3/8/20161 CHAPTER 6 PRODUCT STRATEGY

3/8/20162 Basic Issues in Product Management u The core product-the product/service itself u The tangible product-physical dimensions that benefits to the customer(design, color) u The augmented product-warrantee and service benefits, reputation and psychological benefits. Consumers’ hidden motivation. u Product audit-benefit analysis: customers’ needs and wants.

3/8/20163 Marketing myopia u Narrow product line u emphasis is given the physical dimensions-railroads u Product benefits are not emphasized u Product Classifications: u Agricultural products and raw materials u fairly homogenous u Industrial goods u raw materials, OEM products, parts and equipment u Consumer good u convenience, shopping and specialty goods

3/8/20164 Product Mix and Product Line u Product width u Product length u Product depth u Reasons for product mix u Needs are various u Customer prefer variety u Competitive pressure

3/8/20165 Branding and Brand Equity u A name, symbol or trademark u Line/brand extension u upward direction u downward extension u both directions u Family/franchise brand u Dual branding-joint or co-branding-USAir and NationsBank Visa

3/8/20166 Brand Equity u Loyalty u Awareness u Perceived quality u Brand association u Other brand assets u National brand u Private brand u Generic brand

3/8/20167 Product Life Cycle u Introduction u Growth u Maturity u Decline: u Harvest u Divest

3/8/20168 Stages of Product Life Cycle

3/8/20169 The Product Life Cycle Concept u Life cycle extension u Fashion and fads u Technological life cycle-PC industry u International product life cycle 1.New Product(technical innovation) 2.Maturing product(standardized process) 3.The standardized product(access to world market)

3/8/ Refining Product Strategies To select the best product or decide about promotion strategies. Indices used: u sales level u profit level u growth rate u market potential u importance to customer u relationship with supplier

3/8/ Product Standardization and Adaptation u Product standardization-selling as it is. (Coca Cola, Levi's, and industrial products). u Product modification for different countries and regions (McDonald). u Designing new product for new markets. u Introducing a “global“ product

3/8/ The Product Audit Current product offerings are reviewed so that each product is improved, modified, or deleted. It is used to detect sick products. u Product deletion u new innovation is introduced u Product improvement u changing the product features u Benchmarking u comparing the products with competitors

3/8/ Product Management u Product managers u Product planning committee u New product manager u Venture team

3/8/ Packaging u Protection from temperature change and environmental hazard u Effective marketing tactics u Improves product image u Assists in shelf space, shipping and handling the product u Provides instruction to customers u Responsive to environmental legislation

3/8/ Services Marketing Service Categories u Support services-computer, security u Pure services-insurance, consulting u Service-good combination-airlines, hotels Distinctive Features of Services u Intangibility-hotels, publishers, construction u Storage-lost of sale if it is not purchased u Perishability

3/8/ Services Marketing (Cont.) Distinctive Features of Services (cont.) u Consumption-customer involvement u Customized-customer interaction u Standardization-error and quality control u Evaluation-differences in expectation and perception(SERVQUAL model) u Measurement-marketing research

3/8/ Services Marketing (Cont.) Marketing Repercussions of services u Difficulty to provide samples u Services directed at people-health care, barber shops, education and museums u Services directed at goods-repairs and maintenance, landscaping, insurance and legal

3/8/ Services Marketing (Cont.) Marketing Repercussion of Services (cont.) u Quality of people who deliver the services u Increased demand in peak times-part-time employment opportunities u Flexibility of working hours u Flexibility in demand and prices u Direct and short distribution channels u Cultural factors-differences in expectations and perception

3/8/ Products of Northern Africa