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Product management

Unit 2

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Product Positioning.??

The positioning of a brand is the perception it brings

about in the minds of the target customer.

This perception reflects the essence of the brands in

terms of functional and non-functional benefits in

the judgement of that customer.

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Walmart, position is lowest price, quality not

so bad

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Mercedes, position is luxury

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ALL PRODUCTS CAN BE

DIFFERENITATED TO SOME

EXTEND

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Worlds tallest hotel

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Positioning strategy should be very much

relate to the benefits of the product offered..

Principles of Positioning

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Principles of Positioning.??

It is better to be the first than to belate.

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Principles of positioning.

In case not first ,the company should be able

to create a new category by making smallchange in the marketing mix.

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It is important to understand the position

strategies of competitors

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Positioning using an easy name..is veryimportant

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Types of Positioning

ATTRIBUTE Positioning???

POSITION ITS ATTRIBUTE

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BENEFIT Positioning??

Positioned as a leader in certain benefit

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More mileage 108/L

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Use of application positioning

Positioned it as best for some use or

application..

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User positioning..

Its position for some user group..

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Competitor based positioning

Product claims to better than the

competitor.

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Quality positioning..

The product is positioned as offering the best

value.

E

g Dove

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Positioning in relation to target market

Needs of the target market..

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Common positioning strategies in

consumer durable sector..

Competitor related positioning

we are superior compared to Competitor

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VS

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Positioning by corporate identity

A trusted corporate identity became

household name for products

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Positioning errors

Over positioning

Confused positioning

Doubtful positioning

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Product Life Cycle

To say that a product has a life cycle asserts fourthings

1. Products have a limited life.

2. Product sales pass through distance stages, eachposing different challenges, opportunities, andproblems to the seller.

3. Profits rise and fall at different stages of the productlife cycle.

4. Products require different marketing, financial,manufacturing, purchasing, and human resourcestrategies in each life-cycle stage.

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PLC - Product Life Cycle

The purpose of having a diagram is to

help you understand the changes, in the

revenue that is made, as you gothrough the different stages of selling aproduct, from the beginning, to the end.

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Stages of the Product Life Cycle

Exhibit 7.2

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Stages in the Product Life Cycle

Introduction Growth Maturity Decline

The time at each stage varies

greatly

DVD

Mini-disc

Electric cars

VR*

*= virtual reality

Digital cameras

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Marketing Strategy During

the Product Life Cycle

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IntroductionThe seller tries to stimulate demand

Promotion campaigns to get increase public awareness

Explain how the product is used,

Features Advantages Benefits

You will lose money, but you expect to make profits in the future

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IntroductionSales are low, and profits are below the line because your costs are greater than the

amount of money you make

you have negative profit

Need to spend a lot of money on promotion

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GrowthA lot is sold - The seller tries to sell as much as possible

Other competitor companies watch, and decide about joining in with a competitor

product

success breeds imitation (Text)

Growth will continue until too many competitors in the market - and the market is

saturated

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GrowthAt the end of the growth stage, profits start to decline when competition means you

have to spend more money on promotion to keep sales going.

Spending money on promotion cuts into your profit

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Maturity

Many competitors have joined - the market is saturated

The only way to sell is to begin to lower the price - and profits decrease

It is difficult to tell the different between products since most have the same F.A.B. -

Features, Advantages & Benefits

Competition can get Nasty and commercials are intense

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Maturity

Persuasive Promotion becomes more important during this stage

That is to say, you have commercials almost begging the customer to still buy your

product because you still make it just as good.

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DeclineNewer products are now more attractive - even a low low price does not make

consumers want to buy.

