PRODUCT LINE STRATEGY

1
PRODUCT LINE STRATEGY

• Dr. Metzner

EMGT451 2/2004
2
The Product Life Cycle

• INTRO GROWTH MATURITY DEC

SALES
III
IV
II
I
TIME
3
PRODUCT DEFINED

• UNBUNDLING IN RETAIL PRICING POLICY (SEARS)
• LEVEL OF PRODUCT

• TRADITIONAL
• Core product
• Tangible product
• Augmented product

• MODERN
• Core benefit
• Basic product
• Expected product
• Augmented product
• Potential product

4
Product Hierarchy

• Need Family
• Product Family
• Product Class
• Product Line
• Product Type
• Item

5
PRODUCT CLASSIFICATION SCHEMES

• CONSUMER DURABLES - NONDURABLES
• CONSUMER-GOODS
• INDUSTRIAL-GOODS

6
CONSUMER-GOODS CLASSIFICATION

• Convenience
• Shopping
• Specialty
• Unsought

7
INDUSTRIAL-GOODS CLASSIFICATION

• Capital Goods
• Installations
• Accessories (Equipment)
• Feedstock
• Raw Materials (Farm, Natural)
• Process Materials
• Components (Catalog Items)
• Fabricated Items
• Supplies (MRO)
• Services

8
PRODUCT MIX

• Width
• Length
• Depth
• Consistency

9
Width and Depth Mix
WIDTH OF MIX
SHALLOW
DEPTH OF MIX
DEEP
WIDE
NARROW
10
THE RELATIONSHIP BETWEENPRICE AND QUALITY

PRICE
Q
QUALITY
11
PRODUCT LINE DECISIONS

• LINE STRETCHING
• LINE FILLING
• LINE PRUNING
• LINE FEATURING
• LINE POSITIONING

12
THE RELATIONSHIP BETWEENPRICE AND QUALITY
LINE STRETCHING

PRICE
Q
QUALITY
13
THE RELATIONSHIP BETWEENPRICE AND QUALITY
LINE FILLING

PRICE
Q
QUALITY
14
THE RELATIONSHIP BETWEENPRICE AND QUALITY
LINE PRUNING

PRICE
Q
QUALITY
15
The Product Life Cycle

• INTRO GROWTH MATURITY DEC

SALES
III
IV
II
I
TIME
16
EXPERIENCE CURVE

• SUM OF PRODUCTION

COST PER UNIT
17
Engineering Management 451
Advanced Marketing Management
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