Product PlanningSustaining Product Sales

Chapter 30.2

Objectives

• Identify the four stages of the product life cycle

• Describe product positioning techniques

The Product Life Cycle• Represents the stages that a product goes

through during its life

• The four stages are:– Introduction– Growth – Maturity– Decline

Product Life Cycle• Name the stages:

Introduction Stage• Major goal: – Draw the customer’s attention to the new product

by increasing product awareness and promotions• Costs are high during this stage• Usually the least profitable stage

PowerMat - How It Works

Growth Stage• Prosperous stage• Much of the target market knows about and

buys the product• Advertising is focused on customer

satisfaction• To maintain sales growth, new models or

product modifications may be introduced to stay ahead of competition

Maturity Stage• Sales level off or slow down• Most of the target market own the product• Marketing dollars are spent on fighting off

competition– As advertising expenses climb, the company may

have to decide if it can continue to improve the product to gain sales.

Decline Stage• Sales fall• Profits may reach the point where they are

smaller than costs• Management will need to decide how long it

will continue to support the product.

Decline Stage• Drop the product

• Sell or license the product to risk-taking companies

• Recommit to the product line• Discontinue the product• Regionalize the product to areas where the

product sells well• Modernize or alter the product

OR

Why are companies reluctant to delete products?

– Companies spend large amounts of money to develop and promote consumer and industrial products, so they are reluctant to delete products.

PLC Activity• Product Life Cycle– Groups of Two– On the sheet provided find products that fit into

each category. Provide a picture of the product too!

INTRODUCTION GROWTH MATURITY Decline

POWERMAT iPhone DVD players Check Books

Apple Magic Mouse Smart Car MP3 Players VCR players

Heine’s Ketchup Potato Chips

Hybrid SUV 100 Calorie Packs Typewriters

The Fizz Dark Chocolate M&Ms

Personal Computers

Nilla Wafers

Product Positioning• Positioning a product to project a

certain image – Set the product apart from the

competition– Strategies• Position by price and quality• Position by features and benefits• Position in relation to competition• Position in relation to other products in a line

What determines how a company positions its product?

• To position their products, businesses identify customer needs and determine how their products compare to the competition

Positioning by Price and Quality

• By offering the lines below, companies are able to give each of their products a unique position in the marketplace.

–Economy lines–Mid-priced lines–Luxury Lines

• High price = quality• Low price = value

FORD MOTOR COMPANY:Focus is positioned as a economical compact carMustang is positioned as a high performance car

Positioning by Features and Benefits

• Products are associated with a feature or benefit

– Overtime LLC• Personal care products for boys 9-12• Line includes shampoo, deodorant, body wash, hair gel• News Release

Positioning in Relation to the Competition

• Some businesses position their products to compete directly with the products of other companies.– Not always a good idea to compete head to head

with the industry leader

• Southwest Airlines

Positioning in Relation to Other Products in a Line

• Individual products may be positioned in relation to other products in the same line

Blackberry

Category Management• Process that involves managing product

categories as individual business units– A category may include a group of product lines

with the same target market and distribution channels.

– A category manager is responsible for all the brands of one product category such as• Foods• Beverages• Health and Beauty

Category Management• Planogram– Computer-developed diagram that shows retailers

how and where products within a category should be displayed in a shelf or at individual stores

After Thanksgiving Break…

• Chapter 30 Quiz• Chapter 30 Test• Chapter 31 – Branding, Packaging, & Labeling– Important chapter– Read, notes, & extension activities– Use your time wisely!!

Extension Activity

• Consider your “personal brand”– This is another INDEPENDENT activity!– Grab a DECA Dimensions Magazine and read the

following articles while answering the corresponding questions from a handout:• Article 1: “Is This For Me?” pg. 10• Article 2: “The Seven Habits of Highly Successful

Networkers” pg. 19 - 21• Article 3: “The Six C’s of Leadership” pg. 22 - 24