Product/Service Management Standard 5

Product/Service Management PRODUCT/SERVICE MANAGEMENT: A marketing function that involves obtaining, developing, maintaining, and improving a product or service mix in response to market opportunities.

Product Life Cycle PRODUCT LIFE CYCLE: The stages through which goods and services move from the time they are introduced on the market until they are taken off the market. -MBA Research, 2013 1939 2012

Introduction Stage (1st step) Product branding and quality level is established patents and trademarks are obtained. Pricing may be low to build market share rapidly, or high skim pricing to recover development costs.

Introduction Stage Distribution is selective (a few stores) until consumers show acceptance of the product. Snack wrap -- example Promotion is aimed to build product awareness and to educate potential consumers about the product.

Growth Stage (2nd) Product quality is maintained and additional features and support services may be added. Pricing is maintained as the firm enjoys increasing demand with little competition.

Growth Stage Distribution channels are added as demand increases and customers accept the product. Get the Air Jordan 5 Retro “Laney” when they drop on November 2nd at Nike.com and the following Nike locations (21Mercer, Chicago, Boston, Seattle, New York, Los Angeles, San Francisco, Las Vegas, Lenox, Georgetown, North Park, Scottsdale, Mall of America, Portland, Roosevelt Field and Santa Monica) Promotion is aimed at a broader audience.

Maturity Stage (3rd) At maturity, the strong growth in sales diminishes. Competition may appear with similar products. Product features may be enhanced to differentiate the product from that of competitors. Pricing may be lower because of the new competition. Distribution becomes more intensive and incentives may be offered to encourage preference over competing products. Promotion emphasizes product differentiation.

Decline Stage (4th) As sales decline, the firm has several options: Maintain the product, possibly rejuvenating it by adding new features and finding new uses. Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche segment.

Decline Stage Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.

Market Share MARKET SHARE: A company’s percentage of the total sales volume generated by all companies that compete in a given market. -Marketing Essentials, 2012 Oreo is the world‟s favorite cookie and the best-selling cookie brand of the 21st century, with $1.5 billion in global annual revenues. Kraft Foods is the proud custodian of Oreo, and Oreo is one of the company‟s 12 “billion-dollar” brands.

Market Position MARKET POSITION: The relative standing a competitor has in a given market in comparison to its other competitors. -Marketing Essentials, 2012

Product Mix Product Mix: The assortment of goods and services a company sells -Marketing Essentials, 2012

Product Line Product line: group of closely related products manufactured or sold by a business. Example: All of the car models produced by the Lincoln division of the Ford Motor Company Depth- the number of items offered within each product line Width- number of different product lines a business manufactures or sells

Product Bundling Package or bundle 2 or more different goods/services for one price Example: purchase airline ticket– discount on rental car or hotel Price Bundling: 2 or more similar products for one price.

Idea Generation Methods BRAINSTORMING: A creative-thinking technique involving the identification of as many different ideas as possible during a certain time frame; can be done by one person but is used most often in a group setting. (idea incubators) -MBA Research, 2013 Crowdsourcing: the practice of obtaining needed services, ideas, or content by soliciting contributions from a large group of people and especially from the online community rather than from traditional employees or suppliers (M&M New Colors) -Merriam-Webster.com, 2013 Mind Mapping: A creative-thinking technique that involves the generation of ideas by associations. Screening: A process where new ideas are evaluated and used to find the products that deserve further study. Sometimes involves concept testing with consumers.. A lot of products are rejected in the screening stage.