Chapter 10 - Managing the Product Flashcards
Product Line
A firm’s total product offering designed to satisfy a single need or desire of target customers.
Full Line
A large number of variations is a product line.
- targets many customer segments to boost sales potential.
Limited-line strategy
- Fewer product variations
- Perceived to have a clear, specific position in the market.
Line stretches
- Upward = higher priced, quality
- Downward = adds items at the lower end
- Two-way = Adds to upper and lower ends
- Filling-out = adding sizes or styles not previously available
- Contract = eliminate a line
Cannibalization
The loss of sales of an existing brand when a new item in a product line or product family is introduced.
Product Mix
The total set of all products a firm offers for sale.
Product Life Cycle
Concept that explains how products go through four distinct stages from birth to death: introduction, growth, maturity, and decline.
Introduction Stage
- 1st stage
- Slow growth follows the introduction of a new product in the marketplace
- Innovators
- Get buyers to try the product.
Growth Stage
- 2nd stage
- Profits/Revenues peak before sales peak.
- Opinion Leader
- The product is accepted and sales rapidly increase.
Maturity Stage
- 3rd stage
- Sales peak and profit margins narrow.
- Majority
Decline Stage
- 4th Stage
- Sales decrease as customer needs change.
- Laggards
Decline Stage Strategies
- Modify Product
- Decrease Price
- Reposition
Brand
A name, a term, a symbol, or any other unique element of a product that identifies one firm’s product(s) and sets them apart from the competition.
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.
- Customer loyalty, perceived quality, and brand name awareness.
Brand Extensions
A new product sold with the same brand name as a strong existing brand.
Family Brand
A brand that a group of individual products or individual brands share.
National or Manufacturer Brands
Brands that the manufacturer of the product owns.
Private-label Brands
Brands that are owned and sold by a certain retailer or distributor.
Licensing (of a name)
Agreement in which one firm sells another firm the right to use a brand name for a specific purpose and for a specific period of time.
Co-branding
An agreement between two brands to work together in marketing a new product.
Ingredient Branding
A form of co-branding in which branded materials are used as ingredients or component parts of other branded products.
Package
The covering or container for a product that provides 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 scanners, creates a national system of product identification.
Brand Manager
An individual who is responsible for developing and implementing the marketing plan for a single brand.
Product Category Manager
An individual who is responsible for developing and implementing the marketing plan for all of the brands and products within a product category.
Market Manager
An individual who is responsible for developing and implementing the marketing plans for products sold to a particular customer group.
Venture Teams
Groups of people within an organization who work together focusing exclusively on the development of a new product.
