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Product Planning

Involves making decisions about those features that are needed to sell a businesss products, services, or ideas

Product Mix
Includes all the different products that a company makes

Expanding the Product Mix


Mix-extension strategies include:

Same brand, related product (Tim Horton coffeemaker) Same brand, unrelated product (Swiss Army watch) Different brand, unrelated product (Pepsi & KFC) Different brand, related product (P&G adds Luvs diapers; already makes Pampers)

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Trading Up and Trading Down


Trading up: Adding a higher-priced product to a line to attract a higherincome market and improve the sales of existing lower-priced products. Trading down: Adding a lower-priced item to a line of prestige products to encourage purchases from people who cannot afford the higher-priced product, but want the status.
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Other Product Mix Strategies


Alteration of Existing Products:
Improve an established product with new design, new package, new uses.

Product-Mix Contraction:
Eliminate an entire line or reduce assortment within it. Pruning to reduce similar brands. Dump unprofitable or indistinct brands.
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Product Mix
Product width the number of different product lines a company has Product depth number of product items offered within each product line

Product Mix Cont.


Product line group of closely related products made by a company Product item - specific model, brand, or size of a product

Product Development Steps


1. 2. 3. 4. 5. 6. 7. Generating ideas Screening ideas Developing a business proposal Develop product (prototype) Test the product Introduce the product (Marketing) Evaluate customer acceptance

Developing Existing Products


Line extensions new product lines, ex. Various lines of Tylenol products Product modifications alteration in a companys existing products
Ex Coke story

Deleting a Product or Product Line


Obsolescence Loss of Appeal Conflict with objectives Replacement with newer products Lack of profit Conflict with other products in the line

Product Mix Width


Product line-1 Skin Care Vaseline Fair and lovely Lakme Ponds Dove

Product line-2 Bath Soaps Lux Lux International Lifebuoy Pears Liril Dove Breeze Rexona

Product Mix Width


Product line-3 Toothpaste Pepsodent Close up
Product line4 Detergent Powder Wheel Surf Surf Excel Rin Supreme Ala

Product line-5 Beverages

Product Mix Width

Lipton Green Label Brooke Bond Red Label Bru Taj Mahal Taaza Super Dust

The Product Life Cycle


the concept of the product life cycle applies to product categories, not to brands; it is related to the concept of diffusion of innovation different products will have differently-shaped life cycle curves; will diffuse at different rates a product is normally perceived to pass through four stages over its life cycle; introduction, growth, maturity, and decline each stage requires different marketing strategies

Product Life Cycle Stages


Introductionmost risky and expensive. Growthboth sales and profits rise, often rapidly. Maturitysales increase at a decreasing rate and profits decline. Declinedemand drops, often because of another product development.

Product Life Cycle Curve


INTRODUCTION GROWTH MATURITY DECLINE

Sales Volume Dollars

Profit 0 Loss

Time in years
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Strategic Implications of the Stages


introductory stage: developing the
market, creating awareness, reaching the innovators growth stage: competition begins, sales grow quickly, profits peak, market penetration maturity stage: competition is intense, sales slow down, differentiated product offerings, customers are brand loyal, few new entrants decline stage: customers move to other 10 - 17 options, competitors leave, profits are low, consider exit

length of the life cycle will vary across markets; some are quite short and may be getting shorter some fads have very short life cycles, while other products stay at maturity for years in high-tech markets, life cycles are very short some products do not make it through all four stages; they may fail in introduction the life cycle must be considered in relation to a specific market; stage may 10 - 18 vary across markets

Characteristics of Life Cycles

Successful life-cycle management requires predicting the shape of the curve and then successfully adapting strategies at each stage. when to consider entering the market how to manage to capitalize on growth it is possible to develop strategies that will extend the maturity stage; modify the product, devise new uses, or design new appeals
greatest challenge comes at the decline stage 10 which may result in product abandonment - 19

Managing the Life Cycle

Different Life Cycles


Aggregate sales Part a - Extended introduction stage Part b - Fad

Time in years

Time in years

Aggregate sales

Part c - Indefinite maturity stage

Time in years
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Planned Obsolescence Fashion and Style


Planned Obsolescence: Technological or functional obsolescence; other things do it better now. Style obsolescence: Still serviceable, but looks out of date now.
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Style: A distinctive manner of construction or presentation in any art, product or endeavour. Fashion: Any style that is accepted and purchased by successive groups of people over a long period of time.

Fashion-Adoption Process
Series of buying waves as a given style is popularly accepted by one group after another. Three theories of fashion adoption: Trickle-downa given fashion flows down through several socioeconomic levels. Trickle-acrossthe fashion moves horizontally and simultaneously within several socioeconomic levels. Trickle-upa style first becomes popular at lower levels and then flows upward.
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Fashion Adoption Theories in Action


Product offered first to upper socioeconomic group Product introduced at same time in all three types of stores:
TRICKLE-ACROSS
Exclusive high-priced specialty stores (boutiques) TRICKLEUP

TRICKLE-ACROSS
TRICKLEDOWN
Medium-priced department stores and specialty stores

TRICKLE-ACROSS
Discount stores
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Product adopted first by lower socioeconomic group