Principles of Marketing - MGT301 Power Point Slides Lecture 21

MGT301MGT301Principles of Principles of MarketingMarketing

Lecture-21Lecture-21

SummarySummaryof of

Lecture-20Lecture-20

Individual Product DecisionsIndividual Product Decisions

Product Attributes

Branding

Packaging

Labeling

Product Support Services

QualityQualityQualityQuality FeaturesFeaturesFeaturesFeatures

DesignDesignDesignDesign

BrandingBranding

Brand DevelopmentBrand Development

Line Extension

Multibrands

Brand Extension

New BrandsBra

nd N

ame

Existing New

Product Category

Existing

New

Four Brand Strategies Four Brand Strategies

Today’s TopicsToday’s Topics

Product (cont..) Product (cont..)

• Short and simple• Suggestive of product benefits• Legally available• No negative imagery• Easy to spell, read, and

pronounce• Adaptable for international

markets• Adaptable to packaging/labeling

needs• Adaptable to any advertising

medium

A GoodBrand Name

Is...

A GoodBrand Name

Is...

Generic name: A brand name that has become a Generic name: A brand name that has become a generally descriptive term for a class of generally descriptive term for a class of products.products.– If this occurs, the original owner loses exclusive right to If this occurs, the original owner loses exclusive right to

the brand name (which is very bad for marketers).the brand name (which is very bad for marketers).– Examples: nylon, aspirin, escalator, kerosene, etc.Examples: nylon, aspirin, escalator, kerosene, etc.

PackagingPackaging

Activity of designing and Activity of designing and producing the container or producing the container or wrapper for a product.wrapper for a product.

Packaging used to just Packaging used to just contain and protect the contain and protect the product.product.

Goals of PackagingGoals of Packaging

Protection against damage, spoilage, Protection against damage, spoilage, tampering etc.tampering etc.

Assistance in marketing the Assistance in marketing the product product

Cost effectiveness (and good for the Cost effectiveness (and good for the environment)environment)

LabelingLabeling

Printed information appearing on or with the package.Printed information appearing on or with the package.

Performs several functions:Performs several functions:

– Identifies product or brandIdentifies product or brand

– Describes several things about the productDescribes several things about the product

– Promotes the product through attractive graphics.Promotes the product through attractive graphics.

Universal Product Code (UPC)Universal Product Code (UPC) AA bar code on a product’s package that provides bar code on a product’s package that provides

information read by optical scanners.information read by optical scanners. UPC codes provide several advantages: labor saving, UPC codes provide several advantages: labor saving,

improve inventory control, and help with marketing improve inventory control, and help with marketing research.research.

79400 80740

PromotesIdentifies

Competitive Advantages

Describes

SalesTasks

Product Safety

Packaging

Labeling

Packaging

Labeling

Product - Support ServicesProduct - Support Services

Companies should design its support services to Companies should design its support services to profitably meet the needs of target customers and profitably meet the needs of target customers and gain competitive advantage.gain competitive advantage.

How?How?

Step 1Step 1

Survey customers to assess the value of current Survey customers to assess the value of current services and to obtain ideas for new services.services and to obtain ideas for new services.

Step 2Step 2 Assess costs of providing desired services.Assess costs of providing desired services.

Step 3Step 3 Develop a package of services to delight customers and Develop a package of services to delight customers and

yield profits to the company.yield profits to the company.

Product Line StrategiesProduct Line Strategies

Product Line ExtensionsProduct Line ExtensionsProduct Line ExtensionsProduct Line Extensions

StretchingStretching

Adding new items to line

FillingFilling

Adding sizes or styles

Downward

Upward

Contracting aContracting aProduct LineProduct Line

Dropping items

Contracting aContracting aProduct LineProduct Line

Dropping items

Two-way

New Product Development New Product Development

The development of original products, product The development of original products, product improvements, product modifications, and new improvements, product modifications, and new

brands through the firm’s own R&D effortsbrands through the firm’s own R&D efforts..

