Product

1
Product Service Strategies

• Jeremy Kees, Ph.D.

2
The Basics

• What is a product
• 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.
• Do we market products and services in the same
  manner???

3
Distinguishing Factors

• Intangibility
• Inseparability
• Requirement ofinteraction between buyer and
  seller
• Perishability
• Difficulty of standardization / variability in
  service offering

4
Types of Consumer Products

• Convenience Products
• Inpluse Items
• Staples
• Emergency Items
• Shopping Products
• Homogeneous
• Heterogeneous
• Specialty Products
• Unsought Products

5
Consumer Product Classification
6
The Product Mix

• Using AB as an example
• Product Mix (or Assortment)
• Product lines
• (beer, specialty beer, imports, specialty malt
  beverages)
• Product types
• (Within beer, AB has the Bud family,
  Michelob family, Busch family)
• Items
• (Bud Light, Mic Ultra, Bacardi Silver)

7
The Product Mix Width, Length, and Depth

• Width of product lines
• Length of products within the line(s)
• Depth of variants of each product
• http//www.jnj.com

8
Product Mix Decisions Product Line Analysis

• Evaluate sales and profits associated with each
  item in product line
• Evaluate line positioning relative to competition
• Decide whether to build, maintain, harvest, or
  divest

9
Product Mix Decisions Product Line Analysis

• Depending on success of various lines versus the
  competition, we can.
• Stretch the Line
• Up-stretching AB acquiring Imports and
  Microbrews
• Down-stretching AB developing Natural Light
• Prune the Line
• Goal volume (market share) objectives
• If the goal is profitability, then shorter lines
  might be a more viable strategy

10
Product Mix Decisions Product Line Analysis

• When extending lines, an important consideration
  is consistency and capitalizing on equity built
  in the original brand
• Michelob Light
• Mic Ultra
• Mic Ultra Amber

11
New Product Development
12

• http//www.youtube.com/watch?vjVb8EC1Y2xM

13
New Product Development

• Where do product ideas come from??
• Customers
• Organizations
• Experts
• Government
• Private labs
• Research institutions
• Suppliers
• Retailers
• Partners
• Etc.

14
New Product Development
15
Product Adoption Process
Awareness
Interest
Evaluation
Trial
Adoption
16
Product Adoption Process
17
Product Adoption Process

• Innovators venturesome, educated, high
  socio-economic status
• Early adopters social leaders, popular,
  educated
• Early majority deliberate, many informal social
  contacts
• Late majority skeptical, traditional, lower
  socio-economic status
• Laggards neighbors and friends are main info
  sources, fear of debt

18
Have you adopted.

• Iphone?
• GPS?
• Blackberry?

19
Product Life Cycle Key Decisions at Each Stage

• Draw on Board
• Sales
• Profits
• Prices

20
Product Life Cycle Key Decisions at Each Stage

• Introduction
• Inform potential customers
• Introduce product trial
• Examples for low and high end products??
• Secure retail distribution

21
Product Life Cycle Key Decisions at Each Stage

• Growth
• Improve quality, add new features, and improve
  styling
• Add new models and flanker products
• Enter new segments
• Increase distribution coverage and enter new
  channels
• Shift from product-awareness to
  product-preference advertising
• Lower prices to attract the next layer of
  price-sensitive buyers

22
Product Life Cycle Key Decisions at Each Stage

• Maturity
• Market modification
• Product modification
• Marketing program modification

23
Product Life Cycle Key Decisions at Each Stage

• Decline
• Harvest
• Divest
• Liquidate

24
Product Life Cycle Key Decisions at Each Stage

• Strategies for extending the PLC