Chapter 9: Product Management Copyright © 2010 Pearson Education Canada Product Management 1 Product management concerns three key areas: 1.The internal.
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Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Product Management
1
Product management concerns three key areas:
1.The internal organization structure for managing current products.
2.The allocation of resources for developing new products.
3.Dealing with changing market conditions as products progress through their life cycles.
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Systems for Managing Products
2
An organization has several options or combinations of options for managing its product lines.
• Brand Management: (Product manager)
• Category Management
• Regional Management
• Target-Market Management
• Continental and Global Management
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Brand/Category Management
3
V.P. Marketing
Category Manager
Category Manager
Brand Manager
BrandManager
Brand Manager
BrandManager
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Regional Management
4
V.P. Marketing
B.C.
Prairies
Ontario
Quebec
Atlantic
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Target Market Management
5
V.P. Marketing
Consumer Small Medium Enterprise
V.P. Marketing
Youth Women Ethnic
Bell Canada
Bell Mobility
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Continental/Global Management
6
GlobalV.P. Marketing
North America Europe Australia Latin
America
“Wherever possible U.S. strategies will be implemented in Canada.” --Kraft Inc.--
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Product Management Decisions
7
All aspects of the marketing mix are managed to maximize profit. Key product decisions embrace:
Product Modifications
Product Mix (Stretching)
Brand Design and Packaging
Maintenance or Withdrawal
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Product modification
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Product Mix
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Brand Design and Packaging
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Maintenance or Withdrawal
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Product Life Cycle
12
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Product Life Cycle
13
Unique conditions in each stage of the life cycle necessitate different marketing strategies in each stage.
Introduction
Growth
Maturity
Decline
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Chapter 9: Product Management
Extending the Product Life Cycle
14
As products age the manager introduces rejuvenation (innovation) strategies to extend the life cycle.
Search for New Markets: Attract competitors customers, Entering new segments, Converting non users to users
Offer Product Improvements: Quality Improvements, Feature improvements, style improvements
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Extending the Product Life Cycle
• Introduce New Lines: Different flavors or scents in order to try the product
• Change Other Marketing Mix Elements:• Pricing• Advertising• Sales promotion• Distribution
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Extending the Life Cycle
16
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Extending: Add New Markets
17
There are several options for adding new markets.
Attract competitor’s customers
Enter new market segments
Convert non-users
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Extending: Alter the Product
18
Product improvements can refresh a tired brand; possibly give it a new look.
Improve the quality
Improve the features of the product
Improve the style (product design or package)
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Extending: Add New Lines
19
Depending on the product category numerous options are considered. Some examples:
New flavours or scents
Introduce new product format
Introduce new sizes
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Extending: Alter Other Mix Elements
20
Changes unrelated to the product itself can have an impact on sales at any stage of the life cycle.
1. Assess pricing strategy in context of competitors and consumer expectations.
2. Assess marketing communications strategies and reallocate budgets to more suitable activities.
3. Examine distribution strategy to make product available in new or non-traditional locations.
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Adoption and Diffusion
21
Adoption
Diffusion
Stages a consumer passes through on the way to purchasing a brand regularly.
Gradual acceptance of a product from introduction to market saturation.
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Stages of Adoption
22
Awareness
Interest
Evaluation
Trial
Adoption
Consumer learns of product
Consumer receptive to messages and information
Consumer reviews benefits in relation to needs
Consumer makes initial purchase
Satisfaction results in ongoing purchases
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Chapter 9: Product Management
Adopter Categories
23
Innovators
Early Adopters
Early Majority
Late Majority
Laggards
Some people adopt a product quickly; others take much more time.
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Product Life Cycle Length
24
Consumer acceptance has a direct impact on how long a product lasts.
Instant Bust
Fad
Fashion
Brand Acceptance Wall:A barrier that stops most products from further consumer acceptance. It occurs due to lack of acceptance or uncoordinated marketing strategy.
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
Product Life Cycle Length
25
Copyright © 2010 Pearson Education Canada
Chapter 9: Product Management
New Product Development
26
1. IdeaGeneration 2. Screening 3. Concept
Development and Testing
4. Business Analysis
5. Product Development
6. Test Marketing
7. Commercialization
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