Textbook Notes (369,067)
Canada (162,366)
BUS 343 (122)
Jason Ho (70)
Chapter 8

Marketing: Real People, Real Decision (3rd Edition): Chapter 8

6 Pages

Business Administration
Course Code
BUS 343
Jason Ho

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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 doesn’t 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 doesn’t make profit during this stage due to heavy R&D costs • For new product to be successful o Consumers must know about it o Believe it is something they need o Marketing focuses on informing consumers about the product, how to use it, and its benefits • How long introduction stage lasts depends on o Marketplace acceptance o Producer 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 www.notesolution.com 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 o Product availability is crucial in a very competitive market o Consumers 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 o Phase it out by cutting production in stages and letting existing stocks run out o Drop 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 o To obtain full values firms need to provide relevant information about the product offered o Dialogue with customers is essential to meet the customer requirements and develop a tailored solution o Many firms forget that the choice of communication channels, time, and location should be convenient for customers to place an order • During phase o The delivery, installation, and guarantees offered are key elements • After phase o Provide after sales service that includes maintenance and repair support o Critical in that firms need to allow customers to give feedback on the quality of the service o Feedback can be used to make future readjustments • Firm’s capacity to manage exceptions is also an important asset to a service strategy o Exceptions fall outside the routine of normal product or service delivery www.notesolution.com Creating Product Identity: Branding Decisions • Branding is an extremely important element of product strategies What’s in a Name (or a Symbol) • Brand – a name, term, symbol, or any other unique element of a product that identifies one firm’s product(s) and sets it apart from the competition • Branding provides the recognition factor products need to succeed in market Choosing a Brand Name, Mark, or Character • It must provide positive connotation and be memorable • Good brand name can position a product by conveying a certain image or personality or describing how it works • Good brand designers say there are four “easy” tests o Easy to say, easy to spell, easy to read, and easy to remember • And they should “fit” four ways: o Fit the target market, fit the product’s benefit, fit the customer’s culture, and fit legal requirements • No matter what the brand must be recognizable and memorable in order for
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