CHAPTER 9 PRODUCT STRATEGY PRODUCT STRATEGY Developing New

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CHAPTER 9 PRODUCT STRATEGY

CHAPTER 9 PRODUCT STRATEGY

PRODUCT STRATEGY • Developing New Products • Product Life Cycle • Branding Strategy

PRODUCT STRATEGY • Developing New Products • Product Life Cycle • Branding Strategy

DEVELOPING NEW PRODUCTS • New Product Process • New Product Failures

DEVELOPING NEW PRODUCTS • New Product Process • New Product Failures

NEW PRODUCT PROCESS Creative Ideas Creative Business Ideas Development and Testing Introduce New Product

NEW PRODUCT PROCESS Creative Ideas Creative Business Ideas Development and Testing Introduce New Product Time

SEARCH FOR CREATIVE IDEAS • Create cross-functional committees • Collect stakeholder ideas • Listen

SEARCH FOR CREATIVE IDEAS • Create cross-functional committees • Collect stakeholder ideas • Listen to customers

TYPES OF CREATIVE IDEAS • Never been done before • Improved product technology •

TYPES OF CREATIVE IDEAS • Never been done before • Improved product technology • Creative twist of an existing idea

CREATIVE IDEAS EXAMPLES • Charles Schwab • Ralph Lauren Polo Shirts • Houston National

CREATIVE IDEAS EXAMPLES • Charles Schwab • Ralph Lauren Polo Shirts • Houston National Bank • Blue Chip Forecast

Ralph Lauren Polo Shirt for Dogs

Ralph Lauren Polo Shirt for Dogs

CREATIVE BUSINESS IDEAS • Company Fit • Financial Analysis - Feasibility study - Business

CREATIVE BUSINESS IDEAS • Company Fit • Financial Analysis - Feasibility study - Business Plan

COMPANY FIT • Existing Production Fit • Existing Distribution Fit • Product Strategy Fit

COMPANY FIT • Existing Production Fit • Existing Distribution Fit • Product Strategy Fit

FEASIBILITY STUDIES Studies of potential new products, with evaluations of resources and time in

FEASIBILITY STUDIES Studies of potential new products, with evaluations of resources and time in screening creative ideas

FEASIBILITY STUDY PROCESS Potential New Products Financial Viability Time and Resources Proceed or Drop

FEASIBILITY STUDY PROCESS Potential New Products Financial Viability Time and Resources Proceed or Drop Creative Idea

PRODUCT DEVELOPMENT AND TESTING • Product development - Types of new products - Product

PRODUCT DEVELOPMENT AND TESTING • Product development - Types of new products - Product design • Testing - Beta testing - Store audits

COMMERCIALIZATION • Launch new product • Design and place promotions • Fill distribution pipeline

COMMERCIALIZATION • Launch new product • Design and place promotions • Fill distribution pipeline

NEW PRODUCT FAILURES • Failure to define target market • Lack of customer knowledge

NEW PRODUCT FAILURES • Failure to define target market • Lack of customer knowledge • Poor product performance

NEW PRODUCT FAILURE EXAMPLES • Betamax • Harley Davidson Perfume • Susan B Anthony

NEW PRODUCT FAILURE EXAMPLES • Betamax • Harley Davidson Perfume • Susan B Anthony Dollar

PRODUCT LIFE CYCLE Sales Introduction Time Growth Maturity Decline

PRODUCT LIFE CYCLE Sales Introduction Time Growth Maturity Decline

STAGES OF PRODUCT LIFE CYCLE Stage Sales Profits Introduction Growth Maturity Decline Low Climbing

STAGES OF PRODUCT LIFE CYCLE Stage Sales Profits Introduction Growth Maturity Decline Low Climbing Stable Dropping Negative Rising Peaking Declining

CHARACTERISTICS OF THE INTRODUCTION STAGE • Negative Profits • Heavy Promotion Cost • Heavy

CHARACTERISTICS OF THE INTRODUCTION STAGE • Negative Profits • Heavy Promotion Cost • Heavy Distribution Cost

INTRODUCTION STAGE EXAMPLES • Electric vehicles • Life Straw • Astrata

INTRODUCTION STAGE EXAMPLES • Electric vehicles • Life Straw • Astrata

ASTRATA THEFT BOX • Stops motor on stolen trucks • Locks doors remotely, trapping

ASTRATA THEFT BOX • Stops motor on stolen trucks • Locks doors remotely, trapping thieves • Programmed to notify police

CHARACTERISTICS OF THE GROWTH STAGE • Increasing Revenue • Experience Curve • Increasing Profits

CHARACTERISTICS OF THE GROWTH STAGE • Increasing Revenue • Experience Curve • Increasing Profits

GROWTH STAGE EXAMPLES • Kindle • Greek Yogurt • Smart Phones • Zip Lines

GROWTH STAGE EXAMPLES • Kindle • Greek Yogurt • Smart Phones • Zip Lines • Audio Books

