product planning. product planning decisions about the features and services of the product ideas...
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Product Planning
Product Planning
Product PlanningDecisions about the features and services
of the product
Ideas that will help sell the productPackaging / Labeling / Branding /
Warrenties
Product Planning
Product MixAll products a company makes or sells
Mores brands = Help companies from depending on just one product
Too many brands = may hurt sales by not being as popular as brands already in stock
Product Planning
Product LineClosely relates products
Product ItemSpecific model, brand, or size of a product within a product
lineProduct Width
Number of different product lines
Product DepthNumber of items offered within each product line
Product Mix Strategies
Product MixesVary with the type of business
Company objectives / Image / Market
Existing vs New products
Current trends
Product Mix Strategies
New ProductsSuccessful new products
can increase sales and the company’s market share
Can improve the company’s image and/or reputation
Seen as a Innovator in the industry
New Product Development1. Generating ideas
2. Screening Ideas
3. Developing a business proposal
4. Developing the product
5. Testing the product with consumers
6. Introducing the product
7. Evaluating customer acceptance
Product Mix Strategies
Generating IdeasCreativity is key
Come from customers / competitors / employees
Screening IdeasIdeas are evaluated
Are ideas in line with company strategy?
Conflicts with existing products
Done before allocating resources…Time and Money!!!
Product Mix Strategies
Developing a Business ProposalProfit Potential – Size of Market / Potential Sales / Technology Trends /
Competitive Environment / Risk
Production requirements – Time to create and introduce
Developing the ProductPrototype – Model of new product
Production / Packaging / Labeling / Branding / Promotion / Distribution
Decision on to produce or to outsource
Tests on product based on normal and not so normal consumer use – wear and tare
Product Mix Strategies
Testing the Product with ConsumersTest marketed in certain geographical areas – Gauge consumer acceptance
Test markets and focus groups costs may be too high for some companies and testing will be skipped
Testing may not take place to keep competitors in the dark
Introducing the ProductCommercialization
Advertising to introduce product benefits to customers
Can be Expensive…But…1st on the market can build brand loyalty
Product Mix Strategies
Evaluating Customer AcceptanceHow often do customers buy the new product?
When did customers last buy the new product?
Where are the best customers for our new product?
What new products are customers buying?
Product Mix Strategies
Developing New ProductsBuild on established image
Appeal to new markets
Increase sales and profits
Downside = Costs!
Line Extension and Product Modifications
Product Mix Strategies
Line ExtensionAdding new product lines / items / services
A different product that appeals to somewhat different needs of customers
Wider range of choices for customers
Product ModificationsAlteration of an existing product
Varieties / Formulations / Colors / Styles / Features / Sizes
Quick and Easy
Product Mix Strategies
Deleting a Product or Product LineObsolescence – No longer useful (Technology)
Loss of Appeal – Change in consumer tastes
Changes in Company Objectives
Lack of Profit
Conflict with Other Products in the Line
Replacement with New Products – Have to pay Slotting Fees
The Product Life Cycle
Product Life CycleStages a product goes through during its life
Introduction – Focus on Promotion and production. Draw customer’s attention
Growth – Build brand preference and increase market share. Focus on consumer satisfaction. Increased competition
Maturity – Sales decrease or slow down. Marketing focus is on fighting off competition
Decline – Profits fall below expenses. Company must decide on course of action
The Product Life Cycle
Product Life CycleDecline
Sell or License Product – Other company tries to revitalize product
Recommit to the Product Line – Identify new use for the product
Discount the Product – Lower prices
Regionalize the Product – Focus on geographical areas of success
Update or Alter the Product – Redesign / Packaged differently / Reformulated
Product Positioning
Product PositioningCreating an image of the product that is appealing
to consumers
Effort a business makes to identify, place, and sell its products in the market place
StrategiesPrice and Quality / Features and Benefits / Relation
to Competition / Relation to Other Products in a Line
Product Positioning
Product Positioning Strategies
Price and Quality – High price = Quality, Low Price = ValueEconomy / Mid / Luxury
Features and Benefits – Highlight a unique or Perceived Characteristic
Relation to Competition – Head to Head Competition
Relation to Other Products in a Line – If you like X, you’ll love Y