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Product management
Unit 2
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Product Positioning.??
The positioning of a brand is the perception it brings
about in the minds of the target customer.
This perception reflects the essence of the brands in
terms of functional and non-functional benefits in
the judgement of that customer.
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Walmart, position is lowest price, quality not
so bad
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Mercedes, position is luxury
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ALL PRODUCTS CAN BE
DIFFERENITATED TO SOME
EXTEND
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Worlds tallest hotel
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Positioning strategy should be very much
relate to the benefits of the product offered..
Principles of Positioning
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Principles of Positioning.??
It is better to be the first than to belate.
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Principles of positioning.
In case not first ,the company should be able
to create a new category by making smallchange in the marketing mix.
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Principles of Positioning
It is important to understand the position
strategies of competitors
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Principles of Positioning
Positioning using an easy name..is veryimportant
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Types of Positioning
ATTRIBUTE Positioning???
POSITION ITS ATTRIBUTE
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BENEFIT Positioning??
Positioned as a leader in certain benefit
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More mileage 108/L
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Use of application positioning
Positioned it as best for some use or
application..
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User positioning..
Its position for some user group..
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Competitor based positioning
Product claims to better than the
competitor.
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Quality positioning..
The product is positioned as offering the best
value.
E
g Dove
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Positioning in relation to target market
Needs of the target market..
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Common positioning strategies in
consumer durable sector..
Competitor related positioning
we are superior compared to Competitor
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VS
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Positioning by corporate identity
A trusted corporate identity became
household name for products
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Positioning errors
Over positioning
Confused positioning
Doubtful positioning
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Product Life Cycle
To say that a product has a life cycle asserts fourthings
1. Products have a limited life.
2. Product sales pass through distance stages, eachposing different challenges, opportunities, andproblems to the seller.
3. Profits rise and fall at different stages of the productlife cycle.
4. Products require different marketing, financial,manufacturing, purchasing, and human resourcestrategies in each life-cycle stage.
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PLC - Product Life Cycle
The purpose of having a diagram is to
help you understand the changes, in the
revenue that is made, as you gothrough the different stages of selling aproduct, from the beginning, to the end.
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Stages of the Product Life Cycle
Exhibit 7.2
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Stages in the Product Life Cycle
Introduction Growth Maturity Decline
The time at each stage varies
greatly
DVD
Mini-disc
Electric cars
VR*
*= virtual reality
Digital cameras
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Marketing Strategy During
the Product Life Cycle
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Stages in the Product Life Cycle
Introduction Growth Maturity Decline
IntroductionThe seller tries to stimulate demand
Promotion campaigns to get increase public awareness
Explain how the product is used,
Features Advantages Benefits
You will lose money, but you expect to make profits in the future
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Stages in the Product Life Cycle
Introduction Growth Maturity Decline
IntroductionSales are low, and profits are below the line because your costs are greater than the
amount of money you make
you have negative profit
Need to spend a lot of money on promotion
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Stages in the Product Life Cycle
Introduction Growth Maturity Decline
GrowthA lot is sold - The seller tries to sell as much as possible
Other competitor companies watch, and decide about joining in with a competitor
product
success breeds imitation (Text)
Growth will continue until too many competitors in the market - and the market is
saturated
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Stages in the Product Life Cycle
Introduction Growth Maturity Decline
GrowthAt the end of the growth stage, profits start to decline when competition means you
have to spend more money on promotion to keep sales going.
Spending money on promotion cuts into your profit
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Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Maturity
Many competitors have joined - the market is saturated
The only way to sell is to begin to lower the price - and profits decrease
It is difficult to tell the different between products since most have the same F.A.B. -
Features, Advantages & Benefits
Competition can get Nasty and commercials are intense
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Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Maturity
Persuasive Promotion becomes more important during this stage
That is to say, you have commercials almost begging the customer to still buy your
product because you still make it just as good.
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Stages in the Product Life Cycle
Introduction Growth Maturity Decline
DeclineNewer products are now more attractive - even a low low price does not make
consumers want to buy.
