2.  Product planning involves making decisions about the features and services of a product or idea that will help sell that product.  The product mix includes all the different products that a company makes or sells. › For large companies, this can include hundreds of brands, such as Kraft’s brands of Kraft, Maxwell House, Nabisco, Oreo, etc.

3.  A product line is a group of closely related products manufactured or sold by a business. › Ex: all the car models produced by Ford  A product item is a specific model, brand, or size of a product within a product line. › A Ford Focus or F-150 pick-up

4.  Product width refers to the number of different product lines a business manufactures or sells. › Ex: a retailer may sell 3 types of jeans: Wrangler, Levi’s, and Lee  Product depth refers to the number of items offered within each product line. › Ex: number of sizes, price ranges, colors, fabric type, and styles for each brand of jeans.

5.  A product mix strategy is a plan for determining which products a business will manufacture or stock.  Developing new products is an important business strategy for large manufacturers. › There are seven key steps to new product development.

6.  Step 1: Generate ideas  Step 2: Screen ideas  Step 3: Develop a business proposal  Step 4: Develop the product › Often involves producing a prototype (model of the product)

7.  Step 5: Testing the product with consumers  Step 6: Introducing the product (commercialization)  Step 7: Evaluating customer acceptance

8.  Line extensions › Ex: Tylenol, Tylenol Sinus, Tylenol Cold & Flu  Product modifications › An alteration in a company’s existing product  May be new colors, features, or sizes  Ex: new versions of iphones

9.  Obsolence  Loss of appeal  Changes in company objectives  Lack of profit  Replacement with new products  Conflicts with other products in the line

10.  The product life cycle represents the stages that a product goes through during its life. › 4 stages:  Introduction  Growth  Maturity  Decline

11.  Company is focusing on building awareness of the product.  Special promotions entice the consumer to buy.  Usually the least profitable stage of the life cycle.

12.  Company seeks to build brand preference and increase market share.  The product is experiencing success and attracting repeat customers.  Advertising focuses on customer satisfaction.  Company may need to be price competitive because competitors will enter the market.

13.  Product has more competition now  Most consumers already own or know about the product  Advertising continues to reinforce brand.  Dollars are spent fighting off the competition.

14.  Sales are falling: profits may be less than expenses.  Advertising is reduced.  Product may be deleted from the product line.  To keep the product alive, several options exist:

15. › Sell or license the product. › Recommit to the product line and innovate. › Discount the product. › Regionalize the product. › Update or alter the product.

16.  Product positioning refers to the efforts a business makes to identify, place, and sell its product in the marketplace.  To do this, businesses identify customer needs and determine how their products compare to the competition.

17.  Positioning by price and quality › Ford positioning Focus as economical  Positioning by features and benefits › Rockport shoes positioned as comfortable, no matter the use  Positioning in relation to competitors › Southwest Airlines low-fare alternative  Positioning in relation to other products in the line. › Ipod nano vs touch

18.  Category management is a process that involves managing the product categories as individual business units.  Category manager is responsible for all brands for one generic product category, such as foods, beverages, health and beauty products, etc. › Designed to put business in touch with customers’ needs/wants.

19.  Questions???