7-1 Product Decisions Product is critical element of marketing mix; Anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a want or need. –Physical object, service, person, place, organization, idea

7-2 Unique Characteristics of Services and Resulting Marketing Challenges Exhibit 7.6

7-3 Product Decisions Involve… Product mix- total group of products offered by company Product lines-group of closely related product items –Depth-number of items in line Brands-combination of name, symbol, term, or design that identifies specific product Packaging and labeling Positioning

7-4 Positioning Decision Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the target market’s mind.

7-5 Steps In The Positioning Process 1.Identify relevant set of competitive products serving target market 2.Identify the set of determinant attributes that define the “product space”. 3.Collect information from a sample of customers and potential customers about perceptions of each product on the determinants 4.Determine the product’s current positioning. 5.Determine the customers’ most preferred combination of determinant attributes. 6.Examine the fit between preferences of market segments and current position of products. 7.Write positioning statement to guide development of marketing strategy.

7-6 Positioning Map: Automobiles For Generation Yers More “Edgy” Less “Edgy” ExpensiveInexpensiv e Scion Kia Sorrento $13k Cube Civic $20K

7-7 Trout and Ries suggest a six-step question framework for successful positioning: 1. What position do you currently own? 2. What position do you want to own? 3. Whom you have to defeat to own the position you want. 4. Do you have the resources to do it? 5. Can you persist until you get there? 6. Are your tactics supporting the positioning objective you set?

7-8 How is the Ford Mustang positioned? How has Ford achieved this positioning? Has its positioning changed over time?

7-9 Differentiation Strategies – Create differences in the firm’s product offering that sets it apart from competing offerings based on –Product features –Advantages –Benefits Product Differentiation

7-10 Using Product Descriptors for Product Differentiation Exhibit 6.7

7-11 How is Venus positioned/differentiated from other razors?

7-12 Stages of the Product Life Cycle Exhibit 7.2

7-13 Marketing Strategy During the Product Life Cycle Exhibit 7.3

7-14 Begins when development is complete Ends when customers widely accept the product Marketing strategy goals during this stage: –Attract customers by raising awareness and interest –Induce customers to try and buy –Engage in customer education activities –Strengthen or expand channel and supply relationships –Build on availability and visibility –Set pricing objectives Introduction Stage

7-15 Be ready for sustained sales increases Rapid increase in profitability early in the growth stage that decreases at the end of this stage Length depends on nature of product and competitive reactions Two strategies: –(1) Establish a strong, defensible marketing position –(2) Achieve financial objectives Growth Stage (1 of 2)

7-16 Marketing strategy goals in this stage: –Leverage the product’s perceived differential advantages –Establish a clear product and brand identity –Create unique positioning –Maintain control over product quality –Maximize availability of the product –Maintain or enhance the product’s profitability to partners –Find the ideal balance between price and demand –Keep an eye focused on the competition Growth Stage (2 of 2)

7-17 Few, if any, new firms will enter the market Still an opportunity for new product features and variations Typically the longest stage in the product life cycle Maturity Stage (1 of 2)

7-18 Four general goals in this stage: –(1) Generate Cash Flow –(2) Hold Market Share –(3) Steal Market Share –(4) Increase Share of Customer Four options to achieve these goals: –(1) Develop a new product image –(2) Find and attract new users to the product –(3) Discover new applications for the product –(4) Apply new technology to the product Maturity Stage (2 of 2)

7-19 Two options: –(1) Attempt to postpone the decline –(2) Accept its inevitability Harvesting Divesting Factors to be considered during this stage: –Market segment potential –The market position of the product –The firm’s price and cost structure –The rate of market deterioration Decline Stage

7-20 Product-Mix Width Procter & Gamble Example Disposable Diapers DetergentsBar Soap ToothpastePaper Tissue PampersIvory SnowIvoryGleemCharmin LuvsDreftKirk’sCrestPuffs TideLavaBanner CheerCamaySummit 1100’s OxydolZest DashSafeguar d BoldCoast GainOlay Era

7-21 Product Lines and Product Mixes at Gillette Exhibit 7.1

7-22 Product Mix Decisions Def.: Set of all products and items that a particular seller offers to buyers. Decisions include selection of width, length, depth, and consistency

7-23 Product Line Decisions Line stretching –Downward – enter on the low end –Upward – enter on the high end –Two-way – enter both directions –Line-filling – add more items Line Modernization – update to reflect current trends, themes Line-Featuring-select one or a few items in the line to feature Line-Pruning – select item(s) to cut

7-24 What is a Brand? A brand is a name, term, sign, symbol, or design, or a combination of them intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

7-25

7-26 The World’s Twenty-Five Most Valuable Brands Exhibit 7.5

7-27 Branding Decisions Brand Name –Individual (General Mills- Bisquick, Gold Medal, Betty Crocker; P&G) –Blanket family name (Heinz, Campbell) –Separate family names (Sears-Kenmore for appliances, Craftsman for tools) –Company plus individual names (Kellogg Rice Krispies)

7-28 Product Category Line Category ExistingNew ExistingLine Extension – additional items in the same product category under the same brand name, new flavors, package sizes, added ingredients, e.g. Heinz Green Ketchup Brand Extension – Use existing brand name to launch new products in other categories, e.g. Hondo lawn mowers, marine engines NewMultibrands – Additional brand in the same product category, Pampers, Luvs New Brands – launches new products in new categories, e.g. Barbie Bedding Branding Decisions

7-29 Good Brand Names Distinctive Lack Poor Foreign Language Meanings Suggest Product Qualities Suggest Product Benefits Easy to Pronounce, Recognize, Remember –Zit (Chocolate from Germany) –Koff(Beer)

7-30 Packaging Decisions Design, materials, size Critical as marketing tool –Self-service –Company & brand image –Opportunity for brand innovation

7-31 Factors Influencing Product Strategy Decisions Classification of Products –Convenience –Shopping –Specialty –Unsought Products Product Life Cycle

7-32 Product Classification (1 of 3) Consumer Product Classifications –Convenience Products Routinely purchased, require little or not time searching Make them widely available

7-33 –Shopping Products Spend considerable time making the purchase; seek info on price, features, service Product differentiation very important Have strategy to guarantee and reduce consumer satisfaction

7-34 –Specialty Products Unique, shoppers expend considerable time, effort, money to acquire; accept no substitutes

7-35 –Unsought Products (1) Products of which consumers are unaware (2) Products that consumers do not consider purchasing until a need or emergency arises

7-36 New Product Development Six strategic product development options: –(1) New-to-the-world products (discontinuous innovations) –(2) New product lines –(3) Product line extensions –(4) Improvements or revisions of existing products –(5) Repositioning –(6) Cost reductions Customer perception of differentiation is critical

7-37 No sales revenue during this stage Components of the product concept: –An understanding of desired uses and benefits –A description of the product –The potential for creating a complete product line –An analysis of the feasibility of the product concept Customer needs should be discerned before developing marketing strategy Development Stage