Textbook Notes (369,133)
Canada (162,403)
York University (12,903)
Marketing (116)
MKTG 2030 (84)
Ben Kelly (18)
Chapter

ch 8_

4 Pages
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Department
Marketing
Course Code
MKTG 2030
Professor
Ben Kelly

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Jessica Gahtan 1 MKTG2030 Chapter 8: Manage the Product 8.1 Product Planning: Use Product Objectives to Decide on a Product Strategy Product Management (or Brand Management) is the systematic and usually team-based approach to coordinating all aspects of a product’s marketing initiative including all elements of the marketing mix - Objectives provide focus and direction- they should support the broad marketing objectives of the business unit in addition to be consistent with the firm’s overall mission - Measurable, clear, unambiguous and feasible – should also indicate a specific time frame Objectives and Strategies for Individual Products - After a firm experiences success with a product in a local or regional market, it may decide to introduce it nationally Steps to Manage Products 1. Develop Product Objectives (for individual products, for product lines and mixes) 2. Design Product Strategies 3. Make Tactical Product Decisions (Product Branding, packaging and labeling design) Objectives and Strategies for Multiple Products Product Line or product family is a firm’s total product offering designed to satisfy a single need or desire of target customers Product line length: determined by the number of separate items within the same category - Limited-line strategy has fewer product variations - If a firm’s current product line includes middle and lower end items, an upward line stretch adds new items- higher priced entrants that claim better quality or offer more - Downward line stretches augment a line when they add items at the lower end- a firm must not to blur the images of its higher-priced, upper-end offerings - A two-war stretch adds products at both the upper and lower ends - A filling out strategy adds sizes or styles not previously available in a product category - A contracting strategy dropping some of the less profitable items - A firm can modify its product line to meet the competition or take advantage of new opportunities - Whenever a manufacturer extends a product line or a product family, there’s a risk of cannibalization which is when the new items eat some sales of an existing brand as the firm’s current customers simply switch to the new brand FIGURE 8.2 Product Mix Strategies Product Mix is the total set of all products a firm offers for sale Product Mix Width the number of different product lines the firm produces; considered when developing a product mix strategy Quality as a Product Objective: The Science of TQM Product Quality is the overall ability of the product to satisfy customers’ expectations - Quality tied to how customers think a product will perform Total Quality Management (TQM) is a mgmt. philosophy that focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement Quality Guidelines ISO 9000 is criteria developed by the International Org for Standardization to regulate product quality in Europe ISO 14000 standards of the International Org for Standardization concerned with ‘environmental management’ aimed at minimizing harmful effects on the environment Six Sigma is a process whereby firms limit production defects to 3.4 per million or fewer; five-step process called ‘DMAIC’ (define, measure, analyze, improve, and control) Product Quality - What can quality mean? Durable, reliable, precise, versatile, degree of pleasure, product safety, ease of use, satisfies needs Marketing Throughout the Product Life Cycle Product Life Cycle (PLC) is a concept that explains how products go through four distinct stages from birth to death: introduction, growth, maturity, and decline Introduction Stage: is the first stage of the product life cycle in which slow growth follows the introduction of a new product in the marketplace Jessica Gahtan 2 MKTG2030 Growth Stage is the second stage of the product life cycle, during which consumers accept the product and sales increase rapidly Maturity Stage is the third and longest stage in the product life cycle, during which sales peak and profit margins narrow Decline stage is where sales decrease as customers need change; reason could be obsolescence forced by new technology - 2 ways to eliminate: (1) phase it out by cutting production in stages and letting existing stocks run out (2) simply dumping the product immediately (Choose #1 if believe that there will be some residual demand) - Idea is to sell a limited quantity w/ little or no support Characteristic Introduction Growth Maturity Decline Product Single company New competitors New features Number of produces single enter the market added; sales are variations product creating new mostly reduced variations of the replacement product products Goals Get first-time Encourage brand Attract new users Remain buyer to try the loyalty profitable; decide new product whether to keep or phase out product Sales Increase at a Rapid increase Peak, then level Continue to steady but slow off, often decline decline pace Profits Negative Increase and Profit margins Declining peak narrow Pricing High: recover May need to Price to maintain May reduce if R&D costs reduce b/c of market share product can Low: attract large increased remain profitable numbers of competition customers Marketing Informing Heavy Reminder Decreased to Communications customers advertising to advertising maintain counter new profitability competition 8.3 Create Product Identity: Branding Decisions What’s in a Name (or a Symbol)? Brand is a name, term, symbol (or graphic image), or any other unique element of a product that identifies one firm’ s product(s) and sets it apart from the competition Brand name is the name that uniquely identifies the brand owner as the source of the g/s - Good brand designers say that there are 4 ‘easy’ tests: easy to say, spell, read and remember - 4 ways the brand name should ‘fit’: fit the target market, the product’s benefits, the customer’s culture and legal requirements - Common law protection exists in Canada- if the firm has used the name and established it over a period of time - A registered trademark prevents others from using it on a similar product, it may not bar its use for a product in a completely different type of business Why Brands Matter Brand Equity describes the brand’s value over and above the value of the generic version of the pr
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