1. Principles of Marketing Lecture-23

2. Summary of Lecture-22

3. Consumer Adoption Process

4. Communicate Availability Communicate Benefits Emphasize Advantages Motivate Consumers Ensure Satisfaction Strategy Awareness Interest Evaluation Trial Adoption

5. Product Life-Cycle (PLC)

6. Time Product Development Stage Introduction Profits Sales GrowthMaturityDecline Sales and Profits ($) Sales and Profits Over the Product’s Life From Inception to Demise

7. Today’s Topics

8. Product

9. Value-Driven Marketing Value – A customer’s subjective assessment of benefits relative to the costs in determining the worth of a product Customer value = customer benefits – customer costs – Customer benefits Anything desired by the customer that is received in an exchange – Customer costs Anything a customer gives up in an exchange for benefits –Monetary price of the benefit –Search costs (time and effort) to locate the product –Risks associated with the exchange

10. Benefits  Consumers don’t buy products; they buy benefits  Functional benefits: relating to the practical purpose a product serves  Psychological benefits: relating to how a product makes one feel

11. Segmentation

12. 1.Identify segmentation variables and segment the market 2.Develop profiles of resulting segments 3. Evaluate attractiveness of each segment 4. Select the target segment(s) 5. Identify possible positioning concepts for each target segment 6. Select, develop, and communicate the chosen positioning concept MarketSegmentationMarketTargetingMarketPositioning

13. Question: Why do you buy a product?

14. Marketing Mix 4 Ps

15. Marketing is the involved process of determining the 4 P’s of the Marketing Mix – Product – Price – Promotion – Place (Distribution)

16. The Marketing Mix – Four marketing activities—product, Price, Place and Promotion—that a firm can control to meet the needs of customers within its target market Product Price Place Promotion Target Market

19. Definitions Product – Anything offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want. Service – Any activity or benefit that one party can offer to another that is essentially intangible and does not result in ownership of anything.

20. Goods Services

21. Tangible Produced Then Sold Intangible Sold Then Produced and/ or Consumed Same Time Goods Services

22. Tangible Produced Then Sold Intangible Sold Then Produced and/ or Consumed Same Time Can Store and Transport Produced Separate From Consumer Perishable Often Produced In Consumer's Presence Goods Services

23. Levels of Products

24. Brand Name Quality Level Packaging Design Features Delivery& Credit Installation Warranty After- Sale Service Core Benefit or Service Core Benefit or Service Actual Product Actual Product Core Product Core Product Augmented Product Augmented Product

25. Product Classifications

26. Individual Product Decisions

27. Product Attributes Branding Packaging Labeling Product Support Services

28. Developing a Product or Service Involves Defining the Benefits that it Will Offer Product Attributes

29. QualityQuality FeaturesFeatures DesignDesign

30. Branding

31. Brand A name, term, sign, symbol, or design, or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those competitors

32. To Brand or Not to Brand?

33. Why Incur the Cost & Efforts to Brand?

34. Brand Name Selection

35. Short and simple Suggestive of product benefits Legally available No negative imagery Easy to spell, read, and pronounce Adaptable for international markets Adaptable to packaging/labeling needs Adaptable to any advertising medium A Good Brand Name Is... A Good Brand Name Is...

36. Brand Development

37. Line Extension Multibrands Brand Extension New Brands Brand Name ExistingNew Product Category Existing New Four Brand Strategies

38. Packaging

39. Goals of Packaging

40. Protection against damage, spoilage, tampering etc. Assistance in marketing the product Cost effectiveness (and good for the environment)

41. Labeling

42. PromotesIdentifies Competitive Advantages Describes Sales Tasks Product Safety Packaging Labeling Packaging Labeling

43. Universal Product Code (UPC)  A bar code on a product’s package that provides information read by optical scanners.  UPC codes provide several advantages: labor saving, improve inventory control, and help with marketing research. 79400 80740

44. Product - Support Services

45. Product Line Strategies

46. Product Line Extensions Stretching Adding new items to line Filling Adding sizes or styles Downward Upward Contracting a Product Line Dropping items Contracting a Product Line Dropping items Two-way

47. New Product Development

48. Major Stages in New-Product Development

49. Idea Generation Idea Screening Concept Development and Testing Marketing Strategy Business Analysis Product Development Test Marketing Commercialization

50. Consumer Adoption Process

51. Communicate Availability Communicate Benefits Emphasize Advantages Motivate Consumers Ensure Satisfaction Strategy Awareness Interest Evaluation Trial Adoption

52. Product Life-Cycle (PLC)

53. Time Product Development Stage Introduction Profits Sales GrowthMaturityDecline Sales and Profits ($) Sales and Profits Over the Product’s Life From Inception to Demise

54. Product Life-Cycle Strategies

55. Product Development Stage

56. Time Product Development Stage Introduction Profits Sales GrowthMaturityDecline Sales and Profits ($) Sales and Profits Over the Product’s Life From Inception to Demise

57. Product development Introduction Growth Maturity Decline  Begins when the company develops a new- product idea  Sales are zero  Investment costs are high  Profits are negative PLC Stages

58. Introduction Stage

59. Time Product Development Stage Introduction Profits Sales GrowthMaturityDecline Sales and Profits ($) Sales and Profits Over the Product’s Life From Inception to Demise

60. Sales Costs Profits Marketing Objectives Product Price Low sales High cost per customer Negative Create product awareness and trial Create product awareness and trial Offer a basic product Use cost-plus Distribution Build selective distribution Advertising Build product awareness among early adopters and dealers

61. Growth Stage

62. Time Product Development Stage Introduction Profits Sales GrowthMaturityDecline Sales and Profits ($) Sales and Profits Over the Product’s Life From Inception to Demise

63. Sales Costs Profits Marketing Objectives Product Price Rapidly rising sales Average cost per customer Rising profits Maximize market share Offer product extensions, service, warranty Price to penetrate market Distribution Build intensive distribution Advertising Build awareness and interest in the mass market

64. Maturity Stage

65. Time Product Development Stage Introduction Profits Sales GrowthMaturityDecline Sales and Profits ($) Sales and Profits Over the Product’s Life From Inception to Demise

66. Sales Costs Profits Marketing Objectives Product Price Peak sales Low cost per customer High profits Maximize profit while defending market share Maximize profit while defending market share Diversify brand and models Price to match or best competitors Distribution Build more intensive distribution Advertising Stress brand differences and benefits

67. Decline Stage

68. Time Product Development Stage Introduction Profits Sales GrowthMaturityDecline Sales and Profits ($) Sales and Profits Over the Product’s Life From Inception to Demise

69. Sales Costs Profits Marketing Objectives Product Price Declining sales Low cost per customer Declining profits Reduce expenditure and milk the brand Phase out weak items Cut price Distribution Go selective: phase out unprofitable outlets Advertising Reduce to level needed to retain hard-core loyal customers Reduce to level needed to retain hard-core loyal customers

70. Extending the Product Life Cycle

71. To prevent the product going into decline you modify the product  Adding new features, variations, model varieties will change the consumer reaction - create more demand therefore you attract more users

72. Enough for today...

73. Summary

74. Product

75. Next….

76. 4-P’s Price

77. Principles of Marketing Lecture-23