Chapter-5-Product-Life-cycle

Chapter5ProductTheBestWaytoholdcustomersistoconstantlyfigureouthowtogivethemmoreorless.ThelearningobjectivesProductProductclassificationProductlife-cyclestrategiesNew-productDevelopmentProduct-linedecisionBrandsdecisions1.Whatisproduct?Anythingthatcanbeofferedtoamarketforattention,acquisition,use,orconsumptionthatmightsatisfyawantorneed.ComponentsoftheMarketOfferingValue-basedpricesServicesmixandqualityProductfeaturesandqualityAttractivenessofthemarketofferingServiceandExperienceService—Anyactivityorbenefitthatonepartycanoffertoanotherthatisessentiallyintangibleanddoesnotresultintheownershipofanything.DiscussionDisneystarbucksFiveProductLevelsPotentialproductAugmentedproductExpectedproductBasicproductCorebenefitLevelsofProductCoreproductActualproductAugmentedproductCoreproductCorebenefitorserviceActualproductQualitylevelFeaturesDesignPackageBrandnameAugmentedproductInstallationAfter-saleserviceWarrantyDeliveryandcreditAttachedbenefit2.ProductclassificationsConsumerproductsIndustrialproductOrganizations,persons,places,andideasConsumerproductConvenienceproductsShoppingproductsSpecialtyunsoughtSpecialtyProductsUnsoughtProductsShoppingProductsBuylessfrequentlyGatherproductinformationFewerpurchaselocationsComparefor:•Suitability&Quality•Price&StyleConvenienceProductsSpecialpurchaseeffortsUniquecharacteristicsBrandidentificationFewpurchaselocationsNewinnovationsProductsconsumersdon’twanttothinkabout.Requiremuchadvertising&personalsellingBuyfrequently&immediatelyLowpricedManypurchaselocationsIncludes:•Staplegoods•Impulsegoods•EmergencygoodsConsumer-GoodsClassificationIndustrialProductMaterialandpartsCapitalitemsSuppliesandservices3.ProductLifeCycles(PLC)Thecourseofaproduct’ssaleandprofitoveritlifetime.Itinvolvesfivedistinctstages:productdevelopment,introduction,growth,maturity,anddecline.Sales&ProfitLifeCyclesIntroductionGrowthMaturityDeclineTimeSales&profits($)IntroductionstageTheproductlife-cyclestageinwhichthenewproductisfirstdistributedandmadeavailableforpurchase.Sales&ProfitLifeCyclesIntroductionGrowthMaturityDeclineTimeSales&profits($)FourIntroductoryMarketingStrategiesRapid-skimmingstrategyRapid-penetrationstrategySlow-penetrationstrategySlow-skimmingstrategyPriceLowHighPromotionHighLowGrowthstageTheproductlife-cyclestageinwhichaproduct’ssalesstartclimbingquickly.MaturitystageThestageintheproductlifecycleinwhichsalesgrowthslowsorlevelsoff.Modifythemarket,theproduct,andthemarketingmix.DeclineStageTheproductlifecyclestageinwhichaproduct’ssalesdeclineDiscussionPleaselistthemarketingobjectivesandstrategiesforeachstage.2.whatstrategicoptionareopentothemarketersofproductsinthematurestageoftheproductlifecycle?3.whichproductlife-cyclestage,ifany,isthemostimportant?whichstageisriskiest?whichstageappearstoholdthegreatestprofitpotential?Becertaintoexplainthethinkingbehindeachofyouranswer.4.TheinternationalPLC5.new-productdevelopmentWhatisnewproduct?MajorstagesinnewproductdevelopmentWhatisnewproduct?OriginalproductsProductimprovementsProductmodificationsNewbrandsthatthefirmdevelopsthroughitsownresearchanddevelopmenteffortsMajorstagesinnewproductdevelopmentIdeagenerationIdeascreeningConceptdevelopmentandtestingMarketingstrategiesBusinessanalysisProductdevelopmentTestmarketingCommercializationNewProductDevelopmentProcessIdeaGenerationConceptDevelopmentandTestingMarketingStrategyDevelopmentIdeaScreeningBusinessAnalysisProductDevelopmentMarketTestingCommercializationProbabilityofSuccessProbabilityoftechnicalcompletionOverallprobabilityofsuccess=ProbabilityofcommercializationgiventechnicalcompletionXProbabilityofeconomicsuccessgivencommercializationXConceptDevelopment&Testing1.DevelopProductIdeasintoAlternativeProductConcepts2.ConceptTesting-TesttheProductConceptswithGroupsofTargetCustomers3.ChoosetheBestOneHighprice/oz.LowincaloriesLowprice/oz.HighincaloriesProduct&BrandPositioning(a)Product-positioningmap(breakfastmarket)ExpensiveSlowInexpensiveQuickBaconandeggsPancakesInstantbreakfastColdcerealHotcerealb)Brand-positioningmap(instantbreakfastmarket)BrandCBrandBBrandAConjointAnalysisBrandname----------Utility1.00|||K2RGloryBissellRetailPriceUtility----------1.00|||$1.19$1.39$1.59GoodHousekeepingSeal?Utility1.0----------0||NoYesUtilityMoney-BackGuarantee?1.0----------0||NoYesConsumer-GoodsMarketTestingSales-WaveResearchTestofferingtrailtoasampleofconsumersinsuccessiveperiods.SimulatedTestMarketTestinasimulatedshoppingenvironmenttoasampleofconsumers.StandardTestMarketFullmarketingcampaigninasmallnumberofrepresentativecities.ControlledTestMarketAfewstoresthathaveagreedtocarrynewproductsforafee.21/2%Innovators131/2%Earlyadopters34%Earlymajority34%Latemajority16%LaggardsTimeofadoptioninnovationsAdopterCategorizationoftheBasisofRelativeTimeofAdoptionofInnovations6.product-linedecisionProductmixProduct-lineanalysisProduct–linelengthProductmix(assortment)Thesetofallproductsanditemsthataparticularselleroffersforsale.Acompany’sproductmixhasacertainwidth,length