1. Product Strategy and Marketing through the Life Cycle Key Concepts

2. Product Levels

3. Product Classifications Consumer-goods classification Durability and tangibility Industrial-goods classification

4. Durability and Tangibility Nondurable goods Durable goods Services

5. Consumer-Goods Classification Convenience goods Shopping goods Specialty goods Unsought goods

6. Industrial-Goods Classification Capital items Materials and parts Supplies and services

7. Product-Line Analysis * Evaluate sales and profits associated with each item in product line. Evaluate line positioning relative to competition. Decide whether to build, maintain, harvest, or divest.

8. Line Stretching Down- market Up-market Two-way

9. Co-Branding Two or more well-known brands are combined into a joint product and/or marketed together in some fashion. Same-company Joint-venture Retail Multiple-sponsor

10. Packaging Refers to all the activities of designing and producing a product’s container. Package levels: Primary Secondary Shipping Influenced by: Self-service Consumer affluence Company and brand image Innovation opportunity

11. Functions of Labeling Identifies Grades Describes Promotes

12. Packaging Refers to all the activities of designing and producing a product’s container. Package levels: Primary Secondary Shipping Influenced by: Self-service Consumer affluence Company and brand image Innovation opportunity

13. Warranties and Guarantees Warranties—formal statements of expected product performance by the manufacturer. Expressed or implied—both legally enforceable. Guarantees—purpose is to reduce the buyer’s perceived risk and provide assurance that the company and its offerings are dependable. General Specific

14. The New-Product Development Decision Process

15. Marketing Skills: Finding New Product Ideas Where does Procter & Gamble get new ideas? Customers, organizations, experts, government, private labs, research institutions, suppliers, retailers, partners, and entrepreneurs.

16. Stages in the Adoption Process Awareness Interest Evaluation Adoption Trial

17. Diffusion Process for New Products Adopter Categories

18. Factors Influencing Adoption Relative advantage Compatibility Complexity Communicability Divisibility

19. Product Life Cycles for Styles, Fashions, and Fads

20. Sales of New Audio Products

21. Why New Products Fail  No discernible benefits  Poor match between features and customer desires  Overestimation of market size  Incorrect positioning  Price too high or too low  Inadequate distribution  Poor promotion  Inferior product

22. Success Factors Factors in Successful New Products Match between product and market needs Different from substitute products Benefit to large number of people

23. Success Factors Listening to customers Producing the best product Vision of future market Strong leadership Commitment to new- product development Project-based team approach Getting every aspect right

24. Product Life Cycle

25. Introductory Stage  High failure rates  Little competition  Frequent product modification  Limited distribution  High marketing and production costs  Negative profits with slow sales increases  Promotion focuses on awareness and information  Communication challenge is to stimulate primary demand

26. Marketing Strategies: Introduction Stage and the Pioneer Advantage Inform potential consumers Induce product trial Secure retail distribution

27. Growth Stage  Increasing rate of sales  Entrance of competitors  Market consolidation  Initial healthy profits  Aggressive advertising of the differences between brands  Wider distribution

28. Marketing Strategies: Growth Stage Improve quality, add new features, and improve styling Add new models and flanker products Enter new segments Increase distribution coverage and enter new channels Shift from product-awareness to product- preference advertising Lower prices to attract the next layer of price- sensitive buyers

29. Maturity Stage  Sales increase at a decreasing rate  Saturated markets  Annual models appear  Lengthened product lines  Service and repair assume important roles  Heavy promotions to consumers and dealers  Marginal competitors drop out  Niche marketers emerge

30. Marketing Strategies: Maturity Stage Market modification Product modification Marketing program modification

31. Decline Stage  Long-run drop in sales  Large inventories of unsold items  Elimination of all nonessential marketing expenses  “Organized abandonment”

32. Marketing Strategies: Decline Stage Harvest Divest Liquidate

33. Strategies at Different Stages of the Product Life Cycle Time INTRODUCTION GROWTH MATURITYDECLINE Product Strategy Distribution Strategy Promotion Strategy Pricing Strategy Limited models Frequent changes More models Frequent changes. Large number of models. Eliminate unprofitable models Limited Wholesale/ retail distributors Expanded dealers. Long- term relations Extensive. Margins drop. Shelf space Phase out unprofitable outlets Awareness. Stimulate demand. Sampling Aggressive ads. Stimulate demand Advertise. Promote heavily Phase out promotion High to recoup development costs Fall as result of competition & efficient production. Prices fall (usually). Prices stabilize at low level. Sales