Ch. 09 Media Managing the Product

Chapter Objectives

• product objectives & strategies

• managing products

_{throughout the product life cycle}

• branding

_{creating product identity}

Chapter Objectives

• packaging and labeling

• how organizations are structured

_{new product management}

Product Planning: Taking the Next Step

• product management = very important.

• _{at faster and faster speeds Products are}

• _created, • _grow,

• reach maturity,

• decline.

Figure 9.1:

Product Objectives =Product Strategy

• Objectives must be:

• measurable,

• _clear,

• unambiguous,

• feasible

Product Objectives =Product Strategy

• Objectives & strategies for individual products:

--introduction of new products

Objectives and Strategies for Multiple Products

• Product line

:

• Firm’s total product offering designed to satisfy a single need or desire of target

Objectives and Strategies for Multiple Products

• Product mix:

• The total set • of all products

Product Development

•

_{Product line}

desire for growth

position in marketplace

_{use of resources}

Objectives and Strategies for Multiple Products

• Product-Line Strategies

_{Full-line vs. limited-line strategies}

_{Upward, downward, or two-way line} stretch

Product Mix

• _{Characteristics}

Length =

• # different products firms sells _{Width –}

• # product lines _{Depth –}

Objectives and Strategies for Multiple Products

• Product-Mix Strategies

_{Width of product mix:}

Product Mix

• _Strategies

• _{(extensions & diversity)} _wider

_longer _deeper

Detergents Toothpaste Bar Soap FruitJuices Lotions

Oil of Olay

Citrus Hill Oil of Olay Camay Raintree Tropic Tan Ban de Soleil

Proctor & Gamble Products;

Product Line Length and Product

Mix Width

Depth

Quality as a Product Objective

• Product quality:

• overall ability of product

• to satisfy customer’s expectations

Quality as a Product Objective

• Total Quality Management (TQM):

• company-wide dedication to the

• _development, • _maintenance,

• _{continuous improvement}

• of all aspects of the company’s operations

ISO Quality Standards

• ISO 9000:

• _{voluntary standards}

• for quality management

• _{set by International Organization for}

ISO Quality Standards

• ISO 14000:

• _{concentrate on environmental}

ISO Quality Standards

• Six Sigma methodology: • no more than 3.4 defects

per million

Adding Quality to the Marketing Mix

•

_Product

_:

_{improve customer service}

•

_Place

_:

Adding Quality to the Marketing Mix

• Price:

lower costs and improve service

at same time

• _Promotion:

give customers information

when they want and need it

Marketing Throughout the Product Life Cycle

• Product life cycle:

• _{the way products go through} • four distinct stages

• _{from birth to death –}

The Introduction Stage

• First stage,

in which slow growth

follows the introduction of a new product

in the marketplace.

• --Goal = get 1ST time buyers to try

product.

The Growth Stage

• Second stage

product is accepted

sales rapidly increase.

• --Goal = encourage brand loyalty. • --product variations introduced

The Maturity Stage

• Third & longest stage

sales peak

profit margins narrow.

--Competition grows intense.

--price reductions

The Decline Stage

• Final stage,

• sales decrease

as customer needs change.

• _{Market begins to shrink,} • profits decline,

• _{fewer product variations exist,} • _{suppliers pull out.}

• major decision = to keep product or not.

Extending the PLC

• Ways

_{frequency of use} number of users

find new uses

product improvement

• _Deletion decisions _harvest

Creating Product Identity: Branding Decisions

• Brand:

• a name, term, symbol, • or unique element

A Good Brand Name:

•

_{Creates a positive connotation.}

•

_{Is memorable.}

•

_{Positions a product}

_{by conveying image or personality}

(Ford Mustang)

A Good Brand Name:

• _{easy to}

say_, spell_, read_{, &} remember_.

• Fits:

_{target market,}

_{product benefits,}

Trademarks • Legal term

for a brand name, brand mark, or trade character

• legally registered by a government

obtain protection for exclusive use in that country.

--Trademarks

•

_{Symbol in the U.S.: ®}

•

_{Common-law protection}

_:

_{the firm has used the name &}

The Importance of Branding

• Brand equity:

a brand’s value to its organization

_{over and above the value}

Top 100 Global Brands Scoreboard

The table that follows ranks 100 global brands that have a value greater than $1 billion. The brands were selected according to two criteria. 1)global in nature, deriving 20% or more of sales from outside their home country. 2) publicly available marketing and financial data on which to base the valuation.

