Product Planning ProductService Mix Standard 9 Unit 9

Product Planning Product/Service Mix Standard 9

Unit 9 Vocabulary • • • • • Aseptic Packaging Blisterpacks Brand Extension Brand Label Brand Licensing Brand Mark Brand Name Category Management Cause Packaging Co-Branding Descriptive Label Generic Brands Grade Label Mixed Brand Mixed Bundling • • • • • National Brands Package Planograms Price Bundling Private Distributor Brands Product Depth Product Item Product Life Cycle Product Line Product Mix Product Modification Product Planning Product Positioning Product Width Trade Name Trade Character Trademark

How are decisions made to introduce new products and delete old ones?

What is Product Planning? • Product Planning: The decisions made about what features should be used in selling of a business’s products. • These decisions relate to: – packaging – labeling – warranties – guarantees – branding – product mix

What is Product Planning? • Product Mix: All the different products that a company makes or sells. – Product Line: A group of closely related products manufactured or sold by a business. – Product Item: A specific model, brand, or size of a product within a product line. – Product Width: The number of different product lines a business manufactures or sells. – Product Depth: The number of product items in a product line.

What is Product Planning? • A well defined product plan allows a business to: – Create sales opportunities. – Design appropriate marketing programs. – Develop effective advertising campaigns. – Coordinate the product mix offered to customers. – Add new products. – Delete older products that no longer appeal to customers

Determining what to produce or sell • Businesses will use different product mix strategies to determine what to produce or sell. • Product mix strategies depend on: – Resources – Objectives – Past and current sales – Consumer trends

Product Positioning • Product positioning: Efforts a business makes to identify, place, and sell its products in the marketplace. – Positioning by price and quality: • Ex: Ford Motor Company positions its Focus as an economical passenger car while still emphasizing quality.

Product Positioning – Positioning by features and benefits: • Ex: Oil of Olay was positioned as a premium facial moisturizer and cleanser to keep skin soft and young. – Positioning by unique characteristics: • Ex: Cell phones that can text message or take pictures and send them.

Product Positioning – Positioning in relation to the competition: • Ex: Warner-Lambert Company introduced Cool Mint Listerine by positioning against the “theraputic” benefits of Original Listerine and the “cosmetic” benefits of Scope. – Positioning in relation to other products in a line: • Ex: Binney & Smith introduced washable crayons and positioned them as a specialty item in the company’s Crayola crayon line.

Product Mix Strategies • Developing New Products – Follows six steps: • • • Generate Ideas Screen Ideas Develop a Business Proposal Test the product with consumers Introduce the product Evaluate customer acceptance

Product Mix Strategies • Developing Existing Products – Line Extensions: Adding new product lines, items or services. • Ex: Tylenol – Product Modifications: An alteration to an existing product: • • • New and different varieties Formulations Colors Styles Features Sizes

Product Mix Strategies • Deleting a Product or Product Line – Obsolescence – Loss of Appeal – Changes in Company Objectives – Replacement with New Products – Lack of Profit – Conflict with other products in the line

What is Product Bundling? • Multiple products or components packaged together into one bundled solution. • Price bundling: when two or more similar products are placed on sale for one package price

Benefits for Businesses and Customers • BUSINESSES • • Introduce New Products Acquire New Customers Higher Profits Increase Product Turnover (distressed inventory)

Benefits for Businesses and Customers • CUSTOMERS – Save Money – Perception of Greater Value – Low Risk to Try New Products

Example 1. Astound

Product Positioning Assignment: Pick 10 products that you use and tell me the product, how it is positioned in the market, and how you know it is positioned that way

Branding, Packaging, and Labeling • Brand: Name, design or symbol that identifies the products of a company. – Brand Name: • Word or group of words that can be spoken. • Ex: Nike, Coca-Cola Classic, Cover Girl, Tylenol – Brand Mark: • Symbol, design, distinctive coloring, or lettering

Branding, Packaging, and Labeling – Trade Name: • Identifies the company or a division of a particular corporation. – Trade Character: • A personified brand mark.

Branding, Packaging, and Labeling – Trademark: • When used, it is followed by the registered trademark symbol ®

Branding, Packaging, and Labeling • Package: Physical container or wrapping for a product. • Label: Information tag, wrapper, seal, or imprinted message that is attached to a product or package.

Branding, Packaging, and Labeling Branding Strategies: • Brand Extension: – Uses an existing brand name to promote a new and improved product in a company’s product line – Can you have too many products in a line? • Brand Licensing: – Allows others to use the brand name for a fee • Ex. Sports logos must be officially licensed • Mixed Brands: – National manufacturer makes the product for a private label • Ex. Michelin Tires for Sears Brand • Co-Branding: – Combines one or more brands • Ex. Crest with Scope Mouthwash, Pop-Tarts with Smucker’s Fruit Filling

New Product Opportunities • • Changes in life cycle Changes in technology Changes in market/society Changes in economy

Finding the GAPS! • Find the opportunities when you find the gaps! • Gap=the difference between what is currently available and what is needed/desired

Changes in Life Cycle • Product planning does not end when a product is new! • Must decide what to do with existing products as they change through the life cycle

Product Life Cycle Maturity Gr ow ne th cli De Introduction • What do we do when a product declines? • Have to decide to modify or delete • THIS IS AN OPPORTUNITY! Delete or Reinvent

Changes in Technology • Smartphones – Voice recognition technology • Siri • GPS – Garmin, Tom – Google Maps • Social Media

Changes in Market/Society • Health Conscience – Mc. Donalds Happy Meal • Apple Slices, Milk – Salads, wraps – Bottled water • Convenience • Entertainment – Games, music, movies, culture

Changes in Economy • Economic downturn – Created opportunity for new product and product expansion • Generic brands, discount stores, low cost alternatives and substitutes

Ways To Find the Gaps • Market research – Surveys • Asking customers what they would like, what's lacking – Focus Groups – Sales records • Where are sales decreasing/not improving? – Competitors • What are our competitors offering that we aren’t? • What are they doing better than us?

New Product Categories • Products that create a new market or niche segment. – Paper disposable diapers. • Additions or line extensions to existing products. – New flavors and new sizes of existing products.

New Product Categories • Product improvements. – Cars. – Cell phones • Repositioned products. – Tums repositioned itself to feature its high calcium content as a benefit for women's health.

Product Development • The first step is to generate new business ideas that are unique. – Can the product be • Repositioned • Improved • Brought out in a new size, flavor, or package?

Product Development • Techniques used to generate new product ideas: – Periodically screen your products and compare them with competitors' products, with an eye toward: • improving attributes of products • combining the features/benefits of several separate products into a single new product – examining users' needs that are not being met by current competitive products – using idea-generating methods like brainstorming