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Product Strategy

Product Strategy. Product Strategy. What are products? Breadth of product lines Depth in each product line Product innovation/newness spectrum Product life cycle management. What is a Product?. Installation. Augmented Product. Packaging. Features. Brand Name. After- Sale Service.

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Product Strategy

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  1. Product Strategy

  2. Product Strategy • What are products? • Breadth of product lines • Depth in each product line • Product innovation/newness spectrum • Product life cycle management Product Strategy

  3. What is a Product? Installation Augmented Product Packaging Features Brand Name After- Sale Service Delivery & Credit Core Benefit or Service Styling Quality Warranty Actual Product Core Product Product Strategy

  4. Breadth of Product Lines • How many product lines should a firm have? • Coca-Cola/Pepsi • Soda • Sports drinks • Juices • Bottled water • Shelf stable milk • Issue of generalist versus specialist! • Generalists are broader Product Strategy

  5. Depth of Product Lines • How many different offerings should a firm have within each product line? • Foot Locker versus Sears/Dept. stores • Issue of generalists versus specialists • Specialists are deeper Product Strategy

  6. Defining New Products • Newness to Company vs. Newness to Consumers • Newness of Market vs. Newness of Technology • Preference Uncertainty • Technological Uncertainty Product Strategy

  7. Metrics for Newness: Technology and Market Factors New to the World Next Generation MATURITY/NEWNESS OF TECHNOLOGY Major Enhancement Mature Design ALIGNMENT WITH CURRENT MARKET/CUSTOMER BASE Current Market/ Current Customers New Market/ Known Customers New Market/ Unknown Customers Product Strategy

  8. New to the World Next Generation MATURITY/NEWNESS OF TECHNOLOGY Major Enhancement Mature Design ALIGNMENT WITH CURRENT CUSTOMER BASE Current Customers New Markets Known Cust. New Market/ Unknown Customer Set Mapping Newness Metrics to Development Process Emphasis Research-Driven Development (Technology Push) Market Experimentation (Intuition and Discovery) User-Context Development (User-Driven) Norms-Driven Development (Experience-Based) Marketing-Led Development (Market Pull) Product Strategy

  9. Product Life Cycle Stages and Marketing Strategies and Tactics • Special trade promotions • to keep trade happy • Focused attacks on vulner. • competitors • Long-term price reduction or short-term price promotion • Expand • production • Build inventory • Expand dealer • network • Train expanded • sales force • Invest heavily • in advertising • Institute • marketing • controls • Cut low margin products • from line • Withdraw from unprofitable • channels • Freeze advt. and promotions • Attempt to keep price level • Freeze R&D and product • modification • Consider divesting Sales • Target best • prospects: • innovators and • enthusiasts • Use most loyal • distributors • Use free samples • Public demos • Trade shows • Publicity and • endorsements • Make final product • modifications • Stongly defend home- • market niches • Prune product lines • Focus on profits, not • market share • Reduce direct salesforce efforts, move to telemktg • More trade promotions • Introduce flankers, pvt. • labels • Reinvest in mkt. research and R&D • Use promo. to increase heavy-user loyalty • Rapid expansion of • distributors • Product line expansion • Niche mktg. • Heavy promotions • Sales force incentives • Encourage referrals Time Product Strategy Launch Tradeoff Rapid growth Shakeout Maturity Decline

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