chapter 5 product the best way to hold customers is to constantly figure out how to give them more...
TRANSCRIPT
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Chapter 5 Product
The Best Way to hold customers is to constantly figure out how to give them more or less.
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The learning objectives
Product Product classification Product life-cycle strategies New-product Development Product-line decision Brands decisions
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1. What is product?
Anything that can be offered to a market for attention,acquisition,use,or consumption that might satisfy a want or need.
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Components of theMarket Offering
Value-based prices
Services mixand quality
Product featuresand quality
Attractiveness ofthe market offering
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Service and Experience
Service—Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.
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Discussion
Disney starbucks
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Five Product LevelsPotential product
Augmented product
Expected product
Basic product
Core benefit
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Levels of Product
Core product Actual product Augmented product
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Core product
Core benefit or service
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Actual product
Quality level Features Design Package Brand name
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Augmented product
Installation After-sale service Warranty Delivery and credit Attached benefit
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2. Product classifications
Consumer products Industrial product Organizations, persons, places, and ideas
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Consumer product
Convenience products Shopping products Specialty unsought
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Specialty ProductsSpecialty Products Unsought ProductsUnsought Products
Shopping ProductsShopping ProductsBuy less frequently> Gather product information> Fewer purchase locations> Compare for:
• Suitability & Quality • Price & Style
Convenience ProductsConvenience Products
Special purchase efforts> Unique characteristics> Brand identification> Few purchase locations
New innovations> Products consumers don’t want to think about. >Require much advertising & personal selling
Buy frequently & immediately> Low priced> Many purchase locations> Includes:
• Staple goods• Impulse goods• Emergency goods
Consumer-Goods Classification
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Industrial Product
Material and parts Capital items Supplies and services
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3.Product Life Cycles (PLC)
The course of a product’s sale and profit over it lifetime.It involves five distinct stages:product development,introduction,growth,maturity,and decline.
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Sales & Profit Life Cycles
IntroductionIntroduction GrowthGrowth MaturityMaturity DeclineDecline
TimeTimeSal
esS
ales
&
& p
rofi
tsp
rofi
ts (
$) (
$)
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Introduction stage
The product life-cycle stage in which the new product is first distributed and made available for purchase.
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Sales & Profit Life Cycles
IntroductionIntroduction GrowthGrowth MaturityMaturity DeclineDecline
TimeTimeSal
esS
ales
&& p
rofi
tsp
rofi
ts (
$)($)
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Four IntroductoryMarketing Strategies
Rapid-Rapid-skimmingskimmingstrategystrategy
Rapid-Rapid-skimmingskimmingstrategystrategy
Rapid-Rapid-penetrationpenetration
strategystrategy
Rapid-Rapid-penetrationpenetration
strategystrategy
Slow-Slow-penetrationpenetration
strategystrategy
Slow-Slow-penetrationpenetration
strategystrategy
Slow-Slow-skimmingskimmingstrategystrategy
Slow-Slow-skimmingskimmingstrategystrategy
PricePrice
LowLow
HighHigh
PromotionPromotionHighHigh LowLow
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Growth stage
The product life-cycle stage in which a product’s sales start climbing quickly.
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Maturity stage
The stage in the product life cycle in which sales growth slows or levels off.
Modify the market,the product,and the marketing mix.
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Decline Stage
The product life cycle stage in which a product’s sales decline
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Discussion
Please list the marketing objectives and strategies for each stage.
2.what strategic option are open to the marketers of products in the mature stage of the product life cycle?
3.which product life-cycle stage, if any,is the most important?which stage is riskiest?which stage appears to hold the greatest profit potential? Be certain to explain the thinking behind each of your answer.
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4.The international PLC
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5.new-product development
What is new product? Major stages in new product development
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What is new product?
Original products Product improvements Product modifications New brands that the firm develops through its
own research and development efforts
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Major stages in new product development
Idea generation Idea screening Concept development and testing Marketing strategies Business analysis Product development Test marketing Commercialization
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New Product Development Process
IdeaIdeaGenerationGeneration
ConceptConceptDevelopmentDevelopmentand Testingand Testing
MarketingMarketingStrategyStrategy
DevelopmentDevelopment
IdeaIdeaScreeningScreening
BusinessBusinessAnalysisAnalysis
ProductProductDevelopmentDevelopment
MarketMarketTestingTesting
CommercializationCommercialization
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Probability of Success
ProbabilityProbabilityof technicalof technicalcompletioncompletion
OverallOverallprobabilityprobabilityof successof success==
Probability ofProbability ofcommercializationcommercialization
given technicalgiven technicalcompletioncompletion
XXProbability ofProbability of
economiceconomicsuccess givensuccess given
commercializationcommercializationXX
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Concept Development & Testing
1. Develop Product Ideas into Alternative Product Concepts
1. Develop Product Ideas into Alternative Product Concepts
2. Concept Testing - Test the ProductConcepts with Groups of Target Customers
2. Concept Testing - Test the ProductConcepts with Groups of Target Customers
3. Choose the Best One3. Choose the Best One
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High price/oz.High price/oz.
Lo
w in
cal
ori
esL
ow
in c
alo
ries
Low price/oz.Low price/oz.
