Chapter 9 Manage the Product Product Planning use Product Objectives to Decide on a Product Strategy Product management The systematic and usually team based approach to coordinating all aspects of a product s marketing initiative including all elements of the marketing mix Objectives for Single and Multiple Products Objectives for individual products 1 2 Regional product 3 Mature product Introduce new products Introduce nationally Increase consumer enthusiasm for the product Objectives for Multiple products 1 Product line extensions a Stretching adding new items to line i Downward ii Upward iii Two way b Filling c Contracting a product line Adding sizes or styles Dropping items a Increase width of product mix 2 Product Mix Product planning developing product line and product mix strategies to encompass multiple offerings product line A firm s total s total product offering designed to satisfy a single need or desire of target customers Product line length Determined by the number of separate items within the same category cannibalization The loss of sales of an existing brand when a new item in a product line or product family is introduced Product Mix Strategies product mix The total set of all products a firm offers for sale product mix width The number of different product lines the firm produces Quality as a product objective the science of TQM product quality The overall ability of the product to satisfy customer s expectations total quality management TQM A management philosophy that focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement Product quality The overall ability of the product to satisfy customer expectations Degree of pleasure durable reliable versatile satisfies needs precision ease of use product safety 1 Chapter 9 Manage the Product Marketing throughout the Product Life Cycle product life cycle PLC A concept that explains how products go through four distinct stages from birth to death introduction growth maturity and decline Introduction stage The first stage of the product life cycle in which slow growth follows the introduction of a new product in the marketplace growth stage The second stage in the product life cycle during which consumers accept the product and sales rapidly increase maturity stage The third and longest stage in the product life cycle during which sales peak and profit margins narrow decline stage The final stage in the product life cycle during which sales decrease as customer needs change Create Product Identity Branding Decisions Brand A name a term a symbol or any other unique element of a product that identifies one firm s product s and sets it apart from the competition 1 Fit the target market 2 Fit the product s benefits 3 Fit the customer s culture and 4 Fit legal requirements Trademark The legal term for a brand name brand mark or trade character trademarks legally registered by a government obtain protection for exclusive use in that country brand equity The value of a brand to an organization brand meaning The beliefs and associations that a consumer has about the brand brand storytelling Marketers seek to engage consumers with compelling stories about brands Dimensions of Brand Meaning Brand identification makers Product attribute and benefit Gender Social class Age Reference group Life stage Lifestyles and taste subcultures Place Coca Cola s red and white colors the Nike swoosh logo Harley Davidson s characteristic sound Starbucks as good coffee BMW as The Ultimate Driving Machine NASCAR Harley Davidson Marlboro and masculinity Laura Ashley and femininity Mercedes and the old guard elite Jell O and the lower middle class Facebook MySpace Skechers iPod Adult Swi Dockers and the casual workforce Williams Sonoma and the serious cook Dewar s and the coming of age Parent s Soup and new mothers BMW and the yuppie Red Bull and the club culture Coke and America Ben Jerry s and rural Vermont 2 Chapter 9 Manage the Product Time and decade Trends Traditions and rituals Betty Crocker and the 1950s VW and the 1960s countercultural revolution Pottery Barn and cocooning Starbucks and small indulgences H agen Dazs ice cream and the pampering of self brand extensions A new product sold with the same brand name as a strong existing brand sub branding Creating a secondary brand within a main brand that can help differentiate a product line to a desired target group family brand A brand that a group of individual products or individual brands share National or Manufacturer Brands Brands that the product manufacturer owns private label brands Brands that a certain retailer or distributor owns and sells generic branding A strategy in which products are not branded and are sold at the lowest price possible Licensing An agreement in which one firm sells another firm the right to use a brand Brand Metrics 1 Customer mind set metrics focus on consumer awareness attitudes and loyalty toward a brand However these metrics are based on consumer surveys and don t usually provide a single objective measure that a marketer can use to assign a financial value to the brand 2 Product market outcomes metrics focus on the ability of a brand to charge a higher price than the one an unbranded equivalent charges This usually involves asking consumers how much more they would be willing to pay for a certain brand compared to others These measures often rely on hypothetical judgments and can be complicated to use 3 Financial market metrics consider the purchase price of a brand if it is sold or acquired They may also include subjective judgments about the future stock price of the brand 4 A team of marketing professors proposed a simpler measure that they claim reliably tracks the value of a brand over time Their revenue premium metric compares the revenue a brand generates with the revenue generated by a similar private label product that doesn t have any brand identification In this case brand equity is just the difference in revenue net price times volume between a branded good and a corresponding private label Create Product Identity The Package and Label 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 The UPC readable by