Chapter 4: Product Strategy Flashcards
What are the 4 main components of product strategy
- Market Penetration
- Product Development
- Market Development
- Diversification
What are 3 strategies to increase consumption
- Promoting a more frequent use: changing habits with regard to frequency of use
- Developing new uses: so the same product is used to cover other needs
- Creating new consumption habits: new habits involving the use of more models of the product range
What is Range Extension
It consists of adding models to the current catalog and extending it with the aim of attracting new customers.
These products tend to be complementary to existing ones.
For example Kitkat and KitKat mc flurry or. Ariel washing liquid and Ariel Pods.
What is product improvement
It is to introduce changes to the current product, as a means to achieve greater satisfaction in current users, and therefore higher sales. Most of these products are alternatives to the existing product.
What are the reasons for restyling? (5)
→ Animate a market
→ Responding to competitors
→ Trying to increase the benefits
→ Improve the current image of the company
→ Applying for technological advances
What are the characteristics of restyling (3)
- It affects only the exterior of the brand while the principles and culture are maintained
- The logo, colors, typography, packaging, bags and other elements of external communication with customers are modified
- You do not have to respond to a crisis but simply to an image update
What are the characteristics of rebranding (6)
- It affects the heart of the brand, its philosophy, its image, and its communication
- It involves a restyling adapted to its new principles
- Occurs when the target changes
- It is necessary when the company changes its area of activity (starts selling online)
- Rebranding is used to relaunch a brand in crisis or that has lost market share
- Sometimes it can be the consequence of an identity, reputation, or image crisis
Within market development what is the ‘new uses strategy’
It is about finding new uses for the current products of the company so that through them it is possible to reach new markets
** New applications to cover the same type of need, search for new applications while maintaining the same expected benefit
**Widespread use of different age segments, products aimend at a segment of age may be valid for different age segments
**Different product mix to meet other needs, a product that meets a need, can meet a different need when combined with another
**Widespread use of a product from one part to another of a whole, it is extending the use of a product that is used only for part of one facility to another, being able to cover another function.
**Adaptation of industrial products such as consumer products, multiplying consumption if an industrial product may have application as a mass product. It means potential buyers.
Within market development what is the ‘enlargement line strategy’
→ It is to offer products of the company. Target a market segment with a level of quality/price, to another segment with a different level of quality/price.
→ It is to introduce a different product line, even the same product (manufacturing), but with new
What is elongation down and what is the risk
Product versions with a quality/price below the current, in order to meet the needs of users who could not access the product
Risk: distort the image and brand positioning
What is elongation up and what is the risk
It is to offer high-end products (high quality/price) with the aim of assessing the midline and reinforce the image in its home market (price/quality medium)
Risk: it is important that the organization is prepared to make and sell more expensive products
What is within market development the ‘attribute change strategy’
It is to identify products in the current catalog, by applying different attributes to existing ones, can be regarded as different and interesting to other markets or market segments. Same product manufacturing and a different attribute.
What is a new product strategy?
It is to launch new products for the company, whether they are similar or not in the market. A product is new in the market only when he deems it.
What 2 types of new product strategies are there
- new product, new in the market
- new product, covering new line
What is new product, new in the market
When the company launches the product you are new to the market. Therefore, the company is the market maker.
