1. Section 30.2 Sustaining Product Sales
Marketing Essentials
n Chapter 30 Product Planning
Section Sustaining Product Sales

2. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
What You'll Learn
The product life cycle
The concept of product positioning
The purpose of category management

3. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Why It's Important
After products are introduced in the marketplace, they go through different stages of growth and decline. It is important to understand the different marketing strategies used to sustain product sales over time.

4. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Key Terms
product life cycle
product positioning
category management
planogram

5. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Product Planning
A product life cycle represents the stages that a product goes through during its life. There are four stages of the life cycle:
introduction
growth
maturity
decline

6. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
The Product Life Cycle
The life cycle of a product can be divided into four stages: introduction, growth, maturity, and decline. Why are sales not at their highest during the introduction stage? At what stage do you think a product would be most profitable?

7. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Managing During the Introduction Stage
When the product is introduced to the market, the focus of the company's efforts is on promotion and production. During this stage:
Special promotions may get customers to try the new product.
Profits at their lowest because costs of introducing a product are high. Therefore, this is usually the least profitable stage of the life cycle.

8. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Managing During the Growth Stage
During the growth phase of the product life cycle, the product is enjoying success as shown by increasing sales and profits. During this stage:
Advertising may now focus on consumer satisfaction.
Competitors may offer new competing products.
The company may introduce new models or modify the existing product.

9. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Managing During the Maturity Stage
A product reaches the maturity stage when its sales level off or slow down. During this stage:
The product may have more competition, or most of the target market may already own it.
Advertising expenses climb as the company fights off competition.
The company decides whether it can improve the product to gain sales.

10. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Managing During the Decline Stage
During the decline stage, sales fall. Profits may reach a point where they are smaller than costs. The company’s options include:
dropping the product
selling or licensing the product
recommitting to the product line
discounting the product
regionalizing the product
modernizing or altering the product
Slide 1 of 3

11. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Managing During the Decline Stage
Sell or License the Product Companies sell or license their poorly performing products to risk-taking companies that try to rejuvenate products.
Recommit to the Product Line Decide that a declining product can be marketed for other uses to help improve sales.
Slide 2 of 3

12. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Managing During the Decline Stage
Discount the Product Discount the product to compete with cheaper store or private brands.
Regionalize the Product Sell declining products only in the geographic areas where there is strong customer loyalty.
Modernize or Alter the Product Redesign, repackage, or reformulate the product to avoid deleting it.
Slide 3 of 3

13. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Product Positioning
The focus of product positioning is the image a product projects. The goal of product positioning is to set the product apart from the competition. Products can be positioned:
by price and quality
by features and benefits
in relation to the competition
in relation to other products in a line
Slide 1 of 3

14. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Product Positioning
Positioning by Price and Quality Stresses high price as a symbol of quality or low price as an indication of value.
Positioning by Features and Benefits Stresses product features and benefits, or unique characteristics.
Slide 2 of 3

15. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Product Positioning
Positioning in Relation to the Competition Stresses comparison to the competition.
Positioning in Relation to Other Products in a Line Stresses association with a successful brand.
Slide 3 of 3

16. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Category Management
Category management is a process that involves managing product categories—groups of products that have the same target market and distribution channels—as individual business units. The manufacturer can customize the category's product mix, merchandising, and promotions according to customer preference on a store-by-store basis.
Slide 1 of 2

17. Sustaining Product Sales
SECTION 30.2
Sustaining Product Sales
Category Management
Planograms are computer-developed diagrams that show retailers how and where products within a category should be displayed on a shelf at individual stores. Each store then can stock more of the products that appeal to people in its trading area.
Slide 2 of 2

18. Reviewing Key Terms and Concepts
ASSESSMENT
30.2
Reviewing Key Terms and Concepts
1. What is a product life cycle? Name the four stages in the product life cycle.
2. Explain the concept of product positioning. Why is it important?
3. List and describe four strategies used to position products in the marketplace.
4. What is category management?
5. How can manufacturers use category management to assist a retailer?

19. ASSESSMENT Thinking Critically 30.2
Identify a possible product modification or product extension for an electric shaver, a toothbrush, and animal crackers.

20. Marketing Essentials
End of Section 30.2