PRODUCT STRATEGY

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CHAPTER 6

• PRODUCT STRATEGY

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Basic Issues in Product Management

• The core product-the product/service itself
• The tangible product-physical dimensions that
  benefits to the customer(design, color)
• The augmented product-warrantee and service
  benefits, reputation and psychological benefits.
  Consumers hidden motivation.
• Product audit-benefit analysis customers needs
  and wants.

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Marketing myopia

• Narrow product line
• emphasis is given the physical dimensions-railroad
  s
• Product benefits are not emphasized

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Product Classifications

• Agricultural products and raw materials
• fairly homogenous
• Industrial goods
• raw materials, OEM products, parts and equipment
• Consumer good
• convenience, shopping and specialty goods

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Product Mix and Product Line

• Product width
• Product length
• Product depth
• Reasons for product mix
• Needs are various
• Customer prefer variety
• Competitive pressure

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Branding and Brand Equity

• A name, symbol or trademark
• Line/brand extension
• upward direction
• downward extension
• both directions
• Family/franchise brand
• Dual branding-joint or co-branding-USAir and
  NationsBank Visa

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Brand Equity

• Set of assets of brand. It links to marketplace
  relationships of brand.
• Loyalty
• Awareness
• Perceived quality
• Brand association
• Other brand assets
• Branding strategies
• National brand
• Private brand
• Generic brand

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Product Life Cycle

• Introduction
• Growth
• Maturity
• Decline
• Harvest
• Divest

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Stages of Product Life Cycle
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The Product Life Cycle Concept

• Life cycle extension
• Fashion and fads
• Technological life cycle-PC industry
• International product life cycle
• Product strategies
• New Product(technical innovation)
• Maturing product(standardized process)
• The standardized product(access to world market)

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Refining Product Strategies

• To select the best product or decide about
• promotion strategies. Indices used
• sales level
• profit level
• growth rate
• market potential
• importance to customer
• relationship with supplier

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Product Standardization and Adaptation

• Product standardization-selling as it is. (Coca
  Cola, Levi's, and industrial products).
• Product modification for different countries and
  regions (McDonald).
• Designing new product for new markets.
• Introducing a global product

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The Product Audit

• Current product offerings are reviewed so that
  each product is improved, modified, or deleted.
  It is used to detect sick products.
• Product deletion
• new innovation is introduced
• Product improvement
• changing the product features
• Benchmarking
• comparing the products with competitors

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Product Management

• Product managers
• Product planning committee
• New product manager
• Venture team

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Packaging

• Protection from temperature change and
  environmental hazard
• Effective marketing tactics
• Improves product image
• Assists in shelf space, shipping and handling the
  product
• Provides instruction to customers
• Responsive to environmental legislation

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Services Marketing

• Service Categories
• Support services-computer, security
• Pure services-insurance, consulting
• Service-good combination-airlines, hotels
• Distinctive Features of Services
• Intangibility-hotels, publishers, construction
• Storage-lost of sale if it is not purchased
• Perishability

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Services Marketing (Cont.)

• Distinctive Features of Services (cont.)
• Consumption-customer involvement
• Customized-customer interaction
• Standardization-error and quality control
• Evaluation-differences in expectation and
  perception(SERVQUAL model)
• Measurement-marketing research

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Services Marketing (Cont.)

• Marketing Repercussions of services
• Difficulty to provide samples
• Services directed at people-health care, barber
  shops, education and museums
• Services directed at goods-repairs and
  maintenance, landscaping, insurance and legal

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Services Marketing (Cont.)

• Marketing Repercussion of Services (cont.)
• Quality of people who deliver the services
• Increased demand in peak times-part-time
  employment opportunities
• Flexibility of working hours
• Flexibility in demand and prices
• Direct and short distribution channels
• Cultural factors-differences in expectations and
  perception

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Products of North Africa