Chapter 11 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 11-1 Product and Service Strategies

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Objectives 1. What are products and services? What are their categories? 2. How do firms manage all of their products and services? What are the steps in the best development process for new products? 3. What is the product life cycle, and how is it used?

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Objective 1 What are products and services? What are their categories?

DEFINEDDEFINED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Products are items consumed for personal or business use. Services are activities that deliver benefits to consumers or businesses.

EXPLAINEDEXPLAINED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Products Product GoodService TangibleIntangible

EXPLAINEDEXPLAINED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Distinctions of a Service Intangible Inseparable Perishable Variability

EXPLAINEDEXPLAINED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Goods – Services Continuum Hair Brush Haircut Hair Transplant Pure Good Pure Service Hybrid

APPLIEDAPPLIED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Levels of Product Core Benefits Actual Product Augmented Product Brand Name Attributes Packaging Style Design Delivery Financing Service Warranty Customer Support

APPLIEDAPPLIED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 11-9 Consumer Product Classifications Shopping Specialty Unsought Convenience

APPLIEDAPPLIED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Industrial Product Classifications MRO Products Processed Materials and Services Components Equipment Raw Materials

APPLIEDAPPLIED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall New Product Development Idea Generation Idea Screening Concept Development Business Analysis Market Testing Commercialization

APPLIEDAPPLIED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Types of New Products Cosmetic (Incremental) Context (New Direction) Concept (Breakthrough) Web 1.0  2.0iPod / iTunes PC, airplanes

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 11- Objective 2 How do firms manage all of their products and services? What are the steps in the best development process for new products?

DEFINEDDEFINED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 11- A Product Portfolio is the collection of all products and services offered by a company.

APPLIEDAPPLIED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Sony U.S. Product Portfolio ComputerCameras Televisions Theatre Portable Electronics Sony Pictures Games VAIO -notebook -desktop Digital Home Disc Burner Location Free mylo Software Cyber-shot Alpha SLR HandyCam Printers Digital picture frames Photo services Televisions Home theatre systems Blu-ray Disc DVD players Home audio components Walkman Video MP3 Rolly Reader Digital Book Sony Cell Phone GPS Movies -Theatre -DVD -Blue-ray Television -Comedy -Drama -Daytime -Cartoons Music PlayStation -PS3 -PS2 -Portable

APPLIEDAPPLIED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Sony U.S. Product Portfolio Product Mix Width Product Mix Depth

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 17 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 11- Objective 3 What is the product life cycle, and how is it used?

DEFINEDDEFINED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Product Life Cycle is a model describing the evolution of a product’s sales and profits throughout its lifetime.

EXPLAINEDEXPLAINED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product Life Cycle

EXPLAINEDEXPLAINED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Introduction Stage Sales Volume Low Product Features Basic Retail Outlets Limited Marketing Goal Trial

EXPLAINEDEXPLAINED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Growth Stage Sales Volume Growing Product Features Increasing Retail Outlets Increasing Marketing Goal Preference

EXPLAINEDEXPLAINED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Maturity Stage Sales Volume Flat Product Features New Retail Outlets Maximum Marketing Goal Preference

EXPLAINEDEXPLAINED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Decline Stage Sales Volume Declining Product Features Reduced Retail Outlets Reduced Marketing Goal Survival

APPLIEDAPPLIED Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Diffusion of Innovation Innovators Early Adopters Early Majority Late Majority Laggards 2.5% 13.5%34% 16%

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 25 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 11- Visual Summary