Journal Entry: b Think of one new product on the market and describe an ad (TV, Radio, Internet, Magazine) that you have seen for the product. What attracted you to the advertisement? What didn’t appeal to you?
Why is Product Planning Important? Mrs. Stortzum Part 2
How do companies manage the product life cycle? b Product life cycle-represents the stages that a product goes through in its life. b Introduction Stage(least profitable due to high costs) Focus on promotion & production, create awarenessFocus on promotion & production, create awareness Goal is to draw attention to the new productGoal is to draw attention to the new product b Growth Stage(increasing sales and profits) Focus on customer satisfactionFocus on customer satisfaction Pressure from competitionPressure from competition Modifications, new features, offer more than competitionModifications, new features, offer more than competition
Managing the Product Life Cycle b Maturity Stage(most profitable, sales level off) Focus fighting off competitionFocus fighting off competition decisions based on cost versus profitdecisions based on cost versus profit b Decline Stage(sales fall, profits smaller than costs) How long will company continue to support a losing product? Because of money committed most are reluctant to drop a productHow long will company continue to support a losing product? Because of money committed most are reluctant to drop a product
Decline Stage Options b Besides dropping the product: sell or license the product recommit to the product line discount the product regionalize the product modernize or alter the product offering
Product Life Cycle Marketing Essentials Chapter 30, Section 30.2
Product Positioning b The efforts a business makes to identify, place and sell its products in the marketplace b Position strategies by price and quality (Ford Focus vs. Mustang)by price and quality (Ford Focus vs. Mustang) by product features and benefitsby product features and benefits by unique characteristicsby unique characteristics in relation to competitionin relation to competition in relation to other products in a Linein relation to other products in a Line
Product positioning b Think about position of the following products: b Southwest Airlines b Wii b Dove chocolate b Hershey chocolate
Category management b Manage each category as an individual business b May include products that have the same target market and distribution channels b Can also be done on a store by store basis b Planograms-computer developed diagrams showing retailers how and where to display products on shelves Frito-Lay