Manage the Product Chapter Nine Chapter Objectives Explain

Manage the Product Chapter Nine Chapter Objectives Explain

Manage the Product Chapter Nine Chapter Objectives Explain the different product objectives and strategies a firm may choose Understand how firms manage products throughout the product life cycle Discuss how branding strategies create product identity Explain how packaging and labeling contribute to product identity

Describe how marketers structure organizations for new and existing product management 9-2 Product Lines Product Line: A firms total product offerings designed to satisfy a single need of the target market Product Line Length: The

number of separate items within the same category 9-3 The Product Mix Product Mix: A firms total products offered for sale (Proctor & Gamble) Product Mix Width:

The number of different product lines the firm makes 9-4 Figure 9.1 Steps to Manage Products Step 1 Step 2 Step 3

9-5 Figure 9.2 1-Objectives for Single & Multiple Products 9-6 1a-Objectives and Strategies for Individual Products Objectives and strategies for individual products:

Successful introduction of new products Taking regional products national Breathing new life into mature products while maintaining brand personality 9-7 1b-Objectives and Strategies for Multiple Products Product line: Firms total product offering designed to satisfy a single need or desire of target customers

Product line strategies: Full-line vs. limited-line strategies Upward, downward, or two-way line stretch Filling out or contracting a product line Cannibalization is a risk: loss of sales 9-8 1b-Objectives and Strategies for Multiple Products Product mix strategies:

The total set of products a firm offers for sale Product mix strategies: Width of product mix must be considered Product lines in mix usually have some things in common 9-9 Quality as a Product Objective: The Science of TQM Product quality is often an objective

A philosophy of total quality management (TQM) can help achieve quality objectives 9-10 Quality Guidelines ISO 9000: Standards for quality management ISO 14000: Environmental management

Six Sigma methodology: Process allowing no more than 3.4 defects per million (getting it right 99.9997% of the time) 9-11 2-Design Product Strategies The Product Life Cycle The Product Life Cycle: A concept that provides a way to trace the stages of a products acceptance, from its introduction (birth) to its decline (death).

A familiar concept in marketing and a useful marketing management tool. The PLC concept can be used to analyze a brand, product form or product category. Some critics have challenged the basis & value of the PLC. 5

Figure 9.4 The Product Life Cycle 9-13 Figure 9.5 Marketing Mix Strategies Through the PLC 9-14 Introductory Stage High failure rates Little competition

Frequent product modification Limited distribution High marketing and production costs Negative profits with slow sales increases Promotion based on awareness & information Communication challenge is to stimulate primary demand

5 Growth Stage Increasing rate of sales Entrance of competitors Market consolidation Initial healthy profits Aggressive advertising of the differences between brands Wider distribution

5 Maturity Stage Sales increase at a decreasing rate Saturated markets Annual models appear Lengthened product lines Service and repair assume important roles Heavy promotions to consumers and

dealers Marginal competitors drop out Niche marketers emerge 5 Decline Stage Long-run drop in sales Large inventories of

unsold items Elimination of all nonessential marketing expenses Organized abandonment 5 3-Creating Product Identity: Branding Decisions Brand: A name, term, symbol, or any other unique element that

identifies one firms product and sets it apart from the competition 9-19 Whats in a Name or Symbol? A good brand name: Maintains relationships with customers Positions a product by: Portraying an image, or Describing how the product works

Is easy to say, spell, read, and remember Fits the target market, product benefits, customers culture, and legal requirements 9-20 Trademarks Trademark The legal term for a brand name, brand mark, or trade character

The trademark symbol used in the U.S. Trademarks legally registered by a government obtain protection for exclusive use in that country 9-21 Why Brands Matter Brand equity: A brands value to its organization over and

above the value of the generic version of the product Brand equity provides competitive advantage Brand equity results in brand loyal consumers and attachment 9-22 Why Brands Matter Brand storytelling: Marketers seek to engage consumers with compelling stories about brands Characteristics of world class brands Brand extensions:

New products sold with the same brand name Sub-branding: Creating a secondary brand within a main brand that can help differentiate a product line 9-23 Figure 9.6 Branding Strategies

9-24 Branding Strategies Individual brands vs. family brands Individual brand: A unique brand for each item in the product line Family brand: A brand that a group of products or brands

share Campbells provides an umbrella under which multiple products can be marketed 9-25 Branding Strategies National vs. store brands Store brands (private label brands) are exclusive to a given retailer Generic brands Licensing: One firm sells the right to another to use a

legally protected brand name for a specific purpose and for a specific period of time 9-26 Branding Strategies Co-branding: Two brands combine to create a new product Provides greater recognition or other

strengths than either could achieve alone Ingredient branding is increasing 9-27 Brand Metrics Approaches to measuring brand equity: Customer mind-set metrics Product-market outcomes metrics Financial market metrics Revenue premium metric

9-28 Figure 9.7 Functions of Packaging 9-29 Figure 9.7 Functions of Packaging Functions of packaging: A cover or container for a product Helps create a competitive advantage for the brand Provides protection during transit

Facilitates consumers handling of the product Communicates the brands personality via the use of color, words, shapes, designs, and pictures Supplies important information, such as nutritional information, ingredients, benefits, recipes, directions, warnings, toll- 9-30 Designing Effective Packaging Effective packaging

considers: Packaging of other brands in same product category Package should standout and be different from the competition Store brands attempt to mimic other brands as close as legally possible 9-31

Designing Effective Packaging Effective packaging also considers: Choice of packaging material and image it projects Environmental impact of packaging Shape, color and graphic information to be portrayed Takes into account labeling regulations Federal Fair Packaging & Labeling Act of 1966 Nutrition Labeling & Education Act of 1990 9-32

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