1. Product decisions 7.2

2. Product decisions
As you may recall, a product is a good or service for sale in a market. For example, we buy products when we get our haircut or buy food.

3. Product decisions
Product decisions vary by company. Companies face different product decisions depending on the number of products involved.

4. Product decisions
If an organization is marketing more than one product it has a product mix.
Product item--a single product
Product line--all items of the same type
Product mix--total group of products that an organization markets

5. Product Items, Lines, and Mixes
Product Concepts
Product Items, Lines, and Mixes
Product Item
Product Line
Product Mix
A specific version of a product
A group of closely-related product items that are sold together
The combination off all products that a company sells
Chapter 9 Version 6e

6. The number of product lines an organization offers.
Product Concepts
Product Mix Width
The number of product lines an organization offers.
Diversifies risk
Capitalizes on established reputations
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7. The number of product items in a product line.
Product Concepts
Product Line Depth
The number of product items in a product line.
Attracts buyers with different preferences
Increases sales/profits by further market segmentation
Capitalizes on economies of scale
Evens out seasonal sales patterns
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8. Campbell’s Product Lines and Mix
Chapter 10 Product Concepts
Campbell’s Product Lines and Mix { }
Notes:
All of Campbell’s products constitute its product mix. Each product in the product mix may require a separate marketing strategy.
In some cases, product lines and mixes share some marketing strategy components. Consider Nike’s theme, “Just Do It.”
An example of Campbell’s product lines and product mix is shown in Exhibit 9.1.
Discussion/Team Activity:
Identify a few companies with extensive product lines and product mixes. Pick one and create a matrix similar to Exhibit Evaluate the marketing strategies in use.

9. Product decisions
Companies often make adjustments to product items, lines, and mixes.
Modification
Repositioning
Extensions
Contraction

10. Product decisions
Product modification means changing one or more of the product's features to enhance its customer appeal. For example, a new formula or new package design.

11. Product decisions
Repositioning involves changing the identity of a product, relative to the identity of competing products in the target market. Repositioning is most often changed with a price change. For example, Cadillac introduced cars at a lower prices and was said to “cheapen the brand”.

12. Product decisions
A product extension is the use of an established product’s brand name for a new item in the same product category.
Extensions occur when a company introduces additional items in the same product category under the same brand name such as new flavors, forms, colors, added ingredients, package sizes.

13. Line Extension
The development of a product closely related to existing products in the line, but designed specifically to meet different customer needs
Many “new products” are really line extensions
Are less expensive, lower-risk, and more common than totally new products
Downside is that unpopular line
extensions may result in negative
evaluation of the core product
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14. Product decisions
For example, Charmin toilet paper has been known as high price, high value. Charmin has introduced Basic Charmin to meet the needs of consumers looking for high value and lower cost.

15. Think About It
Reese’s has introduced many line extensions to its core product, the Peanut Butter Cup
Pieces
Miniatures
Big Cup
NutRageous
Cereal
Can you think of any line extensions?
© 2013 Cengage Learning. All rights reserved.

16. Product decisions
Contraction: A reduction in the products offered by a company in order to reduce costs or to focus on core products. General Motors discontinued it Oldsmobile and Pontiac lines.