Title: Product Strategy
1MARKETING STRATEGYO.C. FERRELL MICHAEL D.
HARTLINE
7
Product Strategy
2Product Decisions
- Product is critical element of marketing mix
Anything that can be offered to a market for
attention, acquisition, use or consumption and
that might satisfy a want or need. - Physical object, service, person, place,
organization, idea
3Product Decisions Involve
- Product mix- total group of products offered by
company - Product lines-group of closely related product
items - Depth-number of items in line
- Brands-combination of name, symbol, term, or
design that identifies specific product - Packaging and labeling
- Positioning
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5Product Lines andProduct Mixes at Gillette
Exhibit 7.1
6Product Mix Decisions
- Def. Set of all products and items that a
particular seller offers to buyers. - Decisions include selection of width, length,
depth, and consistency
7Product Line Decisions
- Line stretching
- Downward enter on the low end
- Upward enter on the high end
- Two-way enter both directions
- Line-filling add more items
- Line Modernization update to reflect current
trends, themes - Line-Featuring-select one or a few items in the
line to feature - Line-Pruning select item(s) to cut
8What is a Brand?
- A brand is a name, term, sign, symbol, or design,
or a combination of them intended to identify the
goods or services of one seller or group of
sellers and to differentiate them from those of
competitors.
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10The Worlds Twenty-FiveMost Valuable Brands
Exhibit 7.5
11Branding Decisions
- Brand Name
- Individual (General Mills- Bisquick, Gold Medal,
Betty Crocker PG) - Blanket family name (Heinz, Campbell)
- Separate family names (Sears-Kenmore for
appliances, Craftsman for tools) - Company plus individual names (Kellogg Rice
Krispies)
12Branding Decisions
13Good Brand Names
- Distinctive
- Lack Poor Foreign Language Meanings
- Suggest Product Qualities
- Suggest Product Benefits
- Easy to Pronounce, Recognize, Remember
- Zit (Chocolate from Germany)
- Koff (Beer)
14Packaging Decisions
- Design, materials, size
- Critical as marketing tool
- Self-service
- Company brand image
- Opportunity for brand innovation
15Positioning Decision
- Positioning is the act of designing the companys
offering and image to occupy a distinctive place
in the target markets mind.
16Steps In The Positioning Process
- Identify relevant set of competitive products
serving target market - Identify the set of determinant attributes that
define the product space. - Collect information from a sample of customers
and potential customers about perceptions of each
product on the determinants - Determine the products current positioning.
- Determine the customers most preferred
combination of determinant attributes. - Examine the fit between preferences of market
segments and current position of products. - Write positioning statement to guide development
of marketing strategy.
17Positioning Map Automobiles For Generation Yers
More Edgy
Kia Sorrento
Scion
Cube
Expensive
Inexpensive
13k
20K
Civic
Less Edgy
18Trout and Ries suggest a six-step question
framework for successful positioning 1. What
position do you currently own? 2. What position
do you want to own? 3. Whom you have to defeat
to own the position you want. 4. Do you have the
resources to do it? 5. Can you persist until you
get there? 6. Are your tactics supporting the
positioning objective you set?
19- How is the Ford Mustang positioned? How has Ford
achieved this positioning? Has its positioning
changed over time?
20How is Avis positioned? How does Avis achieve
this positioning? Has this positioning changed
over time?
21Product Differentiation
- Differentiation Strategies Create differences
in the firms product offering that sets it apart
from competing offerings based on - Product features
- Advantages
- Benefits
22Using Product Descriptorsfor Product
Differentiation
Exhibit 6.7
23How is Venus differentiated from other razors?
24Factors Influencing Product Strategy Decisions
- Classification of Products
- Convenience
- Shopping
- Specialty
- Unsought Products
- Product Life Cycle
25Product Classification (1 of 3)
- Consumer Product Classifications
- Convenience Products
- Routinely purchased, require little or not time
searching - Make them widely available
26- Shopping Products
- Spend considerable time making the purchase seek
info on price, features, service - Product differentiation very important
- Have strategy to guarantee and reduce consumer
satisfaction
27- Specialty Products
- Unique, shoppers expend considerable time,
effort, money to acquire accept no substitutes
28- Unsought Products
- (1) Products of which consumers are unaware
- (2) Products that consumers do not consider
- purchasing until a need or emergency
- arises
29Stages of the Product Life Cycle
Exhibit 7.2
30Marketing Strategy Duringthe Product Life Cycle
Exhibit 7.3
31New Product Development
- Six strategic product development options
- (1) New-to-the-world products (discontinuous
- innovations)
- (2) New product lines
- (3) Product line extensions
- (4) Improvements or revisions of existing
- products
- (5) Repositioning
- (6) Cost reductions
- Customer perception of differentiation is critical
32Development Stage
- No sales revenue during this stage
- Components of the product concept
- An understanding of desired uses and benefits
- A description of the product
- The potential for creating a complete product
line - An analysis of the feasibility of the product
concept - Customer needs should be discerned before
developing marketing strategy
33Introduction Stage
- Begins when development is complete
- Ends when customers widely accept the product
- Marketing strategy goals during this stage
- Attract customers by raising awareness and
interest - Induce customers to try and buy
- Engage in customer education activities
- Strengthen or expand channel and supply
relationships - Build on availability and visibility
- Set pricing objectives
34Growth Stage (1 of 2)
- Be ready for sustained sales increases
- Rapid increase in profitability early in the
growth stage that decreases at the end of this
stage - Length depends on nature of product and
competitive reactions - Two strategies
- (1) Establish a strong, defensible marketing
position - (2) Achieve financial objectives
35Growth Stage (2 of 2)
- Marketing strategy goals in this stage
- Leverage the products perceived differential
advantages - Establish a clear product and brand identity
- Create unique positioning
- Maintain control over product quality
- Maximize availability of the product
- Maintain or enhance the products profitability
to partners - Find the ideal balance between price and demand
- Keep an eye focused on the competition
36Maturity Stage (1 of 2)
- Few, if any, new firms will enter the market
- Still an opportunity for new product features
and variations - Typically the longest stage in the product life
cycle
37Maturity Stage (2 of 2)
- Four general goals in this stage
- (1) Generate Cash Flow
- (2) Hold Market Share
- (3) Steal Market Share
- (4) Increase Share of Customer
- Four options to achieve these goals
- (1) Develop a new product image
- (2) Find and attract new users to the product
- (3) Discover new applications for the product
- (4) Apply new technology to the product
38Decline Stage
- Two options
- (1) Attempt to postpone the decline
- (2) Accept its inevitability
- Harvesting
- Divesting
- Factors to be considered during this stage
- Market segment potential
- The market position of the product
- The firms price and cost structure
- The rate of market deterioration
39Product Strategy for Services
- Characteristics of Services
- Marketing Strategy for Services
- Product Issues
- Pricing Services
- Promoting Service Benefits
- Distributing Services
40Unique Characteristics of Servicesand Resulting
Marketing Challenges
Exhibit 7.6
41Product Classification (2 of 3)
- Business Product Classifications
- Raw Materials
- Component Parts
- Process Materials
- MRO Supplies
- Accessory Equipment
- Installations
- Business Services