Marketing

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Anonymous
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117819
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Marketing
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2011-11-18 23:49:05
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Marketing Chapter
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MANAGE THE PRODUCT
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  1. USE PRODUCT TO DECICDE TO ON A PRODUCT STRATEGY
    • Firms that plan well succeed; big role in the firm’s tactical marketing plans
    • Firms create products that grow, mature and then decline at faster and faster speeds
    • To be EFFECTIVE: product-related objectives must be measurable, clear, and unambiguous—and feasible
    • Objectives should consider the long-term applications of a product decisions
  2. OBJECTIVES AND STRATEGIES FOR INDIVIDIDUAL PRODUCTS
    • Strategies for individual products (MINI) may be different for new products, for regional, or mature products
    • New products: the objectives relate to successful introduction and then when it experiences success in a local or regional market it may decide to introduce it nationally (ex: Coors in Mississippi)
    • Mature products: breathing new life into a product while holding on to the traditional brand personality (ex: Goldfish).
  3. OBJECTIVES AND STRATEGIES FOR MULTIPLE PRODUCTS
    • Strategic decisions affect two or more products simultaneously
    • Firm must think in terms of its entire portfolio of products
    • Product planning-> developing product line and product mix strategies to encompass multiple offering
    • Product line: a firm’s total product offering to satisfy a group of target customers
    • Full line: A large number of variations that targets many customer segments to boost sales potential
    • Limited line strategy: fewer product variations, can improve image, perceive it as a specialist with a clear, specific position in the market
    • May decide to extend their product line by adding more brands or models when developing product strategies
    • Upward line stretch: adds new items-higher priced and claiming more quality, bells, and whistles
    • Downward line stretch: adding items at the lower end (not blur the images of its higher priced, upper end offerings).
    • Two-way stretch: adds products at both the upper and lower ends
    • Filling-out strategy: adds sizes or styles not previously available in a product category
    • Cannibalization: the loss of sales of an existing brand when a new item in a product line or product family is introduced
  4. Product line
    Product line: a firm’s total product offering to satisfy a group of target customers
  5. Full line
    A large number of variations that targets many customer segments to boost sales potential
  6. Limited line strategy
    fewer product variations, can improve image, perceive it as a specialist with a clear, specific position in the market
  7. Upward line stretch
    adds new items-higher priced and claiming more quality, bells, and whistles
  8. Downward line stretch
    adding items at the lower end (not blur the images of its higher priced, upper end offerings).
  9. Cannibalization
    the loss of sales of an existing brand when a new item in a product line or product family is introduced
  10. Filling Out Strategy
    adds sizes or styles not previously available in a product category
  11. Two-way stretch
    adds products at both the upper and lower ends
  12. Product Mix Strategies
    • The total set of all products a firm offers for sale
    • Planners usually consider the width of the product mix: the number of different product lines the firm produces
  13. MARKETINGTHROUGHOUT THE PRODUCT LIFE CYCLE
    Useful way to explain how the market’s response to a product and marketing activities change over the life of a product.
  14. Introduction Stage
    • First stage of the product life cycle in which slow growth follows the introduction of a new product in the marketplace
    • Get first time buyers to buy the product
    • Company usually doesn’t make a profit during this stage, because research and development costs and heavy spending for advertising and promotional efforts cut into revenue.
    • Introduction stage last?
