Principles of Marketing What are we doing? Product/Service Management

Define 7 Functions using 1 word: channel management = distribution marketing-information management = data Pricing = price product/service management = lifecycle Promotion = communication Selling = personal (1 on 1) Financing = capital (investment, backing)

Marketing IS EVERYWHERE!

Product Service Management – Designing, producing, maintaining, improving, and obtaining products to meet customer’s wants and needs

Product/Service Management Helps to determine which products a business will offer and in what quantities Aids in determining and developing a company’s/product’s image Provides direction for other marketing activities based on changes in a product’s life cycle

Product Planning Making decisions about features that are needed to sell a business’s products, services or ideas Product Features Packaging Labeling Branding Services Warranties Water bottle example: How much would you pay for a deer park bottle? Smart water? Fiji? Why would you pay more for one than the other?

Product Planning Allows a business to Coordinate existing products and features Add new products Delete products that are no longer attracting customers

Product Mix KRAFT Company: All the different products that a company makes or sells KRAFT Company: Kraft Kool-Aid Nabisco Maxwell House Oscar Mayer Post Cereal products

Product Mix another example SC Johnson

Product Mix another example Procter and Gamble

Product Mix To determine a company’s product mix, a business needs to identify: Its target market Its competitors The image it wants to project The product mix must be periodically reviewed to determine if products need to be expanded, modified, decreased, or eliminated

Product Lines Product line – a group of closely related products sold by a business

Product Items Product item – a specific model, brand, or size of a product within a product line

Product Width and Depth The width and depth of a company’s product offerings defines the product mix

Product Width The number of different product lines sold by one manufacturer

Product Depth From one brand name The number of product items within each specific product line From one brand name depth

Gillette Product Mix Width vs. Depth Oral Care Blades & Razors Personal Care Batteries Appliances Depth

Product Mix Strategies Develop completely new products for existing lines Drop existing product to allow room for new products Expand or modify existing product lines

Developing New Products 7 Key Steps to New Product Development 1. Generate idea – focus groups, idea sessions 2. Screening ideas – evaluated for potential conflicts and profitability 3. Developing a business proposal – production requirements are considered 4. Developing the product – takes on a physical shape, develop marketing strategy

Developing New Products 7 Key Steps to New Product Development 5. Testing the product with consumers – test on small groups 6. Introducing the product (commercialization) – must introduce product to public ASAP 7. Evaluating customer acceptance – study sales information

Developing Existing Products Companies constantly evaluate their product mix to see if they can further expand their product lines or modify existing products Helps to reach new markets and increase overall sales Can be very expensive Increased inventory More promotion Additional storage and distribution

Introducing new product items, or services to meet customer needs Line Extensions Introducing new product items, or services to meet customer needs

Product Modifications An alteration in a company’s existing products

Deleting a Product There are several reasons why a company may decide to eliminate a product item or line Obsolescence Loss of Appeal Change in company objective Replacement with new products Lack of profit Conflict with other products in the line Why do you think the Tiger Gatorade was eliminated by Gatorade?