PRODUCT DECISIONS

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Product
Product is critical element of marketing mix; Anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a want or need.
Physical object, service, person, place, organization, idea
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Unique Characteristics of Services and Resulting Marketing Challenges

Exhibit 7.6

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Product Decisions Involve

Product mix- total group of products offered by company Product lines-group of closely related product items
Depth-number of items in line

Brands-combination of name, symbol, term, or design that identifies specific product Packaging and labeling Positioning
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Positioning Decision

Positioning is the act of designing the companys offering and image to occupy a distinctive place in the target markets mind.
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Steps In The Positioning Process

1. Identify relevant set of competitive products serving target market 2. Identify the set of determinant attributes that define the product space. 3. Collect information from a sample of customers and potential customers about perceptions of each product on the determinants 4. Determine the products current positioning. 5. Determine the customers most preferred combination of determinant attributes. 6. Examine the fit between preferences of market segments and current position of products. 7. Write positioning statement to guide development of marketing strategy.
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Positioning Map: Automobiles For Generation Yers

More Edgy

Kia Sorrento Scion Cube

Inexpensiv e

Expensive
$13k $20K

Civic

Less Edgy

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Trout and Ries suggest a six-step question framework for successful positioning: 1. What position do you currently own? 2. What position do you want to own? 3. Whom you have to defeat to own the position you want. 4. Do you have the resources to do it? 5. Can you persist until you get there? 6. Are your tactics supporting the positioning objective you set?

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 How is the Ford Mustang positioned? How has Ford achieved this positioning? Has its positioning changed over time?
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Product Differentiation
Differentiation Strategies Create differences in the firms product offering that sets it apart from competing offerings based on
Product features Advantages Benefits

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Using Product Descriptors for Product Differentiation

Exhibit 6.7

7-11

How is Venus positioned/differentiated from other razors?

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Stages of the Product Life Cycle

Exhibit 7.2

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Marketing Strategy During the Product Life Cycle

Exhibit 7.3

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Introduction Stage
Begins when development is complete Ends when customers widely accept the product Marketing strategy goals during this stage:
Attract customers by raising awareness and interest Induce customers to try and buy Engage in customer education activities Strengthen or expand channel and supply relationships Build on availability and visibility Set pricing objectives 7-15

Growth Stage (1 of 2)
Be ready for sustained sales increases Rapid increase in profitability early in the growth stage that decreases at the end of this stage Length depends on nature of product and competitive reactions Two strategies:
(1) Establish a strong, defensible marketing position (2) Achieve financial objectives
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Growth Stage (2 of 2)
Marketing strategy goals in this stage:
Leverage the products perceived differential advantages Establish a clear product and brand identity Create unique positioning Maintain control over product quality Maximize availability of the product Maintain or enhance the products profitability to partners Find the ideal balance between price and demand Keep an eye focused on the competition
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Maturity Stage (1 of 2)
Few, if any, new firms will enter the market Still an opportunity for new product features and variations Typically the longest stage in the product life cycle

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Maturity Stage (2 of 2)
Four general goals in this stage:
(1) Generate Cash Flow (2) Hold Market Share (3) Steal Market Share (4) Increase Share of Customer (1) Develop a new product image (2) Find and attract new users to the product (3) Discover new applications for the product (4) Apply new technology to the product

Four options to achieve these goals:

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Decline Stage
Two options:
(1) Attempt to postpone the decline (2) Accept its inevitability
Harvesting Divesting

Factors to be considered during this stage:

Market segment potential The market position of the product The firms price and cost structure The rate of market deterioration
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Product-Mix Width Procter & Gamble Example

Disposable Diapers
Pampers Luvs

Detergents
Ivory Snow Dreft Tide Cheer Oxydol Dash

Bar Soap
Ivory Kirks Lava Camay Zest Safeguar d

Toothpaste Paper Tissue

Gleem Crest Charmin Puffs Banner Summit 1100s

Bold
Gain Era

Coast
Olay

7-21

Product Lines and Product Mixes at Gillette

Exhibit 7.1

7-22

Product Mix Decisions

Def.: Set of all products and items that a particular seller offers to buyers. Decisions include selection of width, length, depth, and consistency

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Product Line Decisions

Line stretching
Downward enter on the low end Upward enter on the high end Two-way enter both directions Line-filling add more items

Line Modernization update to reflect current trends, themes Line-Featuring-select one or a few items in the line to feature Line-Pruning select item(s) to cut
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What is a Brand?
A brand is a name, term, sign, symbol, or design, or a combination of them intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

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7-26

The Worlds Twenty-Five Most Valuable Brands

Exhibit 7.5

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Branding Decisions
Brand Name
Individual (General Mills- Bisquick, Gold Medal, Betty Crocker;
P&G)

Blanket family name (Heinz, Campbell) Separate family names (Sears-Kenmore for appliances,
Craftsman for tools)

Company plus individual names (Kellogg Rice Krispies)

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Branding Decisions
Product Category Line Category Existing Existing Line Extension additional items in the same product category under the same brand name, new flavors, package sizes, added ingredients, e.g. Heinz Green Ketchup New Brand Extension Use existing brand name to launch new products in other categories, e.g. Hondo lawn mowers, marine engines

New

Multibrands Additional brand in the same product category, Pampers, Luvs

New Brands launches new products in new categories, e.g. Barbie Bedding 7-29

Good Brand Names

Distinctive Lack Poor Foreign Language Meanings Suggest Product Qualities Suggest Product Benefits Easy to Pronounce, Recognize, Remember
Zit (Chocolate from Germany) Koff (Beer)

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Packaging Decisions
Design, materials, size Critical as marketing tool
Self-service Company & brand image Opportunity for brand innovation

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Factors Influencing Product Strategy Decisions

Classification of Products
Convenience Shopping Specialty Unsought Products

Product Life Cycle

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Product Classification (1 of 3)
Consumer Product Classifications
Convenience Products
Routinely purchased, require little or not time searching Make them widely available

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 Shopping Products
Spend considerable time making the purchase; seek info on price, features, service Product differentiation very important Have strategy to guarantee and reduce consumer satisfaction

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 Specialty Products
Unique, shoppers expend considerable time, effort, money to acquire; accept no substitutes

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 Unsought Products
(1) Products of which consumers are unaware (2) Products that consumers do not consider purchasing until a need or emergency arises

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New Product Development

Six strategic product development options:
(1) New-to-the-world products (discontinuous innovations) (2) New product lines (3) Product line extensions (4) Improvements or revisions of existing products (5) Repositioning (6) Cost reductions

Customer perception of differentiation is critical

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Development Stage
No sales revenue during this stage Components of the product concept:
An understanding of desired uses and benefits A description of the product The potential for creating a complete product line An analysis of the feasibility of the product concept

Customer needs should be discerned before developing marketing strategy

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