life cycle management -1
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Life Cycle ManagementLife Cycle Management
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Introduction Begins with the launch of the ProductBegins with the launch of the Product
Monitored by Product Management TeamMonitored by Product Management Team
Responsibilities:Responsibilities:
Product Reaches its Potential asProduct Reaches its Potential as
Particular Product ItemParticular Product Item
Emerging Product Line in the Companys Product MixEmerging Product Line in the Companys Product Mix
DecisionsDecisions
Fine tuning Products Marketing StrategyFine tuning Products Marketing Strategy
Defending Against CompetitorsDefending Against Competitors Innovating ProductInnovating Product
Brand ManagementBrand Management
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The ProductLife Cycle (PLC)
Time
ProductDevelop-ment
Introduction
Profits
Sales
Growth Maturity Decline
Sales andProfits
The Product Life Cycle (PLC) has Five StagesThe Product Life Cycle (PLC) has Five Stages
Product Development, Introduction, Growth, Maturity, DeclineProduct Development, Introduction, Growth, Maturity, Decline
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PLC Stages
ProductProduct
DevelopmentDevelopment
Introduction
Growth
Maturity
Decline
PLCPLCStagesStages
Begins when the company develops aBegins when the company develops anewnew--product ideaproduct idea
Sales are zeroSales are zero
Investment costs are highInvestment costs are high
Profits are negativeProfits are negative
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PLC Stages
Product
Development
IntroductionIntroduction
Growth
Maturity
Decline
PLCPLCStagesStages
Low salesLow sales
High cost per customer acquiredHigh cost per customer acquired
Negative profitsNegative profits
Innovators are targetedInnovators are targeted
Little competitionLittle competition
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PLC Stages
Product
Development
Introduction
GrowthGrowth
Maturity
Decline
PLCPLCStagesStages
Rapidly rising salesRapidly rising sales
Average cost per customerAverage cost per customer
Rising profitsRising profits
Early adopters are targetedEarly adopters are targeted
Growing competitionGrowing competition
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PLC Stages
Product
Development
Introduction
Growth
MaturityMaturity
Decline
PLCPLCStagesStages
Sales peakSales peak
Low cost per customerLow cost per customer
High profitsHigh profits
Middle majority are targetedMiddle majority are targeted
Competition begins to declineCompetition begins to decline
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PLC Stages
Product
Development
Introduction
Growth
Maturity
DeclineDecline
PLCPLCStagesStages
Declining salesDeclining sales
Low cost per customerLow cost per customer
Declining profitsDeclining profits
Laggards are targetedLaggards are targeted
Declining competitionDeclining competition
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Marketing Strategy
Introduction StageProduct
Price
Distribution
Advertising
Sales
Promotion
Offer a basic productOffer a basic product
Use costUse cost--plus basis to setplus basis to set
Build selective distributionBuild selective distribution
Build awareness among early adopters andBuild awareness among early adopters anddealers/resellersdealers/resellers
Heavy expenditures to create trialHeavy expenditures to create trial
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Marketing Strategy
Growth StageProduct
Price
Distribution
Advertising
Sales
Promotion
Offer product extensions, service, warrantyOffer product extensions, service, warranty
Penetration pricingPenetration pricing
Build intensive distributionBuild intensive distribution
Build awareness and interest in the massBuild awareness and interest in the massmarketmarket
Reduce expenditures to take advantage ofReduce expenditures to take advantage of
consumer demandconsumer demand
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Marketing Strategy
Maturity StageProduct
Price
Distribution
Advertising
Sales
Promotion
Diversify brand and modelsDiversify brand and models
Set to match or beat competitionSet to match or beat competition
Build more intensive distributionBuild more intensive distribution
Stress brand differences and benefitsStress brand differences and benefits
Increase to encourage brand switchingIncrease to encourage brand switching
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Marketing Strategy
Decline StageProduct
Price
Distribution
Advertising
Sales
Promotion
Phase out weak itemsPhase out weak items
Cut priceCut price
Use selective distribution: phase outUse selective distribution: phase out
unprofitable outletsunprofitable outlets
Reduce to level needed to retain hardReduce to level needed to retain hard--corecore
loyalistsloyalists
Reduce to minimal levelReduce to minimal level
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Exceptions
Not all products follow this cycle:Not all products follow this cycle:
Incorrectly determining the stage of PLC Decisions pull out resources
Reduction in sales
Terminating the product
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Points to Remember Time Cycle and Shape of the life cycle varies with productsTime Cycle and Shape of the life cycle varies with products
External Factors affect the life cycleExternal Factors affect the life cycle
Company influence the PLCCompany influence the PLC
PLC viewed as a managerial planning tool and not aPLC viewed as a managerial planning tool and not a
marketing forecasting tool.marketing forecasting tool.
