Principles of Marketing Lecture-21

Summary of Lecture-20

Individual Product Decisions

Product Attributes Branding Packaging Labeling Product Support Services

QualityQuality FeaturesFeatures DesignDesign

Branding

Brand Development

Line Extension Multibrands Brand Extension New Brands Brand Name ExistingNew Product Category Existing New Four Brand Strategies

Today’s Topics

Product (cont..)

Short and simple Suggestive of product benefits Legally available No negative imagery Easy to spell, read, and pronounce Adaptable for international markets Adaptable to packaging/labeling needs Adaptable to any advertising medium A Good Brand Name Is... A Good Brand Name Is...

Generic name: A brand name that has become a generally descriptive term for a class of products. – If this occurs, the original owner loses exclusive right to the brand name (which is very bad for marketers). – Examples: nylon, aspirin, escalator, kerosene, etc.

Packaging

 Activity of designing and producing the container or wrapper for a product.  Packaging used to just contain and protect the product.

Goals of Packaging

Protection against damage, spoilage, tampering etc. Assistance in marketing the product Cost effectiveness (and good for the environment)

Labeling

Printed information appearing on or with the package. Performs several functions: – Identifies product or brand – Describes several things about the product – Promotes the product through attractive graphics.

Universal Product Code (UPC)  A bar code on a product’s package that provides information read by optical scanners.  UPC codes provide several advantages: labor saving, improve inventory control, and help with marketing research

PromotesIdentifies Competitive Advantages Describes Sales Tasks Product Safety Packaging Labeling Packaging Labeling

Product - Support Services

Companies should design its support services to profitably meet the needs of target customers and gain competitive advantage.

How?

Step 1. Survey customers to assess the value of current services and to obtain ideas for new services.

Step 2. Assess costs of providing desired services.

Step 3. Develop a package of services to delight customers and yield profits to the company.

Product Line Strategies

Product Line Extensions Stretching Adding new items to line Filling Adding sizes or styles Downward Upward Contracting a Product Line Dropping items Contracting a Product Line Dropping items Two-way

New Product Development

The development of original products, product improvements, product modifications, and new brands through the firm’s own R&D efforts.

Major Stages in New-Product Development

Idea Generation Idea Screening Concept Development and Testing Marketing Strategy Business Analysis Product Development Test Marketing Commercialization

Stage 1: Idea Generation – Internal idea sources: R & D Sales force – External idea sources: Customers, competitors, distributors, suppliers

Sources of New- Product Ideas

 Employees  Customers  Resellers  Suppliers/ vendors  Competitors  Advertising agencies  Marketing research firms  Other manufacturers  International

Stage 2: Idea Screening – Product development costs increase substantially in later stages. – Ideas are evaluated against criteria; most are eliminated.

Stage 3: Concept Development and Testing – Product concepts provide detailed versions of new product ideas. – Concept tests ask target consumers to evaluate product concepts.

Stage 4: Marketing Strategy Development – Strategy statements describe: The target market, product positioning, and sales, share, and profit goals for the first few years. Product price, distribution, and marketing budget for the first year. Long-run sales and profit goals and the marketing mix strategy.

Stage 5: Business Analysis Sales, cost, and profit projections Stage 6: Product Development Prototype development and testing

Stage 7: Test Marketing – Standard test markets – Controlled test markets – Simulated test markets

Standard Test Market Full marketing campaign in a small number of representative cities. Standard Test Market Full marketing campaign in a small number of representative cities. Simulated Test Market Test in a simulated shopping environment to a sample of consumers. Simulated Test Market Test in a simulated shopping environment to a sample of consumers. Controlled Test Market A few stores that have agreed to carry new products for a fee. Controlled Test Market A few stores that have agreed to carry new products for a fee.

Stage 8 Commercialization

New-Product Development Management

Key Issues Top Level Support Market-Guided R & D Integration & Coordination Authority

Enough for today...

Summary

Packaging

Labeling

Companies should design its support services to profitably meet the needs of target customers and gain competitive advantage. Product - Support Services

Product Line Strategies

New Product Development

Idea Generation Idea Screening Concept Development and Testing Marketing Strategy Business Analysis Product Development Test Marketing Commercialization

Next….

– New Product Development (cont..) – Product Life Cycle (PLC)

Principles of Marketing Lecture-21