Chapter_6_Product Management Flashcards
Product line, product mix width and product mix depth
Product line - A group of products that are closely related either because they function in a similar manner.
Product width - the number of product lines a company markets
Product depth - the number of brands within each product line
What is product?
A Product is a bundle of physical, service, and symbolic attributes designed to enhance buyers’ want satisfaction
What are marketing do to a product?
Enhance brand, quality, packaging, styling features for improve core benefit of product.
Classification of Consumer Products
Convenience Goods: Bread, milk, eggs etc.
Shopping Goods: Washer and dryer, furniture etc.
Specialty Goods: Luxury cars, designer clothes etc.
Unsought Goods: Cancer insurance, pre-need funeral plans
Impulse items(冲动消费物品）
Classification of Industrial Products
- Installations • Accessories
- Raw Materials
- Component Parts/Materials
- Supplies
Why need multiple product lines?
- Protection from competition
- Increased growth and profits
- Offset sales fluctuations (like seasonal fluctuation)
- Greater market impact
- Economical resource usage
- Avoidance of obsolescence (避免淘汰)
Four Stages of the Product Life Cycle
- Introduction stage.
- Growth stage (competition enter this stage)
- Maturity stage (price goes down)
- Decline stage.
What is skimming price & penetration price.
product pricing strategy by which a firm charges the highest initial price that customers will pay and then lowers it over time.
This approach contrasts with the penetration pricing model, which focuses on releasing a lower-priced product to grab as much market share as possible
How to know if entering the growth stage?
Increase of industry sales
Different stages with different strategy （see week_6, slide 12)
- Introduction stage - Gain awareness
- Growth stage - Stress differentiation
- Maturity stage - Maintain brand loyalty
- Decline stage - harvesting, deletion
What aspect does packaging provide?
- Protection
- Identification
- Information
- Usage enhancement
- Disposal enhancement
- Channel acceptance enhancement
What can labeling do?
helps customers by:
• Identifying the manufacturer, country of origin, ingredients
• Reporting expiration dates, content grading
• Explaining product use
• Warning about potential misuse
• Providing care instructions
• Serving as a communications link between the user, eventual buyers, and the company
What does warrant do?
- Implied Warranties (product suppose to do sth)
* Express Warranties(written warranties, good for marketer).
Brand definition
A name, term, sign, symbol, or design or a combination of them intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.
What are the benefits of branding?
For Buyer: • Product Quality Identification • Shopping Efficiency • Attention to New Products For Seller: • Easier Order Processing (just say the brand name) • Legal Protection • Brand Loyalty • Segmentation • Corporate Image For Society: • Consistent Product Quality • Innovation • More Information
Types of Brand Names
- suggests a function (Mr clean)
- imply a high level of excellence (A1)
- ordinary words (Camel)
- initials or numbers (BMW)
- promises or results
- ease of application
- product in use
- pleasant connotations
- promise of reward
What is Brand Equity
Added value to the product. Like Dole banana
Reasons for Product Failure
- Not heeding marketing research findings
- Market size overestimation
- Product design
- Positioning
- Advertising
- Pricing
- Development Costs
- Competition
What is Booz Allen Hamilton new product development process?
- New Product Strategy Development
- Idea Generation
- Screening and Evaluation
- Business Analysis
- Development
- Testing
- Commercialization
What are Booz Allen Hamilton findings?
Average new product success rate in terms of meeting goals = 65% • 1/7 successfully developed • Spending on R&D and marketing • Median number of new products • Contribution to sales growth • Contribution to profits
Why need new product strategy ?
If no new product strategy, the success rate of new product is 1/53. If have new product strategy, rate is 1/7.
What contribute to the sales and and profit?
New product.
Strategic Role of Most New Products
Externally Driven • Defend Market Share - 43% • Establish Foothold in New Market - 38% • Preempt Market Segment - 34% Internally Driven • Maintain Position as Product Innovator - 47% • Capitalize on Distribution Strength - 34% • Exploit Technology in a New Way - 28% • Provide a Cash Generator - 14% • Capacity Utilization - 8%
Sources of New Product Ideas
• Internal External • Customers • Competitors • Distributors & Suppliers • Other Sources
Idea Screening and Evaluation
- DropError
* Go Error
Determinants of Rate of Adoption for a new product
- RelativeAdvantage
- Compatibility (compatible with culture)
- Complexity (Lower the complexity, the faster new product adopt)
- Trialability
- Observability