Tool for developing marketing strategy and not a tool forTool for developing marketing strategy and not a tool for
making unit sales predictions.making unit sales predictions.
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How to sustain Competitive Adv.?
- Flankers / Line Extensions*
- New uses/ Market Extensions
- Significant Innovations*
Strategic Considerations DuringMaturity Stage
Defense
Strategy
Innovation
Strategy
Fine-tuning product mix to ensure
Product Profitability
Focus on issues important to customer
product quality
service quality
price*
Low Costs
High Margins
Create
Differential
Advantage
Maintenance
Strategy
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ProductFamilies, Platforms andMixes
Product Platforms
Product Mixes
Product Families
Common Platforms on which new products can be built
Products that share a common platform but have
specific features and functionality
Assortment of Product Families
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PRODUCT PLATFORM
Product Family 1 Product Family 2 Product Family 3
Product Mix
ProductLines
Product Mix Map
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Chryslers Product Platform for Mid-Level SedansCommon Features
Basic Car Frame : Suspension : Drive Train
Chrysler Concorde Eagle Vision Dodge Intrepid New Yorker
Product Families
Product Families
Product Families
Chrysler Product Mix
example
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Needfor ProductFamilies?
Greater Effectiveness Efficiency in Manufacturing+
How ?
1. Less Inventory of Specialized Parts
because products with share parts
2. Less Production Downtime
because products would share common processing steps
3. Greater Customer Responsiveness
because products can be half processed in batches
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Needfor ProductMix Hierarchy?
1. Identify Product Family Groupings
2. Identify Gaps in Production Lines
3. Illustrate Product Development History
Product Mix Map
Structure of Product Mix
Historical Perspective of Product Line
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Importance ofbrand management- PLC
One of key areas of life cycle management and productOne of key areas of life cycle management and product
launchlaunch
Brand helps customers toBrand helps customers to interpret and process informationinterpret and process information
about productabout product
Increases effectiveness and efficiencyIncreases effectiveness and efficiency of marketingof marketing
campaigncampaign
Brand provides strong competitive advantage throughBrand provides strong competitive advantage through
improved profit margin, brand loyalty, assist in developingimproved profit margin, brand loyalty, assist in developing
new product via brand extensionnew product via brand extension
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Brand equity
A set ofA set of assets and liabilities linked to a brands name andassets and liabilities linked to a brands name and
symbols that adds to or subtracts from the value providedsymbols that adds to or subtracts from the value provided
by a product or serviceby a product or service to a firm and/or that firmsto a firm and/or that firms
customers.customers.
Such value translates to a bottom line (financial ) impact.Such value translates to a bottom line (financial ) impact.
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Aakers Brand equity framework
Brand
Equity
BrandLoyalty
Brandawareness
Perceivedquality
Brandassociation
Other
proprietaryBrandAssets
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Brand loyaltyBrand loyalty
A measure ofA measure of customers attachment to the brandcustomers attachment to the brand
5 distinct level of loyalty5 distinct level of loyalty--
First levelFirst level --Lowest levelLowest level-- No loyalty at allNo loyalty at all
Second LevelSecond Level -- Habitual buyerHabitual buyer who have no reason to changewho have no reason to change
because they are satisfiedbecause they are satisfied Third levelThird level-- Satisfied BuyerSatisfied Buyer who will incur switching cost onwho will incur switching cost on
switching products.switching products.
Forth LevelForth Level Customers who likes the brand andCustomers who likes the brand and considers itconsiders it
as friendas friend
Fifth LevelFifth Level-- Customers who buy product of any reason toCustomers who buy product of any reason tochange.change.