2005

3 IBM International Business Machines _Corporation 53,3₇₆ 53,791

4 GE GE 46,9

The Importance of Branding

•Brand meaning:

the beliefs and associations

Figure 9.7:

The Importance of Branding (cont’d)

• Brand equity

• provides competitive advantage:

_{the power to capture and hold}

• onto a larger share of the market and

_{to sell at prices with higher profit}

The Importance of Branding (cont’d)

• Brand extensions

:

• new products sold

Branding Strategies

• _{Individual brands} • _{family brands}

• National & store brands

• Generic brands

:

Branding Strategies (cont’d)

• Licensing:

• _{one firm sells the right} • to use a legally

protected brand name

• _{for a specific purpose} • for a specific period of

Branding Strategies (cont’d)

•

_Co-branding:

Creating Product Identity:

Packaging and Labeling Decisions

• Package:

• _the

_covering

_{or container for a}

product

• that provides product protection,

• facilitates product use and storage,

• supplies important marketing

Packaging and Labeling Decisions (cont’d)

• _{Universal Product Code (UPC):} • _{set of black bars or lines}

• printed on the side/bottom

of most items sold in stores;

• _{creates a national system}

Designing Effective Packaging

Effective packaging considers:

• Packaging of other brands

in same product category

• Choice of packaging material

• Environmental impact • Shape and color

Labeling Regulations

• Federal Fair Packaging and

Labeling Act of 1966

• _{aims at making labels more helpful}

to consumers

Labeling Regulations

•

_{Food and Drug Administration}

• requires food labels to tell how much

• _{fat, saturated fat, cholesterol, calories,}

carbohydrates, protein, trans fats, and vitamins

Effective Product Management

•

_{Managing Existing Products}

_{Brand managers}

New-Product Development

•Venture teams:

• specialists in different areas

• _{who work together}

New-Product Development

•

_{“Skunk works”:}

• small and isolated group

• _{in remote location}

Real People, Real Choices

• Grendha Shoes Corp. (Angelo Daros)_{Grendha Shoes Corp. (Angelo Daros)}

• _{Launching the Rider brand in the United States, Launching the Rider brand in the United States,}

Angelo needed a plan to position the brand.

Angelo needed a plan to position the brand.

Option 1: position U.S. Rider the same way as the _{Option 1: position U.S. Rider the same way as the}

Brazilian version

Brazilian version

Option 2: position Rider as an “after sport footwear” _{Option 2: position Rider as an “after sport footwear”}

brand

brand

Option 3: position Rider more specifically as an “after _{Option 3: position Rider more specifically as an “after}

soccer” brand

Real People, Real Choices

• Grendha Shoes Corporation (Angelo Daros)

• Angelo chose option 2: position Rider as an “after sport footwear” brand

Grendha adapted the same strategy in over 85 countries around the world and now sells millions of pairs

globally.

Marketing Plan Exercise

• Dr. Pepper is the oldest soft-drink brand in the United States.

 _{What are some product-line strategies Dr. Pepper might}

consider?

 How important is TQM, and product quality in general, to a brand like Dr. Pepper?

 _{What realistic opportunities for brand extensions exist}

for Dr. Pepper?

Marketing in Action Case: You Make the Call

• _{What is the decision facing Sony?}

• _{What factors are important in}

understanding this decision situation?

• _{What are the alternatives?}

• _{What decision(s) do you recommend?}

• What are some ways to implement your

Keeping It Real: Fast Forward to Next Class Decision Time at Universal Studios

• Meet Robyn Eichenholz, senior brand manager at Universal Orlando.

• Upcoming Donna Summer concert would attract many customers

Group Activity

• Think of your college or university as an organization that offers a line of different educational products.

• Develop alternatives it might consider and

describe how each might be accomplished and evaluated:

 Upward product stretch

 Downward product stretch

 Two-way stretch

Group Activity

• _{Conduct a brief focus group of students}

and find out whether consumers complain to each other about poor product quality.

--Have they ever used a Web site to express displeasure over product quality?

Discussion

• Quality can mean different things for

different products. What does it mean for the following?

Automobile

Pizza

Running shoes

Hair dryer

Deodorant

Discussion

• _{Brand equity means a brand enjoys}

customer loyalty, perceived quality, and brand-name awareness.

--What brands are you loyal to?

Discussion

• _{What are some examples of brand}

Group Activity

• For each of the following, discuss any problems you have with the packaging of the brand you use. Think of ways to improve the package.

 Dry cereal

 Laundry detergent

 Frozen orange juice

 Gallon of milk

 Potato chips