Transcript Consumers Rule - Lampung University

Managing the Product
Chapter Objectives
• product objectives & strategies
• managing products
throughout the product life cycle
• branding
creating product identity
types of branding strategies
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Chapter Objectives
• packaging and labeling
• how organizations are structured
new product management
existing product management
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Product Planning:
Taking the Next Step
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product management = very important.
at faster and faster speeds Products are
created,
grow,
reach maturity,
decline.
LEXUS HYBRID
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Figure 9.1:
Steps in Managing Products
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Product Objectives =Product Strategy
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Objectives must be:
measurable,
clear,
unambiguous,
feasible
indicate a specific time frame.
MINIUSA.COM
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Product Objectives =Product Strategy
• Objectives & strategies for individual products:
--introduction
of new products
--Breathing life into mature products
MINIUSA.COM
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Figure 9.2: Objectives for Single and
Multiple Products
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Objectives and Strategies for
Multiple Products
• Product line:
• Firm’s total product
offering designed to
satisfy a single need
or desire of target
customers
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Objectives and Strategies for
Multiple Products
• Product mix:
• The total set
• of all products
• a firm offers for sale
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Product Development
• Product line
desire for growth
position in marketplace
use of resources
exploit Product Life Cycle
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Objectives and Strategies for
Multiple Products
• Product-Line Strategies
Full-line vs. limited-line strategies
Upward, downward, or two-way line
stretch
Filling out a product line
contracting a product line
Swiss Army
Video
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Product Mix
• Characteristics
Length =
• # different products firms sells
Width –
• # product lines
Depth –
• variations in each product
consistency
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Objectives and Strategies for
Multiple Products
• Product-Mix Strategies
Width of product mix:
the number of different product lines
produced by firm
Swiss Army
Video
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Product Mix
• Strategies
• (extensions & diversity)
wider
longer
deeper
more/less consistent
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P roctor & G am b le P rod ucts;
P rodu ct L in e L en gth an d P rodu ct
M ix W idth
D eter gen ts
Ivor y Sn ow
D r e ft
T ide
Joy
C h ee r
O xydol
D as h
C as cad e
Ivor y L iquid
G ain
D aw n
Era
B old 3
L iquid T ide
Solo
T ooth paste
B ar Soap
G lee m
C r e st
C om ple te
D e nq ue l
Ivor y
C am ay
L ava
K irk's
Z e st
Saf egu ard
C oas t
O il of O lay
F ru it
Ju ices
L otion s
C itr us H ill
Su nny
D e light
W inte r H ill
T e xsu n
L inc oln
Sp eas Far m
W ond ra
N ox em a
O il of O lay
C am ay
R aintr e e
T r opic T an
B an d e
Sole il
D ep th
th e n u m ber o f
alterna tives
av ailab le w ith in
each bra nd
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Quality as a Product Objective
• Product quality:
• overall ability of product
• to satisfy customer’s expectations
MALCOLM BRIDGE
AWARD WINNERS!
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Quality as a Product Objective
• Total Quality Management
(TQM):
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company-wide dedication to the
development,
MALCOLM BaldRIDGE
AWARD WINNERS!
maintenance,
continuous improvement
• of all aspects of the company’s operations
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ISO Quality Standards
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ISO 9000:
voluntary standards
for quality management
set by International Organization for
Standardization (ISO)
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ISO Quality Standards
• ISO 14000:
• concentrate on environmental
management
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ISO Quality Standards
• Six Sigma methodology:
• no more than 3.4 defects
per million
• (getting it right 99.9997% of the time)
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Adding Quality to the Marketing Mix
• Product:
improve customer service
• Place:
involve suppliers and customers
in improving on-time delivery
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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
(not when it’s convenient for firm)
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Dimensions of Product Quality
Figure 9.4
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PRODUCT LIFE CYCLE
Marketing Throughout
the Product Life Cycle
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Product life cycle:
the way products go through
four distinct stages
from birth to death –
introduction,
growth,
maturity,
decline.
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The Product Life Cycle
Figure 9.5
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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.
• --little or no profit during this stage.
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The Growth Stage
• Second stage
product is accepted
sales rapidly increase.
• --Goal = encourage brand loyalty.
• --product variations introduced
to attract market segments
increase market share.
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The Maturity Stage
• Third & longest stage
sales peak
profit margins narrow.
--Competition grows intense.
--price reductions
--reminder advertising.
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The Decline Stage
• Final stage,
• sales decrease
OLDTIMECANDY.COM
 as customer needs change.
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Market begins to shrink,
profits decline,
fewer product variations exist,
suppliers pull out.
major decision = to keep product or not.
