Post on 20-Aug-2015
transcript
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Chapter 9 Module 1
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Managing the Product
Chapter 9
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Tactical Product Decisions Tactical Product Decisions (the marketing mix)(the marketing mix)
Product StrategiesProduct Strategies
Product & Product Line/Mix Product & Product Line/Mix ObjectivesObjectives
Must be clear, measurable, and within
a distinct time frame (SMART)
Own 15% of the snack-chip market by 20115
Considers life of the product & Rate of
Diffusion.
In two years, create a new package for
Sunchips that is both biodegradable AND
quiet.
Be viewed as the most earth friendly chip
brand
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Main Objectives•Understand the PLC & its
relationship to Diffusion
•Demonstrate how marketers manage a product using the PLC
•Define and understand the role of “branding” as a marketing strategy
•Understand the importance of packaging in the marketing mix
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The Product Life Cycle (PLC)
6The Product Life Cycle (PLC)
Explains how the market’s response to a product and marketing activities change over the entire life of a product.Gives managers insights into how long a new product’s life cycle may be, and can help plan for marketing activities in advance.
Products/brands need to be nurtured and developed with care... The PLC can help.
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Stages in the
PLC relate to a
firm’s
marketing
objectives and
marketing mix
actions.
Why are profits low here?
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Introduction: launch & create desire for a product category, not always specific brands (primary
demand); or create desire for a specific brand or company as competition begins to surface(selective
demand)
Intr
oduct
ion
Intr
oduct
ion
Choose a pricing strategy - Penetration vs. SkimmingMay need to educate target May need to educate target audiencesaudiences
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Growth: rapid sales increases, begin to see repeat purchasers and brand loyalty (advertising should
focus on selective demand), product positioning is more segmented;
product innovation and new features are key!
Gro
wth
Gro
wth
Distribution strategy - broaden the availability, or focus on concentrated/premium distribution and pricing
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Maturity: often the longest stage, rate of sales slowing, prices are decreasing, (relative to inflation)
profits are narrowing, competition is decreasing, firms try to attract new markets---differentiation is
key.
Matu
rity
Matu
rity
Distribution strategy - wide distribution, increase target market awareness
Firms wanting to Firms wanting to compete will revise compete will revise their marketing mixtheir marketing mix
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Decline: rapid decrease in sales, technologies may be obsolete, a product “rebirth” may be needed,
firm dedicates limited resources to marketing; hope competition drops out ?
Decl
ine
Decl
ine
BIG DECISION: Deletion or Harvest?
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On a Sheet of Paper...Place these products on the PLC
curve where you believe they belong today.
VCR
3D-TVDigital photo
Low-carb ice cream USB memory
stick
toothpasteFabric softener
Dryer Bars
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Other
influences on
the PLC and
Diffusion:
• Homophily: The more similar to each other that members of a culture are, the more likely an innovation is to spread—people are more likely to imitate similar than different models. The two most rapidly adopting countries in the World are the U.S. and Japan. While the U.S. interestingly scores very low, Japan scores high.
• Physical distance: The greater the distance between people, the less likely innovation is to spread.
• Opinion leadership: The more opinion leaders are valued and respected, the more likely an innovation is to spread. The style of opinion leaders moderates this influence, however. In less innovative countries, opinion leaders tend to be more conservative, i.e., to reflect the local norms of resistance.
• Modernity: The extent to which the culture is receptive to new things. In some countries, such as Britain and Saudi Arabia, tradition is greatly valued—thus, new products often don’t fare too well. The United States, in contrast, tends to value progress.
Cultural Influences
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Other
influences on
the PLC and
Diffusion:
• Relative Advantage: do consumers believe a new product provides superior benefits, or superior value proposition?
• Compatability: is the product consistent with cultural values, customs, practices? Or is it too radical?
• Complexity: Can consumers understand how to use the product? • Trialability: Is the risk low for checking it out? What have we got to
lose? • Observability: Does the product carry social meaning, it is visible and
will it become part of my self-identity?
