1. MARKETING 3.01 Product/Service Management

2. Intro Who is responsible for the last product you bought? Did you know….. -It took over 3 years to develop Google’s search engine -It took over 4 years to develop the famous chicken sandwich at Chick-fil-a

3. Product/Service Management A marketing function that involves obtaining, developing, maintaining, and improving a product or service mix in response to market opportunities.

4. Product and Service Classification System Convenience goods - little effort, relatively inexpensive Shopping goods - e.g ‘white goods’, DIY equipment, more expensive, infrequent Speciality goods - extensive search e.g Jewellery, gourmet food Unsought goods - e.g. double glazing,

5. Industrial goods Installations - ‘speciality’ goods of industrial markets - plant and machinery Accessories - maintenance and office equipment Raw materials components Business to business e.g. consultants, accountants

6. Product/Service Management Factors affecting Product/Service Management: 1. Customer Needs and Wants 2. Company Goals and Strategies 3. Cost and Available Resources 4. Competition 5. Product Itself 6. Government Regulation 7. Stages in Life Cycle 8. Business and Economic Trends

7. Product/Service Management What are Benefits to Product/Service Management? -Offer products consumers want and company’s profits increase -When developing the right products, a company can gain new customers -When products are well managed there is less of a chance for failure

8. Product/Service Management What role does Product/Service Management play in Marketing? 1.Affects positioning of product -what image do you want to create about the product in the minds of consumers? 2. Improves product success 3. Gives product an image -what impressions do you have of certain brands

9. Product/Service Management Who is responsible for managing product/service management? -Several employees of a company, certain departments, 1 employee or just the boss. Normally depends on size of company. 3 Main Phases of Product/Service Management 1. Developing New Products 2. Monitoring Existing Products - Sales, Profit, Market Share 3. Eliminate Weak Products

10. Now let’s see if you got it… 8 student groups Assign each group one factor (remember – there are 8 factors?) that affect product/ service management. Allow each group to choose a product. Discuss how their assigned factor affects that product. Present their findings to the class.

11. Product Life Cycles

13. Stage 1 of Product life cycle – Introduction of the Product Product is launched. A product launch is always risky. You never know how the market will receive the product. There have been numerous failures in the past to make marketers nervous during the launch of the product. The length of the introduction stage varies according to the product. If the product is technological and receives acceptance in the market, it may come out of the introductory phase as soon as it is launched. Whereas if the product is of a different category altogether and needs market awareness, it may take time to launch.

14. Characteristics of Introductory Stage Higher investment, lesser profits Minimal Competition Company tries to Induce acceptance and gain initial distribution Company needs Promotions targeted towards customers to increase awareness and demand for product Company needs Promotions targeted towards channel to increase confidence in the product

15. Stage 2 of Product Life Cycle Growth of the Product Product starts showing better returns on investment. Your customers and channels begin responding. There is better demand in the market and slowly the product starts showing profits.

16. Growth (CONT.) This is a stage where competition may step in to squash the product before it has completely launched. Any marketing mistakes done at this stage affect the product considerably as the product is being exposed to the market and bad news travels fast. Thus special care has to be taken in this stage to ensure competition or bad decisions do not affect the growth stage of the product.

17. Characteristics of Growth Stage Product is successfully launched Demand increases Distribution increases Competition intensifies Company might introduce secondary products or support services. Better revenue generation and ROI

18. Stage 3 of Product Life Cycle Maturity Stage One of the problems associated with maturity stages in a technologically advanced environment is the problem of duplication. Not only is the product available in duplicate markets, but also there are several competing products which arise with the same features and capabilities. As a result, the product becomes less attractive.

19. Characteristics of Maturity Stage Competition is high Product is established and promotion expenditures are less Little growth potential for the product Penetration pricing, and lower profit margins The major focus is towards extending the life cycle and maintaining market share Converting customers product to your own is a major challenge in maturity stage

20. Stage 4 of Product Life Cycle Stage of Decline 1 product, 10 competitors, minimum profits, huge amount of manpower and resources in use – A typical scenario which a product might face in its last stage. In this stage the expenditures begin to equal the profits or worse, expenses are more than profits. Typical scenario for the product to exit the market. It also becomes advantageous for the company as the company can use resources it was spending on the declining product on an altogether different project.

21. Characteristics of Decline Stage Market is saturated Sales and profits decline Company becomes cost conscious A lot of resources are blocked in rejuvenating the dead product.

22. Ethics & Packaging Have you ever seen commercials for an item that looks great, but when you actually buy one it doesn't look anything like it did on TV???? Well that is sometimes what happens with packaged products. The product looks great on the outside of the box, but when the box is opened the product is completely different from the way the packaging described it.