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Decisions
The Product
“ A product is any thing that can be offered to a
market to satisfy a want or need.”
“ Products that are marketed include physical
goods, services, events, persons, places,
properties, organizations, information and
ideas.”
“Everything, both favorable and unfavorable,
that
a person receives in an exchange.”
Components of the
Market Offering
Value-based prices
Attractiveness of
the market offering
A
A product
product used
used toto manufacture
manufacture otherother
Business
Business goods
goods or
or services,
services, to
to facilitate
facilitate an
an
Product
Product organization’s
organization’s operations,
operations, or or to
to resell
resell
to
to other
other consumers.
consumers.
Consumer
Consumer Product
Product bought
bought to
to satisfy
satisfy an
an
Product
Product individual’s
individual’s personal
personal wants
wants
Consumer-Goods Classification
Convenience Products Shopping Products
Buy frequently & immediately Buy less frequently
> Low priced > Gather product information
> Many purchase locations > Fewer purchase locations
> Includes: > Compare for:
• Staple goods • Suitability & Quality
• Impulse goods • Price & Style
• Emergency goods
Natural
Products
Materials and parts
Component
Material
Manufactured
Materials and parts Component
Parts
Industrial Goods
Installations
Capital Items
Equipments
Industrial Goods
Maintenance &
Repair items
Supplies
Operating
supplies
Maintenance &
Repair Services
Business
Services
Business Advisory
Services
Product Items, Lines, and Mixes
A
A specific
specific version
version of
of aa product
product
that
that can
can be
be designated
designated as as aa
Product
Product Item
Item distinct
distinct offering
offering among
among anan
organization’s
organization’s products.
products.
A
A group
group of
of closely-related
closely-related
Product
Product Line
Line product
product items.
items.
All
All products
products that
that an
an
Product
Product Mix
Mix organization
organization sells.
sells.
Product Mix
“ A product mix is the set of all products
and items that a particular seller offers
for Sale.”
Product Mix
Width
Width -- number
number of
of
different
different product
product
Consistency
lines
lines
Length
Length -- total
total Product
Product MixMix --
number
number of of items
items all
all the
the product
product
within
within the
the mix
mix lines
lines offered
offered
Depth
Depth -- number
number of of
versions
versions ofof each
each
product
product inin the
the line
line
Gillette’s Product Lines and Mix
Width of the product mix
Depth of the product lines
Idea Market
Screening Testing
Idea
Generation Commercialization
Idea Generation
Company Employees
Customers
Competitors
Distributors
Suppliers
Idea Screening
Part
Part One
One Describes:
Describes:
The
The Target
Target Market
Market
Planned
Planned Product
Product Positioning
Positioning
Sales,
Sales, Market
Market Share,
Share, && Profit
Profit Goals
Goals
Part
Part Two
Two Outlines
Outlines the
the First-Year’s:
First-Year’s:
Product’s
Product’s Planned
Planned Price
Price
Distribution
Distribution
Marketing
Marketing Budget
Budget
Part
Part Three
Three Describes
Describes Long-Run:
Long-Run:
Sales
Sales &
& Profit
Profit Goals
Goals
Marketing
Marketing Mix
Mix Strategy
Strategy
Business Analysis
Involves a review of the
sales, costs,
Competition, investment
and profit projections to
assess fit with company
objectives.
High (Top
executives)
Price
Above (Middle
average managers)
Average (Salespeople)
Fairfield Inn
Low (Vacationers)
Line Filling
A product line can be lengthened by
adding more items with in present
range of line.
Some time it may results in
cannibalization and creates confusion
in the minds of customers.
3. Product line Modernization
Decision
In some case product line length is
adequate but there is a need of
modernizing it.
An important aspect of product line
modernization decision is that, it allows
competitors see changes and start
redesigning their own lines.
