Business Marketing

1
Chapter 8
Developing and Managing Offerings What do
Customers Want? EMC
2
Business Marketing

• Developing and Managing Products
• Portfolio and PLC Approaches to Product
  Management
• Internal Product Development
• Lead Users in the Product Development Process
• Supplier and Customer Partnering in Product
  Development

3
What is an Offering?

• Features
• Advantages
• Benefits how the product or service satisfies a
  need
• Product a bundle of benefits and a collectionof
  solutions to needs and wants
• Competitive Advantage a benefit that satisfies a
  customerbetter than a competitors product
  benefits
• Core Product
• Augmented Product

4
Managing Products, p. 225
5
Product Management Tools

• The product development process
• The product life cycle
• Product portfolio management tools
• BCG Matrix
• GE matrix

6
Key Product Management Decisions

1. Which product to introduce
2. Which products to keep
3. Which products to promote
4. What level of promotion to provide (low to high)
5. What products to continue or delete

7
Managing Products

• Product Life Cycle
• PLC and Product Strategy
• Development Stage
• Leapfrogged
• Introduction Stage
• Primary Demand
• Growth Stage
• Secondary Demand
• Maturity Stage
• Decline Stage

8
Product Life Cycle, Ex. 8-1, p. 226
9
Product Portfolio Management Tools

• Product PortfoliosProduct Portfolio Management
• Market Attractiveness
• Business Strength
• Matrix cells
• Stars
• Cash Cows
• Question Marks
• Dogs

10
BCG Product Portfolio Matrix, Ex. 8-2, p. 229
11
GE Directional Policy Matrix

• Projects are scored and sorted on the basis of
  Market attractiveness business position.
• Weights on criteria ?
• Surprises? Insight?
• Utility communicate

12
GE Product Portfolio Matrix, Ex. 8-2, p. 229
13
PLC BCG Matrix

• Products are in stages
• Development, Intro, Growth, Maturity, Decline
• Products can move in both directions
• Products finance other products
• Cows fund stars

14
Criticisms of the Product Life Cycle Concept

• Products dont always go through all steps
  sequentially theres no standard life cycle,
  making it a difficult concept to apply to real
  life.
• Too many managers follow the model blindly and
  then make poor decisions
• Identifying which stage a product is in can be
  difficult there are no standard growth or
  decline rates to apply
• A life cycle exists for a particular brand, or
  family of brands, or a technology, or a product
  category, again making it difficult to apply to
  any particular product

15
New Product DevelopmentEx. 8-4, p. 232

• Risk and New Product Decisions
• Investment Risk
• Opportunity Risk
• New Product Development Process
• Generating Ideas
• Lead Users
• Screening and Preliminary Investigation
• Specify Features
• Quality Function Development(links what customer
  wants to how the product will deliver)

16
Four Phases of the Quality Function Deployment
Process, Ex. 8-5, p. 234
17
New Product Development (cont.)

• Develop Product
• Early Supplier Involvement
• Outsourcing (Contract Manufacturer)
• Beta Testing (or Field Testing)
• Launch
• Rolling launch
• Evaluate
• Payback period
• First-mover advantage
• Sunk cost

18
Success or Failure?

• Components of Success
• Core competencies
• Factors Influencing New Product Success, Ex. 8-8,
  p. 240
• Have close ties with a well defined market to
  anticipate customer needs.
• Company is highly integrated and market-oriented
• Company has a competitive advantage in technology
  and production capability
• Company has a strong marketing proficiency
• New product launch adequately financed

19
Success or Failure?

• Accelerating the Development Process
• Streamline Each Stage
• Develop Products in Parallel
• Launch Products Worldwide
• Use Upgrades Strategically
• Keys to Innovation
• Challenges to New Product Success