Product Planning – Involves making decisions about the production & sale of a businesses products Decisions relate to: Design  Packaging Labeling  Warranty Branding  Product mix Deleting old products Creating campaigns

Product Mix – Includes all the different products that a company makes or sells Large manufacturer may have hundreds of products in one product mix

Product Line – Group of closely related products manufactured and/or sold by a business Example: Cereral Pop Tarts Waffles

Product Items – Specific model, brand, or size of a product within a product line Example:

Product Width – # of different product lines a business manufacturers or sells Example: Line #1 – Cereal Line #2 – Crackers Line #3 – Pop tarts Line #4 – Waffles Line #5 – Fruit Snacks Line #6 - Cookies

Product Depth – # of product items offered within each product line Example: Cereal

4 PRODUCT MIX STRATEGIES DEVELOP NEW PRODUCT EXPAND PRODUCT LINE MODIFY PRODUCT LINE DELETE PRODUCT LINE

DEVELOPING NEW PRODUCT SIX STEPS GENERATE IDEAS CUSTOMERS, COMPETITORS, EMPLOYEES SCREEN IDEAS IDEAS ARE SCREENED AND EVALUATED; ELIMINATION; LEFT WITH ONE IDEA DEVELOPING TAKES PHYSICAL SHAPE – PROTOTYPE IS CREATED MILLIONS SPENT ON THIS STAGE CAN BE LONG DELAYS TESTING TESTED IN ONE GEOGRAPHICAL AREA TESTED IN LABS/BY POTENTIAL CONSUMERS INTRODUCING PRODUCT COSTS ARE HIGH; ADVERTISED, DISTRIBUTED, TRAINING EVALUATE CUSTOMER ACCEPTANCE STUDY SALES; PREPARE FOR FUTURE CHANGES

2. EXPAND PRODUCT LINE BUILD ON PRODUCT IMAGE SONY = INNOVATOR INCREASE SALES/PROFITS APPEAL TO NEW MARKETS

3. MODIFY PRODUCT LINE PRODUCT MODIFICATION ALTERATION IN A COMPANY’S EXISTING PRODUCT NEW SIZES, COLORS, SHAPES LOW RISK, QUICK, EASY, INEXPENSIVE

4. DELETE PRODUCT LINE OBSOLETE CHANGING INTERESTS/TECHNOLOGY LOST APPEAL TASTES CHANGE POGS, CRAZY BONES, TAMAGACHI PETS DOES NOT MATCH COMPANY OBJECTIVE SEARS – SOLD CALDWELL BANKER MAKE ROOM FOR OTHER PRODUCTS LIMITED SHELF SPACE NO LONGER PROFITABLE FAST MOVING/PROFITABLE PRODUCTS PET ROCKS CONFLICTS WITH OTHER PRODUCTS IN SAME PRODUCT LINE WHITE CLOUD COMPETING WITH CHARMIN