1. Managing the Product

2. Chapter Objectives
Explain the different product objectives and strategies a firm may choose
Explain how firms manage products throughout the product life cycle
Discuss how branding creates product identity and describe different types of branding strategies
Explain the roles packaging and labeling play in developing effective product strategies
Describe how organizations are structured for new and existing product management

3. Real People, Real Choices
Grendha Shoes Corp. (Angelo Daros)
Launching the Rider brand in the United States, Angelo needed a plan to position the brand.
Option 1: position U.S. Rider the same way as the Brazilian version
Option 2: position Rider as an “after sport footwear” brand
Option 3: position Rider more specifically as an “after soccer” brand

4. Product Planning: Taking the Next Step
Today, successful product management is more important than ever.
Products are created, grow, reach maturity, and decline at faster and faster speeds.
LEXUS HYBRID

5. Figure 9.1: Steps in Managing Products

6. Using Product Objectives to Decide on a Product Strategy
Objectives must be measurable, clear, unambiguous, and feasible and must indicate a specific time frame.
Objectives and strategies for individual products:
--Successful introduction of new products
--Breathing new life into mature products
MINIUSA.COM

7. Figure 9.2: Objectives for Single and Multiple Products

8. Objectives and Strategies for Multiple Products
Product line: Firm’s total product offering designed to satisfy a single need or desire of target customers
Product mix: The total set of all products a firm offers for sale

9. Objectives and Strategies for Multiple Products
Product-Line Strategies
Full-line versus limited-line strategies
Upward, downward, or two-way line stretch
Filling out or contracting a product line
Product-Mix Strategies
Width of product mix: the number of different product lines produced by firm
Swiss Army
Video

10. Group Activity
Think of your college or university as an organization that offers a line of different educational products.
Develop alternatives it might consider and describe how each might be accomplished and evaluated:
Upward product stretch
Downward product stretch
Two-way stretch
Filling-out strategy

11. Quality as a Product Objective
Product quality: overall ability of product to satisfy customer’s expectations
Total Quality Management (TQM): company-wide dedication to the development, maintenance, and continuous improvement of all aspects of the company’s operations
MALCOLM BRIDGE
AWARD WINNERS!

12. ISO Quality Standards
ISO 9000: voluntary standards for quality management set by International Organization for Standardization (ISO)
ISO 14000: concentrate on environmental management
Six Sigma methodology: no more than 3.4 defects per million (getting it right % of the time)

13. Adding Quality to the Marketing Mix
Product: improve customer service
Place: involve suppliers and customers in improving on-time delivery
Price: lower costs and improve service at same time
Promotion: give customers information when they want and need it (not when it’s convenient for firm)

14. Dimensions of Product Quality
Figure 9.4

15. Group Activity
Conduct a brief focus group of students and find out whether consumers complain to each other about poor product quality.
--Have they ever used a Web site to express displeasure over product quality?
--If so, what was the result?

16. Discussion
Quality can mean different things for different products. What does it mean for the following?
Automobile
Pizza
Running shoes
Hair dryer
Deodorant
College education

17. Marketing Throughout the Product Life Cycle
Product life cycle: the way products go through four distinct stages from birth to death -- introduction, growth, maturity, and decline.

18. The Product Life Cycle
Figure 9.5

19. The Introduction Stage
First stage in the product life cycle, in which slow growth follows the introduction of a new product in the marketplace.
--Goal is to get first-time buyers to try product.
--Firm does not usually make a profit during this stage.

20. The Growth Stage
Second stage in the product life cycle, during which the product is accepted and sales rapidly increase.
--Goal is to encourage brand loyalty.
--Firm introduces product variations to attract market segments and increase market share.

21. The Maturity Stage
Third and longest stage in the product life cycle, during which sales peak and profit margins narrow.
--Competition grows intense.
--Firm resorts to price reductions and reminder advertising.

22. The Decline Stage
Final stage in the product life cycle, during which sales decrease as customer needs change.
--Market as a whole begins to shrink, profits decline, fewer product variations exist, and suppliers pull out.
--Firm’s major decision is whether to keep product at all.
OLDTIMECANDY.COM

23. Creating Product Identity: Branding Decisions
Brand: a name, term, symbol, or any other unique element that identifies one firm’s product and sets it apart from the competition.

