Unit 3 Week 3 dismiss Key Words. Unit 3 Week 3 interact Key Words.
Unit 3
description
Transcript of Unit 3
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Unit 3By:
Sydney Eaker, Lauren David, Parker Stone, Lauren Wallace, Sarah Neely, and Khiala
Myers
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Product/Service Management3.01 A, B, and C
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Product/Service Management
A marketing function that involves obtaining, developing, maintaining and improving a product.
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Factors affecting Product/Service Management
1. Customer Needs and Wants2. Company Goals and Strategies 3. Cost and Available Resources4. Competition5. Product Itself6. Government Regulation7. Stages in Life Cycle8. Business and Economic Trends
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Benefits Offer products consumers want and
company’s profits increase When developing the right products,
a company can gain new customers When products are well managed
there is less of a chance for failure
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The Role in Marketing Affects positioning of product Improves product success Gives product an image
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3 Main Phases Developing New Products Monitoring Existing Products Eliminate Weak Products
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Product Life Cycle represents the stages that a product
goes through during its life 4 Stages:
1. Introduction2. Growth3. Maturity4. Decline
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PRODUCT LIFE CYCLE What are good examples of the stages?
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Goals of Introduction Stage Increase Product Awareness Get the Customers attention with
promotion Lots of Special Promotions
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Growth Stage Customers are aware of product,
sales increase Companies focus on customer
satisfaction Competition starts from other
companies
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Maturity and Decline Stage Maturity
› The product’s sales level off. More money is spent on competition during this stage.
Decline› Sales start to decline. A company must
decide to alter the product, discount, or discontinue product.
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Technology1. Point-of-Sale Systems
2. Interactive Touch Screen Computer
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Technology3. Interactive TV
4. Customer Relationship Management
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Technology5. Enterprise Resource Planning Systems
6. Internet
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Technology7. Mass customization is a
technologically advanced method that allows businesses to produce products that are specialized for a very few customers.
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Ethical Packaging3.01 D
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Ethical Product Packaging Why do you think companies package
and label their products?› Creates a good impression, Help sell product, and
Communicate benefits
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Packaging Concerns Product Safety
› Glass now plastic› Tamper-resistant packages› Airtight containers for foods› Wasteful packaging› Switching for spray cans and pumps
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Label Information1. Must have name of
manufactures
2. Quantity of contents
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Label Information3. Nutritional Information
4. Health claims are the same on all products; light, fat free, etc.
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Label Information5. Warnings on products like alcohol and
cigarettes
6. How to care for clothes
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Ethical Labeling What happens when a company fails to
inform customers about product risks?1. Company can get sued2. Harm to Customer
Planned Obsolescence› Making products that are known to not last
long, or change, so that people will need to replace them
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3.02
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Competitive Advantage the set of unique features of a
company and its products that are perceived by the target market as significant and superior to the competition
Multiple Products designed to integrate -Competitive Advantage
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Positioning developing a specific marketing mix to
influence potential customers’ overall perception of a brand, product line or organization in general.
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Purpose of Positioning Used to find a place for the product in
the marketplace and distinguish the product from competitors
Actual Position› How the customers see the product
The position and the actual position is the product are the same, IF MARKETING HAS BEEN SUCCESSFUL.
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Relationship between the Target Market and Positioning
The objective is for marketers to position their products to appeal to the desires and perceptions of a target market.
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Relationship between Competition and Positioning
It is important to use positioning to your advantage. You want to position your product so that customers will continue to purchase from you rather than the competition.
The pricing, promotion, product development, and distribution strategies are all planned with an eye toward the competition.
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Market Position unique image of a product or service in
a consumer’s mind relative to similar competitive offerings.
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6 Bases For Positioning:1. Attibute- one way of positioning a
product is to highlight a product feature or attribute.
2. Price and Quality – this position strategy may stress high price as a sign of quality, or emphasize low price as an indication of value.
3. Use or Application – stressing unique uses or applications can be an effective means of positioning a product.
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6 Bases Cont.4. Product User – this positioning strategy
encourages use of a product or service by associating a personality or type of user with the product.
Product Classification – when positioning according to product class, the objective is to associate the product with a particular category of products.
Competitor – sometimes marketers make an effort to demonstrate how they are positioned against the competitors that hold a strong market position.
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Positioning Strategies revolve around 3 areas
Consumer perception – are the images consumers have of competing goods and services in the marketplace.
Competitors in the marketplace – The ideal situation is when consumers perceive a business’ products to be superior to its competitors’ products or services.
Changes in the business environment – organizations need to be aware of changes in the business environment that might affect the position of their products or services.
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Brand Name Should: Describe the product’s benefits and uses Be easy to read, pronounce, and
remember Create appealing images Be distinctive Be adaptable Be legally available for use Be appropriate for packaging and
advertising
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Levels of Brand Loyalty Brand Recognition – is when consumers
become aware of a brand and recognize the brand.
Brand Preference – when consumers prefer to purchase a certain product brand based on their positive experience with the brand.
