Unit 3 By: Sydney Eaker, Lauren David, Parker Stone, Lauren Wallace, Sarah Neely, and Khiala Myers

Product/Service Management 3.01 A, B, and C

Product/Service Management A marketing function that involves obtaining, developing, maintaining and improving a product.

Factors affecting Product/Service Management Customer Needs and Wants Company Goals and Strategies Cost and Available Resources Competition Product Itself Government Regulation Stages in Life Cycle Business and Economic Trends

Benefits Offer products consumers want and company’s profits increase When developing the right products, a company can gain new customers When products are well managed there is less of a chance for failure

The Role in Marketing Affects positioning of product Improves product success Gives product an image Affects positioning of product -what image do you want to create about the product in the minds of consumers? 2. Improves product success 3. Gives product an image -what impressions do you have of certain brands

3 Main Phases Developing New Products Monitoring Existing Products Eliminate Weak Products Developing New Products 2. Monitoring Existing Products - Sales, Profit, Market Share Eliminate Weak Products

Product Life Cycle represents the stages that a product goes through during its life 4 Stages: Introduction Growth Maturity Decline

Product life cycle What are good examples of the stages?

Goals of Introduction Stage Increase Product Awareness Get the Customers attention with promotion Lots of Special Promotions

Growth Stage Customers are aware of product, sales increase Companies focus on customer satisfaction Competition starts from other companies

Maturity and Decline Stage The product’s sales level off. More money is spent on competition during this stage. Decline Sales start to decline. A company must decide to alter the product, discount, or discontinue product.

Technology Point-of-Sale Systems Interactive Touch Screen Computer Scanners at cash registers, touch screens, hand-held devices at checkout Interactive Touch Screen Computer -Example: Kiosks

Technology Interactive TV Customer Relationship Management Where TV is like a computer- order movies, click on Ragu for recipes, order food 4. Customer Relationship Management A customer can track an order. The CRM or business can track customer satisfaction

Technology Enterprise Resource Planning Systems Internet Software that allows all parts of the company’s management to be integrated 6. Internet Wi-Fi Search Engines E-mail E-commerce

Technology Mass customization is a technologically advanced method that allows businesses to produce products that are specialized for a very few customers. Mass customization is a technologically advanced method that allows businesses to produce products that are specialized for a very few customers. An example is Herff Jones being able to personalize a key chain for each school

Ethical Packaging 3.01 D

Ethical Product Packaging Why do you think companies package and label their products? Creates a good impression, Help sell product, and Communicate benefits

Packaging Concerns Product Safety Glass now plastic Tamper-resistant packages Airtight containers for foods Wasteful packaging Switching for spray cans and pumps

Label Information Must have name of manufactures Quantity of contents

Label Information Nutritional Information Health claims are the same on all products; light, fat free, etc.

Label Information Warnings on products like alcohol and cigarettes How to care for clothes

Ethical Labeling What happens when a company fails to inform customers about product risks? Company can get sued Harm to Customer Planned Obsolescence Making products that are known to not last long, or change, so that people will need to replace them

3.02

Competitive Advantage the set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition Multiple Products designed to integrate -Competitive Advantage

Positioning developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line or organization in general.

Purpose of Positioning Used to find a place for the product in the marketplace and distinguish the product from competitors Actual Position How the customers see the product The position and the actual position is the product are the same, IF MARKETING HAS BEEN SUCCESSFUL.

Relationship between the Target Market and Positioning The objective is for marketers to position their products to appeal to the desires and perceptions of a target market.

Relationship between Competition and Positioning It is important to use positioning to your advantage. You want to position your product so that customers will continue to purchase from you rather than the competition.   The pricing, promotion, product development, and distribution strategies are all planned with an eye toward the competition.

Market Position unique image of a product or service in a consumer’s mind relative to similar competitive offerings.

6 Bases For Positioning: Attibute- one way of positioning a product is to highlight a product feature or attribute. Price and Quality – this position strategy may stress high price as a sign of quality, or emphasize low price as an indication of value. Use or Application – stressing unique uses or applications can be an effective means of positioning a product.

6 Bases Cont. Product User – this positioning strategy encourages use of a product or service by associating a personality or type of user with the product. Product Classification – when positioning according to product class, the objective is to associate the product with a particular category of products. Competitor – sometimes marketers make an effort to demonstrate how they are positioned against the competitors that hold a strong market position.

Positioning Strategies revolve around 3 areas Consumer perception – are the images consumers have of competing goods and services in the marketplace. Competitors in the marketplace – The ideal situation is when consumers perceive a business’ products to be superior to its competitors’ products or services. Changes in the business environment – organizations need to be aware of changes in the business environment that might affect the position of their products or services.

Brand Name Should: Describe the product’s benefits and uses Be easy to read, pronounce, and remember Create appealing images Be distinctive Be adaptable Be legally available for use Be appropriate for packaging and advertising

Levels of Brand Loyalty Brand Recognition – is when consumers become aware of a brand and recognize the brand. Brand Preference – when consumers prefer to purchase a certain product brand based on their positive experience with the brand. Brand Insistence – when the consumer insists on “their” brand and will not accept substitutes.

Brand Strategies Brand Positioning – means the way consumers see the brand as compared to a competitive brand. Brand extension – in which an existing brand name is used for a new or improved product line. Starbucks extends its coffee line to include ice cream and candy bars.

