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2
Anything that is offered to the market for
attention, acquisition, use or consumption that
satisfies a want or a need
Product is . . . . .
3
Types of Products
ConsumerProducts
IndustrialProducts
PRODUCTS
Services
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Product Mix and Product LineProduct Mix and Product Line
- A product mix is the set of all products offered for sale by a company
- The structure of a product mix has both width and depth
- Its width is measured by the number of product lines carried
- Its depth by the variety of sizes, colors, and models offered within each product line
- A product line is a broad group of products, intended for essentially similar uses and having similar physical characteristics
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Product Items, Lines, and Mixes
Product ItemProduct Item
Product LineProduct Line
Product MixProduct Mix
A specific version of a product that can be designated as a distinct offering among an organization’s products.
A specific version of a product that can be designated as a distinct offering among an organization’s products.
A group of closely-related product items.
A group of closely-related product items.
All products that an organization sells.
All products that an organization sells.
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Product Mix and Product LineProduct Mix and Product Line
Product Mix - Breadth and Depth in a Lawn and Garden Store
Gillette’s Product Lines & Mix
Gillette’s Product Lines and Mix http://www.gillette.com/
Width of the product mix
Blades and Writingrazors Toiletries instruments Lighters
Mach 3 Series Paper Mate CricketSensor Adorn Flair S.T. Dupont Trac II ToniAtra Right GuardSwivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry LookTwin Injector Dry Idea Techmatic Brush Plus
Dep
th o
f th
e p
rod
uct
lin
es
Product Line and Product Mix
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Product-Mix StrategiesProduct-Mix Strategies
- To be successful in marketing, producers and middlemen need carefully planned strategies for managing their product mixes
- There are several product-mix strategies:
- positioning the product
- product-mix expansion
- alteration of existing products
- product-mix concentration
- trading up and trading down
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Product-Mix StrategiesProduct-Mix Strategies
Positioning the Product
- Positioning is (again!) about bringing attention to products and differentiating them from similar ones
- Several major positioning strategies can be found:
- Positioning in relation to a competitor
- Positioning in relation to a product class or attribute
- Positioning by price and quality
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Product-Mix StrategiesProduct-Mix Strategies
Product-Mix Expansion
- Product-mix expansion is accomplished by increasing the depth within a particular line and/or the numbers of lines a firm offers to customers
- Line extension: A company adds a similar item to an existing product line with the same brand name
- Mix-expansion: A company adds a new product line to its present assortment (the new line may be related or unrelated to current products, it may also carry one of the company’s existing brand names or may be given an entirely new name)
Brand equity has to be taken into consideration!
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Product-Mix StrategiesProduct-Mix Strategies
Alteration of Existing Products
- Rather than developing a completely new product, management might do well to take a look at the organization’s existing offerings
- Product alteration: Improving an existing product
- Product alteration can be more profitable and less risky than developing a completely new one
- Eg Lifebuoy +, Zen Estillo New & Improved
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Product-Mix StrategiesProduct-Mix Strategies
Product-Mix Contraction
- Product-mix contraction: Carried out either by eliminating an entire line or by simplifying the assortment within a line
- The intended result of product-mix concentration is higher profit from fewer products
- As a result, many organizations now have fewer product lines, and the remaining lines are thinner and shorter
- Eg Rexona , Maruti 1000
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Product-Mix StrategiesProduct-Mix Strategies
Trading Up and Trading Down
- The strategies of trading up and trading down involve a change in product positioning and an expansion of the product line
- Trading up: Adding a higher-price product to a line in order to attract a broader market, the new product’s prestige should help the sale of the existing lower-price products eg Maruti SX4,
- Trading down: Adding a lower-price product to a company’s product line, the firm expects that people who cannot afford the original higher-price product will buy the lower-price one, Honda Jazz, Skoda Fabia
Leveraging Brand Equity
One of the most important changes in the market is the proliferation of extensions.
Line Extension Strategy
When a brand is used to brand a new product that targets a new market segment within a product category currently served by the parent brand.
