PRODUCT STRATEGY Flashcards
(26 cards)
Product
At the core of marketing, without good product, no sales;
Anything that delivers value to
satisfy a need or want
Defining the Product/ Product Characteristics
Essential benefit: fundamental need met by the product
Core product: the physical, tangible elements
Enhanced product: additional features, innovation, design
Classifying Products
By nature: tangibilty, durability
By user: consumer, business
Tangibility
Physical aspects of the product
Durability
product usage
Consumer goods
Convinience goods, Shopping goods, specialty goods, luxury goods
Business goods
Materials, Parts, Maintenance/Repair/Operations, Capital Goods
Product discrimination (differentiation)
Form
Features
Performance
Quality
Conformance
Quality
Durability
Reliability
Repairability
Style
Product Line vs. Product Mix
Product Line: Group of products linked by customer usage / profile, price points, distribution
Product Mix: all products offered by a company
Product Pricing
Individual product in product line, good-better-best strategy
Technology companies face challenge: newer products better and cheaper
Marketing communications
Focus on product or brand, Budget allocation: line, popular products, new products
Product Lifecycle
Intro, Growth, Maturity, Decline
PLC: Intro
Objective: Build awareness, Trial purchases
Profitability: Low sales, high risk of failure, high marketing and product cost
PLC: Growth
Objective: Differentiate product from competitors, promote expansion
Profitability: Sales grow rapid, Profits get better as operations are streamlined
PLC: Maturity
Objective: get ready for steady sales instead of growth
Profitability: Sales increase slower, Cost cannot be minimized more
PLC: Market segment
Intro: Nonexistent;
Growth: New segment established;
Maturity: Approaching saturation;
Decline: Change & substitute products decrease share
PLC: targeted consumers
Intro: Innovators, early adopters;
Growth: Early Adopters & Majority;
Maturity: Majority;
Decline: Laggards
PLC: Competitive environment
Intro: Little competition
Growth: Many competitors
Maturity: Marginal competitors drop out
Decline: Falling demand makes market unattractive
PLC: Competitor Reaction
Intro: Followers release similar products to pioneer;
Growth: Large companies acquire small ones;
Maturity: Models empathize style over function
Decline: Focus on specialty products
PLC Introduction phase
Product: high quality, innovative design, new benefit
Price: skimming or penetration
Communication: Inform about features and benefits, focus on product awareness
Distribution: Wide network with limited availability
PLC Growth phase
Product: more features & better design
Price penetration: new or better models move up
Price skimming: older models get cheaper
Promotion: Link brand with key features, brand advertising
Distribution: broad network to keep up with demand
PLC Maturity phase
Product: Product lines extended
Price penetration: target at higher market
Price skimming: Lower price for not well-differentiated products
Promotion: short-term sales vs. brand-promotion
Distribution: reached maximum
PLC Decline phase
Product: consider expenses in terms of ROI
Price penetration: Low price to stimulate demand
Price skimming: Pressure from competitors
Promotion: discontinued
Distribution: reduce channels
New Product: Company perspective
New-to-the-world: disruptive innovations cause fundamental change, sustaining innovations enhance and improve existing products
Reposition existing products: Add new market segments
Cost reduction: Introduce lower-cost products with less features
