1. Product/Service Management
MARKETING 3.03
Product/Service
Management

2. 4 IMPORTANT P/S MGMT TERMS
Product Mix
Product Line
Product Width
Product Depth

3. Product / Service Management
Product MIX:
All the different products that a company makes or sells.
KRAFT Company Example:
….Kraft
….Maxwell House
….Kool-Aid
….Oscar Mayer
….Post Cereal products

4. Product / Service Management
Product Line
Group of closely related products manufactured &/or sold by a business
Example:
Kellogg’s makes all the cereals listed
All product lines are apart of the product mix

5. Product / Service Management
A product line can be determined by the following:
They function similarly
All of Chevrolets Cars are a Product Line
They are sold to the same groups of people
All of Staples Supplies sold to schools
Are marketed the same way
Are priced similarly

6. Product / Service Management
Product Item
A specific model, brand, or size of a product within a product line.

7. Product / Service Management
Product Mix Example
All classes AK offers
Product Line
All marketing courses offered
Product Item
Marketing
Sports Marketing
International Marketing

8. Product / Service Management
Product Mix:
The width and depth of a company’s product offerings.
Width: number of different product lines a business manufactures or sells
Small businesses have fewer product lines; less width
Depth: number of product items within a product line
Company sells three different sizes & three different flavors they would have a product depth of 9.
Example: Chocolate = small, medium, large

9. Product Mix Assignment
Working in groups of 1-3; you will be assigned a Company
Define Product Mix
At least 10 brands they sell
3 Examples of Product Lines
5 Product Items
Specific items sold by company

10. Companies General Motors Mars Nestle Sony Proctor & Gamble Kraft
General Mills
Johnson & Johnson
Unilever
Kellogg’s
Coca-Cola
Pepsico
Dr. Pepper/Snapple

11. Examples of Product Mixes

12. Nike Example Nike owns Nike Golf Nike Pro Nike+ Nike Skateboarding
Air Jordan
Converse
Hurley International
NikeTown Retail Stores

13. Nike Product Mix Example
4 Product Lines Examples
Converse
Basketball
Soccer
Clothing
Could’ve broken it down by:
Others Sports
Hurley, Golf, Jordan

14. Product Items Converse All Star Ox Nike Club Swoosh Full Zip Hoodie
$49.99
Nike Club Swoosh Full Zip Hoodie
$39.99
Nike Air Max 2013
$179.99

15. 3.01--- Review Types of Goods Sold Staple Convenience Shopping
Specialty
Fashion
Seasonal
Unsought
Industrial
Product Life Cycle
Introduction
Growth
Maturity
Decline

16. 3.03 Product Mix Product Depth Product Width Product Line Product Item
Trading Up
Trading Down
Alteration
Expansion
Contraction

17. Product Mix

18. Assignment Create 10 Flash cards based on the following concepts
Product Width: Contraction
Product Width: Expansion
Why would a company want to narrow its products?
Product Depth: Shallow
Product Depth: Expansion
Product Item
Trading Up
Trading Down
Alteration
Product Positioning

19. Product Mix Example

20. Product Mix Product Width is either narrow or broad
Narrow Product mix occurs when a company offers a limited number of product lines
Also known as Contracting
Why would a company want to narrow its product mix?
Easier on management
Cost effective
Simplicity
Consistency

21. Product Width: Narrowing
In 2009; General Motors (GM) filed for bankruptcy protection
They were told they needed to cut back
GMC
Cadillac
Buick
Chevy
Pontiac
Saturn
Saab
Hummer

22. Product Width: Broadening
Companies seek to expanding their product width by making it broader
Expanding allows you
Reach more markets
Gain a competitive edge
Example of product width is Red Lobster
Specialize in seafood
Sell pasta, chicken, & steak to broaden product mix

23. Product Depth: Expanding
Product Depth expands when more product items are added to a product line
Why would you expand on a product line?
Wider Variety
Greater Quantity
Dillards choosing to sell more colors, sizes, styles of Levi Jeans

24. Product Depth: Shallow
A shallow product depth occurs when there are less products offered in a product line
Why would you contract your product depth?
Cost Effective
Example would be Red Lobster selling chicken on its menu
Usually only 2-4 menu options
Not cost effective to offer a wider variety

25. Product Mix Strategies
Companies devise strategies for their products so that they are profitable
Existing product strategies
Alteration
Trading Up
Trading Down

26. Product Mix Strategy: Alteration
Alteration occurs when an existing product is altered
Improve an established product with new design, new package, &/ or new uses
Example: Jeep Company

27. Jeep Changes Over Time

28. Product Mix Strategies
Trading Up
Occurs when a company adds a higher-priced product to a line
Trying to attract a higher-income market
Want to improve the sales of existing lower- priced products.
Prestige of high-priced item makes brand look better

29. Product Mix Strategies
Trading Down
Adding a lower-priced item to a line of prestige products to encourage purchases from people who cannot afford the higher- priced product, but want the status.

30. Product Positioning
Positioning: actions marketers take to create a certain image of a product in the minds of the customers
In Relation to a Competitor
A common strategy when a firm is trying to solidify an advantage over another firm.
Example: Southwest Airlines promotes itself as the low-cost alternative
In Relation to a Product Class or Attribute (Features & Benefits)

31. Product Positioning Absolut Vodka
In Relation to a Target Market
Focusing on the unique characteristics of specific users can also be effective.
The …For Dummies series of instruction books are attractive to people who want to learn about a topic from a source that doesn’t assume any prior knowledge on the reader’s part.
By Price and Quality
Offer economy, mid-priced, & luxury lines
High Price = Quality Ford Mustang
Low Price = Greater Value Ford Focus
Difficult to change
Absolut Vodka

32. Class Activities
Flash Cards - After 10 minutes into a lecture or concept presentation, have students create a flash card that contains the key concept or idea. Toward the end of the class, have students work in pairs to exchange ideas and review the material.
Product Life Cycle of Mobile Phone