Examples:Coca-Cola dietColgate for Kids
Line Extension Strategies
Product Sizes
Bisleri 1.1 Ltr
Bisleri .5Ltr
Bisleri 1.2Ltr
Bisleri 1.5 Ltr
Bisleri 5Ltr
Line Extension Strategies
Colours
Flavours
Ingredients
Sunsilk Yellow
Sunsilk Pink
Sunsilk Black
Kissan Squash Orange
Kissan Squash Lemon
Colgate Herbal
Colgate Gel
Colgate Namak
Line Extension Strategies
Consumer Need
Dove Shampoo-
Normal Hair
Coloured
Damaged Hair
Essential
Balance
Line Extension Strategies
FormVim Bar
Vim Liquid
Vim Powder
Line Extensions
Price
Quality
Downwar
d
Stretch
Upward
Stretch
Two - w
ay st
retch
MACH 3 TURBO
PRESTO
Effort to use a successful brand name to introduce a new product into a different product category.
Examples: Nike Shoes: Apparels, Bags, Sunglasses
Park Avenue: Shirts, Shaving Creams, Shirts, Belts, Perfumes, Soaps & Razors
Brand Extension Strategy
BRAND STRATEGY DECISIONS
Product Category
Existing New
BrandName
Existing
New
Line
ExtensionBrand
Extension
Multibrands New Brand
Names
Types Of Extensions
• Companion product
• Colgate Dental cream ---------- Colgate Tooth Brush
• Gillette Razors -------- Gillette Blades ..........Gillette Shaving Creams--------- Gillette After Shave
Types Of Extensions
• Customer Need
Johnson's baby Talc
Johnson's baby Oil
Johnson's baby
cream
Johnson's baby
Shampoo
Johnson's Nappy Pads
Types Of Extensions
• Company Expertise
Honda Cars
Honda Scooters
Honda Lawn
mowers
Types Of Extensions
• Brand Distinction
Parashute
Hair Oil ShampooCooking
oilCream
Baby Soap Baby oil
Types Of Extensions
Brand Image or Prestige
Steel, Automobile, Heavy Vehicles, Watches, S/ W Development, Training,
Sub-Branding Strategy
Using a new brand name in conjunction with a family brand name to introduce new products.
Examples:
• Sony Vaio• Colgate Total• Levi’s Dockers
Co-Branding/Brand Alliance Strategies
When two or more different brand names are attached to a product.
Examples:
• Compaq - Intel (“Intel inside”)• Citibank Jet Privilage card
Licensing
• Involves contractual arrangements whereby firms can use names, logos, characters, and other facets of other brands to market their products.
• Essentially, a firm is “renting” another brand to contribute to the brand equity of their own product.
Advantage of brand extensions
• Help reduce cost and speed of new products/brands
• Provide feedback to the parent brand
• Can confuse or frustrate consumers
Disadvantages of brand extensions
• Retailers may resist• Damage to parent brand image• Reduce sales of parent brand• Reduce identification of brand with
any one category• Can dilute brand meaning• Company becomes less innovative
Do we extend the parent brand ?
• Do consumers have some positive associations about the parent brand in memory ?
• Will these positive associations be evoked by the brand extension ?
• Will negative associations be transferred from the parent brand ?
• Will negative associations be created by the brand extension ?
Steps in successful brand extension
• 1. Define consumer knowledge about the brand (brand schema)
• 2. Identify possible brand extensions based on parent brand associations and overall ‘fit’ of extension to parent brand
• 3. Evaluate the potential of possible brand extensions: Salience of parent brand associations Favourability of inferred extension associations Uniqueness of inferred extension associations
Steps in successful brand extension
• 4. Evaluate possible brand extension feedback: How compelling is the extension ? How relevant is the extension ? How consistent is the extension ? How strong is the extension ?
• 5. Consider possible competitive advantages as perceived by consumers
• 6. Design marketing campaign to launch brand extension
• 7. Evaluate brand extension success and effects on parent brand equity
Possible Extensions for the Nivea Brand
NiveaCream
BRAND DEFINITIONS RELATED CATEGORIESmoisturizer
lotion
medicinal
purity
body care
pump bottle
fragrance
Soap - face cream - skin cream
sunburn - after-shave - baby
antiseptic - first-aid - hemorrhoid cream
cotton - gauze - sterile pads
emery boards - muscle toner - cotton swabs
liquid hair gel – hair detangler glass cleaner
perfume - room deodorizer - deodorant