24. A Good Brand Name: Creates a positive connotation. Is memorable.
Positions a product by conveying image or personality (Ford Mustang) or describing how it works (Drano).
Is easy to say, spell, read, and remember.
Fits the target market, product benefits, customer’s culture, and legal requirements.

25. Trademarks Legal term for a brand name, brand mark, or trade character
--Trademarks legally registered by a government obtain protection for exclusive use in that country.
--Symbol in the U.S.: ®
--Common-law protection: the firm has used the name and established it over a period of time.

26. The Importance of Branding
Brand equity: a brand’s value to its organization over and above the value of the generic version of the product
Brand meaning: the beliefs and associations a consumer has about the brand

27. Figure 9.7: The Brand Equity Pyramid

28. The Importance of Branding (cont’d)
Brand equity provides competitive advantage: the power to capture and hold onto a larger share of the market and to sell at prices with higher profit margins
Brand extensions: new products sold with the same brand name

29. Discussion
Brand equity means a brand enjoys customer loyalty, perceived quality, and brand-name awareness.
--What brands are you loyal to?
--What element of the product creates brand loyalty and thus brand equity?

30. Discussion
What are some examples of brand extensions that have damaged the parent brand’s equity? What are some that have enhanced it?

31. Branding Strategies Individual brands vs. family brands
National and store brands
Generic brands: no branding

32. Branding Strategies (cont’d)
Licensing: one firm sells the right to use a legally protected brand name for a specific purpose and for a specific period of time
Co-branding: combines two brands

33. Creating Product Identity: Packaging and Labeling Decisions
Package: the covering or container for a product that provides product protection, facilitates product use and storage, and supplies important marketing communication

34. Packaging and Labeling Decisions (cont’d)
Universal Product Code (UPC): set of black bars or lines printed on the side/bottom of most items sold in stores; creates a national system of product identification

35. Designing Effective Packaging
Effective packaging considers:
Packaging of other brands in same product category
Choice of packaging material
Environmental impact
Shape and color
Graphic information

36. Labeling Regulations
Federal Fair Packaging and Labeling Act of 1966 aims at making labels more helpful to consumers by providing useful information.
Food and Drug Administration requires food labels to tell how much fat, saturated fat, cholesterol, calories, carbohydrates, protein, trans fats, and vitamins are in each product serving.

37. Group Activity
For each of the following, discuss any problems you have with the packaging of the brand you use. Think of ways to improve the package.
Dry cereal
Laundry detergent
Frozen orange juice
Gallon of milk
Potato chips
Loaf of bread

38. Organizing for Effective Product Management
Management of Existing Products
Brand managers
Product category managers
Market managers

39. Organizing for New-Product Development
Venture teams: specialists in different areas who work together to focus on new-product development
“Skunk works”: small and isolated group in remote location that functions with minimal supervision

40. Real People, Real Choices
Grendha Shoes Corporation (Angelo Daros)
Angelo chose option 2: position Rider as an “after sport footwear” brand
Grendha adapted the same strategy in over 85 countries around the world and now sells millions of pairs globally.
GRENDA SHOE CORPORATION

41. Marketing Plan Exercise
Dr. Pepper is the oldest soft-drink brand in the United States.
What are some product-line strategies Dr. Pepper might consider?
How important is TQM, and product quality in general, to a brand like Dr. Pepper?
What realistic opportunities for brand extensions exist for Dr. Pepper?
Does Dr. Pepper have high brand equity? What can it do to enhance its brand equity?

42. Marketing in Action Case: You Make the Call
What is the decision facing Sony?
What factors are important in understanding this decision situation?
What are the alternatives?
What decision(s) do you recommend?
What are some ways to implement your recommendation?

43. Keeping It Real: Fast Forward to Next Class Decision Time at Universal Studios
Meet Robyn Eichenholz, senior brand manager at Universal Orlando.
Upcoming Donna Summer concert would attract many customers
The decision: How to plan for the Donna Summer concert