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Product and Service Management. Product Planning And Or Service Planning

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(1)

Product and Service

Management

Product Planning And Or

(2)

STANDARD 11

You will understand the concept of product planning and how it relates to marketing.

Objective 1: Understand product planning, mix, and development.

 Explain the nature and scope of the product/service management function.

 Explain the concept of the product mix.  Plan a product mix.

 Define: Product, good, service

 Product/service management task are affected and influenced by many factors, both within a company and outside

Objective 2: Understand sustaining product sales.

 Identify the impact of product life cycles on marketing decisions.  Describe factors used by marketers to position products/businesses.

(3)

Have you ever thought about who’s

responsible for those products and what their job duties entail?

What do you think is necessary to

make a new product successful?

How do businesses develop new

product and position it for sale?

Why do businesses need to

introduce new products?

(4)

Product planning: (or

service planning) involves obtaining, developing,

maintaining, and improving a product or service mix in response to market opportunities.

Products Planning

http://www.imagacademy.org/warner%20lessons/8%20Product%20Service%20Management/37%20Product%20Planning%20and%20Development/37%20Produ ct%20Planning%20and%20Development.html http://images.businessweek.com/ss/06/10/yamaha/source/5.htm

(5)

Product: is anything a person receives in an exchange. It can be either a good or a service.

Good: a tangible object that can be manufactured or produced for resale to create value

Service: an intangible activity preformed in exchange for payment to create value

(6)

Product Mix: includes all of the different products that a company makes or sells.

(7)

Importance of Product or Service planning  Sales and profits improve if offering the

right products and the right time to the customer

Market share increases and the ability to

beat the competition

 New products can bring new customers

Product Planning

(8)

Importance of Product Mix

 Appealing to the target market

Helping to present a consistent

company image

 Affecting profitability

 Helping deal with competition

(9)

Product line: group of closely related products manufactured or sold by a business

(10)

Product item: a specific model, or brand of a product in a product line.

(11)

Product Width: refers to the number of different product lines a business manufactures or sells.

Breadth: Carrying items in many different product

categories. Offering several different types of service under one roof. Narrow or wide

(12)

Product Depth

 Refers to the

number of items offered within each product line.

Shallow or deep.

Product Planning

LAY'S® Balsamic Sweet Onion Flavored Potato Chips

LAY'S® Barbecue Flavored Potato Chips

LAY'S® Cajun Herb & Spice Flavored Potato Chips

LAY'S® Cheddar & Sour Cream Flavored Potato Chips

LAY'S® Chile Limon Flavored Potato Chips

LAY'S® Chipotle Ranch Flavored Potato Chips

LAY'S® Classic BLT Flavored Potato Chips

LAY'S® Classic Potato Chips

LAY'S® Creamy Garden Ranch Flavored Potato Chips

LAY'S® Deli Style Original Potato Chips

LAY'S® Dill Pickle Flavored Potato Chips

LAY'S® FLAMIN' HOT® Flavored Potato Chips

LAY'S® Garden Tomato & Basil Flavored Potato Chips

LAY'S® Honey Barbecue Flavored Potato Chips

LAY'S® Honey Mustard Flavored Potato Chips

(13)

Products move through the product

life cycle and require different

marketing strategies at each stage.

 These stages are the basis for product planning.

Introduction

Growth

Maturity

Decline

Product Life Cycle

http://www.beasuccessfulentrepreneur.com/product-lifecycle-do-you-know-where-your-business-is/ S a les Res ea rc h & D ev elo p men t In tr o d u ct io n G row th M a turi ty D e cl ine Innovators Early Adapters Early Majority late Majority Laggards Time

(14)

 Activity: Think of products that have been around most of your lives. For example, Coca-Cola, Barbie, etc.

 Describe the different ways in which the product was marketed at different times.

 What are the stages the products go through?

 Does each stage require different marketing strategies?

(15)

The Key steps in product planning

 Generate Ideas

 Screen Ideas

 Develop the Business Proposal

 Test the Product Concept

 Develop the Product

 Commercialization

 Evaluate Customer Acceptance

(16)

First Step

Generate Ideas

 Brainstorm for new product ideas

Ideas for new products can come from

a variety of sources-  Employees,  customers,  sales representatives,  retailers,  family members

New Product Planning Steps

(17)

Screen ideas

 Identify any ideas that will potentially be unworkable

(18)

Test the Product concept

 This means getting feedback from potential customers about the potential product

 Is the target market interested in this product?

 Is it the right time to introduce this product?

(19)

Business Proposal

 Conduct a feasibility analysis

 Market size  Potential sales  Cost

 Profit potential

 Overall competitive environment  Level of risk

 Production requirements  Time needed to create  Production efficiency

(20)

Develop the Product

 This is a lengthy step that could take months or even years to finish

Prototype: during this step

a working model of the product is tested,

modified, and retested -

(21)

Commercialization

 Introducing the product to customers

 This is an expensive step

(22)

Evaluate Customer Acceptance

 Keep a close eye on-

 sales,

 profit,

 market share,

 and how well the product is meeting company goals.

