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Products.pptx
This document discusses product decisions and the product life cycle. It defines a product and identifies five levels of products. It also discusses classifying products by durability, tangibility, and consumer shopping habits. Additionally, it covers new product development processes, reasons for new product failure, and strategies for marketing products through different stages of the product life cycle.
Products.pptx
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- 2. What is aProduct? • A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas. • A product is a bundle of benefits • A Product is a set of solutions to solve customer problems
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- 4. The Product andProduct Mix Product Classifications • Durability and tangibility • Consumer goods • Industrial goods • Nondurable • Tangible • Rapidly consumed • Example: Milk • Durable • Tangible • Lasts a long time • Example: Oven • Services • Intangible • Example: Tax preparation
- 5. The Product andProduct Mix Product Classifications • Durability and tangibility • Consumer goods • Industrial goods • Classified by shopping habits: • Convenience goods • Shopping goods • Specialty goods • Unsought goods
- 6. The Product andProduct Mix Product Classifications • Durability and tangibility • Consumer goods • Industrial goods • Materials and parts • Farm products • Natural products • Component materials • Component parts • Capital items • Installations • Equipment • Supplies and business services • Maintenance and repair • Advisory services
- 7. The Product andProduct Mix • Product mix dimensions: • Width: number of product lines • Length: total number of items in mix • Depth: number of product variants • Consistency: degree to which product lines are related
- 8. New Product Development •What is a “New” Product? • New-to-the-world products • New product lines • Additions to existing product lines • Improvements and revisions of existing products • Repositioned products • Cost reduction products
- 9. New Product Development •New Product Failure is Rampant: • 95% of new U.S. consumer products • 90% of new European consumer products • Reasons for failure include ignoring unfavorable market research, overestimating market size, marketing mix decision errors, and stronger than anticipated competitive actions
- 10. New Product Development •Successful new products: • Offer a strong relative advantage • Reflect better understanding of customer needs, and beat the competition to market • Exhibit higher performance-to-cost ratios and higher contribution margins • Are launched with larger budgets • Have stronger top management support
- 11. Managing New Products •Idea generation • Idea screening • Concept development • Concept testing • Marketing strategy development • Business analysis New Product Development Process: Ideas to Strategy
- 12. Managing New Products •Product development • Market testing • Commercialization New Product Development Process: Development to Commercialization
- 13. Consumer Adoption Process •Adopters of new products move through five stages: • Awareness • Interest • Evaluation • Trial • Adoption
- 14. Consumer Adoption Process •People adopt new products at different rates • Innovators • Early adopters • Early majority • Late majority • Laggards
- 15. Consumer Adoption Process •Five product characteristics influence the rate of adoption: • Degree of relative advantage • Degree of compatibility • Degree of complexity • Degree of divisibility (trialability) • Degree of communicability
- 16. Marketing Through the ProductLife Cycle • Five product characteristics influence the rate of adoption: • Degree of relative advantage • Degree of compatibility • Degree of complexity • Degree of divisibility (trialability) • Degree of communicability
- 17. Stages of theProduct Life Cycle PLC Stages • Introduction • Growth • Maturity • Decline • Low sales • High costs per customer • Negative profits • Innovator customers • Few competitors
- 18. Stages of theProduct Life Cycle PLC Stages • Introduction • Growth • Maturity • Decline • Rising sales • Average costs • Rising profits • Early adopters customers • Growing competition
- 19. Stages of theProduct Life Cycle PLC Stages • Introduction • Growth • Maturity • Decline • Peak sales • Low costs • High profits • Middle majority customers • Stable/declining competition
- 20. Stages of theProduct Life Cycle PLC Stages • Introduction • Growth • Maturity • Decline • Declining sales • Low costs • Declining profits • Laggard customers • Declining competition
- 21. Objectives and Strategiesfor the Product Life Cycle PLC Stages • Introduction • Growth • Maturity • Decline • Objective: to create awareness and trial • Offer a basic product • Price at cost-plus • Selective distribution • Awareness – dealers and early adopters • Induce trial via heavy sales promotion
- 22. Objectives and Strategiesfor the Product Life Cycle PLC Stages • Introduction • Growth • Maturity • Decline • Objective: maximize market share • Offer service, product extensions, warranty • Price to penetrate • Intensive distribution • Awareness and interest – mass market • Reduce promotions due to heavy demand
- 23. Objectives and Strategiesfor the Product Life Cycle PLC Stages • Introduction • Growth • Maturity • Decline • Objective: maximize profit while defending market share • Diversify brands/items • Price to match or beat competition • Intensive distribution • Stress brand differences and benefits • Increase promotions to encourage switching
- 24. Objectives and Strategiesfor the Product Life Cycle PLC Stages • Introduction • Growth • Maturity • Decline • Objective: reduce costs and milk the brand • Phase out weak models • Cut price • Selective distribution • Reduce advertising to levels needed to retain hard-core loyalists • Reduce promotions to minimal levels