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Explain the product life-cycle concept. LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 10, YOU SHOULD BE ABLE TO: Explain the product life-cycle concept. LO1 Identify the ways that marketing executives manage a product’s life cycle. LO2 LO3 Recognize the importance of branding and alternative branding strategies. 10-2

LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 10, YOU SHOULD BE ABLE TO: Describe the role of packaging, labeling, and warranties in the marketing of a product. LO4 LO5 Recognize how the 4 Ps framework is expanded in the marketing of services. 10-3 3

GATORADE: BRINGING SCIENCE TO SWEAT 10-4

FIGURE 10-1 How stages of the product life cycle relate to a firm’s marketing objectives and marketing mix actions 10-5

FIGURE 10-1A Stages of the product life cycle and its total industry sales and total industry profit 10-6

FIGURE 10-1B How stages of the product life cycle relate to a firm’s marketing objectives and marketing mix actions 10-7

CHARTING THE PRODUCT LIFE CYCLE INTRODUCTION STAGE LO1 Product Life Cycle Stimulate Trial Primary Demand Selective Demand Skimming Strategy Penetration Pricing 10-8

FIGURE 10-2 Product life cycle for the stand-alone fax machine for business use: 1970-2014 10-9

CHARTING THE PRODUCT LIFE CYCLE GROWTH STAGE LO1 Rapid Sales Growth More Competitors Repeat Purchasers New Features Broad Distribution 10-10

CHARTING THE PRODUCT LIFE CYCLE MATURITY STAGE LO1 Industry/Product Sales Slow Profit Declines Product Differentiation Fewer Competitors 10-11

CHARTING THE PRODUCT LIFE CYCLE DECLINE STAGE LO1 Industry/Product Sales Drop Environmental Changes Deletion Harvesting 10-12

MARKETING MATTERS Will E-Mail Spell Extinction for Fax Machines? LO1 10-13

CHARTING THE PRODUCT LIFE CYCLE FOUR ASPECTS LO1 Length of the Product Life Cycle Shape of the Product Life Cycle Generalized Life Cycle High-Learning Product Fashion Product Low-Learning product Fad Product 10-14

FIGURE 10-3 Alternative product life cycle curves based on product types 10-15

CHARTING THE PRODUCT LIFE CYCLE FOUR ASPECTS LO1 The Life Cycle and Consumers Diffusion of Innovation Innovators Late Majority Early Adopters Laggards Early Majority 10-16

FIGURE 10-4 Five categories and profiles of product adopters (diffusion of innovation) 10-17

CHARTING THE PRODUCT LIFE CYCLE FOUR ASPECTS LO1 The Life Cycle and Consumers Barriers to Adoption Usage Value Risk Psychological 10-18

MANAGING THE PRODUCT LIFE CYCLE ROLE OF A PRODUCT MANAGER LO2 Product/Brand Manager Responsibilities Product Life Cycle New Product Development Marketing Program Implementation Data Analysis CDI BDI 10-19

USING MARKETING DASHBOARDS Knowing Your CDI and BDI LO2 Category Development Index (CDI) and Brand Development Index (BDI) 10-20

MANAGING THE PRODUCT LIFE CYCLE MODIFYING THE PRODUCT OR MARKET LO2 Product Modification Product Bundling New Characteristics Market Modification Finding New Customers Increasing a Product’s Use Dockers Ad Creating a New Use Situation 10-21

MANAGING THE PRODUCT LIFE CYCLE REPOSITIONING THE PRODUCT LO2 Product Repositioning Reacting to a Competitor’s Position Reaching a New Market Catching a Rising Trend 10-22

MANAGING THE PRODUCT LIFE CYCLE REPOSITIONING THE PRODUCT LO2 Changing the Value Offered Trading Up Trading Down Downsizing 10-23

MAKING RESPONSIBLE DECISIONS Consumer Economics of Downsizing— Get Less, Pay More LO2 10-24

BRANDING AND BRAND MANAGEMENT LO3 Branding Brand Name Logotype (Logo) Trade Name Trademark ® ™ 10-25

BRANDING AND BRAND MANAGEMENT BRAND PERSONALITY AND BRAND EQUITY LO3 Brand Personality Brand Equity Provides a Competitive Advantage Consumers Willing to Pay a Premium 10-26

FIGURE 10-5 The customer-based brand equity pyramid 10-27

BRANDING AND BRAND MANAGEMENT BRAND PERSONALITY AND BRAND EQUITY LO3 Creating Brand Equity Develop Positive Brand Awareness Establish a Brand’s Meaning Elicit the Proper Response Create Intense Brand Loyalty 10-28

