Ch. 09 Media Managing the Product

  Managing the Product Chapter Objectives

• product objectives & strategies
• managing products
• throughout the product life cycle
• branding
• creating product identity
• types of branding strategies

  Chapter Objectives

• packaging and labeling

• • how organizations are structured

• new product management
• existing product management

  :

  

Product Planning

  Taking the Next Step • product management = very important.

  Products are

• at faster and faster speeds
• created,
• grow,
• reach maturity, • decline. _{LEXUS HYBRID}

  Figure 9.1:

  Steps in Managing Products Product Objectives =Product Strategy

• Objectives must be:
• measurable,
• clear,
• unambiguous,
• feasible • indicate a specific time frame .

  Product Objectives =Product Strategy

  individual products :

• Objectives & strategies for ^--

  introduction of new products

• --Breathing life into mature products

Figure 9.2: Objectives for Single and Multiple Products

  Objectives and Strategies for Multiple Products

  :

• Product line
• Firm’s total product

  offering designed to satisfy a single need or desire of target customers

  Objectives and Strategies for Multiple Products

• Product mix:
• The total set
• of all products
• a firm offers for sale

  Product Development

• Product line
• desire for growth in marketplace
• position

  resources

• use of
• exploit Product Life Cycle

  Objectives and Strategies for Multiple Products

• Product-Line Strategies
• Full-line vs . limited-line strategies
• Upward, downward, or two-way line stretch
• Filling out a product line
• contracting a product line

  Swiss Army _Video

  

Product Mix

• Characteristics
• Length =
• # different products firms sells
• Width –
• # product lines
• – • variations in each product
• Depth
• consistency

  Objectives and Strategies for Multiple Products

• Product-Mix Strategies
• Width of product mix:
• the number of different product lines
• produced by firm

  Swiss Army _Video

  

Product Mix

• Strategies • (extensions & diversity)
• wider
• longer
• deeper
• more/less consistent

   Proctor & Gamble Products;

Product Line Length and Product

Mix Width

  Fruit Lotions Bar Soap

Toothpaste Juices Detergents _{Ivory Snow Dreft Gleem}

_{Ivory Citrus Hill Wondra Joy Tide Cheer Denquel Complete Crest}

_{Lava Camay Kirk's Delight Sunny Winter Hill Oil of Olay} Noxema _{Camay Cascade Oxydol Dash}

_{Coast Safeguard}

_{Zest Texsun Speas Farm Lincoln} Raintree _{Ban de Tropic Tan Gain Ivory Liquid Dawn Depth the number of Oil of Olay} Soleil _{Liquid Tide Bold 3 available within Era each brand} alternatives Solo Quality as a Product Objective

• Product quality:
• overall ability of product
• to satisfy customer’s expectations

  MALCOLM BRIDGE _{AWARD WINNERS!}

  Quality as a Product Objective

• Total Quality Management (TQM):
• company-wide dedication to the
• development, MALCOLM BaldRIDGE _{AWARD WINNERS!}
• maintenance,
• continuous improvement
• of all aspects of the company’s operations

  ISO Quality Standards

• ISO 9000:
• voluntary standards
• for quality management
• set by International Organization for

  Standardization (ISO)

  ISO Quality Standards

• ISO 14000:
• concentrate on environmental

  management

  ISO Quality Standards

  :

• Six Sigma methodology
• no more than 3.4 defects
• per million
• (getting it right

  99.9997% of the time) Adding Quality to the Marketing Mix

• Product:
• improve customer service
• Place:
• involve suppliers and customers
• in improving on-time delivery
Adding Quality to the Marketing Mix

• Price:
• lower costs and improve service
• at same time
• Promotion:
• give customers information
• when they want and need it
• (not when it’s convenient for firm)

  Dimensions of Product Quality Figure 9.4

  PRODUCT LIFE CYCLE

  Marketing Throughout the Product Life Cycle

• Product life cycle:
• the way products go through
• four distinct stages
• from birth to death –
• introduction, growth, maturity, decline.