SALES OF KINDLES 2009 2 million 2011 12 million

SALES OF KINDLES 2009 2 million 2011 12 million

AUDIO BOOK SALES 1997 $480 Million 2013 $1, 200 Million

AUDIO BOOK SALES 1997 $480 Million 2013 $1, 200 Million

CHARACTERISTICS OF THE MATURITY STAGE • Intense Competition • Maintain Promotion • Layering Strategy

CHARACTERISTICS OF THE MATURITY STAGE • Intense Competition • Maintain Promotion • Layering Strategy

MATURE STAGE EXAMPLES • Crayola • Baby carrots • Campbell soup

MATURE STAGE EXAMPLES • Crayola • Baby carrots • Campbell soup

CONCEPT OF LAYERING Sales Time

CONCEPT OF LAYERING Sales Time

LAYERING EXAMPLES • Chicken Soup for the Soul • Movies • Dental Services

LAYERING EXAMPLES • Chicken Soup for the Soul • Movies • Dental Services

MOVIE EXAMPLES OF LAYERING • Shrek • Star Trek • Halloween

MOVIE EXAMPLES OF LAYERING • Shrek • Star Trek • Halloween

LAYERING OF DENTAL SERVICES • Cosmetic • Straighten Teeth • Bonding Teeth • Whiten

LAYERING OF DENTAL SERVICES • Cosmetic • Straighten Teeth • Bonding Teeth • Whiten Teeth

DECLINE STAGE STRATEGIES • Simplify Product Line • Minimize Promotional Cost • Discontinue Product

DECLINE STAGE STRATEGIES • Simplify Product Line • Minimize Promotional Cost • Discontinue Product Line • Sell Product Line

DECLINE STAGE EXAMPLES • Hostess Brands • Kodak • Yellow Pages • PC Decline

DECLINE STAGE EXAMPLES • Hostess Brands • Kodak • Yellow Pages • PC Decline

YELLOW PAGES REVENUE 2005 14 Billion 2011 9 Billion

YELLOW PAGES REVENUE 2005 14 Billion 2011 9 Billion

BRANDING STRATEGY • Product Names • Major Types of Branding • Multiple Branding Strategy

BRANDING STRATEGY • Product Names • Major Types of Branding • Multiple Branding Strategy • Brand Extension

PRODUCT NAMES Commodity Any company can use Grade Defined by government Brand Owned by

PRODUCT NAMES Commodity Any company can use Grade Defined by government Brand Owned by a company

COMMODITY EXAMPLES • Aspirin • Gasoline • Nylon

COMMODITY EXAMPLES • Aspirin • Gasoline • Nylon

GRADING EXAMPLES • Grade AA eggs • Choice beef • Organic foods

GRADING EXAMPLES • Grade AA eggs • Choice beef • Organic foods

MAJOR TYPES OF BRANDING • National Brands by Manufacturers • Store Brands by Retailers

MAJOR TYPES OF BRANDING • National Brands by Manufacturers • Store Brands by Retailers

MANUFACTURING BRANDS ARE LOSING TO STORE BRANDS • Mass media universe has shattered •

MANUFACTURING BRANDS ARE LOSING TO STORE BRANDS • Mass media universe has shattered • Mass channel universe has consolidated • High gross margins for store brands

MULTIPLE BRANDING STRATEGY • BLANKET BRANDS - Same brand name • INDIVIDUAL BRANDS -

MULTIPLE BRANDING STRATEGY • BLANKET BRANDS - Same brand name • INDIVIDUAL BRANDS - Different brand names

EXAMPLES OF BLANKET BRANDS • IBM • Whole Foods (365) • Costco (Kirkland)

EXAMPLES OF BLANKET BRANDS • IBM • Whole Foods (365) • Costco (Kirkland)

EXAMPLES OF INDIVIDUAL BRANDS • Yum Brands • Sears

EXAMPLES OF INDIVIDUAL BRANDS • Yum Brands • Sears

YUM BRANDS • Pizza Hut • Taco Bell • Kentucky Fried Chicken

YUM BRANDS • Pizza Hut • Taco Bell • Kentucky Fried Chicken

SEARS RETAIL BRANDS • Kenmore • Craftman • Diehard

SEARS RETAIL BRANDS • Kenmore • Craftman • Diehard

BRAND EXTENSION A company with a well-known brand uses that brand to market to

BRAND EXTENSION A company with a well-known brand uses that brand to market to a different product category.

BRAND EXTENSION SUCCESSES • Visio • JELL-O pudding • IAMS pet insurance

BRAND EXTENSION SUCCESSES • Visio • JELL-O pudding • IAMS pet insurance

BRAND EXTENSION FAILURES • New Coke • BIC pantyhose • Hooter’s airline

BRAND EXTENSION FAILURES • New Coke • BIC pantyhose • Hooter’s airline

MOST POWERFUL BRANDS IN 2013 #1) Apple #2) Microsoft #3) Coca Cola #4) IBM

MOST POWERFUL BRANDS IN 2013 #1) Apple #2) Microsoft #3) Coca Cola #4) IBM #5) Google

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