Brand Insistence – when the consumer insists on “their” brand and will not accept substitutes.
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Brand Strategies Brand Positioning – means the way
consumers see the brand as compared to a competitive brand.
Brand extension – in which an existing brand name is used for a new or improved product line. Starbucks extends its coffee line to include ice cream and candy bars.
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Brand Strategies Cont. Brand licensing - allows one company to
use its brand name, logo, or character for a fee.
For example, NFL Teams allow logo to be used on merchandise
Co-branding. – occurs when companies join forces to increase recognition, customer loyalty, and sales of both brands.
For example, United Airlines and VISA combine brands for a credit card.
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International Branding Marketers must research their brands
to determine whether they would be acceptable in different countries.
How would the brand be pronounced in Italian, Spanish, German, etc.
Is the brand name culturally taboo in certain areas of the world?
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Impact of Internet on Branding
MUST have a web presence to be successful.
Most companies must determine what URLs are available. They need to have web addresses that represent their brands.
It is also more common for companies to promote their product using social media sites such as Facebook and Twitter.
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Forms of Branding A brand is a design, name, symbol,
term or word that distinguishes and identifies a company and/or products or services
A corporate brand represents the entire company or organization
For example, Coca-Cola, Ford, McDonalds, Kraft or Microsoft
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Forms of Branding A product brand represents a
specific product of a company or organization
For example, Diet Vanilla Coke, Big Mac, or Windows XP
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Forms of Branding A private distributor brand, also
called a store brand For example, Radio Shack brand of
batteries, Lowe’s brand of macaroni and cheese
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Trade Character Personified symbol that represents
the brand name
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3.03
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Product Mix All the types of products a company
makes or sells Some companies have different
brands for different markets› Coca-Cola has different drinks for
sparkling beverages, water, juice, performance, coffee, tea, and international flavors.
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Reasons to Narrow Product Mix
Product Width – number of different product lines
CONTRACTING› Ease on management› Cost effective› Simplicity› Consistency
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Reasons to Broaden Product Mix
Product Width – number of different product lines
EXPANDING› Reach all markets› Competitive advantage› Ex: Red Lobster specializes in seafood, but
offers chicken and steak to broaden their product mix.
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Reasons to Deepen Product Mix
Product Depth – number of items offered within each product line
EXPANDING› Variety› QuantityEx: Kohl’s carries various quantities of sizes,
colors, & styles of Levi Jeans.
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Reasons to Offer to Shallow Product Mix
Product Depth – number of items offered within each product line
CONTRACTING› Cost effective› Satisfy small markets
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Importance of Product Mix Businesses must plan their product
mix carefully because they cannot offer all the products that customers may want.
They should be a profitable market for product offered by a company
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Trading Up/Down Trading up: Adding a higher-priced
product to a line to attract a higher-income market and improve the sales of existing lower-priced products.
Trading down: Adding a lower-priced item to a line of prestige products to encourage purchases from people who cannot afford the higher-priced product, but want the status.
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Positioning Product Mix Strategies
Positioning – actions marketers take to create a certain image of a product in the minds of the customers• In Relation to a Competitor• In Relation to a Product Class or Attribute• In Relation to a Target Market• By Price and Quality • Difficult to change
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Ways Lines can be organized
Product Line – group of closely related products manufactured by a business
Product Item – specific model, brand, or size of a product within a lineEx: P&G has over 250 products within 21
product linesDish care is a product line
Cascade, Dawn, Joy, & Ivory are items
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3.04
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Physical Distribution Organizing and moving products
through the channels Logistics = ordering, transporting,
storing, handling and inventory control
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Channel Functions Providing marketing information:
› Companies rely on market research to determine their target markets’ needs and wants
› Ex: small business producing handmade greeting cards
Promoting products:› Can be expensive› Retailers often take a large portion of
promotion responsibilitiesEx: local supermarkets/discount stores
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Channel Functions Cont. Contact Matching Negotiating with the customers:
› Different prices are paid by the wholesaler, retailer and consumers based on negotiation
Physical distribution Financing and risk taking:
› Moving products through a channel costs money› When channel members work together to finance
activities and to assume financial risks, channels will be more effective
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Tasks of Intermediaries-Retailer
Much stronger personal relationship with the consumer
Hold a variety of products Offer consumers credit Promote and merchandise products Price the final product Build retailer ‘brand’ in the high street
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Tasks of Intermediaries-Internet
Sell to a geographically disperse market
Able to target and focus on specific segments
Relatively low set-up costs Use of e-commerce technology (for
payment, shopping software, etc) Paradigm shift in commerce and
consumption
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Horizontal Conflict Occurs between channel members at
the same level› Good, old-fashioned business
competition› Ex: two retailers selling pet supplies
compete to sell to the same target market
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Vertical Conflict Occurs between channel
members at different levels within the same channel› Producers and wholesalers,
wholesalers & retailers, or producers and retailers
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Dual Distribution A manufacturer may sell its products
through multiple outlets at the same time:› Toll-free phone system› Company website› Multiple retailers
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