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Canada (162,366)
BUS 343 (122)
Jason Ho (70)
Chapter 7

Marketing: Real People, Real Decision (3rd Edition): Chapter 7

14 Pages
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Department
Business Administration
Course Code
BUS 343
Professor
Jason Ho

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Chapter 7: Product Strategy Build a Better Mousetrap New product failure a new product that does not reach expectations for success, failing to reach sales objectives Woodstreams and Cokes failures underscore the importance of creating products that provide benefits people seek Creating and Nurturing Products Firms that plan well succeed Strategies outlined in the product plan tell how the firm expects to develop a product that will meet marketing objectives Product Objectives When markets develop product strategies, they are making decision about product benefits, features, styling, branding, labelling, logos, and packaging Clearly stated product objectives provide focus and direction, they should support the broader marketing objectives of the business unit in addition to supporting the overall mission of the firm Product objectives need to specify how product decisions will support or contribute to reach a desired market share or level of sales To be effective, product-related objectives must be measurable, clear, and unambiguous, and feasible, and must specify a time frame Firm can follow one of the four strategies, depending on whether the products or markets are current or new o Good way for a firm to use the grid is to ensure it has a good balance between the four quadrants Planners must keep in touch with consumers or business customers so that their objectives accurately respond to customer needs Equally important in developing product objective is an up-to-date knowledge of competitive product innovations The Product Concept Goods tangible products we can see, touch, smell, hear, or taste Intangible products services, ideas, people, places Marketers think of the product as more than just a thing that comes in a package, they view a product as a bundle of attributes including www.notesolution.com o Packaging, brand name, benefits, and supporting features, in addition to a physical good Layers of the Product Concept The product has three distinct layers o Core, actual, and augmented Core product all the benefits the product will provide for consumers or business customers Actual product the physical good or the delivered service that supplies the desired benefit Augmented product the actual product plus other supporting features such as a warranty, credit, delivery, installation, and repair service after the sale Consumers dont buy product features, they buy the benefits offered by the product Marketers should focus on marketing communications efforts on the benefits the brand provides to consumers Product Line Decisions Strategies for Individual Products Strategies for individual products may be quite different for new products, for regional products, and for mature products For new products o Objectives relate to successful introduction For regional products o Objective is to start introducing the product nationally For mature products o Objectives may focus on breathing new life into a product long taken for granted while holding onto the traditional brand personality Strategies for Multiple Products Large firms usually markets a mix of related products, which strategic decisions may affect two or more products at once, thus the firm must think in terms of its entire portfolio Product planning means developing product line and product mix strategies that encompass multiple offering Product Line Strategies Product line a firms total product offering designed to satisfy a single need or desire of target customers Full line strategy o When a firm has a large number of variations in its product line www.notesolution.com o Possible to please many customer segments, thus increasing total sales potential Limited line strategy o Markets a smaller number of product variations o Can improve image of the firm because it is perceived to be a specialist and has a clear specific position in the market In developing product strategies, organization may decide to extend their product lines by adding more brands or models When company stretches its product line, it must decide on the best direction in which to go Upward line stretch o Current product line: middle and lower end items o Add: upper end items with higher price, better quality, or more features Downward line stretch o Current product line: upper end items o Add: middle and lower end items o Make sure the lower end items dont blur the images of higher-priced upper-end offerings Two way stretch o Existing product line is meeting the needs of only a small portion of the market and that there is more than one opportunity for growth o Adding items at both the upper and lower ends Filling-out o Adding sizes or styles not previously available in a product category Contract a product o When some of the items are not profitable Sometimes the expansion of product lines or introduction of new product lines will cause cannibalization o Cannibalization - the loss of sales of an existing product when a new item in a product line or product family is introduced Product Mix Strategies Product Mix the total set of all products a firm offers to sale In developing a product mix strategy, planners usually consider the width of the product mix, the number of product lines produced by the firm Reduce the risk associated with putting all their eggs in one basket Develop a mix of product lines that have some similarities Expand into new product lines to take advantage of a strong brand reputation with an existing target market Service Strategy Marketing decision makers need to decide what type of service, they are going to provide, at what level of quality www.notesolution.com
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