BUS M 300 1nd Edition Lecture 9 Outline of Last Lecture II Product Life Cycle III Product Life Cycle Chart Outline of Current Lecture I The Product Life Cycle II Product Adopters III Creating Product Identity Current Lecture I The Product Life Cycle Marketers attempt to extend the product life cycle by 1 Increasing frequency of use use promotion and ads to increase number of times consumers use the product o Called penetration strategy 2 Increasing number of uses find new customers o Increases distribution of product o Increases who uses the product through ads and promotion o Called market development strategy 3 Find new uses for the product show uses through ads and promotion o If same customers penetration o If new customers market development 4 Change packaging labels quality o Called product development strategy Examples 1 Easy Go Carts plans to enter the light materials hauling business by showing existing customers who own golf courses how its golf carts can transport trash tools and other items o Penetration 2 3M plans to sell its 3M filters to China and Vietnam markets new to the firm o Market Development 3 Andros Inc a small startup firm plans to introduce a new software solution to the commercial airline market o Product Development II Product Adopters Innovators o Venturesome higher educated use multiple information sources o 2 5 Early Adopters o Leaders in social setting slightly above average education o 13 5 Early Majority o Deliberate many informal social contacts o 34 Late Majority o Skeptical below average social status o 34 Laggards o Fear of debt neighbors and friends are information sources o 16 III Creating Product Identity Brand Name a term symbol or any other unique element of a product that identifies one firms products and sets them apart from the competition Brand Mark the element of a brand that cannot be vocalized o Nike symbol o MGM lion Brand Equity the added value to the firm the channel or the consumer with which a brand endows a product o Brand with high equity have a high degree of preference and insistence Line extensions the practice of using a current brand to enter a new market segment in its product class Brand Preference stage where consumers will prefer one brand over another but will NOT demand that brand every time o Ads promotion and distribution are very important Brand Insistence stage where no alternatives will suffice o Few goods reach this stage Brand Extensions new products in unrelated product categories that often carry the same brand name Licensing of a Brand one firm sells the right to use a brand name for a specific purpose and for a specific time period