Product: Product Planning for Goods and Services

To Accompany Basic Marketing, 14th Edition by William D. Perreault, Jr. and E. Jerome McCarthy

Your host: David J. Urban Professor of Marketing Virginia Commonwealth University

Marketing Strategy Planning Process Marketing Strategy Planning Process

Narrowing down to focused strategy with quantitative and qualitative screening criteria

Customers
Needs and other Segmenting Dimensions

Targeting & Segmentation S. W. O. T.

Company
Mission, Objectives, & Resources

Positioning & Differentiation

Competitors
Current & Prospective

External Market Environment

Technology Political & Legal Social & Cultural Economic

An Introduction An Introduction

What Are Key Strategy Planning Decisions Related to Product?

Physical good, service or most often some of both Branding Packaging Warranty Life Cycle Management and Product Development

Differences in Goods and Services Differences in Goods and Services

Goods

Services

Differences in Goods and Services Differences in Goods and Services

Goods
Tangible

Services
Intangible Sold Then Produced and/ or Consumed Same Time

Produced Then Sold

Differences in Goods and Services Differences in Goods and Services

Goods
Tangible

Services
Intangible Sold Then Produced and/ or Consumed Same Time Perishable Often Produced In Consumer's Presence

Produced Then Sold

Can Store and Transport Produced Separate From Consumer

Who Does the Branding? Who Does the Branding?

?
Manufacturer Manufacturer

Brand Choices

? ?

Who Does the Branding? Who Does the Branding?

?
Manufacturer Manufacturer

Brand Choices

? ?
Dealer Dealer

Who Does the Branding? Who Does the Branding?

?
Manufacturer Manufacturer

Brand Choices

? ?
Dealer Dealer

?
Generic Generic

Type of Brand Type of Brand

?
Family Brand Family Brand

? ?

Brand Choices

Type of Brand Type of Brand

?
Family Brand Family Brand

?
Individual Brand Individual Brand

Brand Choices

Type of Brand Type of Brand

Licensed Licensed

?
Family Brand Family Brand

?
Individual Brand Individual Brand

Brand Choices

Characteristics of a Good Brand Name Characteristics of a Good Brand Name

A Good A Good Brand Name Brand Name Is... Is...

Short and simple Suggestive of product benefits Legally available Timeless rather than timely No negative imagery Easy to spell, read, and pronounce Adaptable for international markets Adaptable to packaging/labeling needs Adaptable to any advertising medium

International Brands International Brands

Conditions Favorable to Building Brand Familiarity Conditions Favorable to Building Brand Familiarity
1. Easy to identify by brand 1. Easy to identify by brand or trademark or trademark 2. Quality is best value for 2. Quality is best value for the price the price

Seven Seven Conditions Conditions Favorable to Favorable to Successful Successful Branding Branding

Conditions Favorable to Building Brand Familiarity Conditions Favorable to Building Brand Familiarity
1. Easy to identify by brand 1. Easy to identify by brand or trademark or trademark 2. Quality is best value for 2. Quality is best value for the price the price 3. Dependable and wide3. Dependable and widespread availability spread availability 4. Demand for general 4. Demand for general product class is large product class is large

Seven Seven Conditions Conditions Favorable to Favorable to Successful Successful Branding Branding

5. Demand supports price 5. Demand supports price needed to support brand needed to support brand

Conditions Favorable to Building Brand Familiarity Conditions Favorable to Building Brand Familiarity
1. Easy to identify by brand 1. Easy to identify by brand or trademark or trademark 2. Quality is best value for 2. Quality is best value for the price the price 3. Dependable and wide3. Dependable and widespread availability spread availability 4. Demand for general 4. Demand for general product class is large product class is large

Seven Seven Conditions Conditions Favorable to Favorable to Successful Successful Branding Branding

5. Demand supports price 5. Demand supports price needed to support brand needed to support brand 6. Economies of scale 6. Economies of scale possible possible 7. Favorable shelf locations 7. Favorable shelf locations possible possible

Levels of Brand Familiarity Levels of Brand Familiarity

Focus:

Rejection

Change Position

Levels of Brand Familiarity Levels of Brand Familiarity

Focus:

Rejection

Change Position
Focus:

Non-recognition

Increase Awareness

Levels of Brand Familiarity Levels of Brand Familiarity

Focus:

Rejection

Change Position
Focus:

Non-recognition

Increase Awareness
Focus:

Recognition

Continue Education

Levels of Brand Familiarity Levels of Brand Familiarity

Focus:

Rejection

Change Position
Focus:

Non-recognition

Increase Awareness
Focus:

Recognition

Continue Education
Focus :

Preference

Maintain Availability

Levels of Brand Familiarity Levels of Brand Familiarity

Focus:

Rejection

Change Position
Focus:

Non-recognition

Increase Awareness
Focus:

Recognition

Continue Education
Focus :

Preference

Maintain Availability
Focus :

Insistence

Develop High Brand Equity

Generating Brand Preference Generating Brand Preference

Packaging and Strategy Planning Packaging and Strategy Planning

Protection

Packaging can improve shipping, handling, and storage and reduce shoplifting or spoilage

Packaging and Strategy Planning Packaging and Strategy Planning

Packaging and Strategy Planning Packaging and Strategy Planning

Protection

Packaging can improve shipping, handling, and storage and reduce shoplifting or spoilage Packaging sends a signal at point of purchase and consumption

Promotion

Packaging and Strategy Planning Packaging and Strategy Planning

Protection

Packaging can improve shipping, handling, and storage and reduce shoplifting or spoilage Packaging sends a signal at point of purchase and consumption Packaging can make the difference in ease of use, more distinctive, etc.

