product mix strategy

1. Chapter 10 product mix strategy

2. 1 What is a product • 2 Brand and trademark • 3 Product line decision • 4 Product life-cycle • 5Development strategies of New product Chapter 10Product mix strategy In this chapter, we focus on 5 parts:

3. Chapter 10Product mix strategy 1 What is a product • 1.1 Definition • 1.2 Levels of product • 1.3 Product classifications • 1.4 Physical product • 1.5 Product mix

4. Chapter 10Product mix strategy 1.1 Definition • (1) Defined in GB/T19000 ●results or outcomes of act, work, produce and labor ：physical product ● no other than this activities such as an action, a work, a production or labor：invisible produce or service.

5. Chapter 10Product mix strategy 1.1 Definition (2) Defined by Philip Kotler Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Physical products Properties Services Information Persons Organizations Places Experiences Ideas

6. Chapter 10Product mix strategy 1.2 Levels of product potential product augmented product expected product basic product core benefit

7. Chapter 10Product mix strategy 1.2 Levels of product • 现代市场营销关于产品的概念 安装、调试 实质产品或 核心产品 包装 品牌与 特色 商标 质量与款式 交货与信用 售后服务 产品功效 形式产品 扩增产品或 附加产品 送发货免费、质量保证

8. Chapter 10Product mix strategy 1.3 Product classifications • (1) Consumer products • Convenience products • Shopping products • Specially products • Unsought products • (2) Industrial products • Material and Part • Supplies and Business service • Capital items

9. Chapter 10Product mix strategy • 1.3 Product classifications • (3) Durability and Tangibility • Non-durable goods • Durable goods • Services

10. Chapter 10Product mix strategy 1.4 Physical product 1.4.1 Quality of the product ● (1) definition：the ability that can satisfy consumer’s wants, needs and demands. ——需要可以是明确规定的，也可能是隐含的 ——需要既包括顾客需要，又包括社会需要 ——需要必须转化为有规定指标的产品质量（使用性能、可靠性、安全性、舒适性、经济性、维修性、时间性） ——需要是动态的，因而企业质量要发展 ——全面质量

11. Chapter 10Product mix strategy • (2) 全面质量的内涵

12. Chapter 10Product mix strategy 1.4 Physical product 1.4.2 Features and design of the product • (1) Features：the auxiliary function of the product 作用：区别竞争、提升产品感受价值 （企业应研究其各个特色的成本，通常要求特色能够为企业带来附加利润） (2) Phases of the automobile design 方型 流线型 梯型 理智型

13. Chapter 10Product mix strategy 1.5 Product mix • The set of all product lines and items that a particular seller offers for sale. • Width:the number of different product lines the company carries. • Length:the total number of items the company carries within its product lines. • Depth:the number of variants offered of each product in the line. • Consistency:how closely related the various product lines are in end use, production requirements, distribution channels, or some other way.

14. Chapter 10Product mix strategy 2 Brand and Trademark • 2.1 What is brand and trademark • 2.2 Level of brand loyalty • 2.3 Brand Equity • 2.4 Brand strategy

15. Chapter 10Product mix strategy 2.1 What is brandand trademark 2.1.1 Brand • (1) Definition:A name,term,sign,symbol,or design,or a combination of these,that identifies the maker or seller of a product or service.

16. Chapter 10Product mix strategy 2.1 What is brandand trademark 2.1.1 Brand (2)The function of the brand • A brand is essentially a seller`s promise to consistently delivery a specific set of features, benefits, and services to the buyers. • The best brands convey a warranty of quality.

17. Chapter 10Product mix strategy 2.1 What is brandand trademark 2.1.1 Brand (3) A brand can convey up to six levels of meaning： ●Attributes ●Culture ●Benefits ●Personality ●Values ●User

18. Chapter 10Product mix strategy 2.1 What is brandand trademark 2.1.2 Trademark ●Trade mark：a pattern or a design for use by somebody in particular， it’s registered in brand-mark bureau or knowledge property right management department, and preserved by legal regulations. ●The brand and trademark are important industrial property of the enterprise which can be negotiated.

19. Chapter 10Product mix strategy 2.2 Level of brand loyalty ●Customer will change Brands, especially for price reasons. No customer loyalty. ●Customer is satisfied. No reasons to change. ●Customer is satisfied and would incur costs by changing brand. ●Customer value the brand and sees it a friend. ●Customer is devoted to the brand.

20. Chapter 10Product mix strategy 2.3 Brand Equity ●The company will enjoy reduced marketing costs because of the high level of consumer brand awareness and loyalty. ●The company will have trade leverage in bargaining with distributors and retailers since customers expect them to carry the brand. ●The company can charge a higher price than its competitors because the brand has higher perceived quality. ●The company can more easily launch brand extension since the brand name has high credibility. ●The brand offers the company some defense against fierce price competition.

