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Unit -3
Product Planning
Today's Discussion
• Introduction to product planning.
• Key terms used
• Types of product development projects
Why It’s Important?
• Product planning allows a business to make or sell products that are wanted by customers.
• Product planning also is used to design • Product planning also is used to design appropriate marketing programs that help create increased sales and profitopportunities.
Key Terms
• Product planning
• Product mix
• Product line
• Product width
• Product modification
• Product Life Cycle
• Nontraditional
Product Life Cycle-• Product width
• Product depth
Product Life Cycle-
fads, trends, niche &
seasonal items
• Product Positioning
Product Planning
• Product planning involves making decisions
about those features that are needed to sell a
business’s products, services, or ideas.
• These decisions relate to product features, such • These decisions relate to product features, such
as packaging, labeling, and branding, as well as
the services, such as product warranties,
necessary to support the produce.
Product Mix
• Product mix includes all the different products that a company makes or sells.
• Stores need to offer a good selection of • Stores need to offer a good selection of merchandise. Adding more products, though, may not result in increased sales in those products can take away from existing sales.
Product mixincludes all the
different
products that a
company
makes or sells.
Product Mix
makes or sells.
A company like Frito Lay is able to succeed while carrying a large product mix.
Product Items and Lines
• A product line is a
group of closely
related products
manufactured and/or
• Examples include all
the car models
produced by the
Saturn division of
General Motors, , all manufactured and/or
sold by a business. General Motors, , all
the cereals produced
by Kellogg’s, and all
the computers
produced by IBM.
What is my Target Market?
• Similar businesses often have different images and serve different market. Because of this, they also offer different product mixes.
• What is the primary target market for this store?• What is the primary target market for this store?
Product MixThe width and depth of product lines define
product mix.
Width of the Gillette Product Mix
Blades and Razors Toiletries Writing Intruments LightersProduct
MACH 3 Series Paper Mate Cricket
Sensor Adom Flair S.T. Dupon
Trac II Toni
Atra Right Guard
Swivel Silkience
Double-Edge Soft and Dri
Lady Gillette Foamy
Super Speed Dry Look
Twin Injector Dry Idea
Techmatic Brush Plus
Depth of
product
line
Product Width &Product Depth
• Product width refers to the number
of different product
lines a business
• Product depthrefers to the number
of product items
offered within each lines a business
manufactures or sells.
• A retailer that sells
several brands of
jeans such as Levi’s
and Guess? is
demonstrating product
width.
offered within each
product line.
Product Mix Strategies
• A product mix strategy is the plan for how the business determines which products it will make or stock.
• Some businesses develop completely new products to add to their existing product lines. products to add to their existing product lines. Others expand or modify their current productlines.
• To make these decisions, a business must take and objective look at sales as well as other
factors such as current trends.
Product Mix
Product Mix
Sustaining Product Sales
The Product Life Cycle
A product like cycle represents the stages that
a product goes thorough during its life.
• There are four(five) stages of the life cycle: introduction,
growth, maturity, and decline(decision point).
• As each stage in the product life cycle is reached,
marketers must adjust their product mix and their
marketing strategies to ensure continued sales.
A Typical Product Life Cycle
A Typical Product Life Cycle
Products tend to go through five stages:
1. Introduction
2. Growth2. Growth
3. Maturity
4. Decline
5. Decision Point
A Typical Product Life Cycle
Introduction stage– cost high
– sales volume low
– no/little competition - competitive – no/little competition - competitive manufacturers watch for acceptance/segment growth
– losses
– demand has to be created
– customers have to be prompted to try the product
A Typical Product Life Cycle
Growth stage
– costs reduced due to economies of scale
– sales volume increases significantly
– profitability– profitability
– public awareness
– competition begins to increase with a few new
players in establishing market
– prices to maximize market share
A Typical Product Life Cycle
• Mature stage– costs are very low as you are well established in
market & no need for publicity.
– sales volume peaks
– increase in competitive offerings – increase in competitive offerings
– prices tend to drop due to the proliferation of competing products
– brand differentiation, feature diversification, as each player seeks to differentiate from competition with "how much product" is offered
– very profitable
A Typical Product Life Cycle
• Decline or Stability stage – costs become counter-optimal
– sales volume decline or stabilize
– prices, profitability diminish
– profit becomes more a challenge of
production/distribution efficiency than
increased sales
• Decision Point –Drop product?
Nontraditional Product Life Cycle
Some products do not align with those in the traditional product life cycle.
• Fad :A product, service or idea that is
extremely popular for a very brief period of
FAD
extremely popular for a very brief period of
time, and then becomes unpopular just as
quickly.
• Example -
Nontraditional Product Life Cycle
Some products do not align with those in the traditional product life cycle.
Trends : A mass movement toward a style or
value and can result in a number of products
TREND
value and can result in a number of products
that take on a traditional product life cycle.
Nontraditional Product Life Cycle
• A niche is a small section of
the market that a busines dominates. Because this market is so small, there is little competition.
• Example-Bakery that only sells glutten • Example-Bakery that only sells glutten
free items.
• For seasonal items the
consumer demand changes with
the time of year. Sales will peak in
one season and decline at other
times.These seasonal shifts do
not align with those in the
traditional product life cycle. • Examples- Halloween costumes are not
popular in December. Christmas trees and snow blowers are not popular in August.
Nontraditional Product Life Cycle
Some products do not align with those in the traditional product life cycle.
• Niche Markets
• Seasonal Markets
Types of product development
projects• New product platforms
• Derivatives of existing product platforms
• Incremental improvements to existing product platformsproduct platforms
• Fundamentally new products
