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Product Strategy and Marketing through the Life Cycle

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Product Strategy and Marketing through the Life Cycle Key Concepts Chapter 10 Developing and Managing Products * Notes: Exhibit 10.3 illustrates typical life cycles ... – PowerPoint PPT presentation

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Title: Product Strategy and Marketing through the Life Cycle


1
Product Strategy and Marketing through the Life
Cycle
  • Key Concepts

2
Product Levels
3
Product Classifications
Durability and tangibility
Consumer-goods classification
Industrial-goods classification
4
Durability and Tangibility
Nondurable goods
Durable goods
Services
5
Consumer-Goods Classification
6
Industrial-Goods Classification
Materials and parts
Capital items
Supplies and services
7
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.

8
Line Stretching
Down-market
Up-market
Two-way
9
Co-Branding
  • Two or more well-known brands are combined into a
    joint product and/or marketed together in some
    fashion.
  • Same-company
  • Joint-venture
  • Retail
  • Multiple-sponsor

10
Packaging
  • Refers to all the activities of designing and
    producing a products container.
  • Package levels
  • Primary
  • Secondary
  • Shipping
  • Influenced by
  • Self-service
  • Consumer affluence
  • Company and brand image
  • Innovation opportunity

11
Functions of Labeling
12
Packaging
  • Refers to all the activities of designing and
    producing a products container.
  • Package levels
  • Primary
  • Secondary
  • Shipping
  • Influenced by
  • Self-service
  • Consumer affluence
  • Company and brand image
  • Innovation opportunity

13
Warranties and Guarantees
  • Warrantiesformal statements of expected product
    performance by the manufacturer.
  • Expressed or impliedboth legally enforceable.
  • Guaranteespurpose is to reduce the buyers
    perceived risk and provide assurance that the
    company and its offerings are dependable.
  • General
  • Specific

14
The New-Product Development Decision Process
15
Marketing Skills Finding New Product Ideas
Where does Procter Gamble get new ideas?
Customers, organizations, experts, government,
private labs, research institutions, suppliers,
retailers, partners, and entrepreneurs.
16
Stages in the Adoption Process
Awareness
Interest
Evaluation
Trial
Adoption
17
Diffusion Process for New Products Adopter
Categories
18
Factors Influencing Adoption
Relative advantage
Compatibility
Complexity
Communicability
Divisibility
19
Product Life Cycles for Styles, Fashions, and
Fads
20
Sales of New Audio Products
21
Why New Products Fail
  • No discernible benefits
  • Poor match between features and customer desires
  • Overestimation of market size
  • Incorrect positioning
  • Price too high or too low
  • Inadequate distribution
  • Poor promotion
  • Inferior product

22
Success Factors
Factors in Successful New Products
Match between product and market needs
Different from substitute products
Benefit to large number of people
23
Success Factors
24
Product Life Cycle
25
Introductory Stage
  • High failure rates
  • Little competition
  • Frequent product modification
  • Limited distribution
  • High marketing and production costs
  • Negative profits with slow sales increases
  • Promotion focuses on awareness and information
  • Communication challenge is to stimulate primary
    demand

26
Marketing Strategies Introduction Stage and the
Pioneer Advantage
27
Growth Stage
  • Increasing rate of sales
  • Entrance of competitors
  • Market consolidation
  • Initial healthy profits
  • Aggressive advertising of the differences between
    brands
  • Wider distribution

28
Marketing Strategies Growth Stage
  • 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

29
Maturity Stage
  • Sales increase at a decreasing rate
  • Saturated markets
  • Annual models appear
  • Lengthened product lines
  • Service and repair assume important roles
  • Heavy promotions to consumers and dealers
  • Marginal competitors drop out
  • Niche marketers emerge

30
Marketing Strategies Maturity Stage
Market modification
Product modification
Marketing program modification
31
Decline Stage
  • Long-run drop in sales
  • Large inventories of unsold items
  • Elimination of all nonessential marketing
    expenses
  • Organized abandonment

32
Marketing Strategies Decline Stage
33
Strategies at Different Stages of the Product
Life Cycle
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