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Brand AwarenessBrand Awareness--
Ability of potential buyerAbility of potential buyer to recognize that the brand belongsto recognize that the brand belongs
to a certain product categoryto a certain product category
4 distinct level of awareness4 distinct level of awareness
First levelFirst level --Lowest levelLowest level-- No awareness at allNo awareness at all
Second LevelSecond Level RecognitionRecognition of the brandof the brand
Third levelThird level-- Brand recallBrand recall
Forth LevelForth Level TopOf Mind recallTop Of Mind recall
To create and maintain brand awareness brand should beTo create and maintain brand awareness brand should be
Different and memorableDifferent and memorable
Associated with a slogan or jingleAssociated with a slogan or jingle -- BritaniaBritania
Connected to a symbolConnected to a symbol -- AppleApple
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Perceived qualityPerceived quality
CustomersCustomers perceptionperception that a product or service overall is excellentthat a product or service overall is excellent
w.r.t. its intended purpose.w.r.t. its intended purpose.
Key influence driving perceived qualityKey influence driving perceived quality
Product qualityProduct quality
Service qualityService quality
Low
Perceived
Quality
Exceeded
Perceived
Quality
Adequate
Perceived
Quality
Expectation>
Quality
Expectation=
Quality
Quality>
Expectation
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Brand AssociationsBrand Associations
A brand is aA brand is a productproduct plusplus valuesvalues and associationsand associations
Brand knowledge consists of a brand node in memoryBrand knowledge consists of a brand node in memory with awith avariety of associations linked to itvariety of associations linked to it
What comes in mind about a particular brandWhat comes in mind about a particular brand Top of mindTop of mind
Measured by Nodal mapMeasured by Nodal map
ApplesLaptop
Applelogo
Friendly
Macintosh
Innovative
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Brand equity Other proprietary brand assetsOther proprietary brand assets--
Patents , trademarks , channel relationshipPatents , trademarks , channel relationship-- Source of competitiveSource of competitiveadvantageadvantage
11 metrics to measure brand equity11 metrics to measure brand equity
Price premiumPrice premium
Customer satisfactionCustomer satisfaction
Brand awarenessBrand awareness
Perceived qualityPerceived quality
LeadershipLeadership -- Popularity of the brandPopularity of the brand
Perceived valuePerceived value underlying valueunderlying value
Brand personalityBrand personality
Organizational associationsOrganizational associations
Market shareMarket share
Market priceMarket price
Distribution coverageDistribution coverage
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Various decisions take place in brand managementVarious decisions take place in brand management
Framework which outlines these decisionsFramework which outlines these decisions Brand DecisionBrand Decision
FrameworkFramework
Brand decision, brand sponsor decision, brand name decision,Brand decision, brand sponsor decision, brand name decision,
brand strategy decision, brand repositioning decisionbrand strategy decision, brand repositioning decision
Brand Decision Framework
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Decide whether to brand or not brand the product or service.Decide whether to brand or not brand the product or service.
Purpose of branding a product is to give an identity to it in thePurpose of branding a product is to give an identity to it in the
market placemarket place
Generic or no name products need not be given a brand name.Generic or no name products need not be given a brand name.
Brandingdecision
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Concerns the channel level in which the brand will be given.Concerns the channel level in which the brand will be given.
Manufacturer brandManufacturer brand
Distributor brandDistributor brand
Licensed brandLicensed brand
Branding Sponsordecision
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Is a brand that the manufacturer designates and that retains itsIs a brand that the manufacturer designates and that retains its
brand characteristics (name, mark) throughout the channelbrand characteristics (name, mark) throughout the channel
ExamplesExamples Tide (P&G), Colgate (ColgateTide (P&G), Colgate (Colgate Palmolive)Palmolive)
Also referred to as national brandsAlso referred to as national brands
ManufacturerBrand
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Brand that a distributor designates and sells through its outletBrand that a distributor designates and sells through its outlet
ExampleExample Arizona Jeans (Arizona Jeans (JCPennyJCPenny),), SamsSams Choice (Choice (WalmartWalmart))
DistributorBrand
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Associate and professional groups are associated with licensedAssociate and professional groups are associated with licensed
brands.brands.
A group gives permission so that products can be sold with theirA group gives permission so that products can be sold with their
name/brand on them.name/brand on them.
ExamplesExamples Merchandise sold with logos of National FootballMerchandise sold with logos of National Football
League, Major league Baseball.League, Major league Baseball.