Major Stages in New-Product Major Stages in New-Product DevelopmentDevelopment

IdeaGeneration

IdeaScreening

ConceptDevelopmentand Testing

MarketingStrategy

BusinessAnalysis

ProductDevelopment

TestMarketing

Commercialization

Stage 1: Idea GenerationStage 1: Idea Generation

– Internal idea sources:Internal idea sources:

R & DR & D

Sales forceSales force

– External idea sources:External idea sources: Customers, competitors, distributors, suppliersCustomers, competitors, distributors, suppliers

Sources of New-Product IdeasSources of New-Product Ideas

EmployeesEmployees CustomersCustomers ResellersResellers Suppliers/ vendorsSuppliers/ vendors CompetitorsCompetitors Advertising agenciesAdvertising agencies

Marketing research firmsMarketing research firms Other manufacturersOther manufacturers InternationalInternational

Stage 2: Idea ScreeningStage 2: Idea Screening

– Product development costs increase substantially Product development costs increase substantially in later stages.in later stages.

– Ideas are evaluated against criteria; most are Ideas are evaluated against criteria; most are eliminated.eliminated.

Stage 3: Stage 3:

Concept Development and TestingConcept Development and Testing

– Product concepts provide detailed versions of new Product concepts provide detailed versions of new product ideas.product ideas.

– Concept tests ask target consumers to evaluate Concept tests ask target consumers to evaluate product concepts.product concepts.

Stage 4: Stage 4:

Marketing Strategy DevelopmentMarketing Strategy Development

– Strategy statements describe:Strategy statements describe:

– The target market, product positioning, and sales, The target market, product positioning, and sales, share, and profit goals for the first few years.share, and profit goals for the first few years.

– Product price, distribution, and marketing budget for Product price, distribution, and marketing budget for the first year.the first year.

– Long-run sales and profit goals and the marketing Long-run sales and profit goals and the marketing mix strategy.mix strategy.

Stage 5: Business AnalysisStage 5: Business Analysis

– Sales, cost, and profit projectionsSales, cost, and profit projections

Stage 6: Product DevelopmentStage 6: Product Development

– Prototype development and testingPrototype development and testing

Stage 7: Test MarketingStage 7: Test Marketing

Standard test marketsStandard test markets

Controlled test marketsControlled test markets

Simulated test marketsSimulated test markets

StandardTest Market

Full marketing campaignin a small number of representative cities.

StandardTest Market

Full marketing campaignin a small number of representative cities.

SimulatedTest Market

Test in a simulated shopping environment

to a sample of consumers.

SimulatedTest Market

Test in a simulated shopping environment

to a sample of consumers.

Controlled Test Market

A few stores that have agreed to carry newproducts for a fee.

Controlled Test Market

A few stores that have agreed to carry newproducts for a fee.

Stage 8 Stage 8 CommercializationCommercialization

New-Product Development New-Product Development ManagementManagement

KeyIssues

Top LevelSupport

Market-GuidedR & D

Integration &Coordination

Authority

Enough for today. . Enough for today. . ..

SummarySummary

PackagingPackaging

LabelingLabeling

Companies should design its support services to Companies should design its support services to profitably meet the needs of target customers and profitably meet the needs of target customers and

gain competitive advantage.gain competitive advantage.

Product - Support ServicesProduct - Support Services

Product Line StrategiesProduct Line Strategies

New Product Development New Product Development

IdeaGeneration

IdeaScreening

ConceptDevelopmentand Testing

MarketingStrategy

BusinessAnalysis

ProductDevelopment

TestMarketing

Commercialization

Next….Next….

– New Product Development (cont..)New Product Development (cont..)– Product Life Cycle (PLC)Product Life Cycle (PLC)

MGT301MGT301Principles of Principles of MarketingMarketing

Lecture-21Lecture-21