Hig
h in
calories
Hig
h in
calories
Product & Brand Positioning((a) Product-positioninga) Product-positioning
mapmap(breakfast market)(breakfast market)
ExpensiveExpensive
Slo
wS
low
InexpensiveInexpensive
Qu
ickQ
uick
Baconandeggs
Pancakes Instantbreakfast
Coldcereal
Hotcereal
b) Brand-positioningb) Brand-positioningmapmap
(instant breakfast market)(instant breakfast market)
Brand C
Brand B
Brand A
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Conjoint AnalysisBrand nameBrand name----------
Uti
lity
Uti
lity
1.01.0
00 | | |K2R Glory BissellK2R Glory Bissell
Retail PriceRetail Price
Uti
lity
Uti
lity
----------
1.01.0
0| | |
$1.19 $1.39 $1.59$1.19 $1.39 $1.59
Good Housekeeping Seal?Good Housekeeping Seal?
Uti
lity
Uti
lity
1.01.0----------
00 | |No YesNo Yes
Uti
lity
Uti
lity
Money-BackMoney-BackGuarantee?Guarantee?
1.01.0----------00
| |No YesNo Yes
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Consumer-Goods Market Testing
Sales-Wave
ResearchTest offering trail to
a sample of consumers in
successiveperiods.
Sales-Wave
ResearchTest offering trail to
a sample of consumers in
successiveperiods.
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.
StandardTest Market
Full marketing campaignin a small number of representative cities.
StandardTest Market
Full marketing campaignin a small number of representative cities.
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.
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2 1/2%Innovators
13 1/2%Early
adopters
34%Early
majority
34%Late
majority
16%Laggards
Time of adoption innovations
Adopter Categorization of the Basis of Relative Time of Adoption of Innovations
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6.product-line decision
Product mix Product-line analysis Product –line length
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Product mix(assortment)
The set of all products and items that a particular seller offers for sale.
A company’s product mix has a certain width,length,depth, and consistency.
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Width:how many different product lines. Length:the total number of items. Depth:how many variants are offered of each
product in the line. Consistency:how closely related the various
product lines are in end use,production requirement,distribution channels, or some other way.
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Product MixWidthWidth - number
of different product lines
WidthWidth - number of different
product lines
LengthLength - total number of itemswithin the lines
LengthLength - total number of itemswithin the lines
Depth Depth - number of versions of each product
Depth Depth - number of versions of each product
Product Mix - Product Mix - all the product
lines offered
Product Mix - Product Mix - all the product
lines offered
Co
nsi
sten
cy
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Product-line analysis
Sales and profit Market profile
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Product-Line Length
Line Stretching– Downmarket– Upmarket– Two-way
Line Filling Line Modernization Line Featuring & Line Pruning
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Line stretching
Downmarket stretch Upmarket stretch Two-way stretch
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Two-Way Product-Line Stretch: Marriott Hotels
QualityEconomy SuperiorStandard Good
Pri
ceP
rice
High
Aboveaverage
Average
Low Fairfield Inn(Vacationers)
Courtyard(Salespeople)
Marriott(Middle
managers)
MarriottMarquis
(Topexecutives)
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Line filling
Quality—price analysis
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6.Brand Decision
What is brand? Band decision
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What is brand?
Brand is a name,term,sign,symbol,or design,or a combination of them,intended to identify the goods or services of one seller or group of sellers and differentiate them from those of competitors.
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What is a Brand?
Attributes Benefits Values
Culture
User
Personality
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discussion
What is difference between product and brand?
How to define the line cycle of a brand?
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An Overview ofBranding Decisions
BrandingDecision
•Brand
•No brand
Brand-SponsorDecision
•Manu-facturerbrand
•Distribu-tor(private)brand
•Licensedbrand
Brand-Name
Decision•Individualbrandnames•Blanketfamilyname•Separatefamilynames•Company-individualnames
Brand-Repositioning
Decision
•Reposi-tioning
•Noreposi-tioning
Brand-StrategyDecision
•Lineextension
•Brandextension
•Multi-brands
•Newbrands
•Cobrands
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Brand decision
1.to brand or not to brand? 2.brand-sponsor decision 3.Brand-name decision 4.brand-strategy decision 5.brand-reposition decision
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brand-sponsor decision
Manufacturer brand Distributor brand Licensed brand
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Brand-name decision
Individual Blanket family Separated family Company-individual family
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Good Brand Names:
SuggestProductBenefits
Distinctive
Lack PoorForeign
LanguageMeanings
SuggestProductQualities
Easy to:PronounceRecognizeRemember
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Brand Strategies
BrandExtension
New
Bra
nd
Nam
e
Product Category
LineExtension
Existing
Existing
MultibrandsNew NewBrands
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brand-strategy decision
Line extensions Brand extensions New brands cobrands
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brand-reposition decision
Reposition No reposition
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Why Package Crucial as a Marketing Tool
Self-service Consumer affluence Company & brand image Opportunity for innovation
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Labels
IdentifyIdentifyIdentifyIdentify
DescribeDescribeDescribeDescribe
PromotePromotePromotePromote
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Assignment
Case study : P425