Branding
Brand
“ A brand is a name, term, sign, symbol or design or a
combination of them which is intended to identify the
goods or services of one seller or group of sellers and
to differentiate them from those of competitors”
Brand Name
Brand name is a part of a brand consisting of a word,
letter, group of word, or letters comprising a name
which is intended to identify the goods or services of a
seller or a group of sellers and to differentiate them
from those of competitors”
Branding
Brand Mark
“ A brand mark is the part of the brand which
appears in the form of a symbol, design or
distinctive colouring or lettering” ”
Trade mark
“Part of a brand that is given legal
protection because it is capable of
excusive appropriation”
Branding
“ Branding is the management process by
which a product is branded
It covers various activities such as-
Giving brand name to a product
Deciding a brand mark
Establishing and popularizing brand
name and brand mark.
An Overview of
Branding Decisions
Product Category
Existing New
Brand Name
Existing
Line Brand
Extension Extension
New
Multibrands New
Brands
Good Brand Names:
Lack Poor
Foreign
Distinctive
Language
Meanings
Easy to:
Suggest Suggest
Pronounce
Product Product
Recognize
Qualities Benefits
Remember
Packaging
Packing is wrapping a commodity or
bundling it in a way suitable for
transporting, storing and handling.
Packaging includes activities of
designing and producing the contains
for a product.
Packaging involves promoting and
protecting the product.
Importance of Packaging
Protection
Protection
Promote
Promote
Importance
Importance
of
of
Facilitate
Facilitate Storage,
Storage, Use,
Use, Packaging
Packaging
and
and Convenience
Convenience
Facilitate
Facilitate Recycling
Recycling
Labeling
Label is the part of the product that
carries information about the product
and the seller.
A label indicates the products brand
name, the company logo, ingredients,
promotional messages, and instruction
for use.
Labeling
Persuasive
Persuasive Informational
Informational
Sales and
Profits ($) Sales
Profits
Time
Product Introduction Growth Maturity Decline
Develop-
ment
Costs
Costs High
High cost
cost per
per customer
customer
Profits
Profits Negative
Negative
Marketing
Marketing Objectives
Objectives Create
Create product
product awareness
awareness and
and trial
trial
Product
Product Offer
Offer aa basic
basic product
product
Price
Price Use
Use cost-plus
cost-plus formula
formula
Distribution
Distribution Build
Build selective
selective distribution
distribution
Promotion
Promotion Heavy
Heavy to
to entice
entice product
product trial
trial
Growth Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales
Sales Rapidly
Rapidly rising
rising
Costs
Costs Average
Average cost
cost per
per customer
customer
Profits
Profits Rising
Rising
Marketing
Marketing Objectives
Objectives Maximize
Maximize market
market share
share
Product
Product Offer
Offer extension,
extension, service,
service, warranty
warranty
Price
Price Penetration
Penetration strategy
strategy
Distribution
Distribution Build
Build intensive
intensive distribution
distribution
Promotion
Promotion Reduce
Reduce to
to take
take advantage
advantage of
of demand
demand
Maturity Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales
Sales Peak
Peak
Costs
Costs Low
Low cost
cost per
per customer
customer
Profits
Profits High
High
Maximize
Maximize profits
profits while
while defending
defending market
market
Marketing
Marketing Objectives
Objectives share
share
Product
Product Diversify
Diversify brand
brand and
and models
models
Price
Price Match
Match or
or best
best competitors
competitors
Distribution
Distribution Build
Build more
more intensive
intensive distribution
distribution
Promotion
Promotion Increase
Increase to
to encourage
encourage brand
brand switching
switching
Decline Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales
Sales Declining
Declining
Costs
Costs Low
Low cost
cost per
per customer
customer
Profits
Profits Declining
Declining
Marketing
Marketing Objectives
Objectives Reduce
Reduce expenditures
expenditures and
and milk
milk the
the brand
brand
Product
Product Phase
Phase out
out weak
weak items
items
Price
Price Cut
Cut price
price
Distribution
Distribution Selective:
Selective: phase
phase out
out unprofitable
unprofitable outlets
outlets
Promotion
Promotion Reduce
Reduce to
to minimum
minimum level
level
Practical Problems of PLC
Hard to identify Hard to pinpoint
which stage of the when the product
PLC the product is in moves to next stage
Hard to identify
factors that affect
product’s movement
through stages