BUS 343 Chapter Notes - Chapter 8: Brand Management, Skunk Works, Registered Trademark Symbol

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Published on 25 May 2011
School
Simon Fraser University
Department
Business Administration
Course
BUS 343
Professor
Chapter 8: Product Management
The Product Life Cycle and the Decision-Making Process
Product life cycle concept was first used where safety and control were extremely critical,
notably in the military and aerospace industry
Product life cycle management is part of the process of competitive positioning and
finding market opportunities
Marketing Throughout the Product Life Cycle
Product life cycle concept that explains how products go through four distinct stages
from birth to death: introduction, growth, maturity, and decline
Product life cycle doesnt relate to a single brand but to the generic product category
The Introduction Stage
Introduction the first stage of the product life cycle, in which slow growth follows the
introduction of a new product in the market place
If the product is accepted and profitable, competitors will follow with their own versions
Goal of introduction stage is to get first time buyers to try the product
Company doesnt make profit during this stage due to heavy R&D costs
For new product to be successful
oConsumers must know about it
oBelieve it is something they need
oMarketing focuses on informing consumers about the product, how to use it, and
its benefits
How long introduction stage lasts depends on
oMarketplace acceptance
oProducer willingness to support the product during its start up
The Growth Stage
Growth stage the second stage in the product life cycle, during which the product is
accepted and sales rapidly increases
Marketing goal is to encourage brand loyalty and convince marketer that this brand is
superior to others
Marketing strategies include introduction of product variations to attract market segments
and grow market share
When heavy competitors appear, marketers must use heavy advertising and other types
of promotion
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The Maturity Stage
Maturity stage the third and longest stage in the product life cycle, in which sales peak
and profit margins narrow
Most customers have accepted the product, sales are often to replace a worn out item or
to take advantage of product improvements
Firms try to sell their product through all suitable retailers
oProduct availability is crucial in a very competitive market
oConsumers will not go far to find one brand when others are closer at hand
Attracting new users of the product is another strategy used in the maturity stage
The Decline Stage
Decline stage the final stage in the product life cycle in which sales decrease as
customer needs change
Single firm may still be profitable, the market as a whole begins to shrink, profits decline,
and suppliers pull out
Elimination of product can happen in two ways
oPhase it out by cutting production in stages and letting existing stocks run out
oDrop the product immediately
Service Strategy
Important to recognize that any product needs to be supported by a sound service
strategy
Offer good quality service, the main parameter in a service strategy is time, dealing with
the before, during, and after” phases of a product delivery
Before phase
oTo obtain full values firms need to provide relevant information about the product
offered
oDialogue with customers is essential to meet the customer requirements and
develop a tailored solution
oMany firms forget that the choice of communication channels, time, and location
should be convenient for customers to place an order
During phase
oThe delivery, installation, and guarantees offered are key elements
After phase
oProvide after sales service that includes maintenance and repair support
oCritical in that firms need to allow customers to give feedback on the quality of
the service
oFeedback can be used to make future readjustments
Firms capacity to manage exceptions is also an important asset to a service strategy
oExceptions fall outside the routine of normal product or service delivery
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Document Summary

Introduction the first stage of the product life cycle, in which slow growth follows the introduction of a new product in the market place. Creating product identity: branding decisions: branding is an extremely important element of product strategies. If brand extension doesn"t live up to the quality or attractiveness of the original brand, brand equity will suffer, reducing brand loyalty and sales. Branding strategies: marketers have to determine whether to create individual or family brands, national or private-label brands, or to co-brand. Individual brand separate unique brand for each production item: family brand a brand that a group of individual products or individual brands share, an umbrella brand strategy. Co-branding: co-branding an agreement between two brands to work together in marketing a new or existing product, enjoy more recognition power than either would alone. Organizing for effective product management: effectiveness of product strategies depends on marketing managers and the decisions they make.