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PRODUCT PRODUCT PLANNING AND PLANNING AND DEVELOPMENTDEVELOPMENT
Marketing Co-Op
PRODUCT PLANNINGPRODUCT PLANNINGMaking decisions about features that
are needed to sell a business’s products, services or ideas
Product FeaturesProduct Features
Packaging
Labeling
Branding
Services
Warranties
PRODUCT PRODUCT PLANNINGPLANNING
Allows a business to Coordinate existing products and
features Add new products Delete products that are no longer
attracting customers
PRODUCT MIXPRODUCT MIX
KRAFT Company:KRAFT Company: Kraft
Kool-Aid
Nabisco
Maxwell House
Oscar Mayer
Post Cereal products
All the different products that a company makes or sells
PRODUCT MIX PRODUCT MIX ANOTHER EXAMPLEANOTHER EXAMPLE
SC Johnson
PRODUCT MIX PRODUCT MIX ANOTHER EXAMPLEANOTHER EXAMPLE
Procter and GambleProcter and Gamble
PRODUCT MIXPRODUCT MIXTo determine a company’s product
mix, a business needs to identify: Its target market Its competitors The image it wants to project
The product mix must be The product mix must be periodically reviewed to determine periodically reviewed to determine if products need to be expanded, if products need to be expanded, modified, decreased, or eliminatedmodified, decreased, or eliminated
PRODUCT LINESPRODUCT LINESProduct line – a group of closely related
products sold by a business
PRODUCT ITEMSPRODUCT ITEMS
Product item – a specific model, brand, or size of a product within a product line
PRODUCT WIDTH PRODUCT WIDTH AND DEPTHAND DEPTHThe width and depth of a
company’s product offerings defines the product mixproduct mix
PRODUCT WIDTHPRODUCT WIDTHThe number of different product lines
sold by one manufacturer
Product DepthProduct DepthThe number of product items
within each specific product lineFrom one brand name
GILLETTE PRODUCT MIX GILLETTE PRODUCT MIX WIDTH VS. DEPTHWIDTH VS. DEPTH
Oral CareOral Care Blades & Blades & RazorsRazors
Personal Personal CareCare
BatteriesBatteries ApplianceAppliancess
Width
Dep
th
PRODUCT MIX PRODUCT MIX STRATEGIESSTRATEGIES
Develop completely new products for existing lines
Drop existing product to allow room for new products
Expand or modify existing product lines
PRODUCT LIFE CYCLEPRODUCT LIFE CYCLE A representation of the stages that a
product goes through during its life
There are 4 stages of the life cycle
Introduction
Growth
Maturity
Decline
PRODUCT LIFE CYCLEPRODUCT LIFE CYCLEDollarsDollars
TimeTime
Profit
Sales
IntroductionIntroduction
GrowthGrowth
MaturityMaturity
DeclineDecline
ObsoleteObsolete
MANAGING THE MANAGING THE INTRODUCTIONINTRODUCTION
Company is focused on
Promotion and Production
Getting the customers attention
Building sales and customer awareness
Costs in this stage are high, therefore
this is the least profitable stage
MANAGING THE MANAGING THE GROWTHGROWTH
There is an increase in sales and profits
Most of the target market knows about and
buys the product
Company now focuses on
Customer satisfaction
Competing with rival companies
MANAGING THE MANAGING THE MATURITYMATURITY
Sales level off and slow down
More competition exists
Most of target market owns the product
Company starts to think of ways to improve
the product
DEVELOPING EXISTING DEVELOPING EXISTING PRODUCTSPRODUCTS
Companies constantly evaluate their product mix to see if they can further expand their product lines or modify existing products to keep them from moving into the decline stage.
Helps to reach new markets and increase overall sales
Can be very expensive Can be very expensive Increased inventoryMore promotionAdditional storage and distribution
LINE EXTENSIONSLINE EXTENSIONSIntroducing new product items, or services to meet customer needs
PRODUCT PRODUCT MODIFICATIONSMODIFICATIONS
An alteration in a company’s existing products
MANAGING THE MANAGING THE DECLINEDECLINE
Sales fall and there is profit loss
Ways to keep the product alive
Sell or license the product
Recommit to the product line – try to increase
advertising and promotion
Discount the product
Regionalize the product – sell only in areas with
strong customer loyalty
Modernize or alter the product
Delete the product from the line
DELETING A DELETING A PRODUCTPRODUCT
There are several reasons why a company may decide to eliminate a product item or line Obsolescence Loss of Appeal Change in company objective Replacement with new products Lack of profit Conflict with other products in
the line
