Untitled Slide

Product

• Anything offered to a market for acquisition, use or consumption
• Satisfies a want or need
• Examples: computers, food, clothes, etc.

Services

• a form of a product that consist of activities, benefits, or satisfactions offered for sale
• Intangible
• Examples: Manicure, car repair, flight, etc.

Product Planning

• Decisions about what features should be used in selling a company's products and services

Product Planning Considerations

• Product Features
• Labeling
• Packaging
• Branding
• Warrenties

Product Mix

• All of the products that are made or sold by a company
• Manufactures: includes all brands
• Retailers: includes all of the products the store sells

Product Line

• Group of closely related products made or sold by a corporation
• Example: different car models manufactured by General Motors

Product Item

• Specific model, brand, or size of a product within a product line
• Example: iPod Nano, iPod Touch, iPod Classic, iPod Shuffle

Product Depth

• The number of items within each product line
• Includes different sizes, price ranges, colors, and styles for each brand
• Example: Jeans sold by Macy's

Product Width

• The number of product lines that a company makes or sells
• Example: Proctor and Gamble

Product Mix Strategies

• Developing new products
• Developing existing products
• Deleting a product/product line

Developing New Products

• New products can increase sales and market share
• 35% of sales come from products less than 5 year old
• markup on new products is 10 -15% higher than comparable products

Stages of Product Development

• Generate ideas
• Screen ideas
• Develop a business proposal
• Develop the product
• Test the product
• Introduce the product
• Evaluate acceptance

Generating Ideas

• Brainstorming
• Focus groups of consumers and employees

Screening Ideas

• Ideas are matched with the company's strategy
• Concept testing
• Products that don't match the strategy are rejected

Developing a Business Proposal

• Feasibility study:
• Potential profit
• Market conditions
• Potential sales
• Competitive environment
• Risk

Developing the Product

• Plans related to:
• Production
• Packaging
• Labeling
• Branding
• Distribution
• Promotion

Testing the Product

• Test markets
• Focus group evaluations

Introducing the Product

• Commercialization: making product available to consumers
• Distribution of products
• Promotion of products

Evaluating Customer Acceptance

• Study of sales and market data
• Marketing reports compiled

Developing Existing Products

• Line Extensions:
• adding new product lines, items, or services
• Serves different needs
• Increases depth within a line
• Example: Coke Zero

Developing Existing Products

• Product Modification: Alteration in existing products
• New varieties, colors, styles, features, or sizes
• Example: iPhones in different colors

Deleting a Product Line

• Deletion due to:
• Obsolescence
• Loss of sales/profit
• Change in company objectives
• Replacement with new products
• Conflict with other products in the line

The Product Life Cycle

• Representation of the stages that a product passes through during its life

Untitled Slide

Introduction Stage

• Focus is on promotion and production
• Creates awareness
• Cost of introduction is high
• Least profitable stage

Growth Stage

• Gains success through increases in sales and profits
• High market share
• Newer models and modifications may occur

Maturity Stage

• Sales level off or slow down
• Competition may exist
• Saturation of the market
• Marketing costs high due to competition

Decline Stage

• Sales fall
• Profits may be smaller than cost
• Decisions need to be made about the future of the product

Decline Strategies

• Discontinue the product
• Sell/License the product to another company
• Recommit the product to other uses
• Discount the product
• Modernize/modify the product

Product Positioning

• The efforts a business makes to identify, place and sell products in the market

Positioning By Price/Quality

• Stresses high price as a symbol of quality
• Companies may position as: economy, mid-priced, or luxury

Positioning By Features

• Product associated with a feature, attribute, or customer benefit

Positioning Against Competition

• Compete directly with competing products
• Attempt to create an advantage over a competitor

Positioning Within Product Line

• Positioned in relation to other products in the product line
• Modifications and additional features

Category Management

• Process that involves managing product categories as individual business units
• Overseen by a product manager