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Extending the PLC
• Ways
frequency of use
number of users
find new uses
product improvement
• Deletion decisions
harvest
divest
reasons
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Extending the PLC (next chapter)
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BRANDING
Creating Product Identity:
Branding Decisions
• Brand:
• a name, term, symbol,
• or unique element
• that identifies one firm’s product
• sets it apart from the competition.
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A Good Brand Name:
• Creates a positive connotation.
• Is memorable.
• Positions a product
by conveying image or personality
(Ford Mustang)
 or describing how it works (Drano).
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A Good Brand Name:
• easy to
say, spell, read, & remember.
• Fits:
target market,
product benefits,
customer’s culture,
legal requirements.
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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.
--
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Trademarks
• Symbol in the U.S.: ®
• Common-law protection:
the firm has used the name &
established it over a period of time.
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The Importance of Branding
• Brand equity:
a brand’s value to its organization
over and above the value
• of the generic version of the product
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Top 100 Global Brands Scoreboard
The table that follows ranks 100 global brands that have a value greater than $1 billion. The
brands were selected according to two criteria. 1)global in nature, deriving 20% or more of sales
from outside their home country. 2) publicly available marketing and financial data on which to
base the valuation.
2005
Brand
Rank
Brand
Name
Parent Company
2005
Bran
d
Valu
e
($Mil
)
2004
Brand
Value
($Mil)
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CocaCola
Coca-Cola
67,5
25
67,394
2
Microsof
t
Microsoft
59,9
41
61,372
3
IBM
International Business Machines
Corporation
53,3
76
53,791
4
GE
GE
46,9
96
44,111
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Intel
Intel
35,5
88
33,499
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The Importance of Branding
• Brand meaning:
the beliefs and associations
a consumer has about the brand
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Figure 9.7:
The Brand Equity Pyramid
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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
margins
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The Importance of Branding (cont’d)
• Brand extensions:
• new products sold
• with the same brand name
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Branding Strategies
• Individual brands
• family brands
• National & store brands
• Generic brands:
 no branding
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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
time
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Branding Strategies (cont’d)
• Co-branding:
• combines 2 brands
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Packaging & labeling
Creating Product Identity:
Packaging and Labeling Decisions
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Package:
• the covering or container for a
product
• that provides product protection,
• facilitates product use and storage,
• supplies important marketing
communication
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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
 of product identification
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Designing Effective Packaging
Effective packaging considers:
• Packaging of other brands
 in same product category
• Choice of packaging
material
• Environmental impact
• Shape and color
• Graphic information
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Labeling Regulations
• Federal Fair Packaging and
Labeling Act of 1966
• aims at making labels more helpful
to consumers
• by providing useful information.
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Labeling Regulations
• Food and Drug Administration
• requires food labels to tell how much
• fat, saturated fat, cholesterol, calories,
carbohydrates, protein, trans fats, and
vitamins
• are in each product serving.
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Effective Product Management
• Managing Existing Products
Brand managers
Product category managers
Market managers
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New-Product Development
• Venture teams:
• specialists in different areas
• who work together
• to focus on new-product development
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New-Product Development
• “Skunk works”:
• small and isolated group
• in remote location
• that functions with minimal supervision
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The end
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Real People, Real Choices
• Grendha Shoes Corp. (Angelo Daros)
• Launching the Rider brand in the United States,
Angelo needed a plan to position the brand.
 Option 1: position U.S. Rider the same way as the
Brazilian version
 Option 2: position Rider as an “after sport footwear”
brand
 Option 3: position Rider more specifically as an “after
soccer” brand
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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.
GRENDA SHOE CORPORATION
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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?
 Does Dr. Pepper have high brand equity? What can
it do to enhance its brand equity?
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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
recommendation?
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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
• The decision: How to plan for the Donna
Summer concert
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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:
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Upward product stretch
Downward product stretch
Two-way stretch
Filling-out strategy
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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?
 --If so, what was the result?
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Discussion
• Quality can mean different things for
different products. What does it mean for
the following?
 Automobile
 Pizza
 Running shoes
 Hair dryer
 Deodorant
 College education
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Discussion
• Brand equity means a brand enjoys
customer loyalty, perceived quality, and
brand-name awareness.
 --What brands are you loyal to?
 --What element of the product creates brand loyalty
and thus brand equity?
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Discussion
• What are some examples of brand
extensions that have damaged the parent
brand’s equity? What are some that have
enhanced it?
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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.
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Dry cereal
Laundry detergent
Frozen orange juice
Gallon of milk
Potato chips
Loaf of bread
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