  The Product Life Cycle

  Figure 9.5

  The Introduction Stage

• First stage,
• in which slow growth
• follows the introduction of a new product  in the marketplace.
• --Goal = get 1 ^ST

   time buyers to try product.

• --little or no profit during this stage.

  The Stage

  Growth

• Second stage
• product is accepted sales rapidly increase.
• Goal = encourage brand loyalty.
• product variations introduced
• to attract market segments increase market share.

  The Stage

  Maturity

• Third & longest stage
• sales peak profit margins narrow.
• Competition grows intense.
• price reductions --reminder advertising.

  The Stage

  Decline

• Final stage, _{OLDTIMECANDY.COM}
• sales decrease  as customer needs change.
• Market begins to shrink,
• profits decline,
• fewer product variations exist, • suppliers pull out.

• • major decision = to keep product or not.

  Extending the PLC

• Ways

  decisions

• Deletion
• frequency of use
• har>number of users
• di>find new uses
• rea
• product improvement

  Extending the PLC

  (next chapter) BRANDING

Creating Product Identity: Branding Decisions

• Brand:
• a name, term, symbol,
• or unique element
• that identifies one firm’s product • sets it apart from the competition .

  A Good Brand Name :

• Creates a positive connotation.

• Is memorable.
• Positions a product

• by conveying image or personality

  (Ford Mustang)

 or describing how it works (Drano).

  A Good Brand Name :

• easy to , , & .
• Fits:
• target market,
• product benefits,
• customer’s culture, legal requirements.

  say, spell read remember

  

Trademarks

• Legal term
• for a brand name, brand mark, or

  trade character

• • legally registered by a government

• obtain protection for exclusive

  use in that country.

  

Trademarks

• Symbol in the U.S.: ®
• Common-law protection:
• the firm has used the name &

  established it over a period of time.

  The Importance of Branding

• Brand equity:
• a brand’s value to its organization
• over and above the value
• of the generic version of the product

  Top 100 Global Brands Scoreboard _{The table that follows ranks 100 global brands that have a value greater than $1 billion. The brands were selected according to two criteria. 1)global in nature, deriving 20% or more of sales}

  from outside their home country. 2) publicly available marketing and financial data on which to _{base the valuation.}

  2005 _{Brand Rank Brand Name Parent Company} ^{2005 Bran d Valu e} _{($Mil )} ^{2004 Brand} _{Value ($Mil)}

   1 ^Coca- _Cola ^{Coca-Cola 67,5} ₂₅ ^67,394 _{2 Microsof} t ^{Microsoft 59,9 41 61,372} _{3 IBM International Business Machines Corporation 53,3 76 53,791}

   4 GE GE ^46,9 ₉₆ ^44,111 _{5 Intel Intel 35,5}

  88 ^33,499 The Importance of Branding

• Brand meaning:
• the beliefs and associations
• a consumer has about the brand

  Figure 9.7: The Brand Equity Pyramid The Importance of Branding (cont’d)

• Brand equity
• provides competitive advantage :
• the power to capture and hold
• onto a larger share of the market and
• to sell at prices with higher profit

  margins The Importance of Branding (cont’d)

  :

• Brand extensions
• new products sold
• with the same brand name

  Branding Strategies

• Individual brands
• family brands
• National & store brands

  :

• Generic brands
• no branding

  Branding Strategies (cont’d)

• Licensing:
• one firm sells the right
• to

  use a legally protected brand name

• for a specific purpose
• for a specific period of

  time

  Branding Strategies (cont’d)

• Co-branding:
• combines 2 brands

  Packaging & labeling

  Creating Product Identity: Packaging and Labeling Decisions

  : Package

• the or container for a

  covering product

• that provides product protection ,
• facilitates

   product use and storage,

• supplies important marketing

  communication

  Packaging and Labeling Decisions (cont’d)

• Universal Product Code (UPC):
• set of black bars or lines
• printed on the side/bottom
• of most items sold in stores;
• creates a national system
• of product identification

  Designing Effective Packaging

  : Effective packaging considers

• Packaging of other brands

  in same product category

• Choice of packaging material
• Environmental impact
• Shape and color
• Graphic information

  Labeling Regulations

• • Federal Fair Packaging and

  Labeling Act of 1966

• • aims at making labels more helpful

• to consumers • by providing useful information.

