Week 7 - Product Management Strategies Flashcards
WK 7 Key Concepts and Objectives
- Customer Value Proposition
- Customer Value Creation Mix
- Product Management Strategies:
- Strategies for the product line
- Strategies for individual products and brands
- Strategies for new product development/ innovation
Break down the 4 values of the customer value proposition
- Functional Value
The extent to which a product has the desired
characteristics; usefulness; and performance capabilities. - Eperimental Value
The extent to which a product creates appropriate
customer emotions; feelings, experiences and sensory; and epistemic value. - Symbolic Value
The extent to which customers attach or associate
psychological meanings to a product. - Cost Value
The extent to which customers seek to maximise or at least realise
the benefits derived from a product while at the same time seeking to minimise the costs and other sacrifices that may be involved in the purchase
What is the customer value creation mixDescribe the 3 components of the customer value creation mix
- Strategies designed to CREATE value - Product Management strategies
- Strategies designed to COMMUNICATE value - Brand management and IMC
- Strategies designed to DELIVER value - Customer engagement and distribution strategies
Describe what is a product, product mix and product line and how they differ
Product: A product is a good, service or a idea
Product Mix: A company’s entire portfolio of product which may be across different BUs
Product Line: A product class, a group of related products
Using a matrix, illustrate the types of product line strategies and their types of change.
Type of change
- Addition to line
- deletion to line
Dimension of change
- Depth of line (variations within each product)
- Width of line (Number of product items or brands)
Draw Diagram
What is a product line extension and what are the 4 types of extension?
(Addition to line + Depth of line)
Adding new items in the same category
- Upward stretch – adding items to the higher end of the
market - Downward stretch – adding items to the lower end
- Two-way stretch – adding items to both ends
- Same-level stretch – adding items at similar price/quality
point
What is product line pruning and what are the 3 ways to delete a product
(Deletion of line + Depth of line)
Removing items from the product line
- Phase it out: allowing the product to decline without changing any marketing strategy
- Run it out: exploiting any strengths left in the product through intense marketing efforts
to increase sales - Drop it immediately: best for unprofitable products when losses are too great to keep
the product
What is product midification and what are the 3 ways to modify a product
Product Modification: Change in one or more
characteristics of a product.
- Quality modifications – changes relating to a
product’s dependability and durability - Functional modifications – changes affecting a
product’s versatility, effectiveness, convenience or safety - Aesthetic modifications – changes to the sensory
appeal of a product
What are 5 ways to make decisions on extending or pruning?
- Type of generic strategy pursued
- Competitive situation
- Stage in product life cycle
- Consumer needs
- Macro-level opportunities
What is brand leveraging and what are its advantages and disadvantages?
Brand leveraging: using existing brand name for the intro of new product in a different product category
Advantages
- It reduces the cost of launching a new product
- It works best when the brand name has value, is well-known, and relevant for
the new product category
Disadvantage
- Can damage the core value of the original brand
- Old brand doesn’t help and new product fails
What is individual branding and umbrella branding?
Multibrand strategies: using individual brand names within the product line
- Advantage: helps saturate the market, different brands can be positioned at different price, quality, identity levels
Umbrella brand strategy: to use the same brand name for different products
* Advantage: promotional expenditures help the entire line, new product introduction is easier
What are the layers of product attributes brands can take advantage off to differentiate themselves from their competitors
Core Product (Benefits)
2. Formal Product (Tangible)
- Packaging
- Quality
- Price
3. Augmented Products (intangible)
- Service
- Warrantee
- Delivery
What are the 4 potential problems that service businesses need to take note when providing value and discuss their solutions
- Intangibility
Problem: Services cannot be seen, tasted, felt, heard or smelt
before they are bought
Solution: Strategies to overcome intangibility include linking the
service to a tangible symbol or focusing on the people aspect of the
service provide - Inseparability
Problem: The provision and consumption of a service occurs
simultaneously
Solution: There are limited strategies to address this aspect of a
service (such as the use of ATMs by banks to extend service
where/when tellers are NOT present) - Variability:
* Problem: Services vary greatly depending on who provides
them and when and where they are provided
* Solution: Strategies to address variability include establishing
customer service delivery systems and standardizing - Perishability:
* Problem: Services cannot be stored
* Solution: Strategies to address this focus on attempting to
control, as much as possible, the variations in supply and
demand for their services, e.g. the use of price discounting,
sales promotion and/or advertising in low-demand periods
What are the service providers 3 Ps
- Personnel (Service)
- Physical Assets (Ambiance)
- Process (Quality consistency)
List 5 items that represent ‘innovation’ in an organisations perspective?
- New-to-the-world products
- New product lines
- Additions to existing product lines
- Improvements in or revisions of existing products:
- Repositioning: shift in emphasis of tangible or intangible benefits
