Part 4 - Products

Chpt 10 - Product MgmtSlide 1

Chapter 9

PRODUCT STRATEGY

Chapter 10

PRODUCT MANAGEMENT

Chapter 11

SERVICES

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Chpt 10 - Product MgmtSlide 2

Co-Branding

Two companies join to create a new product carrying both their brands.

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Co-Branding

Examples:

McCains cake and KFC

McDonalds & movie Mulan

Pizza Hut & Pepsi

Cereal box with other thing inside

Pizza Pizza and Blockbuster video rental & Chocolate bar

Cinelex Odeon and Blockbuster

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Terms

• A series of related products (TEXT)A series of related products (TEXT)

• a group of products that are physically a group of products that are physically similar in performance, use or features similar in performance, use or features and intended for a similar marketand intended for a similar market

Product Line

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Terms

• The assortment of product lines and individual offerings available from a company. (Text)

• the combination of product lines offered by the manufacturer

Product Mix

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Product Lines Brands

• shoes Nike, addidas, reebok, fila, new balance, british knight, brooks, converse, vans, asic, puma

• notebooks toshiba, nec, TI, compaq,

IBM, DELL• Apple, HP, Hitachi, Mitsubishi,

Matsushita,

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Service Providers

service providers have product lines and product service providers have product lines and product mixes as wellmixes as well

examplesexamples• MastercardMastercard• insuranceinsurance• telephone servicestelephone services• cable servicescable services• ISPs - internet service providersISPs - internet service providers

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• Larkhill Clothing Manufacturing Inc.

Larkhill Larkhill GroupGroup

example of a company, and its product line

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Tap p an ts

Ted d ies

R ob es

G ow n s

C am iso les

Azure-Dee Lingerie

R ob es

G ow n s

C am iso les

Prom ises Lingerie

th on g s

b ra /p an ty se ts

G -s trin g s

Night Fever

L a r k h i l l C l o t h i n g M a n u f a c t u r i n g I n c .

the different product lines = the product mix of the whole companythe different product lines = the product mix of the whole company

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Product Differentiation

• The attempt to create the impression that one product is greatly superior when in fact it may have only minor features or slightly different components/colour/shape etc.

examples• ball point pens• running shoes• others..............

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The Canada Packers Product Mix

Meats Groceries Nonedible

Fresh meats Peanut butter By-productsBacon Mincemeat SoapPepperoni Canned pumpkinHidesWieners Cheese Pharmaceutical rawBologna Lard materialsCanned ham ShorteningPoultryKolbassaGarlic sausage

Width of Assortment

Depth of Assortment

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Cannibalization

• Situation involving one product taking sales from another offering in a product line (Text)

• Cannibalization occurs when sales of a new product cut into (reduce) the sales of a firm’s existing products.

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Line Extension

• The development of individual offerings that appeal to different market segments but are closely related to the existing product line (Text)

• Adding on additional offerings to get more customers.

“Marketers have line-extended to death” - Mattimore

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1.Desire to grow

- firms introduce new products to grow

- also introduce new products to sell throughout the year - if some products are seasonal ie. Campbell soup

- examples:

Importance of Product Lines

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2.Optimal use of company resources

- sometimes new products introduced so the company can use up more of its resources - therefore reduce cost per unit

- eg. Fiberboard made from sawdust

Importance of Product Lines

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3. Increasing company importance in the market

- companies add product lines because of opportunity, and to strengthen overall position- eg. Buck Knives - no has Buck Flashlights

Importance of Product Lines

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4.Exploiting product life cycle

- some features added so the company used “Product Modification” to extend the life cycle

- some advertising done to find explain new uses “Market Modification”

- some new products made as well

Importance of Product Lines

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Decay Curve of New-Product Ideas

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6 Things That Determine Success for New Products

• Market launch - relative strength• good information available in product

development process• has the firm been good at new product launches

in the past• the characteristics of the target market• the ability of the company to make the product• specific characteristics of the new effort

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6 Characteristics of The Superior Product

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•Customer demand exists for a better product

•it has better/more FAB - features, advantages, benefits (does more things compared to others)

•lower cost - but same FAB

•better quality/durability than competitive products

•easier to use

•has specific characteristics that no other competitive product has

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Forms of Product Development

Slide 10-5

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4 Product Development Strategies

• Product Improvement (Product Modification)

- modify existing products

• Market Development (Market Modification)

- find new markets for existing products

• Product Development- introduce new products

• Product Diversificationdevelop new products for new markets

Examples !!!!!!!!!Page 208-209

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1. Committee

2. Department

3. Product/ Brand Manager

4. Venture Team

Structure for New-Product Development

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4 Ways You Can Organize Getting it Done

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Seven Steps of the New-Product Development Process

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• Idea -Idea - 38% of new product ideas come from looking at 38% of new product ideas come from looking at competitorscompetitors- one of the best ways is to listen to employee new ideas- one of the best ways is to listen to employee new ideas

• Screening Screening - purpose is to “screen” out the bad ideas and - purpose is to “screen” out the bad ideas and focus on the good ideas that might workfocus on the good ideas that might work and and AnalysisAnalysis - is making the cost estimates and sales - is making the cost estimates and sales forecasts to estimate profitabilityforecasts to estimate profitability

• DevelopmentDevelopment - concept testing for totally new products (ie. - concept testing for totally new products (ie. holographic maps)holographic maps) Testing Testing - taking the prototypes to a sample group of - taking the prototypes to a sample group of consumers and watch their reactionsconsumers and watch their reactions

• CommercializationCommercialization - promoting the product and developing - promoting the product and developing advertising and sales campaignsadvertising and sales campaigns

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Packaging• An Important Part of the Product

• convinces people to buy• protects the contents when shipped and handled• adds to the value• describes features, advantages and benefits of using

product• contains Warranty Information• cautions and warnings about contents and misuse• UPC code and tax information (cigarettes)