1. Product/Service Management
MARKETING 3.01
Product/Service
Management

2. Product/Service Management
A marketing function that involves obtaining, developing, maintaining, and improving a product or service mix in response to market opportunities.

3. Product/Service Management
Factors affecting Product/Service Management:
1. Customer Needs and Wants
2. Company Goals and Strategies
3. Cost and Available Resources
4. Competition
5. Product Itself
6. Government Regulation
7. Stages in Life Cycle
8. Business and Economic Trends

4. Product/Service Management
What are Benefits to Product/Service Management?
-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

5. Product/Service Management
Who is responsible for managing product/service management?
-Several employees of a company, certain departments, 1 employee or just the boss. Normally depends on size of company.
3 Main Phases of Product/Service MGMT:
1. Developing New Products
2. Monitoring Existing Products
- Sales, Profit, Market Share
3. Eliminate Weak Products

6. Types of Goods Sold Staple Goods
Items that are constantly in demand by customers
Items are used consistently replaced regularly by consumers
Easy to predict sales because of consistency in demand
Examples: Toothpaste, milk, bread, butter, etc..

7. Types of Goods Sold Convenience Goods
Small, inexpensive items that customers purchase frequently
Commonly sold at convenience stores, grocery stores, or gas stations.
Examples: Snack foods, pain relievers, beverages

8. Types of Goods Sold Shopping Goods:
Goods that are more expensive & require more research prior to buying
Consumers usually want to be able to compare & contrast this item with others
Limited to extensive decision-making is required
Examples: Automobile, appliances, furniture, & homes

9. Types of Goods Sold Fashion Goods Items that constantly change.
Items that are only popular for a certain amount of time
NOT just clothing items. ANY item that goes in and out of style is an example
Examples:
Toms, Class of 2013 Shirts, Chubbies, etc…
What is an example of something not clothing related?

10. Types of Goods Sold Seasonal Goods
Items that are only popular at a certain time of year
May focus on seasons or holidays
Examples:
Heavy coats in the winter & swimsuits in the summer
Boxed chocolate around Valentine’s Day

11. Types of Goods Sold Specialty Goods
Goods that are considered unique by buyers
Customers will go to great lengths to buy them
Price is almost never an issue
Purchase is based off of:
Quality, style, scarcity, &/or personal preference
A specialty good can be a shopping good for one person and a specialty for someone else
Examples:
Louis Vuiton Bag from flagship store in Paris, France
Men’s Suits
Expensive Watches

12. Types of Goods Sold Unsought Goods
Goods that are not actively sought out by customers, but is instead purchased due to fear, precaution or need
Marketers tend to actively and aggressively market such goods in order to arouse interest in them
Examples:
Fire Extinguishers
Encyclopedias

13. Types of Goods Sold Industrial Goods
Industrial goods usually produce consumer goods
Goods purchased by an individual or organization in order to modify them or simply distribute them to the ultimate consumer in order to make a profit or meet some other objective
Tends to be items directed at organizations, businesses, and other institutions, rather than at the individual end user of a product
Examples:
Lumber
Fixed Equipment

14. Product Life Cycles

15. Product Life Cycle
Product Life Cycle represents the stages that a product goes through during its life.
There are 4 Stages of Life Cycle:
1. Introduction
2. Growth
3. Maturity
4. Decline

16. Stage 1 of Product life cycle – Introduction of the Product
Product is launched.
Can be risky
The length of the introduction stage varies according to the product.
If the product is technological and receives acceptance in the market, it may come out of the introductory phase as soon as it is launched.
Whereas if the product is of a different category altogether and needs market awareness, it may take time to launch.

17. Characteristics of Introductory Stage
Higher investment, lesser profits
Least profitable stage
Minimal Competition
Efforts are focused on promotion & production
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18. Product Life Cycle What are the goals of the Introduction Stage?
To increase product awareness
Get the customer’s attention thru promotion
Lots of special promotion
Example:
Smartv’s

19. Product starts showing better returns on investment.
Product Life Cycle
During Growth Stage:
Customers are aware of product, sales increase
Product starts showing better returns on investment.
Companies focus on customer satisfaction
Competition starts from other companies

20. Growth (CONT.)
This is a stage where competition may step in to squash the product before it has completely launched.
Any marketing mistakes done at this stage affect the product considerably as the product is being exposed to the market and bad news travels fast.
Thus special care has to be taken in this stage to ensure competition or bad decisions do not affect the growth stage of the product.

21. Characteristics of Growth Stage
Product is successfully launched
Demand increases
Distribution increases
Competition intensifies
Company might introduce secondary products or support services.
Better revenue generation and Return On Investment

22. Stage 3 of Product Life Cycle Maturity Stage
One of the problems associated with maturity stages in a technologically advanced environment is the problem of duplication.
Not only is the product available in duplicate markets, but also there are several competing products which arise with the same features and capabilities.
As a result, the product becomes less attractive.

23. Characteristics of Maturity Stage
Competition is high
Product is established and promotion expenditures are less
Little growth potential for the product
The major focus is towards extending the life cycle and maintaining market share

24. Product Life Cycle What happens during Maturity Stage?
The product’s sales level off.
More money is spent on competition during this stage.

