Product Planning How are decisions made to introduce new products and delete old old ones?
Unit 9 Vocabulary Aseptic Packaging Blisterpacks Brand Brand Extension Brand Label Brand Licensing Brand Mark Brand Name Category Management Cause Packaging Co-Branding Descriptive Label Generic Brands Grade Label Label Mixed Brand Mixed Bundling National Brands Package Planograms Price Bundling Private Distributor Brands Product Depth Product Item Product Life Cycle Product Line Product Mix Product Modification Product Planning Product Positioning Product Width Trade Name Trade Character Trademark
Unit 9 Essential Question What processes and techniques are used to develop, maintain, and improve a product/service mix in order to utilize market opportunities?
What is the nature and scope of the product/service management function? Essential Question 1 Product Planning
What is Product Planning? Product Planning: The decisions made about what features should be used in selling of a business’s products. These decisions relate to: – packaging – labeling – warranties – guarantees – branding – product mix
What is Product Planning? Product Mix: All the different products that a company makes or sells. –Product Line: A group of closely related products manufactured or sold by a business. –Product Item: A specific model, brand, or size of a product within a product line. –Product Width: The number of different product lines a business manufactures or sells. –Product Depth: The number of product items in a product line.
What is Product Planning? A well defined product plan allows a business to: –Create sales opportunities. –Design appropriate marketing programs. –Develop effective advertising campaigns. –Coordinate the product mix offered to customers. –Add new products. –Delete older products that no longer appeal to customers
How do businesses determine which products to produce and sell? Essential Question 2 Product Planning
Determining what to produce or sell Businesses will use different product mix strategies to determine what to produce or sell. Product mix strategies depend on: –Resources –Objectives –Past and current sales –Consumer trends
How are products/services positioned in the market place? Essential Question 3 Product Planning
Product Positioning Product positioning: Efforts a business makes to identify, place and sell its products in the marketplace. –Positioning by price and quality: Ex: Ford Motor Company positions its Focus as an economical passenger car while still emphasizing quality.
Product Positioning –Positioning by features and benefits: Ex: Oil of Olay was positioned as a premium facial moisturizer and cleanser to keep skin soft and young. –Positioning by unique characteristics: Ex: Cell phones that can text message or take pictures and send them.
Product Positioning –Positioning in relation to the competition: Ex: Warner-Lambert Company introduced Cool Mint Listerine by positioning against the “theraputic” benefits of Original Listerine and the “cosmetic” benefits of Scope. –Positioning in relation to other products in a line: Ex: Binney & Smith introduced washable crayons and positioned them as a specialty item in the company’s Crayola crayon line.
What is the concept of product mix and product/service branding? Essential Question 4 Product Planning
Product Mix Strategies Developing New Products –Follows six steps: Generate Ideas Screen Ideas Develop a Business Proposal Test the product with consumers Introduce the product Evaluate customer acceptance
Product Mix Strategies Developing Existing Products –Line Extensions: Adding new product lines, items or services. Ex: Tylenol –Product Modifications: An alteration to an existing product: New and different varieties Formulations Colors Styles Features Sizes
Product Mix Strategies Deleting a Product or Product Line –Obsolescence –Loss of Appeal –Changes in Company Objectives –Replacement with New Products –Lack of Profit –Conflict with other products in the line
What is the nature of product bundling? Essential Question 5 Product Planning
What is Product Bundling? Multiple products or components packaged together into one bundled solution.
BUSINESSES Introduce New Products Acquire New Customers Higher Profits Increase Product Turnover (distressed inventory) Benefits for Businesses and Customers
CUSTOMERS –Save Money –Perception of Greater Value –Low Risk to Try New Products Benefits for Businesses and Customers
What is the nature of corporate branding? Essential Question 6 Product Planning
Branding, Packaging, and Labeling Brand: Name, design or symbol that identifies the products of a company. –Brand Name: Word or group of words that can be spoken. Ex: Nike, Coca-Cola Classic, Cover Girl, Tylenol –Brand Mark: Symbol, design, distinctive coloring, or lettering
Branding, Packaging, and Labeling –Trade Name: Identifies the company or a division of a particular corporation. –Trade Character: A personified brand mark.
Branding, Packaging, and Labeling –Trademark: When used, it is followed by the registered trademark symbol ®
Branding, Packaging, and Labeling Package: Physical container or wrapping for a product. Label: Information tag, wrapper, seal, or imprinted message that is attached to a product or package.
How do you identify product opportunities? Essential Question 7 Product Planning
Changes in life cycle Changes in technology Changes in market/society Changes in economy New Product Opportunities
Find the opportunities when you find the gaps! Gap=the difference between what is currently available and what is needed/desired Finding the GAPS!
Product planning does not end when a product is new! Must decide what to do with existing products as they change through the life cycle Changes in Life Cycle
Product Life Cycle Maturity Introduction Growth Decline Delete or Reinvent What do we do when a product declines? Have to decide to modify or delete THIS IS AN OPPORTUNITY
Smartphones –Voice recognition technology Siri GPS –Garmin, Tom Tom –Google Maps Social Media Changes in Technology
Health Conscience –McDonalds Happy Meal Apple Slices, Milk –Salads, wraps –Bottled water Convenience Entertainment –Games, music, movies, culture Changes in Market/Society
Economic downturn –Created opportunity for new product and product expansion Generic brands, discount stores, low cost alternatives and substitutes Changes in Economy
Market research –Surveys Asking customers what they would like, what's lacking –Focus Groups –Sales records Where are sales decreasing/not improving? –Competitors What are our competitors offering that we aren’t? What are they doing better than us? Ways To Find the Gaps
What methods/techniques can be used to generate a product idea? Essential Question 8 Product Planning
New Product Categories Products that create a new market or niche segment. –Paper disposable diapers. Additions or line extensions to existing products. –New flavors and new sizes of existing products.
New Product Categories Product improvements. –Cars. –Cell phones Repositioned products. –Tums repositioned itself to feature its high calcium content as a benefit for women's health.
Product Development The first step is to generate new business ideas that are unique. –Can the product be Repositioned Improved Brought out in a new size, flavor, or package?
Product Development Techniques used to generate new product ideas: –Periodically screen your products and compare them with competitors' products, with an eye toward: improving attributes of products combining the features/benefits of several separate products into a single new product –examining users' needs that are not being met by current competitive products –using idea-generating methods like brainstorming