Profit margin declines - and so the only way to make money is to sell a high volume
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Stages in the Product Life Cycle
Introduction Growth Maturity Decline
DeclineTo increase volume you try to
1. Increase the number of customers - get new customers
2. Increase the amount each customer uses
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1. Increase frequency of use by present
customers
2. Add new users
3. Find new uses
4. Change product quality or packaging
Extending the Product Life Cycle
Market Modification
Product Modification
Purpose: to sell more product and cover original investment
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Extending the product Cycle
to prevent the product going intoto prevent the product going intodecline you modify the marketdecline you modify the market
MARKET MODIFICATIONMARKET MODIFICATION
you look for new consumers bychanging the product so it has new
users - and then new customers(Baking soda, vinegar, Q(Baking soda, vinegar, Q--tips,tips, AvonAvonSkin So Soft, vaselineSkin So Soft, vaseline
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Extending the product Cycle
MARKET MODIFICATIONMARKET MODIFICATION
examples
Windex for cleaning jewelry
Javex bleach for toilets
Lemons for hair colouring
beer for hair
Bounce for in the garbage, gym bag etc.
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to prevent the product going intoto prevent the product going into
decline you modify the productdecline you modify the product
PRODUCT MODIFICATIONPRODUCT MODIFICATION
adding new features, variations, model
varieties will change the consumerreaction - create more demand
therefore you attract more users
Extending the product Cycle
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PRODUCT MODIFICATIONPRODUCT MODIFICATION
condoms - colours, features
CD players
chip flavours - many kinds
couples seats at movie theatre
Extending the product Cycle
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PRODUCT MODIFICATIONPRODUCT MODIFICATION
examples continued
digital sound at theatres
Extending the product Cycle
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Overlap of Life Cycle for Products A and B
WINDOWS 95
1991 1995 1996 1997
WINDOWS 3.1
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Most people haveaproblem thinking
this theoryis relevant because they
applyit to specificproduct brands - itshould beapplied only to ageneralproduct category
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Length of Cycle Stages Products move through the cycle at different
speeds
sometimes introduction is very long, or veryshort, depending on how easy it is for the
public to understand the F.A.B.
Not all products follow the same pattern
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Life Cycle Length
Some products move very fast because
they are new and have no competition
so the intro stage is short, and they godirect to growth stage.
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Life Cycle Length
Because of
technology and
globalization the introduction stage is getting very
short
some cycles more quickly to maturity,then have many product modificationsso the decline stage drags on and on
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Speed of the PLC
Since the Intro Stage is getting shorter,and sometimes the Growth Stagedoesnt last too long (because
competitors move in) companies mustcontinually come up with new products
You can tell when they are in the growthstage because this is when they
introduce new model variations, andsome improvements to the product
Page 340
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Fashions - currentlypopular
products that tend to follow recurringlifecycles
eg. Widelapels, 3 button suits, high
heels vs. wedge heel
thecurrentlyacceptable stylep. 265
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Fads - Fashions with abbreviated lifecycles - onlypopularwith certaingroups
- music
- fast food
- childrens toys
- adult toysPage 265
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Product Life Cycle Considerations in
Marketing Strategy
Understand that profits have a predictable
pattern
in the early stages, focus is on productinformation
in the later stages, focus is on brand
promotion
use market segmentation in maturity stage tomaintain strong core customer basis
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Marketing Strategies: Introduction
Stage
Product Offer a basic product
Price Use cost-plus basis to set
Distribution Build selective distribution
Advertising Build awareness among early adopters
and dealers/resellers
Sales Promotion Heavy expenditures to create trial
Goal 4: Realize how marketing strategies change during the product life cycle
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Product Life-Cycle Strategies
Product development
Introduction
Growth
Maturity Decline
Rapidly rising sales
Average cost per customer Rising profits
Early adopters are targeted
Growing competition
PLC StagesPLC Stages
Goal 4: Realize how marketing strategies change during the product life cycle
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Marketing Strategies:
Growth Stage
Product Offer product extensions, service, warranty
Price Penetration pricing
Distribution Build intensive distribution
Advertising Build awareness and interest in themass market
Sales Promotion Reduce expenditures to takeadvantage of consumer demand
Goal 4: Realize how marketing strategies change during the product life cycle
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Marketing Strategies:
Maturity Stage
Product Diversify brand and models
Price Set to match or beat competition
Distribution Build more intensive distribution
Advertising Stress brand differences and benefits Sales Promotion Increase to encourage brandswitching
Goal 4: Realize how marketing strategies change during the product life cycle
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Product Life-Cycle Strategies
Product development
Introduction
Growth
Maturity Decline
Declining sales
Low cost per customer Declining profits
Laggards are targeted
Declining competition
PLC StagesPLC Stages
Goal 4: Realize how marketing strategies change during the product life cycle
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Marketing Strategies: Decline Stage
Product Phase out weak items
Price Cut price
Distribution Use selective distribution: phase outunprofitable outlets
Advertising Reduce to level needed to retain hard-core loyalists
Sales Promotion Reduce to minimal level