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Explain the product life-cycle concept. LO1 Identify the ways that marketing executives manage a product’s life cycle. Recognize the importance of branding and alternative branding strategies. LO3 LO2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 10, YOU SHOULD BE ABLE TO: 10-2

LO4 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 10, YOU SHOULD BE ABLE TO: Recognize how the 4 Ps framework is expanded in the marketing of services. LO5 Describe the role of packaging, labeling, and warranties in the marketing of a product. 10-3

GATORADE: BRINGING SCIENCE TO SWEAT 10-4

FIGURE 10-1 FIGURE 10-1 How stages of the product life cycle relate to a firm’s marketing objectives and marketing mix actions 10-5

FIGURE 10-1A FIGURE 10-1A Stages of the product life cycle and its total industry sales and total industry profit 10-6

FIGURE 10-1B FIGURE 10-1B How stages of the product life cycle relate to a firm’s marketing objectives and marketing mix actions 10-7

CHARTING THE PRODUCT LIFE CYCLE INTRODUCTION STAGE LO1  Product Life Cycle Product Life Cycle  Primary Demand  Selective Demand  Skimming Strategy  Penetration Pricing  Stimulate Trial 10-8

FIGURE 10-2 FIGURE 10-2 Product life cycle for the stand-alone fax machine for business use:

CHARTING THE PRODUCT LIFE CYCLE GROWTH STAGE LO1  Rapid Sales Growth  Repeat Purchasers  New Features  Broad Distribution  More Competitors 10-10

CHARTING THE PRODUCT LIFE CYCLE MATURITY STAGE LO1  Product Differentiation  Fewer Competitors  Industry/Product Sales Slow  Profit Declines 10-11

CHARTING THE PRODUCT LIFE CYCLE DECLINE STAGE LO1  Environmental Changes  Industry/Product Sales Drop  Deletion  Harvesting 10-12

MARKETING MATTERS Will Spell Extinction for Fax Machines? LO

CHARTING THE PRODUCT LIFE CYCLE FOUR ASPECTS LO1  Length of the Product Life Cycle  Shape of the Product Life Cycle Generalized Life Cycle High-Learning Product Fashion Product Fad Product Low-Learning product 10-14

FIGURE 10-3 FIGURE 10-3 Alternative product life cycle curves based on product types 10-15

 The Life Cycle and Consumers Diffusion of Innovation  Innovators  Early Adopters  Early Majority  Late Majority  Laggards CHARTING THE PRODUCT LIFE CYCLE FOUR ASPECTS LO

FIGURE 10-4 FIGURE 10-4 Five categories and profiles of product adopters (diffusion of innovation) 10-17

 The Life Cycle and Consumers Barriers to Adoption  Usage  Value  Risk  Psychological CHARTING THE PRODUCT LIFE CYCLE FOUR ASPECTS LO

MANAGING THE PRODUCT LIFE CYCLE ROLE OF A PRODUCT MANAGER LO2  Product/Brand Manager Responsibilities Product Life Cycle Marketing Program Implementation New Product Development Data Analysis  CDI  BDI 10-19

USING MARKETING DASHBOARDS Knowing Your CDI and BDI Category Development Index (CDI) and Brand Development Index (BDI) LO

MANAGING THE PRODUCT LIFE CYCLE MODIFYING THE PRODUCT OR MARKET LO2  Product Modification Product Bundling New Characteristics  Market Modification Finding New Customers Increasing a Product’s Use Creating a New Use Situation Dockers Ad 10-21

MANAGING THE PRODUCT LIFE CYCLE REPOSITIONING THE PRODUCT LO2  Product Repositioning  Reaching a New Market  Reacting to a Competitor’s Position  Catching a Rising Trend 10-22

Trading Up Trading Down Downsizing MANAGING THE PRODUCT LIFE CYCLE REPOSITIONING THE PRODUCT LO2  Changing the Value Offered 10-23

MAKING RESPONSIBLE DECISIONS Consumer Economics of Downsizing— Get Less, Pay More LO

 Branding Branding  Brand Name Brand Name Logotype (Logo) BRANDING AND BRAND MANAGEMENT LO3  Trade Name  Trademark ® ™ 10-25

 Brand Personality Brand Personality  Brand Equity Brand Equity BRANDING AND BRAND MANAGEMENT BRAND PERSONALITY AND BRAND EQUITY LO3 Provides a Competitive Advantage Consumers Willing to Pay a Premium 10-26

FIGURE 10-5 FIGURE 10-5 The customer-based brand equity pyramid 10-27

BRANDING AND BRAND MANAGEMENT BRAND PERSONALITY AND BRAND EQUITY LO3  Creating Brand Equity Develop Positive Brand Awareness Establish a Brand’s Meaning Elicit the Proper Response Create Intense Brand Loyalty 10-28

BRANDING AND BRAND MANAGEMENT BRAND PERSONALITY AND BRAND EQUITY LO3  Valuing Brand Equity Provides a Financial Advantage Brand Licensing 10-29

BRANDING AND BRAND MANAGEMENT PICKING A GOOD BRAND NAME LO3  Should Suggest Product Benefits  Should Fit the Company or Product Image  Should Be Memorable and Positive  Should Have No Legal or Regulatory Restrictions  Should Be Simple and Emotional 10-30

FIGURE 10-6 FIGURE 10-6 Alternative branding strategies 10-31

BRANDING AND BRAND MANAGEMENT BRANDING STRATEGIES LO3  Multiproduct Branding (Family or Corporate Branding) Multiproduct Branding (Family or Corporate Branding) Product Line Extensions Subbranding Brand Extension Co-Branding 10-32

BRANDING AND BRAND MANAGEMENT BRANDING STRATEGIES LO3  Multibranding Multibranding Fighting Brands  Private Branding (Private Labeling or Reseller Branding)  Mixed Branding 10-33

Kimberly-Clark’s Huggies What branding strategy is used? LO

PACKAGING AND LABELING PRODUCTS CREATING CUSTOMER VALUE AND COMPETITIVE ADVANTAGE LO4  Packaging  Label Communication Benefits Functional Benefits Perceptual Benefits 10-35

MARKETING MATTERS Creating Customer Value Through Packaging— Pez Heads Dispense More Than Candy LO

PACKAGING AND LABELING PRODUCTS PACKAGING AND LABELING CHALLENGES AND RESPONSES LO4  Environmental Concerns  Health, Safety, and Security Issues  Cost Reduction  Connecting with Customers Shelf Life 10-37

PRODUCT WARRANTY LO4  Warranty Express Warranties Limited Coverage Warranties Full Warranties Implied Warranties 10-38

MANAGING THE MARKETING OF SERVICES THE SEVEN Ps OF SERVICES LO5  Seven Ps of Services Marketing Seven Ps of Services Marketing  Product (Service) Branding  Price Off-Peak Pricing 10-39

MANAGING THE MARKETING OF SERVICES THE SEVEN Ps OF SERVICES LO5  Place (Distribution)  Promotion Publicity Public Service Announcements (PSAs) 10-40

Customer Experience Management (CEM)  Physical Environment  Process MANAGING THE MARKETING OF SERVICES THE SEVEN Ps OF SERVICES LO5 Capacity Management  People 10-41