25. Stage 4 of Product Life Cycle Stage of Decline
In this stage the expenditures begin to equal the profits or worse, expenses are more than profits.
A typical scenario which a product might face in its last stage.
1 product, 10 competitors, minimum profits, huge amount of manpower and resources in use
Typical scenario for the product to exit the market.
It also becomes advantageous for the company as the company can use resources it was spending on the declining product on an altogether different project.

26. Characteristics of Decline Stage
Market is saturated
Sales and profits decline
Company becomes cost conscious
A lot of resources are blocked in rejuvenating the dead product.

27. DECLINE - Only three options left with the company
Repositioning or Rebranding of the product to extend product life cycle
Maintain the product as it is and reduce costs to get maximum profits till the product can produce profits
Take the product off the market.

29. Virtual Shopping Assignment
Setup a PowerPoint according to what is listed
Individual assignment
Identify & Provide 2 Examples of each goods
Staple: Must Have’s
Convenience: Routine D.M.
Fashion: Trendy
Specialty: Rare
Shopping: Limited / Extensive D.M.
Seasonal: Time Sensitive
Not Unsought & Industrial

30. Staple Goods

32. Introduction Phase The iPad Air is in the introduction phase
Launched November 1, 2013
$499.99
Focus will be on production & promotion

33. Growth Stage Customers are aware of iPhone 5S
Focus is on making them happy
Sales and production/distribution are increasing
Released in35 additional countries last Friday
16 more countries on 11/1/13

34. Maturity Stage Competition is strong Similar models in stores
Product is mass produced
Product is not as popular but is still popular
WOW factor is gone
Sales have slowed
Price Drop
Money is spent combating competition

35. Decline Stage Product starts to lose money
Price drops to point it costs more to product
Product may be liquidated
Virtually no competition because no one wants product

36. How can you extend a product’s lifecycle?
All businesses want to maximize their profits by ensuring that the lifespan of their product is as long as possible.
Businesses can adopt several strategies to extend the life of their product.

37. Extending a Product’s Lifecycle
Make modifications to the product
eg new car model
Change the packaging
Reduce the price
Export to a new market
Introduce new varieties
eg lime-flavored Coke
Increase the advertising

38. Extending a Product’s Lifecycle (cont.)
Some businesses may decide not to employ any extension strategies, and simply withdraw the product from the market.
At the decline stage, the business should be prepared and have a second product ready to replace the declining product.

39. Extending a Product’s Lifecycle (cont.)
Consider how these products have had their life cycle extended:
Coca-Cola
Kit Kat
Playstation console

42. Virtual Shopping Tour

43. 4 IMPORTANT P/S MGMT TERMS
Product Mix
Product Line
Product Width
Product Depth

44. Product / Service Management
Anything a person receives in an exchange
Tangible items (Stapler)
A service (Haircut)
Idea (Marketing Strategy)
An abstract good (Education)
Product Planning:
Decisions about features that are needed to sell a business’s products, services or ideas
Examples:
Packaging, labeling, Branding, Services, Warranties, etc..

45. Product / Service Management
Product MIX:
All the different products that a company makes or sells.
KRAFT Company Example:
….Kraft
….Maxwell House
….Kool-Aid
….Oscar Mayer
….Post Cereal products

46. Product / Service Management
Product Line
Group of closely related products manufactured &/or sold by a business
Example:
Kellogg’s makes all the cereals listed
All product lines are apart of the product mix

47. Product / Service Management
A product line can be determined by the following:
They function similarly
All of Chevrolets Cars are a Product Line
They are sold to the same groups of people
All of Staples Supplies sold to schools
Are marketed the same way
Are priced similarly

48. Product / Service Management
Product Item
A specific model, brand, or size of a product within a product line.

49. Product / Service Management
Product Mix Example
All classes AK offers
Product Line
All marketing courses offered
Product Item
Marketing
Sports Marketing
International Marketing

50. Product / Service Management
Product Mix:
The width and depth of a company’s product offerings.
Width: number of different product lines a business manufactures or sells
Small businesses have fewer product lines; less width
Depth: number of product items within a product line
Company sells three different sizes & three different flavors they would have a product depth of 9.
Example: Chocolate = small, medium, large

51. Product Mix Assignment
Working in groups of 1-3; you will be assigned a Company
Define Product Mix
At least 5 brands they sell
2 Examples of Product Lines
3 Product Items
Specific items sold by company

52. Companies General Motors Mars Nestle Sony Proctor & Gamble Kraft
General Mills
Johnson & Johnson
Unilever
Kellogg’s
Coca-Cola
Pepsico
Dr. Pepper/Snapple

53. Examples of Product Mixes

54. Nike Example Nike owns Nike Golf Nike Pro Nike+ Nike Skateboarding
Air Jordan
Converse
Hurley International
NikeTown Retail Stores

55. Nike Product Mix Example
4 Product Lines Examples
Converse
Basketball
Soccer
Clothing
Could’ve broken it down by:
Others Sports
Hurley, Golf, Jordan

56. Product Items Converse All Star Ox Nike Club Swoosh Full Zip Hoodie
$49.99
Nike Club Swoosh Full Zip Hoodie
$39.99
Nike Air Max 2013
$179.99