LicensedBrand
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Concerns the approach of choosing a brand nameConcerns the approach of choosing a brand name
Individual namesIndividual names
Blanket family nameBlanket family name
Separate family nameSeparate family name
Company individual nameCompany individual name
BrandName Decision
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Gives the product its own identityGives the product its own identity
If product fails the company name and other company brands doIf product fails the company name and other company brands do
not get affectednot get affected
Drawback is that additional resources are required for developingDrawback is that additional resources are required for developing
a new brand namea new brand name
General mills gives individual brand names to its productsGeneral mills gives individual brand names to its products BettyBetty
crockercrocker,, bisquickbisquick, gold medal, nature valley, gold medal, nature valley
IndividualName
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Emphasizes core name and connects with all the productsEmphasizes core name and connects with all the products
Name is typically the manufacturer nameName is typically the manufacturer name
HeinzHeinz Heinz ketchup, Heinz 57 sauce, Heinz mustardHeinz ketchup, Heinz 57 sauce, Heinz mustard
BlanketFamily Name
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Uses different name for different families of productsUses different name for different families of products
SearsSears Craftsman tools, Kenmore appliancesCraftsman tools, Kenmore appliances
Separate Family Name
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Highlights both the company brand and the product brandHighlights both the company brand and the product brand
Intent of the strategy is to use the company brand name toIntent of the strategy is to use the company brand name to
accentuate the individual brand nameaccentuate the individual brand name
KellogsKellogs KellogsKellogs cornflakes,cornflakes, kellogskellogs rasinrasin branbran
Company IndividualName
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Concerns the establishment of the brand in the marketplaceConcerns the establishment of the brand in the marketplace
Line extensionLine extension
Brand extensionBrand extension
Multi brandMulti brand
New brandsNew brands
Co brandsCo brands
Brand Strategy Name
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Concerns the establishment of the brand in the marketplaceConcerns the establishment of the brand in the marketplace
Line extensionLine extension
Brand extensionBrand extension
Multi brandMulti brand
New brandsNew brands
Co brandsCo brands
License extension
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Existing brand names is applied to new product categoriesExisting brand names is applied to new product categories
Honda uses its brand across various industriesHonda uses its brand across various industries automobiles,automobiles,
motorcycles, lawn mowersmotorcycles, lawn mowers
BrandExtension
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New brand names are introduced to the same product categoryNew brand names are introduced to the same product category
currently served by the companycurrently served by the company
Company can serve multiple market segmentsCompany can serve multiple market segments
Marriott uses multiple brand names strategyMarriott uses multiple brand names strategy mariottmariott courtyard,courtyard,
residence inn,residence inn, fairfieldfairfield inn, Courtyard byinn, Courtyard by mariottmariott
MultiBrand Strategy
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The use of a new brand strategy would be predicted on the beliefThe use of a new brand strategy would be predicted on the belief
that present brand would not provide a good association for thethat present brand would not provide a good association for the
new categorynew category
NewBrand Strategy
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Product bears two or more well known namesProduct bears two or more well known names
BettyBetty crockercrocker brownies withbrownies with hersheyshersheys chocolatechocolate ingredient coingredient co
brandingbranding
TrixTrix Flavored Yoplait Yogurt (General mills )Flavored Yoplait Yogurt (General mills ) company connectscompany connects
two or more of its brands into a new producttwo or more of its brands into a new product same companysame company
cobrandingcobranding
Multi sponsor cobrandingMulti sponsor cobranding 2 or more companies brand names are2 or more companies brand names are
there in a productthere in a product Dow CorningDow Corning
Co.Brand Strategy
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After brand introduce d in the market, brand repositioningAfter brand introduce d in the market, brand repositioning
decision.decision.
Decide whether to change a brand or maintain the brandDecide whether to change a brand or maintain the brand
Brands performing wont be changed and can be given moreBrands performing wont be changed and can be given more
resources to strengthen their current imageresources to strengthen their current image
Brands below expectations will be repositioned to meet aBrands below expectations will be repositioned to meet a
different marketdifferent market
Brand Repositioning
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BRAND SWITCHING MATRIX
Analytical method useful for brand managementAnalytical method useful for brand management
Its a matrix which classifies purchase behavior so to reflect theIts a matrix which classifies purchase behavior so to reflect the
characteristics of the market place and customer brand loyaltycharacteristics of the market place and customer brand loyalty
To construct BSM, conduct survey of customers previous brandTo construct BSM, conduct survey of customers previous brand
purchases and current brand purchasespurchases and current brand purchases
An additional use of brand switching matrix is to estimate marketAn additional use of brand switching matrix is to estimate market
share over timeshare over time
Can be used to estimate long run market share over timeCan be used to estimate long run market share over time
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Thank You