MARKETING 3 03 ProductService Management 4 IMPORTANT PS

MARKETING 3. 03 Product/Service Management

4 IMPORTANT P/S MGMT TERMS Product Mix Product Line Product Width Product Depth

Product / Service Management Product MIX: All the different products that a company makes or sells. KRAFT Company Example: …. Kraft …. Maxwell House …. Kool-Aid …. Oscar Mayer …. Post Cereal products

Product / Service Management Product Line ◦ Group of closely related products manufactured &/or sold by a business ◦ Example: Kellogg’s makes all the cereals listed All product lines are apart of the product mix

Product / Service Management A product line can be determined by the following: ◦ They function similarly All of Chevrolets Cars are a Product Line ◦ They are sold to the same groups of people All of Staples Supplies sold to schools ◦ Are marketed the same way ◦ Are priced similarly

Product / Service Management Product Item ◦ A specific model, brand, or size of a product within a product line.

Product / Service Management Product Mix Example ◦ All classes AK offers Product Line ◦ All marketing courses offered Product Item ◦ Marketing ◦ Sports Marketing ◦ International Marketing

Product / Service Management Product Mix: ◦ The width and depth of a company’s product offerings. Width: number of different product lines a business manufactures or sells Small businesses have fewer product lines; less width Depth: number of product items within a product line Company sells three different sizes & three different flavors they would have a product depth of 9. Example: Chocolate = small, medium, large

Product Mix Assignment Working in groups of 1 -3; you will be assigned a Company ◦ Define Product Mix At least 10 brands they sell ◦ 3 Examples of Product Lines ◦ 5 Product Items Specific items sold by company

Companies ◦ ◦ ◦ ◦ General Motors Mars Nestle Sony Proctor & Gamble Kraft General Mills Johnson & Johnson Unilever Kellogg’s Coca-Cola Pepsico Dr. Pepper/Snapple

Examples of Product Mixes

Nike Example Nike owns ◦ ◦ ◦ ◦ Nike Golf Nike Pro Nike+ Nike Skateboarding Air Jordan Converse Hurley International ◦ Nike. Town Retail Stores

Nike Product Mix Example 4 Product Lines Examples ◦ ◦ Converse Basketball Soccer Clothing Could’ve broken it down by: ◦ Others Sports ◦ Hurley, Golf, Jordan

Product Items Converse All Star Ox ◦ $49. 99 Nike Club Swoosh Full Zip Hoodie ◦ $39. 99 Nike Air Max 2013 ◦ $179. 99

3. 01 --- Review Types of Goods Sold 1. Staple 2. Convenience 3. Shopping 4. Specialty 5. Fashion 6. Seasonal 7. Unsought 8. Industrial Product Life Cycle ◦ ◦ Introduction Growth Maturity Decline

3. 03 Product Product Mix Depth Width Line Item Trading Up Trading Down Alteration Expansion Contraction

Product Mix

Assignment Create 10 Flash cards based on the following concepts 1. Product Width: Contraction 2. Product Width: Expansion 3. Why would a company want to narrow its products? 4. Product Depth: Shallow 5. Product Depth: Expansion 6. Product Item 7. Trading Up 8. Trading Down 9. Alteration 10. Product Positioning

Product Mix Example

Product Mix Product Width is either narrow or broad ◦ Narrow Product mix occurs when a company offers a limited number of product lines Also known as Contracting ◦ Why would a company want to narrow its product mix? Easier on management Cost effective Simplicity Consistency

Product Width: Narrowing In 2009; General Motors (GM) filed for bankruptcy protection They were told they needed to cut back ◦ ◦ ◦ ◦ GMC Cadillac Buick Chevy Pontiac Saturn Saab Hummer

Product Width: Broadening Companies seek to expanding their product width by making it broader Expanding allows you ◦ Reach more markets ◦ Gain a competitive edge Example of product width is Red Lobster ◦ Specialize in seafood ◦ Sell pasta, chicken, & steak to broaden product mix

Product Depth: Expanding Product Depth expands when more product items are added to a product line Why would you expand on a product line? ◦ Wider Variety ◦ Greater Quantity ◦ Dillards choosing to sell more colors, sizes, styles of Levi Jeans

Product Depth: Shallow A shallow product depth occurs when there are less products offered in a product line Why would you contract your product depth? ◦ Cost Effective Example would be Red Lobster selling chicken on its menu Usually only 2 -4 menu options Not cost effective to offer a wider variety

Product Mix Strategies Companies devise strategies for their products so that they are profitable Existing product strategies ◦ Alteration ◦ Trading Up ◦ Trading Down

Product Mix Strategy: Alteration occurs when an existing product is altered Improve an established product with new design, new package, &/ or new uses ◦ Example: Jeep Company

Jeep Changes Over Time

Product Mix Strategies Trading Up ◦ Occurs when a company adds a higher-priced product to a line ◦ Trying to attract a higher-income market ◦ Want to improve the sales of existing lowerpriced products. Prestige of high-priced item makes brand look better

Product Mix Strategies Trading Down Adding a lower-priced item to a line of prestige products to encourage purchases from people who cannot afford the higherpriced product, but want the status.

Product Positioning: actions marketers take to create a certain image of a product in the minds of the customers • In Relation to a Competitor • A common strategy when a firm is trying to solidify an advantage over another firm. • Example: Southwest Airlines promotes itself as the low-cost alternative • In Relation to a Product Class or Attribute (Features & Benefits) • http: //www. youtube. com/watch? v=YUNj. Cx 7 w 11 k

Product Positioning • In Relation to a Target Market • Focusing on the unique characteristics of specific users can also be effective. • The …For Dummies series of instruction books are attractive to people who want to learn about a topic from a source that doesn’t assume any prior knowledge on the reader’s part. • By Price and Quality Offer economy, mid-priced, & luxury lines High Price = Quality Low Price = Greater Value Ford Mustang Ford Focus • Difficult to change Absolut Vodka ◦ http: //www. youtube. com/watch? v=EL 4 Es. Zv_lt. U ◦ http: //www. youtube. com/watch? v=Rt 7 e. Os 7 i. G 2 Y

Class Activities Flash Cards - After 10 minutes into a lecture or concept presentation, have students create a flash card that contains the key concept or idea. Toward the end of the class, have students work in pairs to exchange ideas and review the material. Product Life Cycle of Mobile Phone ◦ http: //www. youtube. com/watch? v=A-y 0 Q 9 u. E 0 MM ◦ http: //www. youtube. com/watch? v=d-ZOOhsf. Z-I