Copyright 2000 Prentice Hall10-1 Chapter 10 Managing the Product

Copyright 2000 Prentice Hall10-2 Steps in Managing Products (Fig. 10.1)

Copyright 2000 Prentice Hall10-3 Objectives and Strategies for Individual Products Strategies for NewProducts NewProducts RegionalProducts RegionalProducts MatureProducts MatureProducts

Copyright 2000 Prentice Hall10-4 Objectives and Strategies for Multiple Products: Product Line Strategies A Product Line is a Firm’s Total Product Offering Designed to Satisfy a Single Need Joy Ivory Antibacterial Dawn Special Care Special Care Length of Product Line

Copyright 2000 Prentice Hall10-5 Product Line Extensions Stretching Adding new items to line Filling Adding sizes or styles Downward Upward Product Line Strategies Danger of Cannibalization Contracting a Product Line Dropping items Contracting a Product Line Dropping items Two-way

Copyright 2000 Prentice Hall10-6 Product Mix Strategies Product Mix is the Total Set of all Products a Firm Offers for Sale Beauty Products Beauty Products Health Care Products Health Care Products Laundry & Cleaning Products Laundry & Cleaning Products Width of Product Mix

Copyright 2000 Prentice Hall10-7 Quality as a Product Objective Ease of Use Durable Degree of Pleasure Precision Versatile Satisfies Needs Focus on the Level and Consistency of Quality Reliable Product Safety

Copyright 2000 Prentice Hall10-8 Product Life Cycle (Fig. 10.3)

Copyright 2000 Prentice Hall10-9 Product Single company produces product Introduction Stage of the PLC Goals Sales Profits Pricing Marketing Get first-time buyers to try the product Increase at a steady but slow pace Negative High: recover R&D costs; or Low: attract large number of customers High: recover R&D costs; or Low: attract large number of customers Informing customers Length of Stage Depends on 1) marketplace acceptance, 2) producer willingness to support product

Copyright 2000 Prentice Hall10-10 Sales Profits Goals Marketing Strategies Price Advertising Rapid increase in sales Increase and peak Encourage brand loyalty Introduction of product variations Price competition may appear Heavy advertising is used when competitors appear Growth Stage of the PLC

Copyright 2000 Prentice Hall10-11 Sales Profits Competition Product Distribution Marketing Strategies Peak, then level off, even decline Margins narrow Grows intense Mostly replacement products Sell through all suitable retailers Firms alter the marketing mix, try to attract new users Maturity Stage of the PLC

Copyright 2000 Prentice Hall10-12 Sales Profits Competitors Product Marketing Strategies Declining sales Declining profits Large number with no one having the advantage Should the product be kept? Keep product, phase out gradually, drop product immediately Decline Stage of the PLC

Copyright 2000 Prentice Hall10-13 Creating Product Identity: Branding Decisions A Brand is a Name, a Term, a Symbol, or Any Other Unique Element of a Product that Identifies One Firms’ Product(s) and Sets Them Apart From the Competition.

Copyright 2000 Prentice Hall10-14 Choosing a Brand Name, Mark, or Character n n A good brand name must: – – have a positive connotation & be memorable, – – help maintain relationships with customers, – – help position a product in consumer’s minds. n n How does a firm select a good brand name? It must be: – – easy to say, easy to spell, easy to read, and easy to remember.

Copyright 2000 Prentice Hall10-15 High Customer Loyalty High Customer Loyalty Perceived Quality Perceived Quality Brand Name Awareness Brand Name Awareness Brand Equity is a Brand’s Value to its Organization and Provides: The Importance of Branding

Copyright 2000 Prentice Hall10-16 Branding Strategies are a Major Part of Product Decision Making Family/Umbrella Brand Multiple Items Under the Same Brand Name Family/Umbrella Brand Multiple Items Under the Same Brand Name Individual Brand Separate Unique Brand for Each Product Item Individual Brand Separate Unique Brand for Each Product Item Branding Strategies

Copyright 2000 Prentice Hall10-17 Retailers Have Several Options When Deciding What Brands to Sell Store Brands Private Label Brands Brands That Are Owned & Sold by a Retailer Sam’s Cola Store Brands Private Label Brands Brands That Are Owned & Sold by a Retailer Sam’s Cola Branding Strategies National Brands Manufacturers’ Brands Coca-Cola National Brands Manufacturers’ Brands Coca-Cola

Copyright 2000 Prentice Hall10-18 Other Branding Strategies n n Licensing – – One firm sells another firm the right to use a brand name for a specific purpose and for a specific period of time. – – Example: Jurassic Park movie led to Jurassic Park candy, key chains & toys. n n Co-Branding – – Agreement between two brands to work together in marketing a new product. – – Example: Oreo O’s Cereal

Copyright 2000 Prentice Hall10-19 Provides Product Protection Protection Facilitates Product Use and Storage Facilitates Product Use and Storage Supplies Important Marketing Communication Supplies Important Marketing Communication Functions of Packaging Packaging Packaging Functions

Copyright 2000 Prentice Hall10-20 Product Category Managers Develops a Marketing Plan for all the Brands and Products Within a Product Category Product Category Managers Develops a Marketing Plan for all the Brands and Products Within a Product Category Market Managers Develops a Marketing Plan for Products Sold to a Particular Customer Group Market Managers Develops a Marketing Plan for Products Sold to a Particular Customer Group Brand Managers Team Leaders for a Single Brand Responsible for Positioning the Brand & Developing Brand Equity Brand Managers Team Leaders for a Single Brand Responsible for Positioning the Brand & Developing Brand Equity Management of Existing Products

Copyright 2000 Prentice Hall10-21 Organizing for New Product Development A Venture Team is a Group of People Within an Organization Who Work Together Focusing on the Development of a New Product. The Group Might Consist of People from Design, Engineering and Marketing.

Copyright 2000 Prentice Hall10-22 Chapter Summary n Explain some of the different product objectives and strategies a firm might choose. n Explain how firms manage products throughout the product life cycle (PLC). n Discuss how branding creates product identity and describe different types of branding strategies. n Explain the important part packaging and labeling play in developing effective product strategies. n Describe how organizations are structured for new and existing product management.