Chapter 11 PLC Flashcards
PLC function
describe how stages of the product life cycle relate to a firm’s marketing objectives and marketing mix actions
the four stages of PLC
Introduction Stage
Growth Stage
Maturity Stage
Decline Stage
what is deletion and when does it happen?
Product deletion is the most drastic strategic decision a company can make—to drop a product from the line.
at decline stage
what is “harvesting”?
when a company reduces marketing support costs at decline stage
stage 1 is characterized by (5) growth profit awareness promotion price
This stage is characterized by: Slow growth No to low profits No to low awareness Heavy promotions, trials Price high (Skimming) or low (penetration)!
What is the marketing aim at stage 1
create and maintain awareness and selective demand and develop support service
stage 2 is characterized by (7) growth profit awareness promotion price distribution production
Rapid growth Appearance of Competitors Profits peaks (due to aggressive pricing) High awareness Increasing Production Price – Competitive Wide Distribution
What is the marketing aim at stage 2
The marketing aim is to increase and maintain demand (Firm and category)
Further develop support services
stage 3 is characterized by (5) growth profit awareness new market price and cost
This stage is characterized by:
Slowing of growth for the industry
Falling profits
Full awareness – repeat buyers, switch buyers or none
Few consumer entries and marginal producers exit
Reduction of costs and prices
What is the marketing aim at stage 3
The marketing aim is to create and maintain Market Share
Develop support services
stage 4 is characterized by (4) sales profit trend management attention
This stage is characterized by: Declining Sales Declining and low profits Changing trends Heavy management attention focused on: Deletion Harvesting (low marketing support)
the four dimensions of PLC
- variable length of PLC for different products
- Shape of a product life cycle is generalized
- the product level: variable life cycles regarding product class and product form
- the life cycle and consumers depend on the diffusion of innovation process
def. product class
the entire product class or industry.
def, product form
variations within the class.
what does mean “The shape of the product life cycle is generalized.”?
different product class have different time length of each stage.
shape of the product life cycle: high-learning product
an extended introductory period
shape of the product life cycle: low-learning product
a short introductory period.
shape of the product life cycle: fashion product
decline and reappear
shape of the product life cycle: fads product
a rapid introduction and equally rapid decline.
what is “diffusion of innovation process “?
the time it takes for a product to spread through the population.
the 5 stages of diffusion of innovation process
innovators, early adopters, early majority, late majority, and laggards.
Advertising plays a major role in the ___________ stage of the product life cycle, and ________ ______________ plays a major role in maturity.
introductory
product differentiation
How do high-learning and low-learning products differ?
High-learning products require significant education of the consumer and consequently, there is an extended introductory period. Low-learning products are the opposite of high-learning. Sales begin rapidly for low-learning products because little learning is required by the consumer.
Role of a Product Manager
manages the marketing efforts for a close-knit family of products or brands through three basic strategies
what are the three basic strategies usually applied by a product manager?
- modify the market
- modify the product
- . Re-positioning the Product by changing its relative position in the minds of consumers through changing one or more marketing mix elements.
what is product modification
altering product characteristics, the quality, performance, appearance features, package, size to increase and extend use
How to perform market modification (3)
finding new users, new uses, increasing product use among the users, create new use situations
Four Factors trigger re-positioning of a product
- Four Factors trigger repositioning
- Reaching a New Market
- Catching a Rising Trend & emerging trend
- Changing the Value Offered
which is the critical point to ensure the sustainable thrive of a product ?
Catching a Rising Trend & emerging trend
what is CDI
Category Development Index
% of Product Category’s Total Market Sale in a Market Segment
what is BDI
Brand Development Index
% of Brand’s Total Market Sale in Market Segment
How does a product manager help manage a product’s life cycle?( 4 aspects)
A product manager helps manage a product’s life cycle by: (1) Developing and executing a marketing program for the product line described in an annual marketing plan, (2) approving ad copy, (3) media selection and, (4) package design. Product managers plan, implement, and control the marketing strategy.
