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PRODUCT DECISIONS
Product Line Decisions: Product MixProduct Line Decisions: Product Mix
WidthWidth• Product mix: set
of all product lines# product lines# product lines (3)
Adapted from Kotler, McDougall and Picard, p.360
Detergent ShampooSoap– Width: # of product lines
– Length: # of products in lines
– Depth: # of versions of each product carried
– Consistency: how closely related the product lines are
A B C
11-3
• Product Mix DecisionsProduct Mix Decisions – A firm may lengthen or widen its product mix– A Company may decide to add variations that
will attract new users– A product may be pruned or altered
Two-Way Product-Line Stretch: Marriott Hotels
QualityEconomy SuperiorStandard Good
Pri
ceP
rice
High
Above AboveAverage
ge
Average
Low Fairfield Inn(Vacationers)
Courtyard(Salespeople)
Marriott(Middle
managers)
MarriottMarquis
(Topexecutives)
TENSATOR :THE INNOVATOR
• Tensator :small company ,not known for its innovation. • The company's Sales and Marketing Director Terry Green stated that ‘I'm
a very firm believer that innovation doesn't need to be revolutionary. There's nothing my company has done that couldn't be done by anyone else'.
• Tensator is in a light engineering business which manufactured the Constant Force Spring, a device used in the manufacture of car seat belts throughout Europe.
• In 1978 , the CEO put forward plans for the use of the Constant Force Spring in the production of queuing barriers for supermarkets and banks, etc.
• He persuaded the company to focus on this new product idea.• Research was undertaken where customers, current and potential, were
asked to give opinions on the viability of such a product and how it could improve on the products that were currently available.
TENSATOR THE INNOVATOR
• Tensabarrier was launched. By 1996, the product was being exported to thirty six countries and accounted ‑for £3 million turnover.
• There are now a variety of Tensabarriers in a variety of shapes and forms. There is a bolt down barrier and a ‑special checkout version which incorporates an electronic movement sensor to prevent theft.
• Tensator launched thirteen new products in the years 1995 and 1996. Total turnover had risen more than threefold since 1988 to £10 million,
What are new products????
Stages in the new-product process
Marketing information and methods used in the new-product process
Mattel’s Barbie
Why should laboratory and safety tests be done?
Why do new products fail?
• One study estimated that as many as 80% of new• consumer packaged products failed.• Only about 40% of new consumer products are• around 5 years after introduction• WHY????????????????????????• Overestimated market• Poor design• Incorrect positioning• Error in pricing• Poor marketing• Cost overrun• Competition
LIST OF FAILED PRODUCTS?????
The product lifecycle (PLC)
• Products need managing throughout their working lives.
• This requires deciding:• – What products should be created.• – The best time to launch them and introduce them to
the public.• – How to capitalise on a product’s strengths and iron
out any weaknesses.• – When an older product is past its prime and needs
modification or withdrawal from the market
Stages in PLC
Task
• Identify products at different stages of the life cycle