    • Depends on marketplace acceptance and the producer’s willingness to support its product during start up
    • For a new product to succeed consumers must:
    • First know it
    • Believe that is something they want or need
    • Nearly 40% of all new products fail
  15. Growth Stage
    • Sales increase rapidly while profits increase and peak
    • Marketing’s goal is to encourage brand loyalty by convincing the market that this brand is superior to others
    • Cell phone-> still at its growth stage; relentless innovation as manufacturers continue to build in more and more communication features
    • Marketers must advertise heavily and also rely on other forms of promotion
    • If it initially set the price high, the firm may now reduce it to meet increasing competition
  16. Maturity Stage
    • The product life cycle is usually the longest
    • Sales peak and then begin to level off and even decline while profit margins narrow
    • Competition gets intense when remaining competitors begin to fight for what’s left of the market
    • Try to sell their product through as many outlets as possible because availability is crucial in a competitive market
    • To remain competitive firms may tinker with the marketing mix
    • Try to attract new users of the product (market development- introducing an existing product to a market that doesn’t currently use it)
  17. Decline Stage
    • Decrease in product category sales
    • Obsolescence forced by new technology
    • Single firm may still be profitable, the market as a whole begins to shrink, profits decline, there are fewer variations of the product, and suppliers pull out
    • Many competitors but none has a distinct advantage
    • Unprofitable product drains resources that it could use to develop newer products
    • Firm decides to drop the product, it can eliminate it by:
    • 1. Phase it out by cutting production in stages and letting existing stocks run out
    • 2. Simply dump the product immediately
    • Sell a limited quantity of the product with little or no support from sales, merchandising, advertising, and distribution and just let it “wither on the vine”
  18. Branding Decisions
    • The products identity
    • New brands the failure rate is 80%-90%
    • An extremely important and expensive element of product strategies
  19. Brand
    • is a name, a term, or a symbol, or any other unique element of a product that identifies one firm’s products and sets it apart from the competition
    • Provides the recognition factor products need to succeed in regional, national, and international markets
    • Brands must have a positive connotation and be memorable Brand name is probably the most used and most recognized form of branding Use brand names to maintain relationships with consumers
  20. Prerequisites for Brands
    • Four tests:
    • 1. Easy to say,
    • 2. Easy to spell
    • 3. Easy to read
    • 4. Easy to remember
    • Should “fit” four ways:
    • 1. Fit the target market
    • 2. Fit the product’s benefits
    • 3. Fit the customer’s culture
    • 4. Fit legal requirements
  21. Trademark
    • Trademark: legal term for a brand name, brand mark, or trade character “R” or ®; legally registered by a government obtain protection for exclusive use in that country
    • Common law protection: exists in the firm has used the name established it over a period of time
  22. Brand equity
    • Brand equity: the value of a brand organization, brand’s value over and above the value of the generic version of the product (loyalty)
    • ^ it gives the brand prower to capture and hold on to a larger share of the market and to sell at prices with higher profit margins
  23. Self concept attachment
    product helps establish the user’s identity
  24. Nostalgic attachment
    the product serves as a link with a past self
  25. Interdependence
    product is part of the user’s daily routine
  26. Love
    the product elicits emotional bonds of warmth, passion, or other strong emotion
  27. Brand extensions
    • --Brand extensions: may leverage a brand’s equity, new products it sells with the same brand (create a new brand or modify the existing one)
    • --Firm is able to sell its brand extension at a higher price than if it had given it a new brand, and it will attract new customers immediately
    • --Sometimes a brand’s meaning simply becomes so stretched with a particular consumer group that it can be tough to find ways to branch
  28. Individual brand strategy
    • Individual brand strategy: Separate, unique brand for each product item
    • Communicating clearly and concisely what the customer can expect from the product
  29. Family Brand
    • Family brand (umbrella brand strategy): a brand that a group of individual products or individuals brands share
    • Potential dark side to having too many brands-> become undifferentiated in the eyes of the consumer due to poor positioning….brands often compete with one another
  30. National brands
    National or manufacturer brands: brands that the product manufacturer owns (producer’s brands)
  31. Private Label Brands
    • Private label brands: retail store’s or chain’s exclusive trade name
    • Store brands are gaining in popularity for many value conscious shoppers
    • Competitors that sell only national brands can cut prices on those brands, but that hurts their overall profitability
  32. Generic Brands
    • Generic Branding: a strategy in which products are not branded and are sold at the lowest price possible
    • Meet customer’s demand for the lowest prices on standard products
  33. Licensing
    • An agreement in which one firm sells another firm the right to use a brand name for a specific purpose and for a specific period of time
    • Can provide instant recognition and consumer interest in a new product, and this strategy can quickly position a product for a certain target market as it trades on the high recognition of the licensed brand among customers in that segment
  34. Cobranding
    • --This branding strategy benefits both partners when combining the two brands provides more recognition power than either enjoys alone
    • --Ingredient branding: a form of co-branding that
    • uses branded materials as ingredients or component parts in other branded products
    • 1. It attracts customers to the host brand because the ingredient brand is familiar and has a strong brand reputation for quality
    • 2. The ingredient brand’s firm can sell more of its product and revenues its gets from the licensing agreement
  35. Packaging Functions
    • Package: the covering or container for a product that provides product protection, facilitates product use and storage, and supplies important marketing communication
    • Universal Product Code (UPC): the set of black bars or lines printed on the side or bottom of most items sold in grocery stores and other mass merchandising outlets
    • UPC bars automatically transmit data to a computer in the cash register so that retailers can easily track sales and control inventory
  36. Design Effective Packaging
    • Must consider the packaging of other brands in the same product category
    • The choice of packaging material can make an aesthetic statement
    • Firm that wish to act in a socially responsible manner must also consider the environmental impact of packaging
    • Green packaging: less harmful to the environment than other materials
    • Decisions rest on a marketer’s understanding of consumers, ingenuity, and creative luck

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