3 Product/Service Management A marketing function that involves obtaining, developing, maintaining and improving a product.
4 Factors affecting Product/Service Management Customer Needs and WantsCompany Goals and StrategiesCost and Available ResourcesCompetitionProduct ItselfGovernment RegulationStages in Life CycleBusiness and Economic Trends
5 Benefits Offer products consumers want and company’s profits increase When developing the right products, a company can gain new customersWhen products are well managed there is less of a chance for failure
6 The Role in Marketing Affects positioning of product Improves product successGives product an imageAffects positioning of product-what image do you want to create about the product in the minds of consumers?2. Improves product success3. Gives product an image-what impressions do you haveof certain brands
7 3 Main Phases Developing New Products Monitoring Existing Products Eliminate Weak ProductsDeveloping New Products2. Monitoring Existing Products- Sales, Profit, Market ShareEliminate Weak Products
8 Product Life Cyclerepresents the stages that a product goes through during its life4 Stages:IntroductionGrowthMaturityDecline
9 Product life cycleWhat are good examples of the stages?
10 Goals of Introduction Stage Increase Product AwarenessGet the Customers attention with promotionLots of Special Promotions
11 Growth Stage Customers are aware of product, sales increase Companies focus on customer satisfactionCompetition starts from other companies
12 Maturity and Decline Stage The product’s sales level off. More money is spent on competition during this stage.DeclineSales start to decline. A company must decide to alter the product, discount, or discontinue product.
13 Technology Point-of-Sale Systems Interactive Touch Screen Computer Scanners at cash registers, touch screens,hand-held devices at checkoutInteractive Touch Screen Computer-Example: Kiosks
14 Technology Interactive TV Customer Relationship Management Where TV is like a computer- order movies,click on Ragu for recipes, order food4. Customer Relationship ManagementA customer can track an order. The CRM orbusiness can track customer satisfaction
15 Technology Enterprise Resource Planning Systems Internet Software that allows all parts of the company’s management to beintegrated6. InternetWi-FiSearch EnginesE-commerce
16 TechnologyMass customization is a technologically advanced method that allows businesses to produce products that are specialized for a very few customers.Mass customization is a technologically advanced method that allows businesses to produce products that are specialized for a very few customers.An example is Herff Jones being able to personalize a key chain for each school
18 Ethical Product Packaging Why do you think companies package and label their products?Creates a good impression, Help sell product, and Communicate benefits
19 Packaging Concerns Product Safety Glass now plastic Tamper-resistant packagesAirtight containers for foodsWasteful packagingSwitching for spray cans and pumps
20 Label InformationMust have name of manufacturesQuantity of contents
21 Label Information Nutritional Information Health claims are the same on all products; light, fat free, etc.
22 Label Information Warnings on products like alcohol and cigarettes How to care for clothes
23 Ethical LabelingWhat happens when a company fails to inform customers about product risks?Company can get suedHarm to CustomerPlanned ObsolescenceMaking products that are known to not last long, or change, so that people will need to replace them
25 Competitive Advantage the set of unique features of a company and its products that are perceived by the target market as significant and superior to the competitionMultiple Products designed to integrate -Competitive Advantage
26 Positioningdeveloping a specific marketing mix to influence potential customers’ overall perception of a brand, product line or organization in general.
27 Purpose of Positioning Used to find a place for the product in the marketplace and distinguish the product from competitorsActual PositionHow the customers see the productThe position and the actual position is the product are the same, IF MARKETING HAS BEEN SUCCESSFUL.
28 Relationship between the Target Market and Positioning The objective is for marketers to position their products to appeal to the desires and perceptions of a target market.
29 Relationship between Competition and Positioning It is important to use positioning to your advantage. You want to position your product so that customers will continue to purchase from you rather than the competition. The pricing, promotion, product development, and distribution strategies are all planned with an eye toward the competition.
30 Market Positionunique image of a product or service in a consumer’s mind relative to similar competitive offerings.
31 6 Bases For Positioning: Attibute- one way of positioning a product is to highlight a product feature or attribute.Price and Quality – this position strategy may stress high price as a sign of quality, or emphasize low price as an indication of value.Use or Application – stressing unique uses or applications can be an effective means of positioning a product.
32 6 Bases Cont.Product User – this positioning strategy encourages use of a product or service by associating a personality or type of user with the product.Product Classification – when positioning according to product class, the objective is to associate the product with a particular category of products.Competitor – sometimes marketers make an effort to demonstrate how they are positioned against the competitors that hold a strong market position.
33 Positioning Strategies revolve around 3 areas Consumer perception – are the images consumers have of competing goods and services in the marketplace.Competitors in the marketplace – The ideal situation is when consumers perceive a business’ products to be superior to its competitors’ products or services.Changes in the business environment – organizations need to be aware of changes in the business environment that might affect the position of their products or services.
34 Brand Name Should: Describe the product’s benefits and uses Be easy to read, pronounce, and rememberCreate appealing imagesBe distinctiveBe adaptableBe legally available for useBe appropriate for packaging and advertising
35 Levels of Brand Loyalty Brand Recognition – is when consumers become aware of a brand and recognize the brand.Brand Preference – when consumers prefer to purchase a certain product brand based on their positive experience with the brand.Brand Insistence – when the consumer insists on “their” brand and will not accept substitutes.
