Product strategies[1]

Product Strategies Product Strategies

MS20A Lecture 7

MARKETING REVIEWMARKETING REVIEW

1. Find a Need & Fill It

2. Need = Segments & Targets[Homogeneous Behaviour]

3. Segments & Targets = Demographics, Lifestyle, etc

Product PoliciesProduct PoliciesProduct/Service – Customer Need Link

4. Market Strategy – 4Ps > Target Market

What is a Product?

A PRODUCTPRODUCT is anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need.

Can be tangible – partially intangible What is a Service? A SERVICESERVICE is a form of product that consist

of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.

Nature and Characteristic of a Service (Fig. 8-5)

A Product is truly defined by the behaviour thatassociated with its use.

WHAT IS A PRODUCTWHAT IS A PRODUCT

What does a miner buy a drilling rod or a hole????

What does toothpaste provide..whiter teeth or …a winning smile????

What does a University sell…book learning or a dream??

Levels of Product (Fig. 8-1)

Unsought ProductsUnsought Products

New innovations Products consumers don’t want to think about Require much advertising &personal selling i.e Life insurance, blood donation

Product Classifications: Consumer

Specialty ProductsSpecialty Products

Special purchase efforts High price Unique characteristics Brand identification Few purchase locations i.e Lamborghini, Rolex

Shopping ProductsShopping Products

Buy less frequently Higher price Fewer purchase locations Comparison shop i.e Clothing, cars, appliances

Convenience ProductsConvenience Products

Buy frequently & immediately Low priced Mass advertising Many purchase locations i.e Candy, newspapers

Supplies and Services Operating supplies, repair/

maintenance items

Supplies and Services Operating supplies, repair/

maintenance items

Materials and PartsRaw materials, manufactured

materials, and parts

Materials and PartsRaw materials, manufactured

materials, and parts

Capital ItemsIndustrial products that aid in

buyer’s production or operations

Capital ItemsIndustrial products that aid in

buyer’s production or operations

Product Classifications: Industrial, B2B

Introduction Growth Maturity Decline

Product Life CycleProduct Life Cycle

Time

Sales

Product Life CycleProduct Life Cycle

Introduction Slow sales Low revenue Promote to gain

awareness Varied length

Product Life CycleProduct Life Cycle

Growth Increasing sales Increasing profits Increasing

competition Product

refinement Profits peak Promote to create

brand preference

Product Life CycleProduct Life Cycle

Maturity Sales from

increase to decline

Intense competition

Prices and profit margins decrease

Profits often still high

Product Life CycleProduct Life Cycle

Decline Falling industry

sales & profits Industry shakeout

PRODUCT POLICIESPRODUCT POLICIES

EXISTING

MARKET

NEWMARKET

EXISTING

PRODUCT

PenetratioPenetrationn

BrandingBrandingPackagingPackaging

ModificationModification

MarketMarket

ExtenisoExtenisonn

NEWPRODUC

T

NewNew

ProductProduct

CreationCreation

Diversi-Diversi-

ficationfication

PACKAGINGPACKAGING

•ContainersContainers• ShippingShipping• ProtectionProtection• InformationInformation• Labelling – Brand IDLabelling – Brand ID• ConvenienceConvenience

Labelling

Printed information appearing on or with the package.

Performs several functions: Identifies product or

brand Describes several

things about the product

Promotes the product through attractive graphics

Product Support Services

Companies use product support services as a major tool in gaining competitive advantage.

How?

Step 1. Survey customers to assess the value of current services and to obtain ideas for new services.Step 2. Assess costs of providing desired services.Step 3. Develop a package of services to delight customers and yield profits to the company.

Branding

Brand name Trademark Advantages of branding

to consumers to branders

Disadvantages of branding to consumers to branders

Branding Advantages to

Branding Buyers:

Identification Quality and value

Sellers Tells a story Provides legal

protection Helps segments

markets

Brand Equity Higher brand

loyalty Name awareness Perceived quality Strong brand

associations Patents,

trademarks, channel relationships

Brands and Brand Symbols (p. 292)

Powerful brands such as these have brand equity: Coca-Cola brand -

$69 billion IBM brand - $53

billion Offers defense

against fierce price competition.

Advantages of branding (Kotler) easier for the seller to process orders easier for the seller to process orders

and track down ordersand track down orders with the trademark, it provides legal with the trademark, it provides legal

protection of featuresprotection of features it helps attract loyal and profitable it helps attract loyal and profitable

customerscustomers gives protection from competitiongives protection from competition aids segmentationaids segmentation helps build the corporate imagehelps build the corporate image

…….ease of decision-making

Branding as PLC Extension Branding as PLC Extension ..cont..cont

time

$

Renewal

Branding

Brand equity Brand extension (line extension) Levels of brand familiarity

rejection no recognition recognition preference insistence

Brand Strategies

Individual brand name (multibranding)

Family brands (multiproduct branding) blanket family name for all products separate family name for related

products combination family and individual

brand name

Product Line Decisions

Stretching Filling Pruning (dropping) Line extensions (brand extensions)

The product and the company’s marketing strategy Marketing strategy as a function of

product classification The product life cycle and marketing

strategy Introduction Growth Maturity Saturation Decline