Prerequisites for the product policy: -Marketing strategy: iutenligne resource no Marketing objectives: iutenligne resource no Marketing target: iutenligne resource no Positioning of the offer: iutenligne resource no Guidelines to managing the marketing mix: iutenligne resource no. 268 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux 1

Objectives in terms of content: Define:  the notion of product,  the stages in the life cycle of the product,  a product portfolio,  a product range and its size,  a brand and its functions,  a new product and the stages in its sales launch. 2 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Objectives in terms of expertise: Know how to identify the different levels of the product, Be capable of detecting the life cycle phase in which the product is situated, Understand the logic behind the construction of a product portfolio, a range and a brand, Recognize the stages in the launch of a new product and the issues they raise. Laurence Chérel - Catherine Madrid Tech de Co Bordeaux 3

The place of the product policy -The first variable in the marketing mix 4 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Definition of the product The solution chosen by the company to fulfil an expressed or latent consumer need. 5 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

From tangible product to generic product 6 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux Generic product global or augmented product Tangible product Intrinsic components Product design, quality, brand, packaging Delivery, installation, guarantee, after-sales, training

The life cycle of the product -The operating principle -The consequences: - sales evolution, - management of the mix, - level of profit. 7 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

The life cycle curve 8 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux Sales Ideal life cycle curve Theoretical life cycle curve High costs, lower profits Beginning of profitability Price competition Sell-off of stocks Introduction Growth Maturity Decline Time

Limitations of the life cycle - Non-predictive model - Subjective definition of the length of the phases - The shape of the curve varies according to the product 9 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux Double life cycle sequence Growth-decline-stabilization cycle Renewed cycle Styles Fashions Gadgets Time

Advantage of the life cycle -To attract attention to a product’s limited life span -To allow an analysis of the product life cycle in relation to: - changes in the market - the competition, etc. 10 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Launch phase: managing the mix - Product: few versions, no major modifications - Price: define the price policy logic - Distribution: set-up in the points of sale - Communication: publicize the product, high budget 11 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Growth phase: managing the mix -Product: few or no changes - Price: few or no changes -Distribution: broaden the distribution circuits - Communication: maintain the effort 12 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Maturity phase: managing the mix - Product: minor modifications and extension of the range - Price: riposte to the competition - Distribution: occupy points of sale to the maximum to check competitive intensity - Communication: maintain the image 13 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Decline phase: managing the mix - Product: no expensive modifications - Price: one-off special offers or frequent price reductions - Distribution: abandon the most poorly- performing points of sale -Communication: possible promotional actions 14 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Managing a product portfolio -A set of products managed by the company -Search for a permanent balance between: - a level of cover of the market - a level of market share - a level of profitability - a level of sales, etc.  Adaptation of product ranges 15 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

The product range Definition: A set of products linked together coherently by components such as the technology or the usage and which therefore form the same category. 16 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Range size -Width of a range: -Number of product lines ( products that come from the same technical or commercial base) -Depth of a range: -Number of products within each product line - Length or extent of a range: -The sum of the products in all the lines 17 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Example: Candia Grandlait 18 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux Range width: 5 product lines Depth: Semi-skimmed = 5 ref. Whole = 3 ref. Organic = 3 ref. "Léger&Digeste" = 1 ref. Fresh milk= 6 ref. Extent = 18 products Source:

Interpreting the extent of a range Based on Ferrandi J-M, Lichtlé M-C, (2014), Marketing, Dunod, p Laurence Chérel - Catherine Madrid Tech de Co Bordeaux Width Depth LowHigh LowNicheDifferentiation HighSpecializationDomination

The brand - A set of distinctive components of a product, range or company that enable customers to detect the offer proposed. - An essential differentiation tool made up of several components : name, logo, signature, music, character or icon 20 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

The functions of the brand -Location -Practicality -Specificity -Guarantee -Personalization -Fun Based on Kapeferer J-N, Laurent G, (1992), “La sensibilité aux marques”, Editions d’organisation. 21 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Managing a brand portfolio -Brand-product -Brand-range -Umbrella brand source: ombrelle-range / -Brand-guarantee 22 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Are brands in danger? Threats? -Changes in consumer habits distributor brands consumer behaviour: the role of price, information on the products -Company errors Spread of umbrella brands Over-exploitation of a brand’s potential Brand overkill 23 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

The future of brands… Distinction: - Established brands * legendary * significant * cultural exceptions - Condemned brands * followers * opportunistic * bulimic 24 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Towards new products Context of innovation: - market fragmentation, - reduction in margins and profits, - complexity of regulations, - development costs, - increasingly short product life cycles 25 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Sources of ideas for new products  Internal sources: - sales force, R&D, creativity groups, …  External sources: - customers, distributors, crowdsourcing, … 26 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

In collaboration with: Social and human sciences –Economics –Sociology. Laurence Chérel - Catherine Madrid Tech de Co Bordeaux 27

Defining a new product. New packaging,. Improvement of an existing product,. New distribution method for an existing product,. Repositioned product,. Totally new product,. Etc. 28 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Stages in the launch of a new product 29 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux Search for and screen ideas Define the product characteristics Define the marketing strategy and carry out a financial evaluation Actual launch

Types of ideas for new products linked to a new technology linked to changes in consumer habits Based on Ferrandi J-M, Lichtlé M-C, (2014), Marketing, Dunod, p.140 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux 30 New technologyFormer technology New consumer habits Breakaway innovation Behavioural innovation Former consumer habits Technological innovation Incremental innovation

Screening ideas Two main methods: - analytical evaluation - concept test 31 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Defining the product characteristics - Product tests - Packaging tests - Brand name tests 32 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Defining the marketing strategy and carrying out a financial evaluation -Marketing strategy: -Marketing goals, -Target, -Positioning, -Marketing mix. -Financial evaluation with a view to: -The investment required, -Production and marketing costs, -The provisional sales volume and market share, -Profitability. 33 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

The actual launch -Production, -Implement the marketing strategy, -Monitor and check the results 34 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

Process for adopting innovation 35 Laurence Chérel - Catherine Madrid Tech de Co Bordeaux Cumulative frequency of individuals who have adopted the innovation Number of adoptants Time Early adoptants Innovators Early majority Late majority Latecomers Time Based on Rogers, 1995

The factors that influence innovation Endogenous factors: –Relative advantage of the innovation –Compatibility –Simplicity and ease of use –Possibility of testing –Observable results Exogenous factors Laurence Chérel - Catherine Madrid Tech de Co Bordeaux 36

To summarize: Product policy = the heart of the company’s operational marketing Need to develop the product during its life so that it fits in with the expression of the positioning of the offer Competitive environment  innovation as a Key Success Factor in adapting to changes in demand Laurence Chérel - Catherine Madrid Tech de Co Bordeaux 37

Further reading: VAN LAETHEM N., MORAN S. (2014) – La boîte à outils du Chef de produit. - Paris: Dunod, 2 nd edition. GOTTELAND D., HAON C. (2005) –Développer un nouveau produit ; Méthodes et outils. – Paris: Pearson Education, 258 pages. Laurence Chérel - Catherine Madrid Tech de Co Bordeaux 38

Knowledge check quiz Laurence Chérel - Catherine Madrid Tech de Co Bordeaux 39

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