PRODUCT STRATEGY

PRODUCT 

• Physical/ functional Attributes

• Package design and labeling
• Broad Name
• Symbols/ TradeMarks
• Service/ Warranties

• Purchased Frequently, immediatley, and with a minimum amount of planning and effort
• Impulse Items (Snack foods)
• Staples (gas, bread, milk)
• Emergency items (Bandages, candles)

• Purchase process generally involves comparisons of features,quality, and pric among competing alternatives

1. -Homogeneous (Washers and Dryers)
2. Heterogeneous (Luggage, Computers)

Speciality Products

• Unique characteristics create specialized demand
• Consumers often willing to behave irrationally to acquire it

• Generally avoided
• Must be Sold

Product Life Cycle

What are some generalizations about products?

• Most new products fail
• Many successful products don't last forever

• Length of stages (shape)
• Applies to product categories and forms no brands
• Can the product life cycle be extended?

• Its hard to predict how long each stage will last
• How can you grow after declining sales?

Pros to a Product Life Cycle

• Marketing Mix implications @ different stages
• Motivation for continuous improvement

• Hard to predict shape
• Hard to predict length of stages
• Cause premature abandonment of existing products
• Can products be revitalized?
• Self Fulfilling prophecy

1. Awareness
2. Interest
3. Evaluation
4. Trial
5. Adoption/ Rejection

• THE MARKETERS CHALLENGE IS TO SHORTEN THIS PROCESS!

• Relative Advantage
• Complexity
• Compatibility
• Possibility of Trial use
• Observability

• Revenue and Profits
• Impact of PLC? what?
• Economies of scale
• Brand Image
• Firm Reputation
• Distribution Channel leverage

A series of products sold by a single firm

Product Mix

An organizations product mix is measured in terms of its

1. Width- Number of different prod. lines or categories
2. Length- Number of different products per category
3. Depth of assortment- Variation of assortment within a given product line

• New product offering that is closely related to other products in the firm's existing product line

When a new product takes sales away from another product in the firm's product line.

You dont want to take sales away from your old products

1. Market Penetration- Increasing sales of existing products in existing markets
2. Market Development- Finding new markets for the firm's existing products
3. Product Development- Introduction of new products into existing markets
4. Product Diversification- The development of new products for new makets

Branding

Define Brand 

Brand Loyalty

Measured in 3 stages 

1. Brand Recognition-Consumer awareness and identification of a brand
2. Brand Preference- Consumer reliance on previous experiences with a product to choose it again (over competitors products)
3. Brand Insistence- Consumer accepts no alternative; extensive search for desired brand

Based on Ownership

-Manufacturer's brands

-Private Brands

Private label or retailter/ distributor brands 

Brand Name Strategies (cont'd)

Based on Marketing strategy

-Family Branding- a common brand name identifies several related products

Individual Branding- PRoduct line items are known by their own brand names rather than by the names of their producing companies (Proctor and Gamble does this) 

Cons to Individual Branding 

Red Dog Beer

Lexus

Acura

Infiniti

Old Navy

Banana Republic 

National brands sold exclusively by a retailer

ex: Martha Stewart sold exclusively through K-Mart 

1. Phonetics- Jow a word sounds
2. Semantics- Soft Drink called Jolt... duhh caffeine!
3. Learned Associations- OVer time based on investement it means alot

Intrinsic Value of a Brand Name

What the name of a company is worth...  

attaching a popular brand name to a new product in an unrelated product category.

NOTE THIS IS NOT A LINE EXTENSION 

1. Transfer of image and meaning from the core brand to the extension product
2. Promotional savings (Oreo Cereal)
3. Distribution leverage

-Dilution Effects- putting your brand on too many products

Critical Consideration

-"fit" (Calvin Klein)

-You can avoid dilution effects when the new product goes along with the old (I.E. it "fits" )

1. Technological Fit- Honda Motorcycles/ Lawn Mowers
2. Usage Situation fit- Burton Snowboards/ Snow pants
3. Image Fit- Calvin Klein Jeans/ cologne

1. affects the quality and strength of inferences about the extension [rpdict
2. Affects promotion economies
3. Can lead to positive feedback effects for the core brand

Combination Branding

4 types 

1. Ingredient Branding- ex: intel inside
2. Sub-Branding (Courtyard by Marriott- one new one existing brand name
3. Composite Branding-two existing brand namesused to created a new brand (healthy choice by kelloggs)
4. Brand Licensing- Authorizing another firm to use an existing brand name

1. Product Homogeneity in mature markets
2. Extensive Discounting (as soon as you discount no one wants to pay regular price
3. Concentrated (niche) marketing
4. Private brands
5. Channel power

Intangibility- Difficult to demonstrate

Inseperability- often involve simultaneous production and and consumption.. ex: haircut

Perishability- Cant be inventoried: price fluctuates with demands

-Hotel Rooms

Plane tickets 

More Products vs services

Variability

Search and evaluation is more difficult

Interaction is often required between buyer and  seller

Switching costs are generally higher 

1. Limit the number of marketplace contracts necessary to make a sale
2. Sorting
3. Standardize exchange functions
4. Facilitate search behavior

1. Retailers- Faciilitate exchanges with purchasers
2. Wholesalers- positioned between the producer and the retailer- take title to the goods they distribute
3. Agents/ Brokerse- Positioned between the producer and the wholesaler: may or may not take possession of the goods they handle; almost never take title

Advantages of using Intermediaries

1. Providing efficiency
2. Creating Utility
3. MAximizing Coverage (vs. control)
4. Maximizing Profitability

Types of Distribution Channels

Direct Channel- Moves goods directly from producer to purchaser; no marketing intermediaries

Indirect Channel- Independent intermediaries are involved in the movement of goods from producer to purchaser