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Lessons from Chapter 7 Product strategy: lies at the heart of every organization in that it defines what the organization does and why it exists. involves creating a product offering that is a bundle of physical (tangible), service (intangible), and symbolic (perceptual) attributes designed to satisfy customers' needs and wants. typically strives to overcome commoditization by differentiating product offerings via the service and symbolic elements of the offering. The product portfolio: is used in both consumer (convenience, shopping, specialty, and unsought products) and business (raw materials, component parts, process materials, MRO supplies, accessory equipment, installations, and business services) markets. is used in most firms due to the advantages of selling a variety of products rather than a single product. consists of a group of closely related product items (product lines) and the total group of products offered by the firm (product mix). involves strategic decisions such as the number of product lines to offer (variety), as well as the depth of each product line (assortment). can create a number of important benefits for firms, including economies of scale, package uniformity, standardization, sales and distribution efficiency, and equivalent quality beliefs. The challenges of service products: stem mainly from the fact that services are intangible. Other challenging characteristics of services include simultaneous production and consumption, perishability, heterogeneity, and client-based relationships. include the following issues: service firms experience problems in balancing supply (capacity) with demand. service demand is time-and-place dependent because customers or their possessions must be present for delivery. customers have a difficult time evaluating the quality of a service before it is purchased and consumed. service quality is often inconsistent and very difficult to standardize across many customers. the need for some services is not always apparent to customers. Consequently, service marketers often have trouble tying their offerings directly to customers’ needs. New product development: is a vital part of a firm's efforts to sustain growth and profits. considers six strategic options related to the newness of products: New-to-the-world products (discontinuous innovations)—involve a pioneering effort by a firm that leads to the creation of an entirely new market. New product lines—represent new offerings by the firm, but they become introduced into established markets. Product line extensions—supplement an existing product line with new styles, models, features, or flavors. Improvements or revisions of existing products—offer customers improved performance or greater perceived value. Repositioning—involves targeting existing products at new markets or segments. Cost reductions—involves modifying products to offer performance similar to competing products at a lower price. depends on the ability of the firm to create a differential advantage for the new product. typically proceeds through five stages: idea generation, screening and evaluation, development, test marketing, and commercialization. Branding strategy: involves selecting the right combination of name, symbol, term, or design that identifies a specific product. has two parts: the brand name (words, letters, and numbers) and the brand mark (symbols, figures, or a design). is not only critical to product identification; but also the key factor used by marketers to differentiate a product from its competition. to be truly successful, should develop a brand that succinctly captures the product offering in a way that answers a question in the customer’s mind. has many advantages, including making it easier for customers to find and buy products. involves having a solid understanding of four key issues: manufacturer versus private-label brands—private-label brands are more profitable than manufacturer brands for the retailers that carry them. However, manufacturer brands have built-in demand, recognition, and product loyalty. brand loyalty—a positive attitude toward a brand that causes customers to have a consistent preference for that brand over all other competing brands in a product category. Three levels of loyalty include brand recognition, brand preference, and brand insistence. brand equity—the value of a brand or the marketing and financial value associated with a brand's position in the marketplace. brand alliances—branding strategies, such as cobranding or brand licensing, that involve developing close relationships with other firms. also involves taking steps to protect brand names and brand marks from trademark infringement by other firms. Packaging and labeling: are important considerations in branding strategy because packaging often goes handin-hand in developing a product, its benefits, its differentiation, and its image. includes issues such as color, shape, size, and convenience of the package or the product's container. are often used in product modifications or cobranding to reposition the product or give it new and improved features. are vital in helping customers make proper product selections. can have important environmental and legal consequences. Differentiation and positioning: involves creating differences in the firm’s product offering that set it apart from competing offerings (product differentiation), as well as the development and maintenance of a relative position for a product in the minds of the target market (product positioning). can be monitored through the use of perceptual mapping—a visual, spatial display of customer perceptions on two or more key dimensions. is fundamentally based on the brand, but is often based on product descriptors, customer support services, and image. includes the positioning strategies of strengthen the current position, repositioning, or reposition the competition. Managing products and brands over time: can be addressed via the traditional product life cycle, which traces the evolution of a product's development and birth, growth and maturity, and decline and death over five stages: development—a time of no sales revenue, negative cash flow, and high risk introduction—a time of rising customer awareness, extensive marketing expenditures, and rapidly increasing sales revenue growth—a time of rapidly increasing sales revenue, rising profits, market expansion, and increasing numbers of competitors maturity—a time of sales and profit plateaus, a shift from customer acquisition to customer retention, and strategies aimed at holding or stealing market share decline—a time of persistent sales and profit decreases, attempts to postpone the decline, or strategies aimed at harvesting or divesting the product can be influenced by shifts in the market, or by the actions of the firms within the industry as they constantly reinvent themselves.