Impact of Product Decisions on Marketing Mix
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Transcript of Impact of Product Decisions on Marketing Mix
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Session : 6
PRODUCT
Impact on Marketing Plan
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It can be said that a product is acombination of several characteristics-
physical and psychological. How
people personally feel about, orperceive the product is just as
important as the actual physical
characteristics of it.
What is a Product:
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A product is really a bundle of potential
benefits offered to a purchaser.
To make their product distinct from others
the manufacturers identify them to thecustomer, that is, `differentiate', by using
different packaging, colouring etc. and by
emphasizing different benefits oradvantages in their promotion.
Product Differentiation:
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A manufacturer can use the need-oriented segmentation.
Positioning is used for bringing about
differentiation in a manufacturer's
product.
This concept of product positioning canbe done in terms of pricing, contents
and in many other ways.
Product Positioning:
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a toothpaste manufacturer may appealto prevention of `tooth decay', while
another might offer `sociability' in the
sense of preventing bad breath. Stillanother may provide the need to be
`attractive' by emphasizing the
whiteness of the teeth which hisproduct, toothpaste, gives.
For example
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Who is the product aimed at?
What benefitwill customers expect?How does the firm plan toposition
the product within the market?
What differential advantage will the
product offer over their competitors?
When an organization introduces a product
into a market they must ask themselves a
number of questions.
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Kotler suggested that
a product should be viewed in three levels.
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When placing a product within amarket many factors and decisions
have to be taken into consideration.
Product Decisions
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Product designWill the design be the
selling point for the
organization as we have
seen with the iPod, the
new VW Beetle or the
Dyson Ball vacuum
cleaner.
Product Decision
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Product quality
Quality has to
consistent with
other elements of
the marketing
mix. A premium
based pricing
strategy has toreflect the quality
a product offers
Product Decision
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Product features
What features will you
add that may increase
the benefit offered to
your target market?
Will the organization
use a discriminatory
pricing policy foroffering these
additional benefits?
Product Decision
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Product branding
One of the most important decisions a
marketing manager can make is about
branding. The value of brands intodays environment is phenomenal.
Brands have the power of instant sales,
they convey a message of confidence,quality and reliability to their target
market.
Product Decision
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concerned with the combination of
individual products offered within a givenline. The product-line manager supervises
several product managers who are
responsible for individual products in the
line. Decisions about a product line are
usually incorporated into a marketing plan
at the divisional level. Such a plan specifies
changes in the product lines.
Product-line decisions
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(1) considering expansion of a givenproduct line;
(2) evaluating the effects of product
additions and deletions on the
profitability of other items in the line;and
Product-line managers responsibilities:
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(3) considering candidates for deletion
from the product line;
(4) allocating resources to individual
products in the line on the basis of
marketing strategies recommended byproduct managers.
Product-line managers responsibilities:
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Decisions at the first level of product
management involve the marketing mix
for an individual brand/product. These
decisions are the responsibility of abrand manager (sometimes called a
product manager). Decisions regarding
the marketing mix for a brand arerepresented in the product's marketing
plan.
Product-line decisions
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price level,
advertising expenditures for the coming
year,
coupons,trade discounts,
distribution facilities, and
a five-year statement of projected sales
and earnings.
The plan for a new brand would specify
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The plan for an existing product would
focus on any changes in the marketing
strategy. Some of these changes mightinclude the
product's target market,
advertising and promotional expenditures,
product characteristics,
price level, and
recommended distribution strategy.
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Product Decisions
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The width of a product mix refers to
the total number of different productlines of the company. For example,
width = 2 (pasta and pasta sauces).
The length of a product mix refers tothe total number of brands in all of the
companys product lines.
A companys product mix refers to the total
number of products that are offered for
sale. The product mix has certain width,
length, depth and consistency.
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The depth of a product mix refers to the
average number of variants of the
companys products. For example, depth = 4 (threepasta brands, each marketed in two sizes: 3 2 = 6 and 2
pasta sauce brands, each marketed in 1 size:
2 1 = 2 means 6 + 2 = 8/2 = 4).
The consistency of a product mix refers
to how closely related are the companys
productlines in terms of characteristics,
production process, distribution channels
to name just a few.
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Product Service Decisions
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Branding is more than just a businessbuzzword. It has become the crux of
selling in the new economy. Brand in
its simplest form, a brand is a noun.
Brand is a collection of feelings andperceptions about quality, image,
lifestyle and Status .
Branding
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Professor David Jobber identifiesseven main factors in building
successful brands, as illustrated in the
diagram below:
What factors are important in
building brand value?
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Quality is a vital ingredient of a goodbrand. Remember the core benefits
the things consumers expect. These
must be delivered well, consistently.The branded washing machine that
leaks, or the training shoe that often
falls apart when wet will never developbrand equity.
Quality
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Quality
Research confirms that,
statistically, higher quality
brands achieve a highermarket share and higher
profitability that their inferior
competitors.
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Positioning is about the position a
brand occupies in a market in theminds of consumers. Strong
brands have a clear, often unique
position in the target market.
Positioning
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Positioning can be achieved throughseveral means, including brand name,
image, service standards, product
guarantees, packaging and the way in
which it is delivered. In fact,
successful positioning usually requires
a combination of these things.
Positioning
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Masoom Pears
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Repositioning occurs when a brand
tries to change its market position to
reflect a change in consumers tastes.This is often required when a brand
has become tired, perhaps because
its original market has matured or hasgone into decline.
Repositioning
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Pulsar Definitely Male to Digital Biking
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Communications also play a key rolein building a successful brand. We
suggested that brand
positioning is essentially aboutcustomer perceptions with the
objective to build a clearly defined
position in the minds of the target
audience.
Communication
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All elements of the promotional mix
need to be used to develop and
sustain customer perceptions.Initially, the challenge is to build
awareness, then to develop the
brand personality and reinforce theperception.
Communication
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Business strategists often talk aboutfirst-mover advantage. In terms of
brand development, by first-mover
they mean that it is possible for thefirst successful brand in a market to
create a clear positioning in the minds
of target customers before the
competition enters the market.
First Mover advantage
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This leads onto another important factor
in brand-building: the need to invest in
the brand over the long-term. Building
customer awareness, communicating
the brands message and creating
customer loyalty takes time. This means
that management must invest in abrand, perhaps at the expense of short-
term profitability.
Long term perspective
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Finally, management should ensure that
the brand is marketed internally as well
as externally. By this we mean that the
whole business should understand the
brand values and positioning. This is
particularly important in service
businesses where a critical part of the
brand value is the type and quality of
service that a customer receives.
Internal Marketing
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Brands represent enormously valuablepieces of legal property, capable of
influencing consumer behavior, being
bought and sold, and providing thesecurity of sustained future revenues to
their owner. The value directly or
indirectly accrued by these variousbenefits is often called brand equity.
Brand Equity
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A basic premise of brand equity is thatthe power of a brand lies in the minds
of consumers and what they have
experienced and learned about thebrand over time. Brand equity can be
thought of as the "added value"
endowed to a product in the thoughts,words, and actions of consumers.
Brand Equity?
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The sources of brand equity help
managers understand and focus on
what drives their brand equity; the
outcomes of brand equity help
managers understand exactly how
and where brands add value.
Brand Equity
BRAND
Brand Position
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BRANDIMAGE
How the brand
is now perceived BRAND IDENTITY
How strategists want thebrand to be perceived
BRAND POSITION
The part of the brand identity
and value proposition to beactively communicated to atarget audience
Brand Position
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T
HANK
YO
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