product and service management your lives. for example, coca-cola, barbie, etc. ... what is the...
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STANDARD 11 You will understand the concept of product planning and how it relates to marketing. Objective 1: Understand product planning, mix, and development.
Explain the nature and scope of the product/service management function. Explain the concept of the product mix. Plan a product mix. Define: Product, good, service Product/service management task are affected and influenced by many factors, both
within a company and outside
Objective 2: Understand sustaining product sales.
Identify the impact of product life cycles on marketing decisions. Describe factors used by marketers to position products/businesses.
Objectives
Have you ever thought about who’s responsible for those products and what their job duties entail?
What do you think is necessary to make a new product successful?
How do businesses develop new product and position it for sale?
Why do businesses need to
introduce new products?
Product planning: (or service planning) involves obtaining, developing, maintaining, and improving a product or service mix in response to market opportunities.
Products Planning
http://www.imagacademy.org/warner%20lessons/8%20Product%20Service%20Management/37%20Product%20Planning%20and%20Development/37%20Product%20Planning%20and%20Development.html
http://images.businessweek.com/ss/06/10/yamaha/source/5.htm
Product: is anything a person receives in an
exchange. It can be either a good or a service.
Good: a tangible object that can be manufactured or produced for resale to create value
Service: an intangible activity preformed in exchange for payment to create value
Product Planning
Importance of Product or Service planning
Sales and profits improve if offering the right products and the right time to the customer
Market share increases and the ability to beat the competition
New products can bring new customers
Product Planning
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Importance of Product Mix
Appealing to the target market
Helping to present a consistent company image
Affecting profitability
Helping deal with competition
Product Planning
Product Width: refers to the number of different product lines a business manufactures or sells.
Breadth: Carrying items in many different product categories. Offering several different types of service under one roof. Narrow or wide
Product Planning
Product Depth
Refers to the number of items offered within each product line. Shallow or deep.
Product Planning
• LAY'S® Balsamic Sweet Onion Flavored Potato Chips • LAY'S® Barbecue Flavored Potato Chips • LAY'S® Cajun Herb & Spice Flavored Potato Chips • LAY'S® Cheddar & Sour Cream Flavored Potato Chips • LAY'S® Chile Limon Flavored Potato Chips • LAY'S® Chipotle Ranch Flavored Potato Chips • LAY'S® Classic BLT Flavored Potato Chips • LAY'S® Classic Potato Chips • LAY'S® Creamy Garden Ranch Flavored Potato Chips • LAY'S® Deli Style Original Potato Chips • LAY'S® Dill Pickle Flavored Potato Chips • LAY'S® FLAMIN' HOT® Flavored Potato Chips • LAY'S® Garden Tomato & Basil Flavored Potato Chips • LAY'S® Honey Barbecue Flavored Potato Chips • LAY'S® Honey Mustard Flavored Potato Chips
• LAY'S® Hot & Spicy Barbecue Flavored Potato Chips
Products move through the product life cycle and require different marketing strategies at each stage.
These stages are the basis for product planning.
Introduction
Growth
Maturity
Decline
Product Life Cycle
http://www.beasuccessfulentrepreneur.com/product-lifecycle-do-you-know-where-your-business-is/
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Activity: Think of products that have been around most
of your lives. For example, Coca-Cola, Barbie, etc.
Describe the different ways in which the product was
marketed at different times.
What are the stages the products go through?
Does each stage require different marketing strategies?
Product Life Cycle
The Key steps in product planning
Generate Ideas
Screen Ideas
Develop the Business Proposal
Test the Product Concept
Develop the Product
Commercialization
Evaluate Customer Acceptance
New Product Planning Steps
First Step
Generate Ideas Brainstorm for new product ideas
Ideas for new products can come from a variety of sources-
Employees,
customers,
sales representatives,
retailers,
family members
New Product Planning Steps
http://www.cesaroni.com/design_services/phase1product_research.php
Test the Product concept
This means getting feedback from potential customers about the potential product
Is the target market interested in this product?
Is it the right time to introduce this product?
New Product Planning Steps
Business Proposal Conduct a feasibility analysis
Market size
Potential sales
Cost
Profit potential
Overall competitive environment
Level of risk
Production requirements
Time needed to create
Production efficiency
New Product Planning Steps
Develop the Product This is a lengthy step that
could take months or even years to finish
Prototype: during this step a working model of the product is tested, modified, and retested -
New Product Planning
Commercialization Introducing the product to
customers
This is an expensive step
New Product Planning
Evaluate Customer Acceptance Keep a close eye on-
sales,
profit,
market share,
and how well the product is meeting company goals.