Profit margin declines - and so the only way to make money is to sell a high volume

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DeclineTo increase volume you try to

1. Increase the number of customers - get new customers

2. Increase the amount each customer uses

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1. Increase frequency of use by present

customers

2. Add new users

3. Find new uses

4. Change product quality or packaging

Extending the Product Life Cycle

Market Modification

Product Modification

Purpose: to sell more product and cover original investment

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Extending the product Cycle

to prevent the product going intoto prevent the product going intodecline you modify the marketdecline you modify the market

MARKET MODIFICATIONMARKET MODIFICATION

you look for new consumers bychanging the product so it has new

users - and then new customers(Baking soda, vinegar, Q(Baking soda, vinegar, Q--tips,tips, AvonAvonSkin So Soft, vaselineSkin So Soft, vaseline

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MARKET MODIFICATIONMARKET MODIFICATION

examples

Windex for cleaning jewelry

Javex bleach for toilets

Lemons for hair colouring

beer for hair

Bounce for in the garbage, gym bag etc.

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to prevent the product going intoto prevent the product going into

decline you modify the productdecline you modify the product

PRODUCT MODIFICATIONPRODUCT MODIFICATION

adding new features, variations, model

varieties will change the consumerreaction - create more demand

therefore you attract more users


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condoms - colours, features

CD players

chip flavours - many kinds

couples seats at movie theatre


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examples continued

digital sound at theatres


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Overlap of Life Cycle for Products A and B

WINDOWS 95

1991 1995 1996 1997

WINDOWS 3.1

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Most people haveaproblem thinking

this theoryis relevant because they

applyit to specificproduct brands - itshould beapplied only to ageneralproduct category

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Length of Cycle Stages Products move through the cycle at different

speeds

sometimes introduction is very long, or veryshort, depending on how easy it is for the

public to understand the F.A.B.

Not all products follow the same pattern

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Life Cycle Length

Some products move very fast because

they are new and have no competition

so the intro stage is short, and they godirect to growth stage.

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Life Cycle Length

Because of

technology and

globalization the introduction stage is getting very

short

some cycles more quickly to maturity,then have many product modificationsso the decline stage drags on and on

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Speed of the PLC

Since the Intro Stage is getting shorter,and sometimes the Growth Stagedoesnt last too long (because

competitors move in) companies mustcontinually come up with new products

You can tell when they are in the growthstage because this is when they

introduce new model variations, andsome improvements to the product

Page 340

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Fashions - currentlypopular

products that tend to follow recurringlifecycles

eg. Widelapels, 3 button suits, high

heels vs. wedge heel

thecurrentlyacceptable stylep. 265

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Fads - Fashions with abbreviated lifecycles - onlypopularwith certaingroups

- music

- fast food

- childrens toys

- adult toysPage 265

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Product Life Cycle Considerations in

Marketing Strategy

Understand that profits have a predictable

pattern

in the early stages, focus is on productinformation

in the later stages, focus is on brand

promotion

use market segmentation in maturity stage tomaintain strong core customer basis

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Marketing Strategies: Introduction

Stage

Product Offer a basic product

Price Use cost-plus basis to set

Distribution Build selective distribution

Advertising Build awareness among early adopters

and dealers/resellers

Sales Promotion Heavy expenditures to create trial

Goal 4: Realize how marketing strategies change during the product life cycle

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Product Life-Cycle Strategies

Product development

Introduction

Growth

Maturity Decline

Rapidly rising sales

Average cost per customer Rising profits

Early adopters are targeted

Growing competition

PLC StagesPLC Stages


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Marketing Strategies:

Growth Stage

Product Offer product extensions, service, warranty

Price Penetration pricing

Distribution Build intensive distribution

Advertising Build awareness and interest in themass market

Sales Promotion Reduce expenditures to takeadvantage of consumer demand


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Marketing Strategies:

Maturity Stage

Product Diversify brand and models

Price Set to match or beat competition

Distribution Build more intensive distribution

Advertising Stress brand differences and benefits Sales Promotion Increase to encourage brandswitching


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Product Life-Cycle Strategies

Product development

Introduction

Growth

Maturity Decline

Declining sales

Low cost per customer Declining profits

Laggards are targeted

Declining competition

PLC StagesPLC Stages


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Marketing Strategies: Decline Stage

Product Phase out weak items

Price Cut price

Distribution Use selective distribution: phase outunprofitable outlets

Advertising Reduce to level needed to retain hard-core loyalists

Sales Promotion Reduce to minimal level

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