Strategic Marketing EBMA 3715 Unit 6 & 7 (Chapter 6 & 7)
Transcript of Strategic Marketing EBMA 3715 Unit 6 & 7 (Chapter 6 & 7)
PRODUCT DECISIONSCHAPTER 6
Have you come across
any NEW PRODUCT
DEVELOPMENTS
recently?
these
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What is a Product (pg.164)‘A product is a physical good or service which is obtained by the consumer and which has the aim of
satisfying the needs of the consumer as a result of the product’s direct use, with additional factors, services and perceptions of the product such as being useful, desirable or convenient.’
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Actual, physical product which is offered to the consumer. E.g. design, features, brand, quality.
Figure 6.1(pg. 165)Five Product Levels
Using each
level to add
more customer value
Production ImagePotential Product
Augmented Product
Tangible Product
CORE PRODUC
T
Dominant benefit the user expects.
Physical & non-physical “extra’s” that add value. E.g. Delivery, installation, guarantees
Potential Developments & Adjustments
How the product is perceived by consumers
?
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Actual, physical product which is offered to the consumer. E.g. design, features, brand, quality.
Figure 6.1(pg. 165)Five Product Levels
Using each
level to add
more customer value
Production ImagePotential Product
Augmented Product
Tangible Product
CORE PRODUC
T
Dominant benefit the user expects.
Physical & non-physical “extra’s” that add value. E.g. Delivery, installation, guarantees
Potential Developments & Adjustments
How the product is perceived by consumers
Identify how the 5 product levels were implemented by the “Smart Racket”:
PRODUCT/ BRAND
PRODUCT/ BRAND
IF YOU HAD TO BE A
WHICH WOULD YOU CHOOSE? WHY?
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The Meaning of Brands (pg. 181)
A name, symbol, slogan or design that is created with the aim of identifying a seller, manufacturer, provider of a product or service, or the product or service itself.
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Types of New Products (pg. 192)
NEW-TO-THE-WORLD PRODUCTS
NEW-TO-THE-MARKETER PRODUCTS
LINE EXTENSIONS
REPOSITIONED PRODUCTS
IMPROVED PRODUCTS
LINE EXTENSIONS
Improvements
Improvements
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THE NEW PRODUCT DEVELOPMENT PROCESS (pg. 193)
THE NEW PRODUCT DEVELOPMENT PROCESS:1.Idea generation2.Idea screening3.Concept testing4.Business analysis 5.Product development6.Test marketing7.Commercialisation8.Review of market performance
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IDEA GENERATION (pg. 195) Customers
Competitors
Employees and R&D staff
Top Management
IDEA SCREENING
Marketing FactorsProduction Factors
Development Factors
Financial Factors
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THE NEW PRODUCT DEVELOPMENT PROCESS (pg. 193)
THE NEW PRODUCT DEVELOPMENT PROCESS:1.Idea generation2.Idea screening3.Concept testing4.Business analysis 5.Product development6.Test marketing7.Commercialisation8.Review of market performance
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Figure 6.10 (pg. 204)Category of Adopters:
Differences in peoples readiness to try a new product
Address the five characteristics of acceptance:
-RELATIVE ADVANTAGE - Emphasise the advantage of using a product.
-COMPATIBILITY- Match the product with consumer’s values and
experiences
-COMPLEXITY- Make product user-friendly
-DIVISIBILITY- Use samples, demonstrations and free offers.
-COMMUNICABILITY- Beneficial results of product should be observed.
Page 206-216
The Product Life Cycle
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INTRODUCTION Phase (pg. 210)
LOW sales, LOW Profits and HIGH costs
Innovative products: No direct competition
Difficult to persuade retailers to carry the product.
Customers: Innovators
Inform potential customers Create Awareness
Induce product trial 4P’s Strategies (pg.
211) Rapid skimming strategy Low skimming strategy Rapid penetration strategy Slow penetration strategy
CHARACTERISTICS STRATEGIES
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GROWTH Phase (pg. 212)
Rapid increase in sales and profits due to:
Increased awareness, trial and satisfaction.
New competitors enter, attracted by the opportunities: 'Me too' products
Improved operation costs and methods
Brand loyalty comes into play Build Brand loyalty
Customers: Early adopters
PRODUCT DECISIONS: Service/Support Strategy
becomes important: after-sales service, expert advice.
DISTRIBUTION DECISIONS: Expand market coverage
Maximum exposure Prevent delays
PRICE DECISIONS: Slight/ drastic price reductions
PROMOTION DECISIONS: Create secondary demand Inform, remind and convince
them to buy
CHARACTERISTICS STRATEGIES
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Strategies: MATURITY Phase (pg. 335)
This phase presents major challenges for marketers: Reduced prices and increased
marketing costs lead to reduced profits
Increased competitive activity Saturated market penetration Brand switching occurs Product differentiation,
possible modifications and/or range expansion must be considered
Use marketing communications to: Emphasize differentiation and/ or
improvements
Retain the existing marketing strategy
Retaining the current product and revise other marketing instruments
1. Changing price2. Changing market
communication3. Changing distribution4. Changing price, marketing
communication and distribution
Changing all the marketing instruments
Product differentiation – improved quality, improved product characteristics, improved styling
Product range extensions – extended product range
Other marketing instruments
CHARACTERISTICS STRATEGIES
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Strategies: DECLINE Phase (pg. 335)
Shift in consumer tastes and/or technological developments
Declining sales and profits- despite marketing efforts
Customers: Laggards Management needs to
decide: Withdrawing marketing support
and leaving the product to run its own course naturally
Eliminating the product Phased withdrawal Selling or contracting out
Continue with the existing marketing strategy
Revise existing marketing strategy partly or entirely
Withdraw product from all markets
CHARACTERISTICS STRATEGIES
The Many
Parts of the
Product &
Brand Puzzle
Types of
Products
Product Line & Mix
Decisions
Product Line
Decisions
Benefits of Branding
Types of
Brands
Packaging &
Labelling
TOPIC 1: CLASSIFYING PRODUCTSExplain the following product concept/s and provide as many South
African examples as possible (pg. 168-170)Sub-Topic Explanation SA Examples
Durable goods
Nondurable goods
Services
REVIEW YOUR TOPIC…
REVIEW HOW YOU WILL BE ASSESSED…
READ AND SUMMARISE…
Consumer products van be classified as…
DURABLE
CONSUMER EXPECTS:
A product that can be used over a LONG period of time: at least 3 years!
BUSINESSES AIM:Big purchase= Big support
NON-DURABLE
CONSUMERS EXPECT:
A product that can be used/consumed over s
SHORT period.
The benefits of these goods fade after one of
few uses.
BUSINESSES AIM:Create HABIT
SERVICES
CONSUMERS EXPECT:
100% intangible offering
BUSINESSES AIM:
Create tangible cues to make service offering
stand out.
Most Tangible Most Intangible
Durable
Non-DurableCreate a HABIT
ServicesCreate Tangible
Cues
Group Leaders to come to the
front to pick a topic for next Wednesday’s presentation
session
Visit Blackboard for more
information
Bring your study guide along