisions • Design, materials, size • Critical as marketing tool • Self-service • Company & brand image • Opportunity for brand innovation
Factors Influencing Product Strategy Decisions • Classification of Products • Convenience • Shopping • Specialty • Unsought Products • Product Life Cycle
Product Classification(1 of 3) • Consumer Product Classifications • Convenience Products • Routinely purchased, require little or not time searching • Make them widely available
Shopping Products • Spend considerable time making the purchase; seek info on price, features, service • Product differentiation very important • Have strategy to guarantee and reduce consumer satisfaction
Specialty Products • Unique, shoppers expend considerable time, effort, money to acquire; accept no substitutes
Unsought Products • (1) Products of which consumers are unaware • (2) Products that consumers do not consider purchasing until a need or emergency arises
Six strategic product development options: (1) New-to-the-world products (discontinuous innovations) (2) New product lines (3) Product line extensions (4) Improvements or revisions of existing products (5) Repositioning (6) Cost reductions Customer perception of differentiation is critical New Product Development
Development Stage • No sales revenue during this stage • Components of the product concept: • An understanding of desired uses and benefits • A description of the product • The potential for creating a complete product line • An analysis of the feasibility of the product concept • Customer needs should be discerned before developing marketing strategy