What does “creating new use situations” mean in managing a product’s life cycle?
Creating new-use situation means to find new uses for an existing product.
Explain the difference between trading up and trading down in re-positioning.
Trading up involves adding value to the product (or line) through additional features or higher-quality materials. Trading down involves reducing the number of features, quality, or price.
def. branding
managing a positive brand-experience for increases in consumer satisfaction.
involves activities in which an organization uses a name, a phrase, a design, a symbol(s), or a combination to identify its products and distinguish them from all others.
def. Brand name
any word, device (design, shape, sound, coulor) or combination used to distinguish seller’s goods & services.
def. trade name
A legal, commercial name under which a Company does business. Those names follow by ® or ©
def. Trademark
Indicates that a firm has legally registered its brand or trade name and that the firm has their exclusive use of it.
def. Brand Personality
Established brands take on a brand personality which is a set of human characteristics often associated with a brand name.
def. Brand-Equity
A good brand leads to brand-equity, the added value a given brand name provides a product beyond the functional benefits provided. (ex. premium pay)
Brand-equity provides (2 )
i) a competitive advantage and results in
ii) consumers willing to pay a higher price for a product with a high brand-equity.
how to create this positive energy? 4 steps
- Developing positive brand awareness & association
- Establish brand meaning
- Eliciting proper/positive consumer’s response for brand identity
- Create consumer brand resonance ( active loyalty between the consumers and the brand)
what are the two basic dimensions required to establish brand meaning ?
- Functional and performance-related
2. Abstract and imagery
what are the four levels within customer-based brand equity pyramid? the same as the card 42
- brand salience
- brand performance = brand imagery
- consumer judgement = consumer feelings
- consumer brand resonance
what does the customer-based brand equity pyramid reflect?
It is a mutual reaction on both subjective and objective sides
def. Multiproduct branding
One name for all the firm’s products -– Family or corporate branding
def. Co branding
Combining a pair or more recognized brands on a product
def. Multi-branding
Giving each product its distinct name
Private Branding
: manufactured by a supplier and sold Under a wholesaler or retailer brand.
Cohort Brand Management
The bundling of a company multiple brands in a cohort for a Common Consumer Group.
Mixed Branding
mixing a firm’s own brand and reseller’s brand because each reaches a different segment.
def. Packaging
any container and information on it in which a product is offered for sale.
Label
an integral part of the package and identifies the product or brand, who made it, where and when it was made, how it is to be used, and the package contents and ingredients.
What do packaging and labelling do?
Create customer value by providing information
how do marketers create value in three ways through packaging and labeling
- Communication benefits. (information, ingredients, instructions, etc)
- Functional benefits.(stacking, protection, convenience)
- Perceptual benefits. (the impression in the consumer’s mind)
4 Contemporary Packaging and Labeling Challenges
- Connecting with Customers (aesthetically, perceptually, even emotionally).
- Environmental Concerns (lighter packaging, recyclables, green materials).
- Health, Safety and Security Issues (package made of safe and secure materials and keep the products safe and secure)
- Cost Reduction (packaging to reduce weight and bulk and reduce costs -10 to 15%)
the most major trend in packaging
- environmental sensitivity
2. health and safety concerns
def. warranty
a statement that indicates the liability of the manufacturer for product deficiencies
4 types of warrenties
- expressed warranties
- limited-coverage warranty
- full warranty
- implied warranties
How does a generic brand differ from a private brand?
A generic brand is a no-brand product, which is an alternative branding approach. A private brand is when a company manufactures products but sells them under the brand name of a wholesaler or retailer.
Explain the role of packaging in terms of perception
Packaging and labelling is the perception created in the consumer’s mind. A package can connote status, economy, and product quality. Colour may also affect perceptions.
What is the difference between an expressed and an implied warranty?
An express warranty is a written statement of liability. An implied warranty assigns responsibility for product deficiencies to the manufacturer
