Product Planning Sustaining Product Sales Chapter 30.2

Objectives Identify the four stages of the product life cycle Describe product positioning techniques

The Product Life Cycle Represents the stages that a product goes through during its life The four stages are: – Introduction – Growth – Maturity – Decline

Product Life Cycle Name the stages:

Introduction Stage Major goal: – Draw the customer’s attention to the new product by increasing product awareness and promotions Costs are high during this stage Usually the least profitable stage PowerMat - How It Works

Growth Stage Prosperous stage Much of the target market knows about and buys the product Advertising is focused on customer satisfaction To maintain sales growth, new models or product modifications may be introduced to stay ahead of competition

Maturity Stage Sales level off or slow down Most of the target market own the product Marketing dollars are spent on fighting off competition – As advertising expenses climb, the company may have to decide if it can continue to improve the product to gain sales.

Decline Stage Sales fall Profits may reach the point where they are smaller than costs Management will need to decide how long it will continue to support the product.

Decline Stage Drop the product Sell or license the product to risk-taking companies Recommit to the product line Discontinue the product Regionalize the product to areas where the product sells well Modernize or alter the product

Why are companies reluctant to delete products? – Companies spend large amounts of money to develop and promote consumer and industrial products, so they are reluctant to delete products.

PLC Activity Product Life Cycle – Groups of Two – On the sheet provided find products that fit into each category. Provide a picture of the product too!

Product Positioning Positioning a product to project a certain image – Set the product apart from the competition – Strategies Position by price and quality Position by features and benefits Position in relation to competition Position in relation to other products in a line

What determines how a company positions its product? To position their products, businesses identify customer needs and determine how their products compare to the competition

Positioning by Price and Quality By offering the lines below, companies are able to give each of their products a unique position in the marketplace. – Economy lines – Mid-priced lines – Luxury Lines High price = quality Low price = value FORD MOTOR COMPANY: Focus is positioned as a economical compact car Mustang is positioned as a high performance car

Positioning by Features and Benefits Products are associated with a feature or benefit – Overtime LLC Personal care products for boys 9-12 Line includes shampoo, deodorant, body wash, hair gel News Release

Positioning in Relation to the Competition Some businesses position their products to compete directly with the products of other companies. – Not always a good idea to compete head to head with the industry leader Southwest Airlines

Positioning in Relation to Other Products in a Line Individual products may be positioned in relation to other products in the same line Blackberry

Category Management Process that involves managing product categories as individual business units – A category may include a group of product lines with the same target market and distribution channels. – A category manager is responsible for all the brands of one product category such as Foods Beverages Health and Beauty

Category Management Planogram – Computer-developed diagram that shows retailers how and where products within a category should be displayed in a shelf or at individual stores

After Thanksgiving Break… Chapter 30 Quiz Chapter 30 Test Chapter 31 – Branding, Packaging, & Labeling – Important chapter – Read, notes, & extension activities – Use your time wisely!!

Extension Activity Consider your “personal brand” – This is another INDEPENDENT activity! – Grab a DECA Dimensions Magazine and read the following articles while answering the corresponding questions from a handout: Article 1: “Is This For Me?” pg. 10 Article 2: “The Seven Habits of Highly Successful Networkers” pg Article 3: “The Six C’s of Leadership” pg