Promotion

Better Product

Packaging and Strategy Planning Packaging and Strategy Planning

Packaging and Strategy Planning Packaging and Strategy Planning

Protection

Packaging can improve shipping, handling, and storage and reduce shoplifting or spoilage Packaging sends a signal at point of purchase and consumption Packaging can make the difference in ease of use, more distinctive, etc. Packaging costs and externalities vary widely big environmental issues

Promotion

Better Product

Affects Cost

Warranties and Strategy Planning Warranties and Strategy Planning

Warranty

A warranty says the company stands behind the product. Consumers often feel more comfortable with products they know come with assurances.

The Product Life Cycle The Product Life Cycle

Market Introduction

$0 Sales grow slowly, at a cost

Time

The Product Life Cycle The Product Life Cycle

Market Introduction

Market Growth

Market Maturity

Sales Decline

Total Industry Sales Total Industry Profit Time Sales grow slowly, at a cost Sales growth, but profits level off Sales Manage it levels, but or say profits goodbye decline

$0 -

The Product Life Cycle The Product Life Cycle

Market Introduction

Market Growth

Market Maturity

$0 Sales grow slowly, at a cost Sales growth, but profits level off

Time Sales levels, but profits decline

The Product Life Cycle The Product Life Cycle

Market Introduction

Market Growth

Market Maturity

Sales Decline

Total Industry Sales Total Industry Profit Time Sales grow slowly, at a cost Sales growth, but profits level off Sales Manage it levels, but or say profits goodbye decline

$0 -

Avoid Confusion about PLC Avoid Confusion about PLC

Key Points Key Points About the About the PLC... PLC...

Product-market, not brand Markets may have different cycles Timing of stages may vary Strategy must change over time

The Product Life Cycle The Product Life Cycle

Market Introduction Market Growth Market Maturity Sales Decline

Total Industry Sales Total Industry Profit

$0 -

Tim e

Product
One of Few Variety - try to All the find best same product Battle of the Build brand brands familiarity Some drop out But favorites may be profitable for a long time!

The Product Life Cycle The Product Life Cycle

Market Introduction Market Growth Market Maturity Sales Decline

Total Industry Sales Total Industry Profit

$0 -

Tim e

Place
Build Channels Maybe selective distribution More of the same, but more channel outlets available Move toward Find a way to more intensive reach loyal distribution laggards

The Product Life Cycle The Product Life Cycle

Market Introduction Market Growth Market Maturity Sales Decline

Total Industry Sales Total Industry Profit

$0 -

Tim e

Promotion
Build primary Build selective demand demand Informing/Persuading Persuading/reminding Frantically competitive!

The Product Life Cycle The Product Life Cycle

Market Introduction Market Growth Market Maturity Sales Decline

Total Industry Sales Total Industry Profit

$0 -

Tim e

Price
Skim the cream at a high price or Low to penetrate faster Meet competition (especially in oligopoly) or Price dealing and price cutting or Value pricing for long-term relationships

New-Product Development Process New-Product Development Process

Idea Idea Generation Generation

Screening Screening

Idea Idea Evaluation Evaluation

DevelopDevelopment ment

CommerCommercialization cialization

The Need for New Products The Need for New Products

New-Product Development Process New-Product Development Process

Idea Idea Generation Generation

New-Product Development Process New-Product Development Process

Idea Idea Generation Generation

Screening Screening

New-Product Development Process New-Product Development Process

Idea Idea Generation Generation

Screening Screening

Idea Idea Evaluation Evaluation

New-Product Development Process New-Product Development Process

Idea Idea Generation Generation

Screening Screening

Idea Idea Evaluation Evaluation

DevelopDevelopment ment

New-Product Development Process New-Product Development Process

Idea Idea Generation Generation

Screening Screening

Idea Idea Evaluation Evaluation

DevelopDevelopment ment

CommerCommercialization cialization

Marketing Strategy Planning Process Marketing Strategy Planning Process

Narrowing down to focused strategy with quantitative and qualitative screening criteria

Customers
Needs and other Segmenting Dimensions

Targeting & Segmentation S. W. O. T.

Company
Mission, Objectives, & Resources

Positioning & Differentiation

Competitors
Current & Prospective

External Market Environment

Technology Political & Legal Social & Cultural Economic