Chapter 30 Product Planning
Product Planning Making decisions about those features that are needed to sell a business’s products, services, or ideas Packaging, labeling, branding, warranties
Product Mix All the different products that a company makes or sells All items sold by a particular retailer Image, target market, and business objectives determine the product mix
Exercise With a neighbor, decide on ten products you would want to offer if you opened your own gas station
Product Lines and Items Product Line – a group of closely related products manufactured or sold by a business Product Item – a specified model, brand, or size of a product within a line
Product Width and Depth Product Width – the number of different product lines a business has Product Depth – the number of product items offered within a product line
Think and respond Think of a product line. What are product items in that line? What is the product depth of the company? What is the product width? I will call for volunteers to share answers.
Product Mix Strategies Developing New Products Developing Existing Products Deleting a Product or Product Line
Developing a New Product Generating Ideas Screening Ideas Developing a business proposal Developing the product Testing the product Introducing the product Evaluating customer acceptance
The Hunchpack A combination coat/backpack Go through the six steps and decide potential snags Generate Ideas, Screen Ideas, Develop the Product, Test the Product, Introduce the Product, Evaluate Customer Response Also brainstorm ideas to make the product a success I will make this product one day and I may use your ideas to succeed…thanks
Developing Existing Products Line extensions – expand offerings of popular items Product modifications – change colors, sizes, features, or styles
Deleting a Product or Product Line Obsolescence Loss of Appeal Conflict with current objectives Replacement with new products Lack of Profit Conflict with other products in line
Getting the Axe Think of a product that is no longer available Why do you think it went away? Obsolescence, loss of appeal, lack of profit, conflict with other products, etc.
Product Life Cycle 4 stages – Introduction, Growth, Maturity, and Decline
Introduction Stage Focus is on promotion and production Looking to draw in new customers Special promotions, incentives
Growth Stage Advertising focuses on customer satisfaction Competing products on the market Introduce new models, features to continue growth
Maturity Stage Sales level off or slow down Product is widely owned Advertising expenses rise to try to draw in more customers
Decline Stage Sales fall Profits may reach the point where product is a liability Rather than discontinue a product, companies may license, discount, regionalize, or alter the product
Category Management Process that involves managing product lines as individual business units Manufactures work closely with retailers to maximize profits within their category Planograms are computer-developed diagram that show product shelf placement