Product Planning: Taking the Next Step Today, successful product management is more important than ever. Products are created, grow, reach maturity, and decline at faster and faster speeds. LEXUS HYBRID

Steps in Managing Products

Using Product Objectives to Decide on a Product Strategy Objectives must be measurable, clear, unambiguous, and feasible and must indicate a specific time frame. Objectives and strategies for individual products: --Successful introduction of new products --Breathing new life into mature products MINIUSA.COM

Objectives for Single and Multiple Products

Objectives and Strategies for Multiple Products Product line: Firm’s total product offering designed to satisfy a single need or desire of target customers Product mix: The total set of all products a firm offers for sale

Objectives and Strategies for Multiple Products Product-Line Strategies Full-line versus limited-line strategies Upward, downward, or two-way line stretch Filling out or contracting a product line Product-Mix Strategies Width of product mix: the number of different product lines produced by firm

Group Activity Think of your college or university as an organization that offers a line of different educational products. Develop alternatives it might consider and describe how each might be accomplished and evaluated: Upward product stretch Downward product stretch Two-way stretch Filling-out strategy

Quality as a Product Objective Product quality: overall ability of product to satisfy customer’s expectations Total Quality Management (TQM): company-wide dedication to the development, maintenance, and continuous improvement of all aspects of the company’s operations MALCOLM BRIDGE AWARD WINNERS!

ISO Quality Standards ISO 9000: voluntary standards for quality management set by International Organization for Standardization (ISO) ISO 14000: concentrate on environmental management Six Sigma methodology: no more than 3.4 defects per million (getting it right 99.9997% of the time)

Adding Quality to the Marketing Mix Product: improve customer service Place: involve suppliers and customers in improving on-time delivery Price: lower costs and improve service at same time Promotion: give customers information when they want and need it (not when it’s convenient for firm)

Dimensions of Product Quality

Group Activity Conduct a brief focus group of students and find out whether consumers complain to each other about poor product quality. --Have they ever used a Web site to express displeasure over product quality? --If so, what was the result?

Discussion Quality can mean different things for different products. What does it mean for the following? Automobile Pizza Running shoes Hair dryer Deodorant College education

Creating Product Identity: Branding Decisions Brand: a name, term, symbol, or any other unique element that identifies one firm’s product and sets it apart from the competition.

A Good Brand Name: Creates a positive connotation. Is memorable. Positions a product by conveying image or personality (Ford Mustang) or describing how it works (Drano). Is easy to say, spell, read, and remember. Fits the target market, product benefits, customer’s culture, and legal requirements.

Trademarks Legal term for a brand name, brand mark, or trade character --Trademarks legally registered by a government obtain protection for exclusive use in that country. --Symbol in the U.S.: ® --Common-law protection: the firm has used the name and established it over a period of time.

The Importance of Branding Brand equity: a brand’s value to its organization over and above the value of the generic version of the product Brand meaning: the beliefs and associations a consumer has about the brand

The Brand Equity Pyramid

The Importance of Branding (cont’d) Brand equity provides competitive advantage: the power to capture and hold onto a larger share of the market and to sell at prices with higher profit margins Brand extensions: new products sold with the same brand name

Discussion Brand equity means a brand enjoys customer loyalty, perceived quality, and brand-name awareness. --What brands are you loyal to? --What element of the product creates brand loyalty and thus brand equity?

Branding Strategies Individual brands vs. family brands National and store brands Generic brands: no branding

Branding Strategies (cont’d) Licensing: one firm sells the right to use a legally protected brand name for a specific purpose and for a specific period of time Co-branding: combines two brands

Creating Product Identity: Packaging and Labeling Decisions Package: the covering or container for a product that provides product protection, facilitates product use and storage, and supplies important marketing communication

Designing Effective Packaging Effective packaging considers: Packaging of other brands in same product category Choice of packaging material Environmental impact Shape and color Graphic information

Labeling Regulations Federal Fair Packaging and Labeling Act of 1966 aims at making labels more helpful to consumers by providing useful information. Food and Drug Administration requires food labels to tell how much fat, saturated fat, cholesterol, calories, carbohydrates, protein, trans fats, and vitamins are in each product serving.

Organizing for Effective Product Management Management of Existing Products Brand managers Product category managers Market managers

Organizing for New-Product Development Venture teams: specialists in different areas who work together to focus on new-product development “Skunk works”: small and isolated group in remote location that functions with minimal supervision