Chapter 10

Life Cycle Management From cradle to grave management of the product Fine-tuning strategy Defending against competitors Continuously innovating the product, if possible

Product Life Cycle Similar to S-curve for product diffusion Four distinct stages of a product’s life Introduction Growth Maturity Decline Different development costs, sales, and marketing costs in each stage (Kahn, p. 183) Different marketing mix strategies for each stage (Exhibit 10.2, p. 184)

Maturity Stage Considerations Three basic strategic options Maintenance – fine tune marketing mix for optimal profitability Defense – focus on a key marketing element important to the customer base Innovation – use line extensions, flankers, or new markets to extend the life of the product

Product Families and Platforms Expanding beyond a single product in a category Platforms typically have an underlying foundation of common design elements Product families are “products that share a common platform” but are customized for specific user requirements (Dodge Durango versus Chrysler Aspen)

Mapping the Product Mix Visual representation of the different products List the current product, and group by product line Possibly utilize a time element of product introduction Group product lines by common platform elements Identify possible overlaps or gaps in the lines

Brand Management Brand is a promise from the company to the buyer about certain inherent characteristics of the product Mercedes brand promise is extreme quality Wal-Mart brand promises lowest price Over time, brands develop equity – the difference between assets and liabilities on the balance sheet

Brand Equity Framework Aaker says brand equity is five key components Brand loyalty – degree of repeat purchases Brand awareness – consideration set Perceived quality of the brand Brand associations – signals connected to the brand (memorable events, memories, etc.) Other proprietary brand assets – patents, trademarks, channel relationships, etc. Example in Exhibit 10.4, page 190

Brand Equity Measurement Brand Loyalty Price premium Customer satisfaction Brand Awareness Salience Perceived Quality Expectations and performance met Leadership in category Brand Associations Perceived value Brand personality Organizational associations Market Behavior Market share Market price Distribution coverage

Brand Decision Framework Five major decisions regarding a brand Branding decision – to brand or not to brand Brand sponsor decision – manufacturer, distributor, or licensed brand Brand name decision – individual names, blanket family name, separate family name, company/individual name Brand strategy – line extension, brand extension, multi- brands, new brands, co-brands Brand repositioning decision – reposition or not

Brand Switching Matrix Switching behavior from former brand to current brand Based on consumer input Identifies for a specific brand the source (former brand) of their new customers and the destination (new brand) of some of their existing customers Example in Exhibit 10.6, page 197