Webster U MRKT 5000 - Product Decisions

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Slide 1Slide 2Chapter 11 Product ConceptsObjectivesWhat Is A Product?The Total ProductProduct CharacteristicsClassifying ProductsConvenience ProductsConvenience Product Strategy ImplicationsShopping ProductsShopping Product Marketing ImplicationsSpecialty ProductsSpecialty Product Marketing ImplicationsUnsought ProductsUnsought Products Marketing ImplicationsBusiness ProductsProduct Line And Product MixProduct Width/Depth Of Proctor & GambleProduct Life CycleIntroduction StageIntroductory StageGrowth StageSlide 24Growth Stage Marketing StrategyMaturity StageMaturity Stage Marketing StrategyMaturity Stage ObjectivesManaging Products In The Maturity StageDecline StageDecline Stage Marketing StrategyProduct Adoption ProcessStages Of Product Adoption ProcessMost New Ideas Have Their SkepticsAdopter CategoriesProduct Adopter CategoriesWhy Some Products Fail/SucceedProduct Successes And Failures11 | 2Copyright © Houghton Mifflin Company. All rights reserved.Part FiveProduct DecisionsChapter 11Product Concepts11 | 4Copyright © Houghton Mifflin Company. All rights reserved.Objectives•Understand the concept of a product•Explain how to classify products•Examine concepts of product: item, line, and mix and how they are connected•Understand product life cycle and impact on marketing strategies•Describe product adoption process•Understand why products fail/succeed11 | 5Copyright © Houghton Mifflin Company. All rights reserved.What Is A Product?•Good- Tangible physical entity•Service- Intangible result of the application of human and mechanical efforts to people or objects•Idea- Concept, philosophy, image, or issue11 | 6Copyright © Houghton Mifflin Company. All rights reserved.The Total Product11 | 7Copyright © Houghton Mifflin Company. All rights reserved.Product Characteristics•Fundamental utility•Supplemental features–Installation–Delivery–Training–Financing•Symbolic meaning11 | 8Copyright © Houghton Mifflin Company. All rights reserved.Classifying Products•Consumer- products purchased to satisfy personal and family needs•Business- products brought to use in an organization’s operations, to resell, or to make other products11 | 9Copyright © Houghton Mifflin Company. All rights reserved.Convenience ProductsRelatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort11 | 10Copyright © Houghton Mifflin Company. All rights reserved.Convenience ProductStrategy Implications•Retail outlets•Low per-unit gross margins•Little promotion effort•Packaging important11 | 11Copyright © Houghton Mifflin Company. All rights reserved.Shopping ProductsItems for which buyers are willing to expend considerable effort in planning and making purchases11 | 12Copyright © Houghton Mifflin Company. All rights reserved.Shopping ProductMarketing Implications•No brand loyalty•Fewer retail outlets than convenience•Lower inventory turnover•Higher gross margins•Personal selling•Channel member cooperation11 | 13Copyright © Houghton Mifflin Company. All rights reserved.Specialty ProductsItems with unique characteristics that buyers are willing to expend considerable effort to obtain.11 | 14Copyright © Houghton Mifflin Company. All rights reserved.Specialty ProductMarketing Implications•Limited retail outlets•Lower inventory turnover•High gross margins11 | 15Copyright © Houghton Mifflin Company. All rights reserved.Unsought ProductsProducts purchased to solve a sudden problem, products of which customers are unaware, and products that people do no necessarily think of buying.11 | 16Copyright © Houghton Mifflin Company. All rights reserved.Unsought ProductsMarketing ImplicationsBuild trust with consumer by:•Recognizable brand•Superior performance11 | 17Copyright © Houghton Mifflin Company. All rights reserved.Business Products•Installations- facilities & nonportable equipment•Accessory equipment- not part of final product•Raw materials- natural materials part of product•Component parts- finished items ready for assembly or need little processing•Process materials-used in production but not identifiable•MRO supplies-maintenance, repair, and operating items not part of final product•Services-intangible products in operations11 | 18Copyright © Houghton Mifflin Company. All rights reserved.Product Line And Product Mix•Item- specific version of product•Line- closely related items viewed as a unit•Mix- total group of products•Width of mix- number to lines•Depth of mix- number of different products in line11 | 19Copyright © Houghton Mifflin Company. All rights reserved.Product Width/DepthOf Proctor & Gamble11 | 20Copyright © Houghton Mifflin Company. All rights reserved.Product Life CycleThe progression of a product through four stages: introduction, growth, maturity, and decline.Windows Product Life Cycle Policy11 | 21Copyright © Houghton Mifflin Company. All rights reserved.Introduction StageThe initial stage of a product’s life cycle; its first appearance in the marketplace when sales start at zero and profits are negative.11 | 22Copyright © Houghton Mifflin Company. All rights reserved.Introductory Stage•Risk of failure high•Buyers must be made aware of:–Features–Uses–Advantages•Sellers lack–Resources–Technological knowledge–Marketing know-how11 | 23Copyright © Houghton Mifflin Company. All rights reserved.Growth StageThe product life cycle stage when sales rise rapidly and profits reach a peak, then start to decline.11 | 24Copyright © Houghton Mifflin Company. All rights reserved.Growth Stage•Sales rise rapidly•Profits peak•Starts to decline•Competitors react11 | 25Copyright © Houghton Mifflin Company. All rights reserved.Growth StageMarketing Strategy•Encourage brand loyalty- stress brand benefits•Strengthen market share•Emphasize product’s benefits•Aggressive pricing•Analyze production position•Efficient distribution system•Promotion costs drop as % of sales11 | 26Copyright © Houghton Mifflin Company. All rights reserved.Maturity StageThe stage of a product’s life cycle when the sales curve peaks and starts to decline, and profits continue to fall.11 | 27Copyright © Houghton Mifflin Company. All rights reserved.Maturity StageMarketing Strategy•Intense competition•Emphasize improvements and differences•Advertising and dealer-oriented promotion•Global expansion11 | 28Copyright © Houghton


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