1. Cluster BSBMKG502A & BSBSBM403A Marketing – Products & Channels week 4 © John Loftus

2. Check your understanding – review questions pages: 212 – Product and service concepts 241 – Developing and managing products 293 – Marketing channels and logistics decisions © John Loftus

3. Contents – week 4 BSBMKG502A Team presentations Product life cycle (Bized) Product and service concepts (Ch 6) Developing and managing products (Ch 7) Channels of distribution (Ch 8) © John Loftus

4. Team presentations 1.New product development – success is a sure thing 2.Amazon © John Loftus

5. Team presentation New product development – success is a sure thing © John Loftus

6. Team presentation Amazon © John Loftus

7. New product development – key points 1. Marketing strategies during the product life cycle - Refer to Exhibit 7.5 on page 236 2. Understand your target market and how to deliver to that market with a holistic marketing mix (value proposition) that will appeal to the target market. 3. Scanner based research tracks trends in product sales volume through the product life-cycle. © John Loftus

8. Amazon – key points 1.In Australia, the Privacy Act stipulates how personal data can be captured, stored and used in a business environment. Refer to: http://www.privacy.gov.au/ACT/privacyact/ http://www.privacy.gov.au/ACT/privacyact/ 2.Potential customers can easily search and find desired products using the Internet. Web merchants are able to capture, analyse, and store customer information that can enable a personalised value proposition and relationship maximisation. 3.Direct to user is a growing trend that by-passes traditional channels of distribution (e.g. Dell and Amazon). However, consumers maintain a high preference for bricks and mortar channels. A blend has advantages and disadvantages. © John Loftus

9. Marketing strategy © John Loftus

10. Marketing mix Managers adjust 4 key variables: Products and services Place – (channels of distribution) Promotion (communication) Price © John Loftus

11. Adapted from Bized www.bized.co.uk

14. Physical Environment The ambience, mood or physical presentation of the environment –Smart/shabby? –Trendy/retro/modern/old fashioned? –Light/dark/bright/subdued? –Romantic/chic/loud? –Clean/dirty/unkempt/neat? –Music? –Smell? Adapted from Bized www.bized.co.uk

15. Product Life Cycles

16. Product Life Cycle – shows the stages that products go through from development to withdrawal from the market

17. The Stages of the Product Life Cycle: –Development –Introduction/Launch –Growth –Maturity –Saturation –Decline –Withdrawal

18. Product Life Cycle stages Sales Time DevelopmentIntroductionGrowthMaturitySaturationDecline Adapted from Bized www.bized.co.uk

19. Product Life Cycles Sales Time Effects of Extension Strategies Adapted from Bized www.bized.co.uk

20. Product Life Cycle and profits Sales/Profits Time PLC Losses Break Even Profits Adapted from Bized www.bized.co.uk

21. Sales Time A B C D The product portfolio – four products in the portfolio (1) (1) ‘A’ is at maturity stage – cash cow. Generates funds for the development of ‘D’ (2) (2) Cash from ‘B’ used to support ‘C’ through growth stage and to launch ‘D’. (3) (3) Cash from ‘C’ used to support growth of ‘D’ and possibly to finance extension strategy for ‘B’? Importance of maintaining a balance of products in the portfolio at different stages of the PLC Adapted from Bized www.bized.co.uk

22. Product classifications Business product Consumer product A product used to manufacture other goods or services, to facilitate an organisation’s operations, or to resell to other consumers. Products that are bought to satisfy an individual’s personal wants. Adapted from Summers et. Al (2005)

23. Types of consumer products Unsought products Specialty products Shopping products Convenience products Consumer products Business products Products Adapted from Summers et. Al (2005)

24. Types of consumer products (cont.) Convenience product Shopping product Specialty product Unsought product A relatively inexpensive item that merits little shopping effort. A product that requires comparison shopping because it is usually more expensive and found in fewer stores. A particular item for which consumers search extensively and are reluctant to accept substitutes. A product unknown to the potential buyer or a known product that the buyer does not actively seek. Adapted from Summers et. Al (2005)

25. Product items, lines and mixes Product item Product line Product mix A specific version of a product that can be designated as a distinct offering among an organisation’s products. A group of closely related product items. All products that an organisation sells. Adapted from Summers et. Al (2005)

26. Benefits of product lines Why form product lines? –advertising economies –package uniformity –standardised components –efficient sales and distribution –equivalent quality Adapted from Summers et. Al (2005)

27. Product line depth The number of product items in a product line: –attracts buyers with different preferences –increases sales/profits by further market segmentation –capitalises on economies of scale –evens out seasonal sales patterns. Adapted from Summers et. Al (2005)

28. Branding Brand name Brand mark Brand equity Master brand That part of a brand that can be spoken, including letters, words and numbers. The elements of a brand that cannot be spoken. The value of company and brand names. A brand so dominant that it comes to mind immediately when a product category, use, attribute or benefit is mentioned. Adapted from Summers et. Al (2005)

29. An effective brand name… is easy to pronounce is easy to recognise and remember is short, distinctive and unique describes the product, use and benefits has a positive connotation reinforces the product image is legally protectable. Adapted from Summers et. Al (2005)

30. Master brands Photography Adhesive bandages Rum Vacuum cleaners Biscuits Cream cheese Crayons Petroleum jelly Kodak Band-Aid Bundaberg Hoover Arnott’s Philadelphia Crayola Vaseline Adapted from Summers et. Al (2005)

31. Branding strategies BrandNo brand Manufacturer’s brand Private brand Individual brand Family brand Individual brand Combi- nation Family brand Combi- nation Adapted from Summers et. Al (2005)

32. Manufacturers’ brands vs. private brands Manufacturers’ brand Private brand The brand name of a manufacturer. A brand name owned by a wholesaler or a retailer. Adapted from Summers et. Al (2005)

33. Generic brand A no-frills, no-brand-name, low-cost product that is simply identified by its product category. Adapted from Summers et. Al (2005)

34. Individual brands versus family brands Individual brand Family brand Using different brand names for different products. Marketing several different products under the same brand name. Adapted from Summers et. Al (2005)

35. Trademarks Trademark – exclusive right to use a brand. –Many parts of a brand and associated symbols qualify for trademark protection. –The mark has to be continuously protected. –Rights continue for as long as it is used. Adapted from Summers et. Al (2005)

36. Identify the differences between services and goods Learning objective

37. How services differ from goods Characteristics that distinguish services –intangibility –inseparability –heterogeneity –perishability. Adapted from Summers et. Al (2005)

38. Characteristics of services Intangibility Inseparability Heterogeneity Perishability Services that cannot be touched, seen, tasted, heard or felt in the same manner as goods. A characteristic of services that allows them to be produced and consumed simultaneously. A characteristic of services that makes them less standardised and uniform than goods. A characteristics of services that prevents them from being stored, warehoused or inventoried. Adapted from Summers et. Al (2005)

39. Break Short break (10 minutes) © John Loftus

40. Video options: 1.Ben and Jerry’s taste and innovation 2.Burton Snowboards: going global 3.Pass © John Loftus

41. Assignments before next class Prescribed reading for next week Prepare for case study presentations Visit resources on the course website – Clarify any questions © John Loftus