BRANDING AND BRAND MANAGEMENT BRAND PERSONALITY AND BRAND EQUITY LO3 Valuing Brand Equity Provides a Financial Advantage Brand Licensing 10-29

BRANDING AND BRAND MANAGEMENT PICKING A GOOD BRAND NAME LO3 Should Suggest Product Benefits Should Be Memorable and Positive Should Fit the Company or Product Image Should Have No Legal or Regulatory Restrictions Should Be Simple and Emotional 10-30

FIGURE 10-6 Alternative branding strategies 10-31

BRANDING AND BRAND MANAGEMENT BRANDING STRATEGIES LO3 Multiproduct Branding (Family or Corporate Branding) Product Line Extensions Subbranding Brand Extension Co-Branding 10-32

BRANDING AND BRAND MANAGEMENT BRANDING STRATEGIES LO3 Multibranding Fighting Brands Private Branding (Private Labeling or Reseller Branding) Mixed Branding 10-33

Kimberly-Clark’s Huggies What branding strategy is used? LO3 10-34

PACKAGING AND LABELING PRODUCTS CREATING CUSTOMER VALUE AND COMPETITIVE ADVANTAGE LO4 Packaging Label Communication Benefits Functional Benefits Perceptual Benefits 10-35

MARKETING MATTERS Creating Customer Value Through Packaging— Pez Heads Dispense More Than Candy LO4 10-36

Connecting with Customers PACKAGING AND LABELING PRODUCTS PACKAGING AND LABELING CHALLENGES AND RESPONSES LO4 Connecting with Customers Environmental Concerns Health, Safety, and Security Issues Shelf Life Cost Reduction 10-37

Warranty PRODUCT WARRANTY Express Warranties LO4 Warranty Express Warranties Limited Coverage Warranties Full Warranties Implied Warranties 10-38

MANAGING THE MARKETING OF SERVICES THE SEVEN Ps OF SERVICES LO5 Seven Ps of Services Marketing Product (Service) Branding Price Off-Peak Pricing 10-39

MANAGING THE MARKETING OF SERVICES THE SEVEN Ps OF SERVICES LO5 Place (Distribution) Promotion Publicity Public Service Announcements (PSAs) 10-40

MANAGING THE MARKETING OF SERVICES THE SEVEN Ps OF SERVICES LO5 People Customer Experience Management (CEM) Physical Environment Process Capacity Management 10-41

MARY KAY, INC.: BUILDING A BRAND IN INDIA VIDEO CASE 10 10-42

VIDEO CASE 10 MARY KAY 10-43

VIDEO CASE 10 MARY KAY 1. What information should be included in a written positioning statement for Mary Kay? 10-44

VIDEO CASE 10 MARY KAY 2. How would you draft a formal, written positioning statement for Mary Kay using the information detailed in question 1? 10-45

3. Is Mary Kay a global brand? Why or why not? VIDEO CASE 10 MARY KAY 3. Is Mary Kay a global brand? Why or why not? 10-46

VIDEO CASE 10 MARY KAY 4. How has Mary Kay, India, focused on the different steps in the customer-based brand equity pyramid described in Figure 11-6? 10-47

Product Life Cycle A product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline. 10-48

Branding Branding is a marketing decision in which an organization uses a name, phrase, design, or symbols, or combination of these to identify its products and distinguish them from those of competitors. 10-49

Brand Name A brand name is any word, device (design, shape, sound, or color), or combination of these used to distinguish a seller’s goods or services. 10-50

Brand Personality Brand personality is a set of human characteristics associated with a brand name. 10-51

Brand Equity Brand equity is the added value a brand name gives to a product beyond the functional benefits provided. 10-52

Multiproduct Branding Multiproduct branding is a branding strategy in which a company uses one name for all its products in a product class. 10-53

Multibranding Multibranding is a branding strategy that involves giving each product a distinct name when each brand is intended for a different market segment. 10-54

Seven Ps of Services Marketing The seven Ps of services marketing is an expanded marketing mix for services that includes the four Ps (product, price, promotion, and place or distribution) as well as people, physical environment, and process. 10-55

Off-Peak Pricing Off-peak pricing involves charging different prices during different times of the day or during different days of the week to reflect variations in demand for the service. 10-56

Capacity Management Capacity management integrates the service component of the marketing mix with efforts to influence consumer demand. 10-57