Post on 16-Dec-2015
Check your understanding – review questions pages:
212 – Product and service concepts
241 – Developing and managing products
293 – Marketing channels and logistics decisions
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Contents – week 4 BSBMKG502A
• Team presentations• Product life cycle (Bized)• Product and service concepts (Ch 6)• Developing and managing products (Ch
7)• Channels of distribution (Ch 8)
© John Loftus
New product development – key points
1. Marketing strategies during the product life cycle
- Refer to Exhibit 7.5 on page 236
2. Understand your target market and how to deliver to that market with a holistic marketing mix (value proposition) that will appeal to the target market.
3. Scanner based research tracks trends in product sales volume through the product life-cycle.
© John Loftus
Amazon – key points1. In Australia, the Privacy Act stipulates how personal data
can be captured, stored and used in a business environment. Refer to: http://www.privacy.gov.au/ACT/privacyact/
2. Potential customers can easily search and find desired products using the Internet. Web merchants are able to capture, analyse, and store customer information that can enable a personalised value proposition and relationship maximisation.
3. Direct to user is a growing trend that by-passes traditional channels of distribution (e.g. Dell and Amazon). However, consumers maintain a high preference for bricks and mortar channels. A blend has advantages and disadvantages.
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Marketing mix
Managers adjust 4 key variables:• Products and services
• Place – (channels of distribution)
• Promotion (communication)
• Price
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Physical Environment• The ambience, mood or physical
presentation of the environment– Smart/shabby?– Trendy/retro/modern/old fashioned?– Light/dark/bright/subdued?– Romantic/chic/loud?– Clean/dirty/unkempt/neat?– Music?– Smell?
Adapted from Bized www.bized.co.uk
Product Life Cycles
• Product Life Cycle – shows the stages that products go through from development to withdrawal from the market
• The Stages of the Product Life Cycle:– Development– Introduction/Launch– Growth– Maturity– Saturation– Decline– Withdrawal
Product Life Cycle stages
Sales
Time
Development Introduction Growth Maturity Saturation Decline
Adapted from Bized www.bized.co.uk
Product Life Cycle and profits
Sales/Profits
Time
PLC
Losses
Break Even
Profits
Adapted from Bized www.bized.co.uk
Sales
Time
AB C
D
The product portfolio – four products in the portfolio
(1)
(1) ‘A’ is at maturity stage – cash cow. Generates funds for the development of ‘D’
(2)
(2) Cash from ‘B’ used to support ‘C’ through growth stage and to launch ‘D’.
(3) (3) Cash from ‘C’ used to support growth of ‘D’ and possibly to finance extension strategy for ‘B’?
Importance of maintaining a balance of products in the portfolio at different stages of the PLC
Adapted from Bized www.bized.co.uk
Product classifications
Businessproduct
Consumer product
A product used to manufacture other goods or services, to facilitate an organisation’s operations, or to resell to other consumers.
Products that are bought to satisfy an individual’s personal wants.
Adapted from Summers et. Al (2005)
Types of consumer products
Unsoughtproducts
Specialtyproducts
Shoppingproducts
Convenienceproducts
Consumerproducts
Businessproducts
Products
Adapted from Summers et. Al (2005)
Types of consumer products (cont.)
Convenienceproduct
Shoppingproduct
Specialtyproduct
Unsoughtproduct
A relatively inexpensive item that merits little shopping effort.
A product that requires comparison shopping because it is usually more expensive and found in fewer stores.
A particular item for which consumers search extensively and are reluctant to accept substitutes.
A product unknown to the potential buyer or a known product that the buyer does not actively seek.
Adapted from Summers et. Al (2005)
Product items, lines and mixes
Product item
Product line
Product mix
A specific version of a product that can be designated as a distinct offering among an organisation’s products.A group of closely related product items.
All products that an organisation sells.
Adapted from Summers et. Al (2005)
Benefits of product lines
• Why form product lines?– advertising economies– package uniformity– standardised components– efficient sales and distribution– equivalent quality
Adapted from Summers et. Al (2005)
Product line depth
• The number of product items in a product line:– attracts buyers with different preferences– increases sales/profits by further
market segmentation – capitalises on economies of scale– evens out seasonal sales patterns.
Adapted from Summers et. Al (2005)
Branding
Brand name
Brandmark
Brand equity
Masterbrand
That part of a brand that can be spoken, including letters, words and numbers.
The elements of a brand that cannot be spoken.
The value of company and brand names.
A brand so dominant that it comes to mind immediately when a product category, use, attribute or benefit is mentioned.
Adapted from Summers et. Al (2005)
An effective brand name…
• is easy to pronounce
• is easy to recognise and remember
• is short, distinctive and unique
• describes the product, use and benefits
• has a positive connotation
• reinforces the product image
• is legally protectable.
Adapted from Summers et. Al (2005)
Master brands
Photography Adhesive bandages
Rum
Vacuum cleaners
Biscuits
Cream cheese
Crayons
Petroleum jelly
Kodak Band-Aid
Bundaberg
Hoover
Arnott’s
Philadelphia
Crayola
Vaseline
Adapted from Summers et. Al (2005)
Branding strategies
Brand No brand
Manufacturer’s brand Private brand
Individualbrand
Family brand
Individualbrand
Combi-nation
Family brand
Combi-nation
Adapted from Summers et. Al (2005)
Manufacturers’ brands vs. private brands
Manufacturers’ brand
Private brand
The brand name of a manufacturer.
A brand name owned by a wholesaler or a retailer.
Adapted from Summers et. Al (2005)
Generic brand
• A no-frills, no-brand-name, low-cost product that is simply identified by its product category.
Adapted from Summers et. Al (2005)
Individual brands versus family brands
Individual brand
Family brand
Using different brand names for different products.
Marketing several different products under the same brand name.
Adapted from Summers et. Al (2005)
TrademarksTrademark – exclusive right to use a brand.
– Many parts of a brand and associated symbols qualify for trademark protection.
– The mark has to be continuously protected.
– Rights continue for as long as it is used.
Adapted from Summers et. Al (2005)
How services differ from goods
Characteristics that distinguish services– intangibility
– inseparability
– heterogeneity
– perishability.
Adapted from Summers et. Al (2005)
Characteristics of services
Intangibility
Inseparability
Heterogeneity
Perishability
Services that cannot be touched, seen, tasted, heard or felt in the
same manner as goods.
A characteristic of services that allows them to be produced and
consumed simultaneously.
A characteristic of services that makes them less standardised and
uniform than goods.
A characteristics of services that prevents them from being stored,
warehoused or inventoried.
Adapted from Summers et. Al (2005)
Video options:1. Ben and Jerry’s taste and innovation
2. Burton Snowboards: going global
3. Pass
© John Loftus