Chapter 30 Section 30.2.ppt

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 Chapter 30 Product Planning

Section 30.2 Sustaining

Product Sales

Marketing Essentials

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SECTION 30.2

What You'll Learn What You'll Learn

Sustaining Product Sales

 _{The product life cycle}

 _{The concept of product positioning}

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SECTION 30.2

Sustaining Product Sales

Why It's Important Why It's Important

After products are introduced in the

marketplace, they go through different stages of growth and decline. It is important to

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SECTION 30.2

Sustaining Product Sales

Key Terms Key Terms

 _{product life cycle}  _{product positioning}

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SECTION 30.2

Sustaining Product Sales

A

product life cycle

represents the stages that a product goes through during its life. There are four stages of the life cycle:

 _introduction

 _growth

 _maturity

 _decline

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SECTION 30.2

SECTION 30.2 The Product Life Cycle

The life cycle of a product can be divided into four stages: introduction, growth, maturity, and

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SECTION 30.2

Managing During the Introduction Stage

When the product is introduced to the market, the focus of the company's efforts is on

promotion and production. During this stage:  _{Major goal is to draw attention to the product}

through promotions.

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SECTION 30.2

Managing During the Growth Stage

During the growth phase of the product life cycle, the product is enjoying success as shown by

increasing sales and profits

. During this stage:

 _{Advertising may now focus on consumer}

satisfaction.

 _{Competitors may offer new competing}

products.

 _{The company may}

introduce new models

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SECTION 30.2

A product reaches the maturity stage when

its

sales level

off

or

slow

down

. During this stage:

_{The product may have more competition, or most}

of the target market may already own it.

_{Advertising expenses climb as the company}

fights off competition so most money is spent

fighting off the competition

.

_{The company decides whether it can improve the}

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SECTION 30.2

During the decline stage, sales

fall

. Profits may reach a point where they are

smaller

than

costs. Aside from dropping the product, the company’s options include:



Sell or License

_{the Product}



Recommit

_{to the Product Line}



Discount

_{the Product}



Regionalize

_{the Product}



Modernize/Alter

_{the Product Offering}

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SECTION 30.2

Managing During the Decline Stage

Sell

Sell or License the Product

Companies sell or license their poorly performing products to risk-taking companies that try to rejuvenate products.

Recommit

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SECTION 30.2

Managing During the Decline Stage

Discount

the Product Discount the product to compete with cheaper store or private brands.

Regionalize

the Product Sell declining

products only in the geographic areas where there is strong customer loyalty.

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SECTION 30.2

The focus of product

positioning

is the image a product projects.

The goal of product

positioning is to set the product

apart

from the

competition

. Products can be positioned:

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SECTION 30.2

Positioning by

Price

and

Quality

Stresses high price as a symbol of quality or low price as an indication of value.

Positioning by

Features

and

Benefits

Stresses product features and benefits, or unique characteristics.

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SECTION 30.2

Positioning in Relation to the

Competition

Stresses comparison to the competition.

Positioning in Relation to Other

Products

in a

Line

Stresses association with a successful brand.

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SECTION 30.2

Category management is a process that involves

managing product categories as individual business units.

Categories include groups of product lines that have the same target market and distribution channels.

A category manager is responsible for all of the profits or losses for one specific product line.

The manufacturer can customize the category's product

mix, merchandising, and promotions according to customer preference on a store-by-store basis.

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SECTION 30.2

Planograms

are computer-developed

diagrams

that show retailers

how

and

where

products within a category should be

displayed

on a shelf at individual stores. Each store then can stock more of the products that appeal to people in its trading area.

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30.2

A

SSESSMENTSSESSMENT

Reviewing Key Terms and Concepts

1. What is a product life cycle? Name the four stages in

the product life cycle.

2. Explain the concept of product positioning. Why is it

important?

3. List and describe four strategies used to position

products in the marketplace.

4. What is category management?

5. How can manufacturers use category management

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30.2

A

SSESSMENTSSESSMENT

Thinking Critically

Identify a possible product modification or product extension for an electric

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Marketing Essentials

Marketing

Essentials