Copyright © 2010 Pearson Education Canada Product Management Product management concerns three key areas: The internal organization structure for managing current products. The allocation of resources for developing new products. Dealing with changing market conditions as products progress through their life cycles. Copyright © 2010 Pearson Education Canada

Systems for Managing Products An organization has several options or combinations of options for managing its product lines. Brand Management: (Product manager) Category Management Regional Management Target-Market Management Continental and Global Management Copyright © 2010 Pearson Education Canada

Brand/Category Management V.P. Marketing Category Manager Category Manager Brand Manager Brand Manager Brand Manager Brand Manager Copyright © 2010 Pearson Education Canada

Copyright © 2010 Pearson Education Canada Regional Management V.P. Marketing B.C. Ontario Atlantic Prairies Quebec Copyright © 2010 Pearson Education Canada

Target Market Management Bell Canada V.P. Marketing Consumer Small Medium Enterprise Bell Mobility V.P. Marketing Youth Women Ethnic Copyright © 2010 Pearson Education Canada

Continental/Global Management V.P. Marketing North America Europe Australia Latin America “Wherever possible U.S. strategies will be implemented in Canada.” --Kraft Inc.-- Copyright © 2010 Pearson Education Canada

Product Management Decisions All aspects of the marketing mix are managed to maximize profit. Key product decisions embrace: Product Modifications Product Mix (Stretching) Brand Design and Packaging Maintenance or Withdrawal Copyright © 2010 Pearson Education Canada

Copyright © 2010 Pearson Education Canada Product modification Copyright © 2010 Pearson Education Canada

Copyright © 2010 Pearson Education Canada Product Mix Copyright © 2010 Pearson Education Canada

Brand Design and Packaging Copyright © 2010 Pearson Education Canada

Maintenance or Withdrawal Copyright © 2010 Pearson Education Canada

Copyright © 2010 Pearson Education Canada Product Life Cycle Copyright © 2010 Pearson Education Canada

Copyright © 2010 Pearson Education Canada Product Life Cycle Unique conditions in each stage of the life cycle necessitate different marketing strategies in each stage. Introduction Growth Maturity Decline Copyright © 2010 Pearson Education Canada

Extending the Product Life Cycle As products age the manager introduces rejuvenation (innovation) strategies to extend the life cycle. Search for New Markets: Attract competitors customers, Entering new segments, Converting non users to users Offer Product Improvements: Quality Improvements, Feature improvements, style improvements Copyright © 2010 Pearson Education Canada

Extending the Product Life Cycle Introduce New Lines: Different flavors or scents in order to try the product Change Other Marketing Mix Elements: Pricing Advertising Sales promotion Distribution Copyright © 2010 Pearson Education Canada

Extending the Life Cycle Copyright © 2010 Pearson Education Canada

Extending: Add New Markets There are several options for adding new markets. Attract competitor’s customers Enter new market segments Convert non-users Copyright © 2010 Pearson Education Canada

Extending: Alter the Product Product improvements can refresh a tired brand; possibly give it a new look. Improve the quality Improve the features of the product Improve the style (product design or package) Copyright © 2010 Pearson Education Canada

Extending: Add New Lines Depending on the product category numerous options are considered. Some examples: New flavours or scents Introduce new product format Introduce new sizes Copyright © 2010 Pearson Education Canada

Extending: Alter Other Mix Elements Changes unrelated to the product itself can have an impact on sales at any stage of the life cycle. Assess pricing strategy in context of competitors and consumer expectations. Assess marketing communications strategies and reallocate budgets to more suitable activities. Examine distribution strategy to make product available in new or non-traditional locations. Copyright © 2010 Pearson Education Canada

Adoption and Diffusion Stages a consumer passes through on the way to purchasing a brand regularly. Adoption Gradual acceptance of a product from introduction to market saturation. Diffusion Copyright © 2010 Pearson Education Canada

Copyright © 2010 Pearson Education Canada Stages of Adoption Awareness Consumer learns of product Consumer receptive to messages and information Interest Consumer reviews benefits in relation to needs Evaluation Consumer makes initial purchase Trial Satisfaction results in ongoing purchases Adoption Copyright © 2010 Pearson Education Canada

Copyright © 2010 Pearson Education Canada Adopter Categories Innovators Early Adopters Some people adopt a product quickly; others take much more time. Early Majority Late Majority Laggards Copyright © 2010 Pearson Education Canada

Product Life Cycle Length Consumer acceptance has a direct impact on how long a product lasts. Instant Bust Fad Fashion Brand Acceptance Wall: A barrier that stops most products from further consumer acceptance. It occurs due to lack of acceptance or uncoordinated marketing strategy. Copyright © 2010 Pearson Education Canada

Product Life Cycle Length Copyright © 2010 Pearson Education Canada

New Product Development 1. Idea Generation 2. Screening 3. Concept Development and Testing 7. Commercialization 6. Test Marketing 5. Product Development 4. Business Analysis Copyright © 2010 Pearson Education Canada