  Labeling Regulations

• Food and Drug Administration
• requires food labels to tell how much

• • fat, saturated fat, cholesterol, calories,

  carbohydrates, protein, trans fats, and vitamins • are in each product serving.

  Effective Product Management

• Managing Existing Products
• Brand managers
• Product category managers
• Market managers

  New-Product Development

• Venture teams:
• specialists in different areas
• who work together
• to focus on new-product development

  New-Product Development

• “Skunk works”:
• small and isolated group
• in remote location

• • that functions with minimal supervision

  The end Real People, Real Choices

• Grendha Shoes Corp. (Angelo Daros)

  Grendha Shoes Corp. (Angelo Daros)

• Launching the Rider brand in the United States,

  Launching the Rider brand in the United States, Angelo needed a plan to position the brand. Angelo needed a plan to position the brand.

• Option 1: position U.S. Rider the same way as the

  Option 1: position U.S. Rider the same way as the Brazilian version

  Brazilian version

• Option 2: position Rider as an “after sport footwear”

  Option 2: position Rider as an “after sport footwear” brand brand

• Option 3: position Rider more specifically as an “after

  Option 3: position Rider more specifically as an “after soccer” brand soccer” brand and now sells millions of pairs _globally.

  Real People, Real Choices

• Grendha Shoes Corporation (Angelo Daros)
• Angelo chose option 2: position Rider as an “after sport footwear” brand _{Grendha adapted the same strategy in over 85 countries around the world}

  Marketing Plan Exercise

• Dr. Pepper is the oldest soft-drink brand in the United States.
• What are some product-line strategies Dr. Pepper might consider?
• How important is TQM, and product quality in general, to a brand like Dr. Pepper?

•  What realistic opportunities for brand extensions exist

  for Dr. Pepper?
• Does Dr. Pepper have high brand equity? What can it do to enhance its brand equity?

  Marketing in Action Case: You Make the Call

• What is the decision facing Sony?
• What factors are important in

  understanding this decision situation?

• What are the alternatives?
• What decision(s) do you recommend?
• What are some ways to implement your

  recommendation?

  

Keeping It Real: Fast Forward to Next Class

Decision Time at Universal Studios

• Meet Robyn Eichenholz, senior brand manager at Universal Orlando.
• Upcoming Donna Summer concert would attract many customers
• The decision: How to plan for the Donna Summer concert

  Group Activity

• Think of your college or university as an organization that offers a line of different educational products.
• Develop alternatives it might consider and

  describe how each might be accomplished and

  evaluated: _{ Upward product stretch}
• Downward product stretch _{ Two-way stretch}
• Filling-out strategy

  Group Activity

• Conduct a brief focus group of students

  and find out whether consumers complain

to each other about poor product quality.

• --Have they ever used a Web site to express

  displeasure over product quality?

• --If so, what was the result?

  Discussion

• Quality can mean different things for

  different products. What does it mean for the following?

• Automobile  Pizza  Running shoes
• Hair dryer
• Deodorant  College education

  Discussion

• Brand equity means a brand enjoys

  customer loyalty, perceived quality, and brand-name awareness.

• --What brands are you loyal to?
• --What element of the product creates brand loyalty

  and thus brand equity?

  Discussion

• What are some examples of brand

  extensions that have damaged the parent brand’s equity? What are some that have enhanced it?

  Group Activity

• • For each of the following, discuss any problems

  

you have with the packaging of the brand you

use. Think of ways to improve the package. _{ Dry cereal  Frozen orange juice}  Laundry detergent _{ Potato chips}  Gallon of milk

• Loaf of bread