1. Product/Service Management
MARKETING 3.03
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. 3.01--- Review Types of Goods Sold Staple Convenience Shopping
Specialty
Fashion
Seasonal
Unsought
Industrial
Product Life Cycle
Introduction
Growth
Maturity
Decline

7. Product Life Cycles

8. 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

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

11. 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

12. 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

13. 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

14. 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.

15. 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.

16. 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

19. Class Activities
Flash Cards - After 10 minutes into a lecture or concept presentation, have students create a flash card that contains the key concept or idea. Toward the end of the class, have students work in pairs to exchange ideas and review the material.
Product Life Cycle of Mobile Phone

20. 4 IMPORTANT P/S MGMT TERMS
Product Mix
Product Line
Product Width
Product Depth

21. 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..

22. 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

23. 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

24. 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

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

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

27. 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

28. 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

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

30. Examples of Product Mixes

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

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

33. 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

34. Product Mix

35. Product Mix Example

36. Product Mix Product Width is either narrow or broad
Narrow Product mix occurs when a company offers a limited number of product lines
Also known as Contracting
Why would a company want to narrow its product mix?
Easier on management
Cost effective
Simplicity
Consistency

37. Product Width: Narrowing
In 2009; General Motors (GM) filed for bankruptcy protection
They were told they needed to cut back
GMC
Cadillac
Buick
Chevy
Pontiac
Saturn
Saab
Hummer

38. Product Width: Broadening
Companies seek to expanding their product width by making it broader
Expanding allows you
Reach more markets
Gain a competitive edge
Example of product width is Red Lobster
Specialize in seafood
Sell pasta, chicken, & steak to broaden product mix

39. Product Depth: Expanding
Product Depth expands when more products are added to a product line
Why would you expand on a product line?
Wider Variety
Greater Quantity
Dillards choosing to sell more colors, sizes, styles of Levi Jeans

40. Product Depth: Shallow
A shallow product depth occurs when there are less products offered in a product line
Why would you contract your product depth?
Cost Effective
Example would be Red Lobster selling chicken on its menu
Usually only 2-4 menu options
Not cost effective to offer a wider variety

41. Product Mix Strategies
Companies devise strategies for their products so that they are profitable
Existing product strategies
Alteration
Trading Up
Trading Down

42. Product Mix Strategy: Alteration
Alteration occurs when an existing product is altered
Improve an established product with new design, new package, &/ or new uses
Example: Jeep Company

43. Jeep Changes Over Time

44. Product Mix Strategies
Trading Up
Occurs when a company adds a higher-priced product to a line
Trying to attract a higher-income market
Want to improve the sales of existing lower- priced products.
Prestige of high-priced item makes brand look better

45. Product Mix Strategies
Trading Down
Adding a lower-priced item to a line of prestige products to encourage purchases from people who cannot afford the higher- priced product, but want the status.

46. Quiz

47. Product Positioning Positioning In Relation to a Competitor
In Relation to a Product Class or Attribute
In Relation to a Target Market
By Price and Quality
Difficult to change