Product Planning Section 8.1

Product Planning, Mix, and Development The nature and scope of product planning The concept of product mix The different product mix strategies The steps in new product development What you’ll learn...

Product Planning Involves making decisions about those features that are needed to sell a business’s products, services, or ideas.

Product Mix Includes all the different products that a company makes or sells.

Product Line A group of closely related products manufactured and/or sold by a business.

Product Item A specific model, brand, or size of a product within a product line.

Product Width Oral Care Blades & Razors Personal Care BatteriesAppliances Width of the Gillette Product Mix The number of different product lines a business manufactures or sells.

Product Depth Oral Care Blades & Razors Personal Care BatteriesAppliances The number of product items offered within each product line.

Product Mix Strategies The plan for how the business determines which products it will make or stock May develop completely new products May expand or modify their current product lines May drop existing products

Developing New Products Generating Ideas –Come from a variety of sources –Creativity is essential Screening Ideas –Ideas are evaluated and matched against the company’s overall objectives.

Developing New Products Developing a Business Proposal –Consider a product’s potential sales, costs, and production requirements. Developing the Product –The new idea takes physical shape –Marketers develop a marketing strategy. Testing the Product with consumers

Developing New Products Introducing the Product –The product has been researched successfully –This stage also is called commercialization. Evaluating Customer Acceptance –Marketers track new product performance.

Steps to Product Development Generating Ideas …Cultural Trends, Behavior Screening Ideas.. Companies match idea against Co. objectives Developing Business proposal …Potential sales, costs Developing the product …prototype … final product Testing the product …Test Marketing Introducing product (Commercialization) –If response if favorable, product introduced into the marketplace Evaluating customer acceptance …Tracking customer acceptance

Developing Existing Products Companies constantly review their product mix to see if they can further expand their product lines or modify existing products. Two ways to do this:

Developing Existing Products Original Product Newer Products Line Extensions – new product lines, items, or services

Developing Existing Products Product Modifications – an alteration in a company’s existing product

Deleting a Product or Product Line Obsolescence Loss of appeal Conflict with current company objectives Replacement with new products Lack of profit Conflict with other products in the line