Brand Strategies Cont. Brand licensing - allows one company to use its brand name, logo, or character for a fee. For example, NFL Teams allow logo to be used on merchandise Co-branding. – occurs when companies join forces to increase recognition, customer loyalty, and sales of both brands. For example, United Airlines and VISA combine brands for a credit card.

International Branding Marketers must research their brands to determine whether they would be acceptable in different countries. How would the brand be pronounced in Italian, Spanish, German, etc. Is the brand name culturally taboo in certain areas of the world?

Impact of Internet on Branding MUST have a web presence to be successful. Most companies must determine what URLs are available. They need to have web addresses that represent their brands. It is also more common for companies to promote their product using social media sites such as Facebook and Twitter.

Forms of Branding A brand is a design, name, symbol, term or word that distinguishes and identifies a company and/or products or services A corporate brand represents the entire company or organization For example, Coca-Cola, Ford, McDonalds, Kraft or Microsoft

Forms of Branding A product brand represents a specific product of a company or organization For example, Diet Vanilla Coke, Big Mac, or Windows XP

Forms of Branding A private distributor brand, also called a store brand For example, Radio Shack brand of batteries, Lowe’s brand of macaroni and cheese

Trade Character Personified symbol that represents the brand name

3.03

Product Mix All the types of products a company makes or sells Some companies have different brands for different markets Coca-Cola has different drinks for sparkling beverages, water, juice, performance, coffee, tea, and international flavors.

Reasons to Narrow Product Mix Product Width – number of different product lines CONTRACTING Ease on management Cost effective Simplicity Consistency

Reasons to Broaden Product Mix Product Width – number of different product lines EXPANDING Reach all markets Competitive advantage Ex: Red Lobster specializes in seafood, but offers chicken and steak to broaden their product mix.

Reasons to Deepen Product Mix Product Depth – number of items offered within each product line EXPANDING Variety Quantity Ex: Kohl’s carries various quantities of sizes, colors, & styles of Levi Jeans.

Reasons to Offer to Shallow Product Mix Product Depth – number of items offered within each product line CONTRACTING Cost effective Satisfy small markets

Importance of Product Mix Businesses must plan their product mix carefully because they cannot offer all the products that customers may want. They should be a profitable market for product offered by a company

Trading Up/Down Trading up: Adding a higher-priced product to a line to attract a higher-income market and improve the sales of existing lower-priced products. Trading down: Adding a lower-priced item to a line of prestige products to encourage purchases from people who cannot afford the higher-priced product, but want the status.

Positioning Product Mix Strategies Positioning – actions marketers take to create a certain image of a product in the minds of the customers In Relation to a Competitor In Relation to a Product Class or Attribute In Relation to a Target Market By Price and Quality Difficult to change

Ways Lines can be organized Product Line – group of closely related products manufactured by a business Product Item – specific model, brand, or size of a product within a line Ex: P&G has over 250 products within 21 product lines Dish care is a product line Cascade, Dawn, Joy, & Ivory are items

3.04

Physical Distribution Organizing and moving products through the channels Logistics = ordering, transporting, storing, handling and inventory control

Channel Functions Providing marketing information: Promoting products: Companies rely on market research to determine their target markets’ needs and wants Ex: small business producing handmade greeting cards Promoting products: Can be expensive Retailers often take a large portion of promotion responsibilities Ex: local supermarkets/discount stores

Channel Functions Cont. Contact Matching Negotiating with the customers: Different prices are paid by the wholesaler, retailer and consumers based on negotiation Physical distribution Financing and risk taking: Moving products through a channel costs money When channel members work together to finance activities and to assume financial risks, channels will be more effective

Tasks of Intermediaries-Retailer Much stronger personal relationship with the consumer Hold a variety of products Offer consumers credit Promote and merchandise products Price the final product Build retailer ‘brand’ in the high street

Tasks of Intermediaries-Internet Sell to a geographically disperse market Able to target and focus on specific segments Relatively low set-up costs Use of e-commerce technology (for payment, shopping software, etc) Paradigm shift in commerce and consumption

Horizontal Conflict Occurs between channel members at the same level Good, old-fashioned business competition Ex: two retailers selling pet supplies compete to sell to the same target market

Vertical Conflict Occurs between channel members at different levels within the same channel Producers and wholesalers, wholesalers & retailers, or producers and retailers

Dual Distribution A manufacturer may sell its products through multiple outlets at the same time: Toll-free phone system Company website Multiple retailers

http://smallbiztechnology.com/media/HPrp3000%20CompleteSolution.JPG http://www.kodak.com/ek/uploadedImages/G4_Kiosk_with_Collage.jpg http://www.gd-wholesale.com/userimg/21/3738i2/37-lcd-all-in-one-computer-tv-127.jpg http://www.herffjones.com/images/dmImage/SourceImage/Multi-Ring-Postcard-(10-511.jpg http://colleges.herffjones.com/college/pepperdine/assets/images/Pepperdine_PRODUCT_RING.jpg

http://www. savingwithshellie http://www.savingwithshellie.com/wp-content/uploads/2011/01/Vitaminwater.jpg http://allcarlogos.net/wp-content/uploads/2012/12/logos.gif http://nutritiondata.self.com/images/help/nfl_example.png http://ecx.images-amazon.com/images/I/61O%2BXHftyrL._SY300_.jpg http://today.uconn.edu/wp-content/uploads/2010/12/warninglabels_2lg.jpg