Cluster BSBMKG502A & BSBSBM403A

Marketing – Products & Channels week 4

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Check your understanding – review questions pages:

212 – Product and service concepts

241 – Developing and managing products

293 – Marketing channels and logistics decisions

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Contents – week 4 BSBMKG502A

• Team presentations• Product life cycle (Bized)• Product and service concepts (Ch 6)• Developing and managing products (Ch

7)• Channels of distribution (Ch 8)

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Team presentations

1.New product development – success is a sure thing

2.Amazon

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Team presentation

New product development – success is a sure thing

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Team presentation

Amazon

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New product development – key points

1. Marketing strategies during the product life cycle

- Refer to Exhibit 7.5 on page 236

2. Understand your target market and how to deliver to that market with a holistic marketing mix (value proposition) that will appeal to the target market.

3. Scanner based research tracks trends in product sales volume through the product life-cycle.

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Amazon – key points1. In Australia, the Privacy Act stipulates how personal data

can be captured, stored and used in a business environment. Refer to: http://www.privacy.gov.au/ACT/privacyact/

2. Potential customers can easily search and find desired products using the Internet. Web merchants are able to capture, analyse, and store customer information that can enable a personalised value proposition and relationship maximisation.

3. Direct to user is a growing trend that by-passes traditional channels of distribution (e.g. Dell and Amazon). However, consumers maintain a high preference for bricks and mortar channels. A blend has advantages and disadvantages.

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Marketing strategy

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Marketing mix

Managers adjust 4 key variables:• Products and services

• Place – (channels of distribution)

• Promotion (communication)

• Price

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Adapted from Bized www.bized.co.uk

Adapted from Bized www.bized.co.uk

Adapted from Bized www.bized.co.uk

Physical Environment• The ambience, mood or physical

presentation of the environment– Smart/shabby?– Trendy/retro/modern/old fashioned?– Light/dark/bright/subdued?– Romantic/chic/loud?– Clean/dirty/unkempt/neat?– Music?– Smell?

Adapted from Bized www.bized.co.uk

Product Life Cycles

Product Life Cycles

• Product Life Cycle – shows the stages that products go through from development to withdrawal from the market

• The Stages of the Product Life Cycle:– Development– Introduction/Launch– Growth– Maturity– Saturation– Decline– Withdrawal

Product Life Cycle stages

Sales

Time

Development Introduction Growth Maturity Saturation Decline

Adapted from Bized www.bized.co.uk

Product Life Cycles

Sales

Time

Effects of ExtensionStrategies

Adapted from Bized www.bized.co.uk

Product Life Cycle and profits

Sales/Profits

Time

PLC

Losses

Break Even

Profits

Adapted from Bized www.bized.co.uk

Sales

Time

AB C

D

The product portfolio – four products in the portfolio

(1)

(1) ‘A’ is at maturity stage – cash cow. Generates funds for the development of ‘D’

(2)

(2) Cash from ‘B’ used to support ‘C’ through growth stage and to launch ‘D’.

(3) (3) Cash from ‘C’ used to support growth of ‘D’ and possibly to finance extension strategy for ‘B’?

Importance of maintaining a balance of products in the portfolio at different stages of the PLC

Adapted from Bized www.bized.co.uk

Product classifications

Businessproduct

Consumer product

A product used to manufacture other goods or services, to facilitate an organisation’s operations, or to resell to other consumers.

Products that are bought to satisfy an individual’s personal wants.

Adapted from Summers et. Al (2005)

Types of consumer products

Unsoughtproducts

Specialtyproducts

Shoppingproducts

Convenienceproducts

Consumerproducts

Businessproducts

Products

Adapted from Summers et. Al (2005)

Types of consumer products (cont.)

Convenienceproduct

Shoppingproduct

Specialtyproduct

Unsoughtproduct

A relatively inexpensive item that merits little shopping effort.

A product that requires comparison shopping because it is usually more expensive and found in fewer stores.

A particular item for which consumers search extensively and are reluctant to accept substitutes.

A product unknown to the potential buyer or a known product that the buyer does not actively seek.

Adapted from Summers et. Al (2005)

Product items, lines and mixes

Product item

Product line

Product mix

A specific version of a product that can be designated as a distinct offering among an organisation’s products.A group of closely related product items.

All products that an organisation sells.

Adapted from Summers et. Al (2005)

Benefits of product lines

• Why form product lines?– advertising economies– package uniformity– standardised components– efficient sales and distribution– equivalent quality

Adapted from Summers et. Al (2005)

Product line depth

• The number of product items in a product line:– attracts buyers with different preferences– increases sales/profits by further

market segmentation – capitalises on economies of scale– evens out seasonal sales patterns.

Adapted from Summers et. Al (2005)

Branding

Brand name

Brandmark

Brand equity

Masterbrand

That part of a brand that can be spoken, including letters, words and numbers.

The elements of a brand that cannot be spoken.

The value of company and brand names.

A brand so dominant that it comes to mind immediately when a product category, use, attribute or benefit is mentioned.

Adapted from Summers et. Al (2005)

An effective brand name…

• is easy to pronounce

• is easy to recognise and remember

• is short, distinctive and unique

• describes the product, use and benefits

• has a positive connotation

• reinforces the product image

• is legally protectable.

Adapted from Summers et. Al (2005)

Master brands

Photography Adhesive bandages

Rum

Vacuum cleaners

Biscuits

Cream cheese

Crayons

Petroleum jelly

Kodak Band-Aid

Bundaberg

Hoover

Arnott’s

Philadelphia

Crayola

Vaseline

Adapted from Summers et. Al (2005)

Branding strategies

Brand No brand

Manufacturer’s brand Private brand

Individualbrand

Family brand

Individualbrand

Combi-nation

Family brand

Combi-nation

Adapted from Summers et. Al (2005)

Manufacturers’ brands vs. private brands

Manufacturers’ brand

Private brand

The brand name of a manufacturer.

A brand name owned by a wholesaler or a retailer.

Adapted from Summers et. Al (2005)

Generic brand

• A no-frills, no-brand-name, low-cost product that is simply identified by its product category.

Adapted from Summers et. Al (2005)

Individual brands versus family brands

Individual brand

Family brand

Using different brand names for different products.

Marketing several different products under the same brand name.

Adapted from Summers et. Al (2005)

TrademarksTrademark – exclusive right to use a brand.

– Many parts of a brand and associated symbols qualify for trademark protection.

– The mark has to be continuously protected.

– Rights continue for as long as it is used.

Adapted from Summers et. Al (2005)

Identify the differences between services and goods

Learning objective

How services differ from goods

Characteristics that distinguish services– intangibility

– inseparability

– heterogeneity

– perishability.

Adapted from Summers et. Al (2005)

Characteristics of services

Intangibility

Inseparability

Heterogeneity

Perishability

Services that cannot be touched, seen, tasted, heard or felt in the

same manner as goods.

A characteristic of services that allows them to be produced and

consumed simultaneously.

A characteristic of services that makes them less standardised and

uniform than goods.

A characteristics of services that prevents them from being stored,

warehoused or inventoried.

Adapted from Summers et. Al (2005)

Break

Short break (10 minutes)

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Video options:1. Ben and Jerry’s taste and innovation

2. Burton Snowboards: going global

3. Pass

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Assignments before next class

• Prescribed reading for next week• Prepare for case study presentations• Visit resources on the course website

–• Clarify any questions

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