Marketing Fourteen (Product Decisions)

PRODUCT DECISIONS

Product Line Decisions: Product MixProduct Line Decisions: Product Mix

WidthWidth• Product mix: set

of all product lines# product lines# product lines (3)

Adapted from Kotler, McDougall and Picard, p.360

Detergent ShampooSoap– Width: # of product lines

– Length: # of products in lines

– Depth: # of versions of each product carried

– Consistency: how closely related the product lines are

A B C

11-3

• Product Mix DecisionsProduct Mix Decisions – A firm may lengthen or widen its product mix– A Company may decide to add variations that

will attract new users– A product may be pruned or altered

Two-Way Product-Line Stretch: Marriott Hotels

QualityEconomy SuperiorStandard Good

Pri

ceP

rice

High

Above AboveAverage

ge

Average

Low Fairfield Inn(Vacationers)

Courtyard(Salespeople)

Marriott(Middle

managers)

MarriottMarquis

(Topexecutives)

TENSATOR :THE INNOVATOR

• Tensator :small company ,not known for its innovation. • The company's Sales and Marketing Director Terry Green stated that ‘I'm

a very firm believer that innovation doesn't need to be revolutionary. There's nothing my company has done that couldn't be done by anyone else'.

• Tensator is in a light engineering business which manufactured the Constant Force Spring, a device used in the manufacture of car seat belts throughout Europe.

• In 1978 , the CEO put forward plans for the use of the Constant Force Spring in the production of queuing barriers for supermarkets and banks, etc.

• He persuaded the company to focus on this new product idea.• Research was undertaken where customers, current and potential, were

asked to give opinions on the viability of such a product and how it could improve on the products that were currently available.

TENSATOR THE INNOVATOR

• Tensabarrier was launched. By 1996, the product was being exported to thirty six countries and accounted ‑for £3 million turnover.

• There are now a variety of Tensabarriers in a variety of shapes and forms. There is a bolt down barrier and a ‑special checkout version which incorporates an electronic movement sensor to prevent theft.

• Tensator launched thirteen new products in the years 1995 and 1996. Total turnover had risen more than threefold since 1988 to £10 million,

What are new products????

Stages in the new-product process

Marketing information and methods used in the new-product process

Mattel’s Barbie

Why should laboratory and safety tests be done?

Why do new products fail?

• One study estimated that as many as 80% of new• consumer packaged products failed.• Only about 40% of new consumer products are• around 5 years after introduction• WHY????????????????????????• Overestimated market• Poor design• Incorrect positioning• Error in pricing• Poor marketing• Cost overrun• Competition

LIST OF FAILED PRODUCTS?????

The product lifecycle (PLC)

• Products need managing throughout their working lives.

• This requires deciding:• – What products should be created.• – The best time to launch them and introduce them to

the public.• – How to capitalise on a product’s strengths and iron

out any weaknesses.• – When an older product is past its prime and needs

modification or withdrawal from the market

Stages in PLC

Task

• Identify products at different stages of the life cycle