New Product Planning
Develop a new product. (See activity sheets)
Activity: Focus group
Work in groups/pairs to generate ideas for a new product.
Present your ideas to a focus group of several students.
The focus group should discuss what they liked and
disliked about the products and any improvements they
might suggest. Could finalize by writing a one page report.
Activity
Developing existing products
Line extensions
Product modifications
Product Planning
http://www.austinwestdesign.com/work/packaging/
Deleting a product or product line
Obsolescence
Loss of appeal
Changes in company objectives
Lack of profit
Conflict with other products in the products in the line
Replacement with new products
Product Planning
Activity
Ask students to partner with someone and make a list of products they still use today that are 10 years old or older.
Then create another list of products they think will be obsolete in the next ten years and the reason why. Have pairs share their answers.
Activity
Positioning: a strategy in which a business creates a
certain image or impression of a product in the minds of consumers.
Product Positioning
Perception map – reviles the product positioning in customers mind Customers indicate their perception
of a product by where they place the dot.
In this instance customer perception of Twix is low priced, lower quality snack item
Where as Belgium Chocolates are perceived as high quality and high price
Product Positioning
Positioning Strategies Positioning by price and quality
Positioning by features and benefits
Positioning in relation to the competition
Positioning in relation to other products in a line
Product Positioning
Question: What is the primary goal of product positioning?
Objective 3: Understand packaging, labeling, and branding elements and strategies.
Explain the nature of branding.
Explain branding strategies.
Objective 4: Understand packaging and labeling.
Explain the functions of packaging.
Explain labeling laws.
Product Branding
What is a product brand?
It is a name, term, symbol, or design, that identifies a product
and distinguishes it from competitors’ products
Branding
Brand Name
a word, group of words, letters, or numbers that represent a product or service. Also called product brand.
Branding
Trade Name
Identifies and promotes a company or a division of a particular corporation.
The trade name is the legal name that a company uses when it does business.
Branding
Brand mark: visually recognizable and does not need to be pronounced.
Example: U.S. Postal Service’s eagle or Apple Computer’s apple.
Branding
Trademark:
a word, name, symbol, device, or combination of these elements that is given legal protection by the Federal government
Branding
Importance of Brands in Product Planning
To build product recognition and customer loyalty
To ensure quality and consistency
To capitalize on brand exposure
Branding
75% of all companies introduce a new product
each year
Types of Brands
National Brands: also called producer brands, they are owned by national manufacturers
Branding
Private distributor brands
Also called private brands, store brands, dealer brands or private labels.
Manufacture does not appear on the product.
Generic Brands
Products that do not carry a company identity
Branding
Manufacture Brand
Private brand
Brand Extension
Using an existing brand name on a new product
Brand Licensing
Allowing other companies to use their brand name
Co-Branding
Combining one or brands. Kellogg’s Pop-Tarts with Smucker’s fruit filling
Branding Strategies
What makes a good brand name? The name should describe the product’s uses.
Easy to read, pronounce, and remember
Create appealing images
Should be distinctive
Should be adaptable
Legally available
Appropriate for packaging and advertising
Branding
Brand Insistence - the goal of Branding
Definition: to be emphatic in demanding a specific brand.
How to Create Brand Insistence
The brand stands for something that is important to them
The brand connects with them on multiple levels across several senses
The brand is unique (or at least appears to be)
The brand is admirable
The brand interacts with them and does not disappoint them
The brand makes them feel good
Branding
Functions of Packaging
Promote and sell the product
Defining Product Identity
Providing information
Expressing customer needs-various sizes, etc.
Ensuring safe use
Protecting the product
Packaging
Packaging Types
Aseptic Packaging: technology that keeps food fresh without refrigeration, such as canning or bottling
Environmental Packaging: friendly to the environment
Cause Packaging: used to promote social and political causes
Packaging
Label: is an information tag, wrapper, seal, or imprinted message that is attached to the product.
Main function is to give information
Descriptive label: information about
the product’s use, construction, care, performance, and other features
Grade Label: States quality of the product. Grade AA, A, B
Labeling
Labels must meet local and national law requirements.
Federal mandates required:
Name, address of manufacture or distributor
and quantity of contents and other items as required
Labeling Laws
Fair Packaging and Labeling Act (FLPA) of 1966 Requires mandatory labeling requirements
Federal Nutrition Labeling and Education Act 1990 protects consumers from deceptive labeling. Labels
must give nutritional information on how a food fits into an overall daily diet.
Federal Food and Drug Administration (FDA) Regulates the labeling and safety of food, drugs, and
cosmetics sold in the U.S.
Federal Trade Commission (FTC) Monitors advertising that is false or misleading.
Labeling Laws