K 29 Bad 67051 Marketing Management Lecture 5 Prod

K29Bad67051MarketingManagementLecture5ProductStrategy,Planning,andDevelopmentI.ProductDevelopmentA.ThedevelopmentofnewproductsB.ThecontinuousimprovementofexistingproductsC.WHYbother?TheProductLifeCycleIntroductionGrowthMaturityDeclineStage:DollarsTimeEmphasisinMarketingMixPromotionDistributionPriceCostReductionDropProductInnovate,RedesignTotalMarketSalesTheProductLifeCycleIntroductionGrowthMaturityDeclineStage:DollarsTimeEmphasisinMarketingMixPromotionDistributionPriceCostReductionDropProductInnovate,RedesignTotalMarketSalesTotalMarketProfitII.The“TotalProduct”A.Defined:Broadspectrum[bundle]oftangibleandintangiblebenefitsB.PrimaryCharacteristics:basicfeaturesofthecoreproductC.AuxiliaryDimensions:supplementarybenefitsCoreandAugmentedProductExampleCoreProduct--CloseUpToothpasteCoreandAugmentedProductExampleCoreProduct--CloseUpToothpastePrimaryCharacteristics:basicfeaturesofthecoreproductESSENTIALBENEFITS•CleanTeeth•PreventToothDecayAugmentedProduct--AuxiliaryDimensionsCoreProduct--CloseUpToothpasteFliptoppackageBrandName--CloseUp800helpphonelineFluorideFlavorTartarControlBenefitsoftheAugmentedProductCoreProduct--CloseUpToothpasteFliptoppackageBrandName--CloseUp800helpphonelineFluorideFlavorTartarControlSocialConfidence;Romance;WhiteTeethSafetyLowerDentalBillsCleanerTeethGoodTasteFreshBreathConvenientStorageIII.ClassifyingProductsA.EndUseMarket1.AgriculturalProducts&RawMaterials2.OrganizationalGoods3.ConsumerGoodsAgricultural&RawMaterialsForexample:Ingredients(zinc,pigiron,cotton)–RatherHomogeneous–Soldinbulk–LowvalueperunitOrganizationalProducts1.Manufacturedmaterialsandcomponentparts:(electricalresistors,screws,electricmotors)2.Processmaterials:usedinproduction,notpartoffinishedproduct(chemicals)3.Installations:primaryproductionequipmentandmajorcapitalitems(buildings,computerhardware,assemblylines)OrganizationalProducts4.Accessoryequipment:(wordprocessors,trucks)5.OperatingSupplies:facilitateroutineoperations(writingpaper,handtools)6.Services:workprovidedbyothers(maintenance,repairs)ConsumerGoods1.BasedonDurability/TangibilityClassificationSHOVELRESTAURANTEMPLOYMENTAGENCYGOODGOOD/SERVICESERVICEConsumerGoods2.BasedonCONSUMER’SInterestCONVENIENCEPRODUCTSHOPPINGPRODUCTSPECIALTYPRODUCTWillingnesstoExpendEffortforProductLOWHIGHCONVENIENCEPRODUCTSCHARACTERISTICS:1.RelativelyInexpensive2.Purchaseisregularandrecurring3.LittleThinkingInvolved4.MinimalShoppingEffort5.Boughtamostconvenientlocation6.BoughtonimpulseSTRATEGY:1.Makeavailableineverypossibleplace2.Mustbevisibleinsidethestore3.Distributionisamajormarketingmixfactor4.Easysubstitutionbysimilarbrands5.ExtensiveadvertisingisusedShoppingProductsCHARACTERISTICS:1.Productcomparisonsoccur2.Consumerseekinformation3.Decisionsarebasedonthought4.Relativelyhigherprices5.Oftenfashionoriented6.Monetary&socialrisks7.BrandloyaltymaybefoundSTRATEGY:1.Selectivedistribution2.Consumerswillseekproductsinlessvisiblelocations3.Qualityisimportant4.ProductdifferentiationispossibleSpecialtyProductsCHARACTERISTICS:1.Substitutesarenotaccepted2.Infrequentlypurchased3.ExtensiveSearch4.Brandloyaltymaybestrong5.Loyaltytoretailermaybeasimportantasbrandselection6.MaytravelgreatdistancestoacquireSTRATEGY:1.Limiteddistribution2.Consumerswillseekproductsregardlessoflocation3.Extensiveproductandpricedifferentiation4.StrongbrandimageIV.DoesyourproductofferQualityorValue?QUALITY----degreeofexcellenceorsuperiorityyourproducthas(orserviceprovides)--CUSTOMER’Sperceptionofqualityiskey--TQMandISO9000VALUE----whatthecustomergetsinexchangeforwhatthecustomergives.--”AmIsatisfied?”“Howmuchdiditcost?”V.ProductMixTerminologyProductMixAlloftheproductsweofferforsaleProductLineAgroupofcloselyrelatedproductsWidthofProductMixThenumberofproductlinescarriedDepthofProductMixAverageNumberofProductsineachlineConsistencyofProductMixHowsimilarareourproductlines?ProductMixExampleHairCareSaltySnacksDentalCareSoftDrinksShampooChipsToothbrushColasConditionerNutsToothpasteGingerAleHairSprayCrackersDentalFlossRootBeerCombWidth(NumberofProductLines)Depth#ofItemsVI.BrandEquityA.Brandingidentifiesanddistinguishesonemarketer’sproductfromanother's–Customersusebrandinformationasimportantbuyingcues.1.ABRANDisanyname,term,symbol,sign,design,orunifyingcombinationofthesethatidentifiesaproduct.VI.BrandEquitya.ABRANDNAMEistheverbalpartofthebrand.b.ABRANDMARKisauniquesymbolthatispartofthebrand.c.Alogo,orlogotype,isabrandnameorcompanynamewritteninadistinctivestyle.VI.BrandEquity2.Brandequityisthe“value”ofthebrandcausedbygoodwillandbrandreputation.–Itisavaluableassetthatmustbemanaged!–Strongequitymakesmarketpositioneasiertodefend.–Strongequitymakesnewproductseasiertointroduce.VII.FamilyBrandingA.Familybrandingisastrategythatusesasinglebrandnamefordifferentitemsinaproductline–e.g.,Heinz,DelMonte,GeneralElectricVIII.IndividualBrandsA.UseofSeparateBrandNamesforeachproduct.Example:--Goodyear--Dunlop--SpringfieldGoodyearTargetMarketsGoodyearDunlopKellyCust.FamilyCenteredEuro-coolBluecollarAudienceMirrorofActiveAmericaOnthewayupTakingCareofBasicsA