Product strategies[1]

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Product strategies[1]

  1. 1. Product Strategies MS20A Lecture 7
  2. 2. MARKETING REVIEW 1. Find a Need & Fill It 2. Need = Segments & Targets [Homogeneous Behaviour] 3. Segments & Targets = Demographics, Lifestyle, etc 4. Market Strategy – 4Ps > Target Market Product Policies Product/Service – Customer Need Link
  3. 3. What is a Product?   A PRODUCT is anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need. Can be tangible – partially intangible What is a Service?  A SERVICE is a form of product that consist of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.
  4. 4. Nature and Characteristic of a Service (Fig. 8-5)
  5. 5. WHAT IS A PRODUCT A Product is truly defined by the behaviour that associated with its use. What does a miner buy a drilling rod or a hole???? What does toothpaste provide..whiter teeth or …a winning smile???? What does a University sell…book learning or a dream??
  6. 6. Levels of Product (Fig. 8-1)
  7. 7. Product Classifications: Consumer Convenience Products Shopping Products  Buy frequently & immediately  Buy less frequently Specialty Products Unsought Products  Special purchase efforts  New innovations  Low priced  Mass advertising  Many purchase locations i.e Candy, newspapers  High price  Unique characteristics  Brand identification  Few purchase locations i.e Lamborghini, Rolex  Higher price  Fewer purchase locations  Comparison shop i.e Clothing, cars, appliances  Products consumers don’t want to think about  Require much advertising & personal selling i.e Life insurance, blood donation
  8. 8. Product Classifications: Industrial, B2B Materials and Parts Materials and Parts Raw materials, manufactured Raw materials, manufactured materials, and parts materials, and parts Capital Items Capital Items Industrial products that aid in Industrial products that aid in buyer’s production or operations buyer’s production or operations Supplies and Services Supplies and Services Operating supplies, repair/ Operating supplies, repair/ maintenance items maintenance items
  9. 9. Product Life Cycle S a l e s Introduction Growth Maturity Time Decline
  10. 10. Product Life Cycle  Introduction     Slow sales Low revenue Promote to gain awareness Varied length
  11. 11. Product Life Cycle  Growth       Increasing sales Increasing profits Increasing competition Product refinement Profits peak Promote to create brand preference
  12. 12. Product Life Cycle  Maturity     Sales from increase to decline Intense competition Prices and profit margins decrease Profits often still high
  13. 13. Product Life Cycle  Decline   Falling industry sales & profits Industry shakeout
  14. 14. PRODUCT POLICIES EXISTIN G PRODUC T NEW EXISTIN NEW G MARKET MARKET Penetration  Branding Packaging   Market Extenison Modification New Diversi-
  15. 15. PACKAGING •Containers • Shipping • Protection • Information • Labelling – Brand ID • Convenience
  16. 16. Labelling   Printed information appearing on or with the package. Performs several functions:    Identifies product or brand Describes several things about the product Promotes the product through attractive graphics
  17. 17. Product Support Services Companies use product support services as a major tool in gaining competitive advantage. How? Step 1. Survey customers to assess the value of current services and to obtain ideas for new services. Step 2. Assess costs of providing desired services. Step 3. Develop a package of services to delight customers and yield profits to the company.
  18. 18. Branding    Brand name Trademark Advantages of branding    to consumers to branders Disadvantages of branding   to consumers to branders
  19. 19. Branding  Advantages to Branding  Buyers:    Identification Quality and value Sellers    Tells a story Provides legal protection Helps segments markets  Brand Equity      Higher brand loyalty Name awareness Perceived quality Strong brand associations Patents, trademarks, channel relationships
  20. 20. Brands and Brand Symbols (p. 292)  Powerful brands such as these have brand equity:    Coca-Cola brand - $69 billion IBM brand - $53 billion Offers defense against fierce price competition.
  21. 21. Advantages of branding (Kotler)       easier for the seller to process orders and track down orders with the trademark, it provides legal protection of features it helps attract loyal and profitable customers gives protection from competition aids segmentation helps build the corporate image …….ease of decision-making
  22. 22. Branding as PLC Extension ..cont Renewal $ time
  23. 23. Branding    Brand equity Brand extension (line extension) Levels of brand familiarity      rejection no recognition recognition preference insistence
  24. 24. Brand Strategies   Individual brand name (multibranding) Family brands (multiproduct branding)    blanket family name for all products separate family name for related products combination family and individual brand name
  25. 25. Product Line Decisions     Stretching Filling Pruning (dropping) Line extensions (brand extensions)
  26. 26. The product and the company’s marketing strategy   Marketing strategy as a function of product classification The product life cycle and marketing strategy  Introduction  Growth  Maturity  Saturation  Decline

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