1. Marketing Mix-Product
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2. Product Classifications (Solomon)
Consumers
Convenience- Milk, Bread
Shopping-IKEA Furniture
Specialty-Steinway Piano
Unsought-Insurance, AAA
Businesses
Equipment
Maintenance
Raw Materials
Processed Materials
Component Parts

3. Product-New Car Core Product Actual Product Augmented Product
Basic Benefits Transportation
Actual Product
Features Engine Size
Quality Workmanship
Package Body Size, Interior Design
Brand Model Name
Appearance Color
Augmented Product
Warranties 4 year, 60,000 miles
Installation Dealer prep
Service Free oil change for a year

4. Product (Solomon)
Managing Products
Product Life Cycle

5. Marketing Mix Strategies Through the Product Life Cycle (Solomon)
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
LECTURE NOTES:
Introduction stage:
Slow growth occurs for newly introduced product as the company’s key objective is to get first-time buyers to try product.
The firm does not usually make a profit during this stage. A great deal of money is spent on marketing communications which create awareness for the product and where it can be found. The initial pricing strategy may set a high price more quickly recover R&D expenditures, or a low price to encourage greater sales and market penetration.
It’s impossible to know how long any product will spend in the introduction or any other stage of the product life cycle. The product characteristics discussed in the previous chapter (relative advantage, complexity, compatibility, etc.) influence the rate of adoption. Also, the amount of money that a manufacturer is willing to invest in the product’s start-up can shorten or prolong the introduction stage. Unfortunately, many products never make it out of the introduction, and lack of a budget for marketing communications is often the problem. 5

6. Product (Solomon)
Adoption Process

7. Product “New” Looking for opportunities Generate Ideas Screen ideas
Concept Testing
Market Analysis and Plan Development
Product Production
Test Market
Commercialize

8. Creativity is bringing into existence something that has value.
Creative Thinking
Creativity is bringing into existence something that has value.
Edward de Bono

9. Creative Thinking The rules! Defer all judgment.
Freewheeling is encouraged.
Go for quantity.
Try to ‘piggyback’ or build upon other ideas.

10. Creative Thinking Substitute something.
Combine it with something else.
Adapt something to it.
Modify or Magnify it
Put it to some other use.
Eliminate something.
Reverse or Rearrange it.
- Michael Michalko

11. Substitute
What can be substituted? Who else? What else? When else? Where else?
Can you substitute someone else’s perspective for yours? (i.e. What would Walt Disney do? Oprah? A lawyer?)
Example: Henry Heinz tried glass jars instead of tin cans for his pickles, sauerkraut and vinegar and became a multimillionaire.

12. Combine
What if you combined your subject’s purpose with that of something else?
Can you create an assortment? An ensemble? A collection?
Can you combine your own ideas?
Example: Smart watches combine multiple uses – phone/communication, , internet surfing, apps…

13. Adapt What have others done? Can you emulate (or copy) them?
Can you make any analogies or connections to other fields? Consider: science, religion, art, war, music, etc.
Example: Ray Kroc – Was a salesman when he became intrigued with the way Dick and Maurice McDonald had simplified, economized and minimized the greasy hamburger business. Kroc bought them out, adapted their ideas and invented the concept of fast food. Netflix adapted the concept of watching movies at home via mail and streaming services.

14. Modify How can you make your subject more attractive? Appealing?
Can you change the package?
What about its name, color, motion, sound, odor, form, shape or functions?
Example: At one time, Ford held 60% of automobile market. Then GM asked questions about modifications and came out with a philosophy that stated: a car for every shape and color for every purse and purpose. Henry Ford responded with maintaining everything in Black. By the 1940’s, Ford held just 20% and GM had taken the lead.

15. Magnify Can you broaden your subject? What can be exaggerated?
What can be added? Can you magnify it, make it larger, or extend it?
What might add more value?
Example: Subway has added value by constantly broadening and adding to its menu…personal pizza, yogurt parfait, flat bread, etc. Sam's Club offers value by larger sizes, which offers value to some.

16. Put to Other Uses
What is the most unconventional, unusual new use you can imagine?
What’s currently being wasted that could be put to use?
What uses would a 12-year old kid imagine?
Example: 3M’s biggest consumer success has been the post-it note. The company had developed a special not-very-sticky adhesive for use on bulletin boards, but the idea never caught on. The inventor of post-it notes, Arthur Fry, was intrigued by the glue and kept searching for uses. In 1974, Fry was signing at church choir and dropped the bookmark from the hymnal and suddenly realized that the adhesive could be used to keep little notes and bookmarks in place.

17. Eliminate Can you simplify it? Streamline it? Miniaturize it?
How else can you limit (or narrow in on) this problem?
Example: Kiichiro Toyoda, the founder of Toyota, studies supermarkets and notes that, to save space and avoid spoilage, they don’t store perishable items on site. When they run low, the suppliers are notified and they arrive ‘just in time.’ Toyoda adapted this ‘just in time’ concept and used it to eliminate waste and warehouse space.

18. Reverse What are the opposites?
What if you reversed relationships? Uses? Functions? Goals? Ideas? Roles?
Example: In 1909, Henry Ford changed modern history with the creation of the assembly line. Instead of bringing people to the work, he brought work to the people. This change brought the cost of the Model T down from $950 to $350 in eight years.

19. Rearrange What other layout might be better? Other pattern?
Can you change the order? How about the timing? The schedule?
Example: Sam Walton got his start in retail by operating a Ben Franklin franchise store. At that time, a store’s home office decided what goods would be stocked in every outlet. When Sam left to create Walmart, he rearranged the process and let each store manager order only those goods he/she knew were wanted in the area.

20. Problem Solving
Creativity yields ideas…but now what do we do with all these ideas? Use your Creativity Skills to solve problems! In your teams, please review and make recommendations for the Old Paper Company.