Week 5 - Product Policy Flashcards
What is product positioning?
Creating an image of product
in consumer mind
consistent with their needs/wants/desires.
What is overpositioning?
too narrow of a brand
potential customer think it’s too expensive, too cheap, too bold, etc
what is underpositioning?
image is too vague
potential customers think there’s nothing special
what is confused positioning?
more than one competing image
no clear image in consumer mind
what is doubtful positioning?
consumers do know the image
but don’t believe it
worst place to be
what is differentiation
a strategic approach
to
positioning products as meaningfully different
what is effective differentiation?
important - valued by customers
distinctive - true difference perceived by customers
superior - not just different
preemptive - not easy to copy (sustainable competitive advantage)
affordable - value vs cost
profitable - cost must not be too high
what are the 5 strategies for differentiation?
product service personnel channel image
what is product differentiation?
make product better (attributes)
examples form - physical features - supplimentary benefits performance quality - better conformance quality - consistency durability - longer operating life reliability - low failure rate repairability - easy to fix problems IP protection - legally preemptive
what is service differentiation?
adding services beyond a product
examples ordering ease - reducing issues delivery - easy to purchase and start using installation customer training - if needed maintenance / repair rewards
what is personnel differentiation?
employees as a means of value creation
frequently used to differentiate services
examples competence - superior skills courtesy credible - trustworthy reliable responsive communication - understandable
what is channel differentiation?
partnerships = two is better than one
examples
associations - affiliations with positive brands
partnerships - formal relationships with another brand
what is image differentiation?
build a brand image
examples
identity - strong symbol association
personality - human characteristics associated w/ brand
atmosphere - physical space
what are the three product levels?
how products are described
core benefit - most basic reason to purchase
actual product - core benefit + associated features
augmented product - actual plus intangibles (service, warranty, delivery, installation, etc)
what is durable vs nondurable products?
durable - multiple uses over time
nondurable - brief period, sometimes single use
3 years is a common dividing point, but is flexible
what is the product life cycle?
model to demonstrate product sales over time
showing common stages in product life cycle
controversal, but very common and well known
what happens in the product life cycle?
sales curve
profit curve
new product dev (sales 0, profits negative)
introduction (sales growing, overall negative)
growth (breakeven)
maturity (peak, start declining)
decline (rapid decrease)
what’s wrong with the product life cycle model?
often wrong
fads, styles, and fashions can be different
not always a smooth curve
maturity can be extended at times
a “second life” can happen
useful for ways of thinking, but not for sales forecasts
what is the diffusion of innovation model?
useful for forecasting sales
normal distribution curve
what are the stages in diffusion of innovation model?
innovators - 2.5% (risk takers)
early adopters - 13.5% (emulate innovators)
early majority - 34% (closes first half of adopters)
late majority - 34% (skeptical)
laggards - 16% (wait until traditional product goes away)
what influences rate of adoption in the diffusion of innovation model?
complexity - too hard = slower adoption
relative advantage - better product = faster adoption
compatability - shorter, spikier curve
divisibility/trialability - faster adoption
communicatability - can someone tell me why I should (virality)
culture - does it fit the world I know?
discretionary income - do I have money for it?
distribution - can I actually get it?
what 4 things do successful new products do?
profitable
competitive advantage
marketable
satisfy a new or poorly met need
what are the main stages of new product development?
idea generation - new ideas
idea screening - first evaluation
concept
development - making a marketable concept
testing - pretesting on a target market
business analysis - financial stuff
product dev - prototype and production
test marketing - limited, controlled launch
commercialization - full introduction to target
what are the reasons for product failure?
no real advantage
poor quality
inaccessible or insufficient market
lack of top management commitment
what are the reasons for product elimination?
poor sales
incompatibility with organisation
poor market outlook
moviepass - did so well that it forced them to massively change
wasn’t financially viable at scale
what is the goal of product management?
look for growth opportunities
what are growth opportunities for product management?
Ansoff’s model (new product/new market)
market penetration - increase sales of existing product
product development - new product in existing market
market development - new market for existing product
product diversification - new product/new market
what are line extensions?
using an old brand name
for a new product
in an old product category
what are new brands?
new brand name
for new product
in new product category
what are multi brand strategies?
new brand name
for new product
in old product category
what are brand extensions?
old brand name
for new product
in new product category
what are the main ways to grow through product management
line extension - old brand / old cat
brand extension - old brand / new cat
new brand - new / new
multi-brand - new brand / old cat
what are the various types of line extensions?
line stretching - higher/lower/both change in price point
line filling - new product dissimilar from existing
product modification - quality, function, asthetic
product deletion - eliminate product
what is a brand?
means of identifying
a product/service
from a particular provider
what does branding consist of?
names, terms, signs, symbols, colors, design, or anything identifying an association
brand name - words to identify
brand mark - non-word identifiers
trade name - legally protected name
trade mark - legally protected non-word designation
what is a brand image?
often described as a brand’s personality
often human-like
what are the main types of brands?
national brands - widely recognized
reseller brands - “house” brand affiliated with reseller, not manufacturer
generic brands - no brand affiliation
why do branding?
has to be increased value to the company
consumers often willing to pay more due to perceived quality and reduced risk
what is brand equity?
the finanancial value of the strength of a brand
what is brand loyalty?
when a consumer prefers one brand over others
associated with repeat purchases
reduces the need to find new customers