(23)

Develop a new product. (See activity sheets)

 Activity: Focus group

 Work in groups/pairs to generate ideas for a new product. Present your ideas to a focus group of several students. The focus group should discuss what they liked and

disliked about the products and any improvements they might suggest. Could finalize by writing a one page report.

(24)

Developing existing products

Line extensions

Product modifications

Product Planning

(25)

Deleting a product or product line

 Obsolescence

Loss of appeal

 Changes in company objectives

Lack of profit

 Conflict with other products in the products in the line

Replacement with new products

(26)

Activity

 Ask students to partner with someone and make a list of products they still use today that are 10 years old or

older.

 Then create another list of products they think will be obsolete in the next ten years and the reason why. Have pairs share their answers.

(27)

Positioning

: a strategy in which a business creates a certain image or impression of a product in the minds of consumers.

(28)

Perception map – reviles the

product positioning in customers mind

 Customers indicate their perception of a product by where they place the dot.

 In this instance customer perception of Twix is low priced, lower quality snack item

 Where as Belgium Chocolates are perceived as high quality and high price

(29)

Positioning Strategies

 Positioning by price and quality

 Positioning by features and benefits

Positioning in relation to the

competition

Positioning in relation to other

products in a line

Product Positioning

(30)

Objective 3: Understand packaging, labeling, and branding elements and strategies.

 Explain the nature of branding.

 Explain branding strategies.

Objective 4: Understand packaging and labeling.

 Explain the functions of packaging.

 Explain labeling laws.

(31)

What is a product brand?

 It is a name, term, symbol, or design, that identifies a product

 and distinguishes it from competitors’ products

(32)

Brand Name

 a word, group of words, letters, or numbers that represent a product or service. Also called product brand.

(33)

Trade Name

 Identifies and promotes a company or a division of a particular corporation.

 The trade name is the legal name that a company uses when it does business.

(34)

Brand mark: visually recognizable and does not need to be pronounced.

 Example: U.S. Postal Service’s eagle or Apple Computer’s apple.

(35)

Trade character: one with human form or characteristics.

(36)

Trademark:

a word, name, symbol, device, or combination of these

elements that is given legal protection by the Federal government

(37)

Importance of Brands in Product Planning

 To build product recognition and customer loyalty

 To ensure quality and consistency

To capitalize on brand exposure

Branding

75% of all companies introduce a new product

(38)

Types of Brands

National Brands: also called

producer brands, they are owned by national manufacturers

(39)

Private distributor brands

Also called private brands, store brands,

dealer brands or private labels.

Manufacture does not appear on the

product.

Generic Brands

Products that do not carry a company

identity

Branding

Manufacture Brand Private brand

(40)

Brand Extension

Using an existing brand name on a new product

Brand Licensing

 Allowing other companies to use their brand name

Co-Branding

 Combining one or brands. Kellogg’s Pop-Tarts with Smucker’s fruit filling

(41)

What makes a good brand name?

The name should describe the product’s uses.  Easy to read, pronounce, and remember

 Create appealing images

 Should be distinctive

 Should be adaptable

 Legally available

 Appropriate for packaging and advertising

(42)

Brand Insistence - the goal of Branding

Definition: to be emphatic in demanding a specific brand.

How to Create Brand Insistence

 The brand stands for something that is important to them

The brand connects with them on multiple levels across several

senses

The brand is unique (or at least appears to be)  The brand is admirable

 The brand interacts with them and does not disappoint them

 The brand makes them feel good

(43)

Packaging: the physical container or wrapping for a product.

(44)

Functions of Packaging

 Promote and sell the product

 Defining Product Identity

 Providing information

 Expressing customer needs-various sizes, etc.

 Ensuring safe use

 Protecting the product

(45)

Packaging Types

Aseptic Packaging: technology that keeps food fresh without refrigeration, such as canning or bottling

Environmental Packaging: friendly to the environment

Cause Packaging: used to promote social and political causes

(46)

Label

: is an information tag, wrapper, seal, or imprinted message that is

attached to the product.

 Main function is to give information

Descriptive label

: information about the product’s use, construction, care, performance, and other features

Grade Label

: States quality of the product. Grade AA, A, B

(47)

 Labels must meet local and national law requirements.

 Federal mandates required:

Name, address of manufacture or distributor

 and quantity of contents and other items as required

(48)

Fair Packaging and Labeling Act (FLPA) of 1966  Requires mandatory labeling requirements

Federal Nutrition Labeling and Education Act 1990  protects consumers from deceptive labeling. Labels

must give nutritional information on how a food fits into an overall daily diet.

Federal Food and Drug Administration (FDA)

 Regulates the labeling and safety of food, drugs, and cosmetics sold in the U.S.

Federal Trade Commission (FTC)

 Monitors advertising that is false or misleading.

(49)

 Activity

 Ask students to think of a new product that currently

does not exist. Fun and crazy ideas are OK for this activity. Then have students using their idea to

create a line extension of the product.

References

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