2 The Product Development stage can take a long time and can be very expensive. Did you know…..-It took over 3 years to develop Google’s search engine-It took over 4 years to develop the famous chicken sandwich at Chick-fil-aIt took 10 years to develop Crest toothpasteIt took 51 years to develop television
3 Product/Service Management Product/Service Management is a marketing function that involves obtaining, developing, maintaining, and improving a product.
4 Product/Service Management Factors affecting Product/Service Management:1. Customer Needs and Wants2. Company Goals and Strategies3. Cost and Available Resources4. Competition5. The Product Itself6. Government Regulations7. Stages in Product Life Cycle8. Business and Economic Trends
5 Product/Service Management What are Benefits to Product/Service Management?-Offer products that consumers want andcompany’s profits increase-When developing the right products, acompany can gain new customers-When products are well managed there isless of a chance for failure
6 Product/Service Management What role does Product/Service Management play in Marketing?Affects positioning of product-what image do you want to create about the product inthe minds of consumers?2. Improves product success3. Gives product an image-what impressions do you have of certain brands
7 Product/Service Management Who is responsible for managing product/service management?-Several employees of a company, certain departments, 1 employee or just the boss. Normally depends on size of company.3 Main Phases of Product/ServiceManagement1. Developing New Products2. Monitoring Existing Products- Sales, Profit, Market Share3. Eliminate Weak Products
9 Product/Service Management (PSM) Unit 3.01 “Gum for THEM” Work in groups of 3-4 of the same gender to create a new pack of gum for the opposite gender.Create an in-depth 10 question survey to better determine what type of gum will best interest the opposite gender and give the survey to each opposite gender group.Based on the survey results create a pack of gum and make a mock up (sample packaging).Answer the following questions in complete sentences:What is the product name and what is the flavor?What type of packaging will you use?To which target market are you positioning the product?What is the gum’s brand image?
12 Write down your response to the following two questions What is a product that has been around for as long as you can remember?2. How has the product changed over the years?Share your response with a partner
13 Product Life CycleProduct Life Cycle represents the stages that a product goes through during its life.There are 4 Stages in the Product Life Cycle:1. Introduction2. Growth3. Maturity4. Decline
14 Product Life Cycle What are the goals of the Introduction Stage? To increase product awareness (informative advertising)Get the customer’s attention thru promotionDuring Growth Stage:Customers are aware of product, sales increaseProduct are sold at more locationsCompanies focus on customer satisfactionCompetition starts from other companies which drives down pricesPersuasive advertising begins
15 Product Life Cycle What happens during Maturity Stage? The product’s sales level off.Typically this is the product’s longest stage.Heavy promotion is required to maintain market share.Niche products developDiscussion: Choose a mature productDiscuss how the company is managing:1. Competition2. Advertising3. Distribution – How many locations?4. Other Strategies they have put in place
16 Product Life Cycle During the Decline Stage: A long-run drop in sales. A company must decide to alter the product (new uses for the product), discount the product (reduce prices until inventory is sold off), or discontinue the product.
18 Technology in Product/Service Management Applications of Technology in Marketing:1. Point-of-Sale Systems2. Interactive Touch Screen Computer3. Interactive TV4. Customer Relationship Management5. Enterprise Resource Planning Systems6. Internet7. Mass customization examples of each on following slides
19 Technology in Product/Service Management Point of SaleScanners at cash registers, touch screens, hand-held devices atcheckoutInteractive Touch Screen ComputersExample: KiosksInteractive TVWhere TV is like a computer- order movies, click on Ragu forrecipes, order food
20 Technology in Product/Service Management CRM- Customer Relationship ManagementA customer can track an order. The CRM or business can trackcustomer satisfactionERP- Enterprise Resource PlanningSoftware that allows all parts of the company’s management to beintegrated using an internal company INTRANETInternetWi-FiSearch EnginesE-commerce
21 Technology in Product/Service Management Interactive TV helps marketers to develop a database of their usesThis database analysis helps see thecustomer’s reaction to productsThey are testing Interactive TV for promotion
22 Technology in Product/Service Management Mass customization is a technologically advanced method that allows businesses to produce products that are specialized for a very few customers.(It is the customization and personalization of products and services for individual customers at a mass production price. The concept was first conceived by Stan Davis in Future Perfect. It was then further developed by Joseph Pine in his book Mass Customization - The New Frontier in Business Competition.)
24 Ethical Considerations in Product Packaging Why do you think companies package and label their products?Answer: Build brand awarenessHelp promote product and communicate benefitsProtect the product and increase shelf lifeConcerns for Product Packaging?Product Safety- Plastic vs. GlassTamper-resistant packagingAirtight containers for foodsWasteful packagingNon-aerosol spray cans and pumps
25 Product labeling must inform customers about a product’s contents and give directions for use. 1. Must have name of manufacturer2. Quantity of contents3. Nutritional info4. Organic and Recycled or Environmentally Friendly claims must meet certain standards5. Health claims are standardized on all products; light, fat free, etc.6. Warnings on products like alcohol and cigarettes7. How to care for clothes
26 Ethical Considerations in Product Packaging What happens when a company fails to inform customers about product risks?Company can get suedHarm to customersWhat is Planned Obsolescence?Making products that are known to not last long, or make changes to the product requiring a need to replace the productExample: Cell phones are always coming out with newer functions and it makes consumers want to purchase the new and improved cell phone