36 Brand StrategiesBrand Positioning – means the way consumers see the brand as compared to a competitive brand.Brand extension – in which an existing brand name is used for a new or improved product line. Starbucks extends its coffee line to include ice cream and candy bars.
37 Brand Strategies Cont.Brand licensing - allows one company to use its brand name, logo, or character for a fee.For example, NFL Teams allow logo to be used on merchandiseCo-branding. – occurs when companies join forces to increase recognition, customer loyalty, and sales of both brands.For example, United Airlines and VISA combine brands for a credit card.
38 International Branding Marketers must research their brands to determine whether they would be acceptable in different countries.How would the brand be pronounced in Italian, Spanish, German, etc.Is the brand name culturally taboo in certain areas of the world?
39 Impact of Internet on Branding MUST have a web presence to be successful.Most companies must determine what URLs are available. They need to have web addresses that represent their brands.It is also more common for companies to promote their product using social media sites such as Facebook and Twitter.
40 Forms of BrandingA brand is a design, name, symbol, term or word that distinguishes and identifies a company and/or products or servicesA corporate brand represents the entire company or organizationFor example, Coca-Cola, Ford, McDonalds, Kraft or Microsoft
41 Forms of BrandingA product brand represents a specific product of a company or organizationFor example, Diet Vanilla Coke, Big Mac, or Windows XP
42 Forms of BrandingA private distributor brand, also called a store brandFor example, Radio Shack brand of batteries, Lowe’s brand of macaroni and cheese
43 Trade CharacterPersonified symbol that represents the brand name
45 Product Mix All the types of products a company makes or sells Some companies have different brands for different marketsCoca-Cola has different drinks for sparkling beverages, water, juice, performance, coffee, tea, and international flavors.
46 Reasons to Narrow Product Mix Product Width – number of different product linesCONTRACTINGEase on managementCost effectiveSimplicityConsistency
47 Reasons to Broaden Product Mix Product Width – number of different product linesEXPANDINGReach all marketsCompetitive advantageEx: Red Lobster specializes in seafood, but offers chicken and steak to broaden their product mix.
48 Reasons to Deepen Product Mix Product Depth – number of items offered within each product lineEXPANDINGVarietyQuantityEx: Kohl’s carries various quantities of sizes, colors, & styles of Levi Jeans.
49 Reasons to Offer to Shallow Product Mix Product Depth – number of items offered within each product lineCONTRACTINGCost effectiveSatisfy small markets
50 Importance of Product Mix Businesses must plan their product mix carefully because they cannot offer all the products that customers may want.They should be a profitable market for product offered by a company
51 Trading Up/DownTrading up: Adding a higher-priced product to a line to attract a higher-income market and improve the sales of existing lower-priced products.Trading down: Adding a lower-priced item to a line of prestige products to encourage purchases from people who cannot afford the higher-priced product, but want the status.
52 Positioning Product Mix Strategies Positioning – actions marketers take to create a certain image of a product in the minds of the customersIn Relation to a CompetitorIn Relation to a Product Class or AttributeIn Relation to a Target MarketBy Price and QualityDifficult to change
53 Ways Lines can be organized Product Line – group of closely related products manufactured by a businessProduct Item – specific model, brand, or size of a product within a lineEx: P&G has over 250 products within 21 product linesDish care is a product lineCascade, Dawn, Joy, & Ivory are items
55 Physical Distribution Organizing and moving products through the channelsLogistics = ordering, transporting, storing, handling and inventory control
56 Channel Functions Providing marketing information: Promoting products: Companies rely on market research to determine their target markets’ needs and wantsEx: small business producing handmade greeting cardsPromoting products:Can be expensiveRetailers often take a large portion of promotion responsibilitiesEx: local supermarkets/discount stores
57 Channel Functions Cont. ContactMatchingNegotiating with the customers:Different prices are paid by the wholesaler, retailer and consumers based on negotiationPhysical distributionFinancing and risk taking:Moving products through a channel costs moneyWhen channel members work together to finance activities and to assume financial risks, channels will be more effective
58 Tasks of Intermediaries-Retailer Much stronger personal relationship with the consumerHold a variety of productsOffer consumers creditPromote and merchandise productsPrice the final productBuild retailer ‘brand’ in the high street
59 Tasks of Intermediaries-Internet Sell to a geographically disperse marketAble to target and focus on specific segmentsRelatively low set-up costsUse of e-commerce technology (for payment, shopping software, etc)Paradigm shift in commerce and consumption
60 Horizontal Conflict Occurs between channel members at the same level Good, old-fashioned business competitionEx: two retailers selling pet supplies compete to sell to the same target market
61 Vertical ConflictOccurs between channel members at different levels within the same channelProducers and wholesalers, wholesalers & retailers, or producers and retailers
62 Dual DistributionA manufacturer may sell its products through multiple outlets at the same time:Toll-free phone systemCompany websiteMultiple retailers