Transcript Product Planning Unit 9 Product Planning • How are decisions made to introduce new products and delete old old ones?

Product Planning
Unit 9
Product Planning
• How are decisions made
to introduce new
products and delete old
old ones?
Unit 9 Vocabulary
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Aseptic Packaging
Blisterpacks
Brand
Brand Extension
Brand Label
Brand Licensing
Brand Mark
Brand Name
Category Management
Cause Packaging
Co-Branding
Descriptive Label
Generic Brands
Grade Label
Label
Mixed Brand
Mixed Bundling
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National Brands
Package
Planograms
Price Bundling
Private Distributor Brands
Product Depth
Product Item
Product Life Cycle
Product Line
Product Mix
Product Modification
Product Planning
Product Positioning
Product Width
Trade Name
Trade Character
Trademark
Unit 9 Essential
Question
• What processes and techniques
are used to develop, maintain, and
improve a product/service mix in
order to utilize market
opportunities?
Essential Question 1
Product Planning
• What is the nature and scope of the
product/service management function?
What is Product Planning?
• Product Planning: The decisions made
about what features should be used in
selling of a business’s products.
• These decisions relate to:
– packaging
– labeling
– warranties
– guarantees
– branding
– product mix
What is Product Planning?
• Product Mix: All the different products
that a company makes or sells.
– Product Line: A group of closely related
products manufactured or sold by a business.
– Product Item: A specific model, brand, or size of
a product within a product line.
– Product Width: The number of different product
lines a business manufactures or sells.
– Product Depth: The number of product items in a
product line.
What is Product Planning?
• A well defined product plan allows a
business to:
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Create sales opportunities.
Design appropriate marketing programs.
Develop effective advertising campaigns.
Coordinate the product mix offered to
customers.
– Add new products.
– Delete older products that no longer appeal to
customers
Essential Question 2
Product Planning
• How do businesses determine which
products to produce and sell?
Determining what to produce or sell
• Businesses will use different product
mix strategies to determine what to
produce or sell.
• Product mix strategies depend on:
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Resources
Objectives
Past and current sales
Consumer trends
Essential Question 3
Product Planning
• How are products/services positioned
in the market place?
Product Positioning
• Product positioning: Efforts a
business makes to identify, place and
sell its products in the marketplace.
– Positioning by price and quality:
• Ex: Ford Motor Company positions its Focus as an economical
passenger car while still emphasizing quality.
Product Positioning
– Positioning by features and benefits:
• Ex: Oil of Olay was positioned as a premium facial
moisturizer and cleanser to keep skin soft and
young.
– Positioning by unique characteristics:
• Ex: Cell phones that can text message or take
pictures and send them.
Product Positioning
– Positioning in relation to the
competition:
• Ex: Warner-Lambert Company introduced Cool
Mint Listerine by positioning against the “theraputic”
benefits of Original Listerine and the “cosmetic”
benefits of Scope.
– Positioning in relation to other
products in a line:
• Ex: Binney & Smith introduced washable crayons
and positioned them as a specialty item in the
company’s Crayola crayon line.
Essential Question 4
Product Planning
• What is the concept of product mix
and product/service branding?
Product Mix Strategies
• Developing New Products
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Generate Ideas
Screen Ideas
Develop a Business Proposal
Test the product with consumers
Introduce the product
Evaluate customer acceptance
Product Mix Strategies
• Developing Existing Products
– Line Extensions: Adding new product lines,
items or services.
• Ex: Tylenol
– Product Modifications: An alteration to an
existing product:
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New and different varieties
Formulations
Colors
Styles
Features
Sizes
Product Mix Strategies
• Deleting a Product or Product Line
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Obsolescence
Loss of Appeal
Changes in Company Objectives
Replacement with New Products
Lack of Profit
Conflict with other products in the line
Essential Question 5
Product Planning
• What is the nature of product
bundling?
What is Product Bundling?
• Multiple products or components
packaged together into one bundled
solution.
Benefits for Businesses
and Customers
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Introduce New Products
Acquire New Customers
Higher Profits
Increase Product Turnover (distressed
inventory)
Benefits for Businesses
and Customers
• CUSTOMERS
– Save Money
– Perception of Greater Value
– Low Risk to Try New Products
Examples
1. Astound
2. X-Box
3. Happy Meal
Essential Question 6
Product Planning
• What is the nature of corporate
branding?
Branding, Packaging, and
Labeling
• Brand: Name, design or symbol that
identifies the products of a company.
– Brand Name:
• Word or group of words that can be spoken.
• Ex: Nike, Coca-Cola Classic, Cover Girl, Tylenol
– Brand Mark:
• Symbol, design, distinctive coloring, or lettering
Branding, Packaging,
and Labeling
– Trade Name:
• Identifies the company or a division of a particular
corporation.
– Trade Character:
• A personified brand mark.
Branding, Packaging,
and Labeling
– Trademark:
• When used, it is followed by the registered trademark
symbol ®
Branding, Packaging, and
Labeling
• Package: Physical container or wrapping
for a product.
• Label: Information tag, wrapper, seal, or
imprinted message that is attached to a
product or package.
Essential Question 7
Product Planning
• How do you identify product
opportunities?
New Product Opportunities
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Changes in life cycle
Changes in technology
Changes in market/society
Changes in economy
Finding the GAPS!
• Find the opportunities
when you find the
gaps!
• Gap=the difference
between what is
currently available
and what is
needed/desired
Changes in Life Cycle
• Product planning does not end
when a product is new!
• Must decide what to do with
existing products as they change
through the life cycle
Product Life Cycle
Maturity
Introduction
• What do we do when a product
declines?
• Have to decide to modify or delete
• THIS IS AN OPPORTUNITY!
Delete or Reinvent
Changes in Technology
• Smartphones
– Voice recognition technology
• Siri
• GPS
– Garmin, Tom Tom
– Google Maps
• Social Media
Changes in Market/Society
• Health Conscience
– McDonalds Happy Meal
• Apple Slices, Milk
– Salads, wraps
– Bottled water
• Convenience
• Entertainment
– Games, music, movies, culture
Changes in Economy
• Economic downturn
– Created opportunity for new product
and product expansion
• Generic brands, discount stores, low cost
alternatives and substitutes
Ways To Find the Gaps
• Market research
– Surveys
• Asking customers what they would like, what's lacking
– Focus Groups
– Sales records
• Where are sales decreasing/not improving?
– Competitors
• What are our competitors offering that we aren’t?
• What are they doing better than us?
Essential Question 8
Product Planning
• What methods/techniques can be
used to generate a product idea?
New Product Categories
• Products that create a new market or
niche segment.
– Paper disposable diapers.
• Additions or line extensions to existing
products.
– New flavors and new sizes of existing products.
New Product Categories
• Product improvements.
– Cars.
– Cell phones
• Repositioned products.
– Tums repositioned itself to feature its high
calcium content as a benefit for women's health.
Product Development
• The first step is to generate new
business ideas that are unique.
– Can the product be
• Repositioned
• Improved
• Brought out in a new size, flavor, or
package?
Product Development
• Techniques used to generate new product
ideas:
– Periodically screen your products and compare them
with competitors' products, with an eye toward:
• improving attributes of products
• combining the features/benefits of several separate
products into a single new product
– examining users' needs that are not being met by
current competitive products
– using idea-generating methods like brainstorming