Chapter 10

Life Cycle ManagementFrom cradle to grave management of the

productFine-tuning strategyDefending against competitorsContinuously innovating the product, if

possible

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)

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

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)

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

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

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

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

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

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