1. Manage the Product Chapter Nine

2. 9-2 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Chapter Objectives  Explain the different product objectives and strategies a firm may choose  Understand how firms manage products throughout the product life cycle  Discuss how branding strategies create product identity  Explain how packaging and labeling contribute to product identity  Describe how marketers structure organizations for new and existing product management

3. 9-3 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Real People, Real Choices: Decision Time at General Corporation  How should General Mills position the Fiber One cereal brand in order to reinforce a consistent and desirable brand meaning? Option 1: Own the position of “Fiber Superiority” Option 1: Own the position of “Fiber Superiority” Option 2: Own the position of “Great Tasting High Fiber” Option 2: Own the position of “Great Tasting High Fiber” Option 3: Own the position of “Digestive Health” Option 3: Own the position of “Digestive Health”

4. 9-4 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Figure 9.1 Steps to Manage Products

5. 9-5 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Figure 9.2 Objectives for Single and Multiple Products

6. 9-6 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Objectives and Strategies for Individual Products  Objectives and strategies for individual products: Successful introduction of new products Successful introduction of new products Taking regional products national Taking regional products national Breathing new life into mature products while maintaining brand personality Breathing new life into mature products while maintaining brand personality

7. 9-7 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Importance of Product Planning New products owe their success to well-executed product planning and management.

8. 9-8 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Objectives and Strategies for Multiple Products  Product line: Firm’s total product offering designed to satisfy a single need or desire of target customers  Product line strategies: Full-line vs. limited-line strategies Full-line vs. limited-line strategies Upward, downward, or two-way line stretch Upward, downward, or two-way line stretch Filling out or contracting a product line Filling out or contracting a product line  Cannibalization is a risk

9. 9-9 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Objectives and Strategies for Multiple Products  Product mix strategies: The total set of products a firm offers for sale  Product mix strategies: Width of product mix must be considered Width of product mix must be considered Product lines in mix usually have some things in common Product lines in mix usually have some things in common

10. 9-10 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Quality as a Product Objective: The Science of TQM  Product quality is often an objective  A philosophy of total quality management (TQM) can help achieve quality objectives

11. 9-11 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Quality Guidelines  ISO 9000: Standards for quality management Standards for quality management  ISO 14000: Environmental management Environmental management  Six Sigma methodology: Process allowing no more than 3.4 defects per million (getting it right 99.9997% of the time) Process allowing no more than 3.4 defects per million (getting it right 99.9997% of the time) Watch a YouTube video: TQM at MotorolaTQM at Motorola

12. 9-12 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Figure 9.3 Product Quality

13. 9-13 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Figure 9.4 The Product Life Cycle

14. 9-14 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Figure 9.5 Marketing Mix Strategies Through the Product Life Cycle

15. 9-15 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Introduction Phase of PLC New products that are offshoots of well-known brands have an advantage. Many products don’t make it out of the introduction phase; poor or insufficient advertising is often the cause. New product failures

16. 9-16 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Introduction and Growth Stages  Growth stage of the PLC The product is accepted and sales rapidly increase The product is accepted and sales rapidly increase  Maturity stage of the PLC Sales peak, profit margins narrow Sales peak, profit margins narrow  Decline stage of the PLC Sales decrease as customer needs change Sales decrease as customer needs change

17. 9-17 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Marketing Mature Products Marketers need to keep giving consumers new reasons to buy products in the mature stage This may be accomplished by finding new uses for an existing product, moving into new markets, changing the product’s attributes or by introducing variations to keep consumer interest

18. 9-18 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Creating Product Identity: Branding Decisions  Brand: A name, term, symbol, or any other unique element that identifies one firm’s product and sets it apart from the competition What Brands Do The Logos Represent?

19. 9-19 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. What’s in a Name or Symbol?  A “good” brand name: Maintains relationships with customers Maintains relationships with customers Positions a product by: Positions a product by:  Portraying an image, or  Describing how the product works Is easy to say, spell, read, and remember Is easy to say, spell, read, and remember Fits the target market, product benefits, customer’s culture, and legal requirements Fits the target market, product benefits, customer’s culture, and legal requirements

20. 9-20 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. It’s Debatable Class Discussion Question How do V8 and the Skinny Cow Truffle Bar brand names stack up against the criteria that distinguish a “good” brand name?