Product Factors
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Importantly:
PLC’s are not 100% predictable - only estimable based on history
PLC’s are not to be used to forecast sales and production figures
PLC’s can be misleading due to spikes & drops in sales, causing mis-adjustment of marketing mix
elements
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End Module 1
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Chapter 9Module 2
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Bring the product to life:
With brand identityBrand personality and
Brand recognition
“Brand” = symbol, name, unique element that identifies
one product (or firm) from another.
“Brand” = symbol, name, unique element that identifies
one product (or firm) from another.
Brands help firms
create
relationships with
customers
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“Brand” = symbol, name, unique element that identifies one product
(or firm) from another.
“Brand” = symbol, name, unique element that identifies one product
(or firm) from another.
Brand mark: a logo or set of words Trade character: carries human features
Good Brand names are...Easy to say
Convey product benefitsFit customer culture
Are legal
Trademark: the legal term for a brand name, mark, or character.
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Is it memorable??meaningful??
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Dimensions of Brand
MeaningIdentification
Product Attribute Gender
Social classAge
Life stageLifestyle
Traditions/RitualsTrends
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End Module 2
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Chapter 9Module 3
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The Importance of Brands
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Brand Equity
The value over and above the value of the
generic version.
Price premiums are associated with high
brand equity.Consumers can
experience strong attachments to brands
related to....Self-concept * Nostalgia * Interdependence * Love
115 00
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= Comp. Advantage
It’s me. It’s me. Feel good Feel good Can’t do Can’t do without without
Emotional Emotional bonds bonds
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Value: $79b Value: $15b
Pricing Premium: $64b
“Branding accounts for 80% of it’s value.”
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The North Face's logo consists of a slightly skewed quarter-circle with two lines running within it. This image is an interpretation of Half Dome, a massive granitic monolith in Yosemite National Park, viewed from the west, with the sheer north (or northwest) face of Half Dome to the left.
The North Face maintains strong links with the outdoor community through its sponsored athlete program. Athletes such as Lizzy Hawker who recently won the Ultra Trail Tour du Mont Blanc have benefited greatly from the program.
THE NORTH FACE has meaning.
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Leveraging Brand Equity
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The North Face brand was established in 1966 when Douglas Tompkins and Kenneth "Hap" Klopp created an equipment retail store that eventually acquired the name The North Face. This name was chosen because the north face of a mountain in the northern hemisphere is generally the most difficult face to climb.By the 1980s, skiwear was added to the line of products, and eventually camping equipment was added as well. The North Face is now a wholly owned subsidiary of the VF Corporation.
The North Face, Inc. Now specializes in outerwear, fleece, footwear, and equipment such
as backpacks, tents, and sleeping bags.
33Branding strategies
Family Brand Individual Brand
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34Branding strategies
National Brands Private BrandsHigh profit potential
Compete with national brands
Attract price-conscious consumers
Still need some brand awareness and recognition
Owned by retailer or distributor
Carry brand equity
Attract brand loyal customers
Drive store traffic
Owned by manufacturers
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Licensing Brands Co-Branding
More powerful recognition
Can use ingredient branding strategy
Helps create a wider product portfolio
Can offer instant recognition & interest to lesser known
products...
...especially for targeting specific consumer groups
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PackagingAs part of the product identity
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Packages serve several functions:
1. Protect the product 2. Inform the customer3. Brand the product4. Communicate with the customer5. Lets the customer handle the product
Fill the cap for a single serving
Flavor, texture, contents
Brand
Easy to hold
Fits in car cup-holder
Plastic, opaque protects the
contents, maintains freshness.
Must consider: Competitor packaging, retailer specs,
distribution limits, consumer acceptance
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RecapBrand identity influences how
consumers perceive the brand.
Brand equity, as a competitive advantage, is achieved through
branding.
Branding is part of product positioning!
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End Chapter 9