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Slide 1 :
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PRODUCT DEVELOPMENT JOE BOB’s AMAZING CAT FOOD “ All products are mortal” (Part 2 of 2) |
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Slide 2 :
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Remember:Keys in Business Success 1. Calculated Risk Taking
- investing money
- P (B) of failure - success
2. Borrowing Ideas
3. Specialty Products
- imaginative services
4. Structured Marketing Mix
Assumption: target market problem solution
& skilled personnel SUCCESS (Sales&Mktg. Exe. Inst., 1974) |
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Slide 3 :
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Organizing to Develop and Manage Products Product manager … has total responsible for a product, a product line, or several distinct products that make up a group
Brand manager … is responsible for a single brand
Market manager … is responsible for all the marketing activities that serve a group of customers
Venture team …is a cross-functional group that creates entirely new products. Team members come from different functional areas of the organization. |
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Product Differentiation...is creating products so that customers perceive them as different from competing products Form Creation
Idea Demand
Acceptance Estimation Profit (Management’s View) |
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Product design and features - style is the physical appearance, …
Product quality - level and consistency of durability, …
Product support services
- Delivery, installation, … SPORTS
DRINK Sports Drink Product Differentiation Through Quality, Design, and Support Services Branding is fundamental to differentiation. |
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Influenced by Marketing Mix &
* Available technology
* Government standards
* Level of competition
* “Consumer expectations” define product quality Product Differentiation through Quality MARKETING
MIX Principle: avoid promotions that “overpromise” benefits Product Quality is the ability (characteristic) to perform as expected in satisfying customer needs |
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Product Quality Car – SUV – Truck - safety issues
Crash-tests are conducted by the US government and Insurance Institute for Highway Safety New Safety Innovations for older drivers:
Improved designs make for a sturdier car
Sophisticated Cruise-Control Systems
Collision Mitigation Brake Systems FDA, Federal Drug Administration
FAA, Federal Aviation Association |
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Quality’s Lagging Role Percentage of Companies That Consider These Criteria of Primary Importance in Compensating Senior Managers |
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Product Differentiation by Design Product attributes (tangible or intangible) separate your product from others Product design allows functional performance of tasks & may provide a competitive advantage |
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A clean, visually attractive cabin.
Spacious and comfortable seats.
An environment that promotes safety.
Adequate temperature & quietness
On-time flights.
Entertainment. Case Example: Airlines Assess Customer Needs |
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THE SOLUTION: A product redesign Smaller/bigger gyms/bars Reality: airport nightmares, lost luggage, cramped seating, arrival-departure delays, no food , low customer service |
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Product Differentiation through support services Product Support Services
Are human or mechanical efforts that add value to a product such as financing, warranties, guarantees, repairs & training.
Are a competitive advantage when all other product features are equally matched by competitors |
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Product Positioning is creating a desired product concept based on consumer perceptions. Segmentation is grouping of people by needs or wants. Positioning: is the way consumers perceive the brand relative to its competitors caused by how a product is marketed to attract the targeted segment
ID competitive advantage by
Differentiating the product &
Stressing salient characteristics |
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Hypothetical Perceptual Map for Pain Relievers Perceptual maps show marketers how closely products are conceptually positioned by consumers to “ideal points,” to their own products, and to competitors’ products. |
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Product Positioning and Repositioning Repositioning a Product
Adjusting a product’s present position can strengthen/increase its market share and profitability.
Repositioning is accomplished by changing the product’s features, price, distribution, or image by focusing on people who use the product .
Adding new products to the line may necessitate the repositioning of older products. |
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The Brand Race
(Positioning) Dr.Batory
#1 BATTLE of the BRANDS - ID competitive advantage
- Stress salient characteristics
- Differentiate product |
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Top editors of women’s magazines are being replaced.
What Do Women Want-To Read? WSJ, 4June2001 Market Changes: The market for women’s magazines has shifted towards more specialized magazines.
Older magazines that offer an overview of women’s issues such as beauty, fashion, health, and sex are now finding themselves obsolete. Applied Marketing |
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Specialized Magazines Real Simple – simplifying your life
Lucky – shopping
In Style – Fashion
Self – Health/Beauty |
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Glamour Bonnie Fuller was fired after sales fell 11% in 2002.
Under her leadership, the magazine started to look too much like Cosmo, its top competitor.
Wants to go back to its old ways of putting out serious pieces about health and politics. Kathy Betts was fired as editor in chief
Sales had declined over 7% last year and there was a definite increase in staff turnover
Under Betts the magazine was starting to lose its reputation for sophisticated fashion coverage. Harper’s Bazaar |
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Product Deletion Product Deletion is the process of eliminating a product from the product mix
Reasons to remove a product:
Slow sales create higher unit-production costs, inventory costs, and distribution costs.
To prevent negative feelings from affecting the company’s other products. |
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Slide 23 :
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Product Deletion Process FIGURE 12.5 Source: Martin L. Bell, Marketing: Concepts and Strategy, 3rd ed., p. 267; Copyright © 1979, Houghton Mifflin Company. Reprinted by permission of Mrs. Martin L. Bell. Common choices: Postpone the decline or accept its inevitability |
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