Download - Product Planning
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Chapter 10
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Life Cycle ManagementFrom cradle to grave management of the
productFine-tuning strategyDefending against competitorsContinuously innovating the product, if
possible
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Product Life CycleSimilar to S-curve for product diffusionFour distinct stages of a product’s life
IntroductionGrowthMaturityDecline
Different development costs, sales, and marketing costs in each stage (Kahn, p. 183)
Different marketing mix strategies for each stage (Exhibit 10.2, p. 184)
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Maturity Stage ConsiderationsThree basic strategic options
Maintenance – fine tune marketing mix for optimal profitability
Defense – focus on a key marketing element important to the customer base
Innovation – use line extensions, flankers, or new markets to extend the life of the product
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Product Families and PlatformsExpanding beyond a single product in a
categoryPlatforms typically have an underlying
foundation of common design elementsProduct families are “products that share a
common platform” but are customized for specific user requirements (Dodge Durango versus Chrysler Aspen)
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Mapping the Product MixVisual representation of the different
productsList the current product, and group by
product linePossibly utilize a time element of product
introductionGroup product lines by common platform
elementsIdentify possible overlaps or gaps in the lines
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Brand ManagementBrand is a promise from the company to the
buyer about certain inherent characteristics of the product
Mercedes brand promise is extreme qualityWal-Mart brand promises lowest priceOver time, brands develop equity – the
difference between assets and liabilities on the balance sheet
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Brand Equity FrameworkAaker says brand equity is five key
componentsBrand loyalty – degree of repeat purchasesBrand awareness – consideration setPerceived quality of the brandBrand associations – signals connected to the
brand (memorable events, memories, etc.)Other proprietary brand assets – patents,
trademarks, channel relationships, etc.Example in Exhibit 10.4, page 190
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Brand Equity MeasurementBrand Loyalty
Price premiumCustomer
satisfactionBrand Awareness
SaliencePerceived Quality
Expectations and performance met
Leadership in category
Brand AssociationsPerceived valueBrand personalityOrganizational
associationsMarket Behavior
Market shareMarket priceDistribution
coverage
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Brand Decision FrameworkFive major decisions regarding a brand
Branding decision – to brand or not to brandBrand sponsor decision – manufacturer,
distributor, or licensed brandBrand name decision – individual names,
blanket family name, separate family name, company/individual name
Brand strategy – line extension, brand extension, multi-brands, new brands, co-brands
Brand repositioning decision – reposition or not
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Brand Switching MatrixSwitching behavior from former brand to
current brandBased on consumer inputIdentifies for a specific brand the source
(former brand) of their new customers and the destination (new brand) of some of their existing customers
Example in Exhibit 10.6, page 197