III MARKETING STRATEGY: PRODUCT

1. IIIMARKETING STRATEGY: PRODUCT New Product Development New Product Diffusion Process Product Life Cycle Product Mix and Product Line Strategies Product Portfolio Concept Product Differentiation Product Positioning Brand Awareness, Preference, Loyalty, Equity Services as Products (Key Distinctions)

2. Product Anything that can be offered to a market that can satisfy a need or want

3. Product - Broadly DefinedSome Examples • Physical Goods (auto, T.V.) • Services (medical care, haircut) • People (Bill Clinton, Tiger Woods) • Places (Australia, London, Las Vegas) • Organizations (Girl Scouts, AAA) • Ideas (Stop Smoking, Capitalism)

4. Five Product Levels Potential product Augmented product Expected product Basic product Core benefit

5. New Product Development Dilemma Most firms must introduce new products to survive and prosper in the long-run yet the prospects for success are low (80% failure rate in consumer packaged goods)

6. Six Categories of New Products • New-to-the- world products (10%) • New product lines • Additions of existing product lines • Improvements and revisions to existing products • Repositioning • Cost reductions

7. New Product Development Process • Idea generation • Screening • Concept development • Business analysis • Prototype • Test marketing • Commercialization

8. Product Diffusion Process Five Stages

9. Adopter Categorization of the Basis of Relative Time of Adoption of Innovations 34% Early majority 34% Late majority 13.5% 2.5% Innovators 16% Laggards Early adopters Time of adoption of innovations

10. I Introduction IIGrowth IIIMaturity IV Saturation VDecline Product Life Cycle Sales V IV III II I Time

11. Product Mix Set of all product that any given seller offers for sale to the market

12. Product Line Groups of products that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same channels, or fall within given price ranges

13. Product Mix Strategies • Width - how many product lines • Length - total number of products in mix • Depth - variety offered in each line • Consistency - how similar are lines

14. Product Line Strategies • Line lengthening • Line shortening • Line broadening • Line pruning • Line filling • Trading up • Trading down

15. Two-Way Product-Line Stretch: Marriott Hotels Quality Economy Standard Good Superior Marriott Marquis (Top executives) High Marriott (Middle managers) Above average Price Average Courtyard (Salespeople) Fairfield Inn (Vacationers) Low

16. Product Portfolio Concept Products (or brands) in product mix or line viewed as analogous to securities in a financial portfolio. Contribution of each product and overall “balance” of the portfolio evaluated.

17. Product Differentiation Sellers attempt to portray a product as being different from competitive products and therefore more desirable to purchase even though the price may be higher http://www.youtube.com/watch?v=zJcAa3_1rEA

18. Product Positioning Creating an impression about a particular product relative to other available products Jack Trout on Positioning: http://www.youtube.com/watch?v=DixFg-reeaw http://www.youtube.com/watch?v=veaE5__5BWw&playnext=1&list=PLCC5B9D2ADD5A6687 http://www.youtube.com/watch?v=fxWZ2sY3o3k http://www.youtube.com/watch?v=SBUImQ60kAM&feature=related http://www.youtube.com/watch?v=3YaSF2_K9l4&feature=related

19. Product and BrandPositioning Product-positioning map (breakfast market) Expensive Bacon and eggs Cold cereal Slow Quick Pancakes Hot cereal Instant breakfast Inexpensive

20. Product Brand Name, term, symbol, or unique design, or combination of these factors intended to identify the products of a particular seller and distinguish them from those of competitors

21. Brand Terminology • Brand awareness • Brand acceptability • Brand preference • Brand loyalty • Brand equity

22. Brand Awareness Consumers are aware of a specific brand offered on the market

23. Brand Acceptability Consumers accept and are willing to purchase a given brand

24. Brand Preference Consumers choose a particular brand over other brands, perhaps because of habit or favorable past experience with the brand

25. Brand Loyalty Consumers become committed to a brand and make repeat purchases over time http://www.youtube.com/watch?v=-qHP_fr1RI0

26. Brand Equity The added value that a brand gives to a product in the marketplace http://www.youtube.com/watch?v=KmaWeWX2j5g http://www.youtube.com/watch?v=WTeO0lf_CV0&feature=related

27. Google IBM Apple Microsoft Coca Cola 6) McDonald’s 7) Marlboro 8) China Mobile 9) GE 10) Vodafone The World’s 10 Most Valuable Brands* • * based in survey by Millward Brown

28. An Overview ofBranding Decisions Brand- sponsor decision Brand- name decision Brand- strategy decision Brand- repositioning decision Branding decision Should a brand be developed for the product? Who should sponsor the brand? What names should be put on the products? What branding strategies should be used? Should the brand be reposi- tioned? • Brand • No brand • Manu- • facturer’s • brand • Distribu- • tor’s • (private) • brand • Licensed • brand • Individual • brand • names • Blanket • family • names • Separate • family • names • Company/ • individual • names • Line • extension • Brand • extension • Multi- • brands • New • brands • Cobrands • Brand • reposi- • tioning • No brand • reposi- • tioning

29. Special Characteristics of Services as Products • Intangibility of services • Inseparability of service from provider • Difficulty of standardization • High degree of customer involvement • Perishability of services

30. Intangibility of Services • Services are less tangible than physical products • Services cannot be easily differentiated

31. Inseparability of Service from Provider • Services are inextricably tied to the service provider

32. Perishability of Services • Services cannot be produced ahead of or in anticipation of customer needs and then stored

33. High Degree of Customer Involvement Customer involvement in the production of a service is often greater than for a product

34. Difficulty of Standardization Standardization of services is much more difficult than standardization of mass-produced products