21. 9-21 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Trademarks  Trademark The legal term for a brand name, brand mark, or trade character Trademarks legally registered by a government obtain protection for exclusive use in that country Trademarks legally registered by a government obtain protection for exclusive use in that country ® is the trademark symbol used in the U.S. ® is the trademark symbol used in the U.S. Visit the United States Patent and Trademark OfficePatent and Trademark Office

22. 9-22 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Why Brands Matter  Brand equity: A brand’s value to its organization over and above the value of the generic version of the product  Brand equity provides competitive advantage  Brand equity results in brand loyal consumers and attachment

23. 9-23 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Table 9.1 Dimensions of Brand Meaning

24. 9-24 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Why Brands Matter  Brand storytelling: Marketers seek to engage consumers with compelling stories about brands Marketers seek to engage consumers with compelling stories about brands  Characteristics of world class brands  Brand extensions: New products sold with the same brand name New products sold with the same brand name  Sub-branding: Creating a secondary brand within a main brand that can help differentiate a product line Creating a secondary brand within a main brand that can help differentiate a product line

25. 9-25 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Figure 9.6 Branding Strategies

26. 9-26 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Branding Strategies  Individual brands vs. family brands Family brands such as Campbell’s provide an umbrella under which multiple products can be marketed Family brands such as Campbell’s provide an umbrella under which multiple products can be marketed

27. 9-27 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Branding Strategies  National vs. store brands Store brands (private label brands) are exclusive to a given retailer Store brands (private label brands) are exclusive to a given retailer  Generic brands  Licensing: One firm sells the right to another to use a legally protected brand name for a specific purpose and for a specific period of time One firm sells the right to another to use a legally protected brand name for a specific purpose and for a specific period of time

28. 9-28 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Branding Strategies  Co-branding: Two brands combine to create a new product Two brands combine to create a new product Provides greater recognition or other strengths than either could achieve alone Provides greater recognition or other strengths than either could achieve alone Ingredient branding is increasing Ingredient branding is increasing

29. 9-29 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Brand Metrics  Approaches to measuring brand equity: Customer mind-set metrics Customer mind-set metrics Product-market outcomes metrics Product-market outcomes metrics Financial market metrics Financial market metrics Revenue premium metric Revenue premium metric

30. 9-30 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Figure 9.7 Functions of Packaging

31. 9-31 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Designing Effective Packaging  Effective packaging considers: Packaging of other brands in same product category Packaging of other brands in same product category

32. 9-32 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Designing Effective Packaging  Effective packaging also considers: Choice of packaging material and image it projects Choice of packaging material and image it projects Environmental impact of packaging Environmental impact of packaging Shape and color influences on image Shape and color influences on image Graphic information to be portrayed Graphic information to be portrayed

33. 9-33 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Labeling Regulations  Federal Fair Packaging and Labeling Act of 1966: Aims at making labels more helpful to consumers by providing useful information Aims at making labels more helpful to consumers by providing useful information  Nutrition Labeling and Education Act of 1990 Require food labels to state how much fat, saturated fat, cholesterol, calories, carbohydrates, protein, and vitamins are in each product serving Require food labels to state how much fat, saturated fat, cholesterol, calories, carbohydrates, protein, and vitamins are in each product serving

34. 9-34 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Figure 9.8 Three Types of Product Management

35. 9-35 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Organizing for New-Product Development  Venture teams: Specialists in different areas who work together to focus on new-product development Specialists in different areas who work together to focus on new-product development  “Skunk works”: Small and isolated group in remote location that function with minimal supervision Small and isolated group in remote location that function with minimal supervision

36. 9-36 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Real People, Real Choices: Decision Made at General Mills  David chose option 2 Why do you think that David chose to position Fiber One as a great-tasting, fiber product? Why do you think that David chose to position Fiber One as a great-tasting, fiber product?

37. 9-37 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Keeping It Real: Fast-Forward to Next Class Decision Time at 76ers  Meet Lara Price, Sr. VP of Business Operations for the Philadelphia 76ers  The 76ers are a professional basketball team within the NBA  The decision to be made: What method should be used to compile more detailed information about the customer base?

38. 9-38 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America