Chapter 8 - slide 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter Eight Product, Services, and Brands: Building Customer Value

New-Product Development Process Major Stages in New-Product Development

Product Life-Cycle Strategies Product Life Cycle

Product development Sales are zero and investment costs mount Introduction Slow sales growth and profits are nonexistent Growth Rapid market acceptance and increasing profits. Maturity Slowdown in sales growth and profits level off or decline Decline Sales fall off and profits drop Product Life-Cycle Strategies

Slow sales growth Little or no profit High distribution and promotion expense Introduction Stage

Product Life-Cycle Strategies Sales increase New competitors enter the market Price stability or decline to increase volume Consumer education Profits increase Promotion and manufacturing costs gain economies of scale Growth Stage

Product Life-Cycle Strategies Slowdown in sales Many suppliers Substitute products Overcapacity leads to competition Increased promotion and R&D to support sales and profits Maturity Stage

Product Life-Cycle Strategies Market modifying Product modifying Marketing mix modifying Maturity Stage Modifying Strategies

Product Life-Cycle Strategies Maintain the product Harvest the product Drop the product Decline Stage

Product Life-Cycle Strategies

Brand represents the consumer’s perceptions and feelings about a product and its performance. It is the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers Branding Strategy: Building Strong Brands

Brand strategy decisions include: Product attributes Product benefits Product beliefs and values Brand Positioning

Branding Strategy: Building Strong Brands Desirable qualities 1. Suggest benefits and qualities 2. Easy to pronounce, recognize, and remember 3. Distinctive 4. Extendable 5. Translatable for the global economy 6. Capable of registration and legal protection Brand Name Selection

Branding Strategy: Building Strong Brands Manufacturer’s brand Private brand Licensed brand Co-brand Brand Sponsorship

Branding Strategy: Building Strong Brands Brand Development Strategies

Services Marketing Nature and Characteristics of a Service