1. Product Mix Strategies
Product Planning
Product Mix Strategies

2. Product Mix Strategies
Plan for how the business determines which product it will make or stock.
Develop New Products
Develop Existing Products
Delete Product or Product Line

3. Developing New Products
Why develop new products?
Can add to sales. (Markup and profits)
Can boost market share.
Can help company’s image.
Often become part of product line.

4. Developing New Products
Six Step Process (pg 450)
Generate Ideas
Screen Ideas
Develop Product
Test Product
Introduce Product
Evaluate Customer Acceptance

5. 1. Generate Ideas Ideas can come from: Customers Competitors
Channel Members
Company Employees

6. 2. Screen Ideas Determine: Size of market Profit Potential
Level of Risk
Effect on Existing Products
Effect on Company Image
Production Requirements (Cost)

7. 3. Develop the Product Can take a very long time.
Develop Prototype: Model (first piece)
Government Requirements / Approvals?
Develop plans for: Production / Packaging / Labeling / Branding / Promotion / Distribution

8. 4. Test the Product Test in lab Does Product Function Properly Safe
Test with consumers (market testing)
Geographic Testing
Forgo? Expense and Time Delay

9. 5. Introduce the Product If it is market tested…Get out to Public
Advertise
High Initial Costs
Train Staff?
Distribute
New Channels?

10. 6. Evaluate Acceptance Track Performance Study Sales:
Who Are Best Customers for Product?
What New Products are Customers Buying?
How Often Do they Buy?
When Did They Last Buy?

11. Product Mix Strategies
Plan for how the business determines which product it will make or stock.
Develop New Products
Develop Existing Products
Delete Product or Product Line

12. Developing Existing Products
Line Extension

13. Line Extension Example: -Crunch ‘N Yogurt-
Add New Products: WIDTH or DEPTH
Example:
-Crunch ‘N Yogurt-
Build on Product or Company Image
Take Advantage of Customer Loyalty
Increase Sales and Profits
Appeal to New Markets
Get New Customers…Market Share

14. Line Extension Disadvantages? If bad…Existing Products May Suffer.
Increased Costs
Inventory
Promotion
Distribution
May Take Sales Away from Existing Products

15. Developing Existing Products
Product Modification

16. Product Modification Alteration in Company’s Existing Product.
New Varieties
New Colors
New Styles
New Features
New Sizes

17. Product Modification Why Modify? Quick and Easy Low Risk Low Cost
New Technology

18. Product Mix Strategies
Plan for how the business determines which product it will make or stock.
Develop New Products
Develop Existing Products
Delete Product or Product Line

19. Delete Product or Line Why? Product Obsolete Changing Technology
Product Lost Appeal
Product Does Not Match Current Objectives
Make Room for Other Products
Limited Shelf Space
Product No Longer Profitable
Product Conflicts with Others in Product Line