21. Chapter 10Product mix strategy 2.4 Brand strategy (1)Brand sponsor (2)Brand strategy Manufacturer brand Distributor brand Licensed brand Line extensions Brand extension Multi-brands New brands

22. Chapter 10Product mix strategy 2.4 Brand strategy (3)Product category new Existing Existing Brand name new

23. Chapter 10Product mix strategy 2.4 Brand strategy • (4)Brand Name Decision ●Individual Brand Name ●Blanket family Name For All Product ●Separate Family Names For All Products ●Company Trade Name Combined With Individual Product Names

24. Chapter 10Product mix strategy 2.4 Brand strategy • (4)Brand Name Decision ●It should suggest something about the product’s benefits; ●It should suggest product qualities; ●It should be easy to pronounce, recognize, and remember; ●It should not carry poor meanings in other countries and language. Interesting stories: AIDS;Eastern Wind means wind come from Siberia, Santana ;Passat means dead in Shanghai dialect;‘Nova’ in Spanish means ‘can't go’, etc.

25. Chapter 10Product mix strategy 3 Product line decision • 3.1 Product line define • 3.2 Product line analysis • 3.3 Product line length • 3.4 Product line modernization • 3.5 Product line characteristicization

26. Chapter 10Product mix strategy 3.1 Product line define • A group of products that are closely relates 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.

27. Chapter 10Product mix strategy 3.1 Product line define • Example:

28. Chapter 10Product mix strategy 3.2 Product line analysis • Sales volume and profit • Line manager of products should know sales amount and profit of the project of the products. • Market position and prospect • Line manager of products should analyses how the one's own products line made a reservation .

29. Chapter 10Product mix strategy 3.3 Product line length • line stretching • Stretch line downward • Stretch line upward • Stretch line both ways  • line filling • Reasons: reaching for extra profits、 Satisfying dealers、 using excess capacity、 Being the leading full-line company、 Plugging holes to keep out competitors

30. Chapter 10Product mix strategy 3.4 Product line modernization • Pay attention to two points • The question is that a products line should be modernized gradually or modernized quickly • choose the best opportunity of improving the products , not too late either too early 

31. Chapter 10Product mix strategy 3.5 Product line characteristicization • The line manager of products chooses one or minority produce having models in the products line to sell with characteristic. • Low-grade products----make it serve as" cheap goods which opens up the sale". • High end products----In order to improve the grade of the products line

32. Chapter 10Product mix strategy 4 product life-cycle • 4.1 Definition of Product life-cycle • 4.2 Five distinct stages • 4.3 Product life-cycle strategies

33. Chapter 10Product mix strategy 4.1 Definition of Product life-cycle ●the period of a type/kind of product is being manufactured and sold lastingly. It lasts from R&D, trial production and selling to ceasing production and selling because of lack of enough consumer or appearance of replacements or competitive product. ● product life-cycle usually includes five distinct stages as R&D, introduction, growth, maturity, decline.

34. Chapter 10Product mix strategy 4.2 Five distinct stages • Product development • Introduction • Growth • Maturity • Decline 

35. Sales and profits ($) 0 Time Product develo-pment Growth Decline Introduction Maturity Losses-investment ($) Chapter 10Product mix strategy 4.2 Five distinct stages Sales Profits

36. Chapter 10Product mix strategy 4.3 Product life-cycle strategies • (1)Introduction • Rapid-skimming strategies • Slow-skimming strategies • Rapid-penetration strategies • Slow-penetration strategies In a word, a manager must stress on “accurate”.

37. Chapter 10Product mix strategy 4.3 Product life-cycle strategies • (2) Growth  • Improve product quality and add new product features and models • Enter new market segments and new distribution channels In a word, a manager must stress on “splendid”.

38. Chapter 10Product mix strategy 4.3 Product life-cycle strategies • (3)Maturity  • Modify the market---trying to increase the consumption of the current product • Modify the product---changing characteristics such as quality,features,or style to attract new users and to inspire more usage • Modify the market mix---improving sales by changing one or more marketing mix elements In a word, a manager must stress on “strive for”.

39. Chapter 10Product mix strategy 4.4 Product life-cycle strategies • (4) Decline  • Identify their aging products in the decline stage by reviewing sales,market shares,costs,and profits • Decide whether to maintain,harvest,or drop each of these declining products • Reduce various costs and hope that sales hold up or sell it to other firms In a word, a manager must stress on “transform”.

40. Chapter 10Product mix strategy 5 Development strategies of new product • (1) Definition of new product: a product that can bring consumer new satisfaction and benefits. • For examples: • New type/kind of product • Improved product: function increased, performance improved, structure changed, advanced techniques applied, and so on • New packed product • New brand product • etc.

41. Chapter 10Product mix strategy 5 Development strategies of new product(2)the process of new product development

42. Chapter 10Product mix strategy 5 Development strategies of new product (3) New product development method • Independence development: to depend on own capabilities • Development based on techniques from else corporation or based on import technology • Development cooperated with each other • Combined those

43. Chapter 10Product mix strategy 5 Development strategies of new product (4) Preparing work • 试用（有偿使用）、展销 • 测算有关项目：市场规模、销量、市场占有率、投资收益率、促销预算等 • 确立未来的市场营销组合