Download LO 11-1 - McGraw

Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 11, YOU SHOULD BE ABLE TO:
LO 11-1
Explain the product life-cycle concept.
LO 11-2
Identify the ways that marketing
executives manage a product’s life cycle.
LO 11-3
Recognize the importance of branding
and alternative branding strategies.
LO 11-4
Describe the role of packaging, labeling,
and warranties in the marketing of a
product.
11-2
GATORADE: BRINGING SCIENCE TO
SWEAT TO WIN FROM WITHIN

Creating the
Gatorade Brand

Building the
Gatorade Brand
11-3
FIGURE 11-1 How stages of the product life
cycle relate to a firm’s marketing objectives
and marketing mix actions
11-4
FIGURE 11-1A Stages of the product life cycle
and its total industry sales and total industry
profit
11-5
FIGURE 11-1B How stages of the product life
cycle relate to a firm’s marketing objectives
and marketing mix actions
11-6
LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
INTRODUCTION STAGE

Product Life Cycle

Trial

Primary Demand

Selective Demand

Skimming Pricing

Penetration Pricing
11-7
FIGURE 11-2 Product life cycle for the standalone fax machine for business use: 1970-2014
11-8
LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
GROWTH STAGE

Rapid Sales Growth

More Competitors

Repeat Purchasers

New Features

Broad Distribution
11-9
LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
MATURITY STAGE

Industry/Product Sales Slow

Profit Declines

Product Differentiation

Fewer Competitors
11-10
LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
DECLINE STAGE

Industry/Product Sales Drop

Environmental Changes

Deletion

Harvesting
11-11
LO 11-1
Chevy Spark and Amazon Kindle
Which stage of the product life cycle?
11-12
LO 11-1
Soft Drinks and Fax Machines
Which stage of the product life cycle?
11-13
LO 11-1
MARKETING MATTERS
Will E-mail Spell Extinction for Fax Machines?
11-14
LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS OF THE PRODUCT LIFE CYCLE

Length of the Product Life Cycle

Shape of the Product Life Cycle
• Generalized Life Cycle
• High-Learning
Product
• Fashion
Product
• Low-Learning
product
• Fad
Product
11-15
FIGURE 11-3 Alternative product life cycle
curves based on product types
11-16
LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS OF THE PRODUCT LIFE CYCLE

The Product Level: Class and Form
• Product Class
• Product Form
11-17
FIGURE 11-4 Prerecorded music product life
cycles by product form
11-18
LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS OF THE PRODUCT LIFE CYCLE

The Life Cycle and Consumers
• Diffusion of Innovation
 Innovators
 Late Majority
 Early Adopters
 Laggards
 Early Majority
11-19
FIGURE 11-5 Five categories and profiles of
product adopters (diffusion of innovation)
11-20
LO 11-1
CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS OF THE PRODUCT LIFE CYCLE

The Life Cycle and Consumers
• Barriers to Adoption
 Usage
 Risk
 Value
 Psychological
11-21
LO 11-2
MANAGING THE PRODUCT LIFE CYCLE
ROLE OF THE PRODUCT/BRAND MANAGER

Responsible for the Following:
• Product Life Cycle
• New Product Development
• Marketing Program Implementation
• Data Analysis
 CDI
 BDI
11-22
LO 11-2
USING MARKETING DASHBOARDS
Knowing Your CDI and BDI
Category Development Index (CDI) and Brand Development Index (BDI)
æ % of a Product Category's Total U.S. Sales in a Market Segment ö
CDI = ç
÷ø ´ 100
% of the Total U.S. Population in a Market Segment
è
æ % of a Brand's Total U.S. Sales in a Market Segment ö
BDI = ç
´ 100
è % of the Total U.S. Population in a Market Segment ÷ø
11-23
LO 11-2
MANAGING THE PRODUCT LIFE CYCLE
MODIFYING THE PRODUCT OR MARKET

Product Modification
• Product
Bundling

• New
Characteristics
Market Modification
• Finding New
Customers
• Increasing a
Product’s Use
• Creating a New
Use Situation
Dockers
Ad
11-24
LO 11-2
MANAGING THE PRODUCT LIFE CYCLE
REPOSITIONING THE PRODUCT

Product Repositioning

Reacting to a Competitor’s
Position

Reaching a New Market

Catching a Rising Trend

Changing the Value Offered
• Trading Up
• Trading Down
• Downsizing
11-25
LO 11-2
MAKING RESPONSIBLE DECISIONS
Consumer Economics of Downsizing—Got Less, Pay More
Price for both is the same!
11-26
LO 11-3
BRANDING AND BRAND MANAGEMENT

Branding

Brand Name
• Logotype (Logo)

Trade Name

Trademark
® ™
SM
• Product Counterfeiting
11-27
LO 11-3
BRANDING AND BRAND MANAGEMENT
BRAND PERSONALITY AND BRAND EQUITY

Brand Personality

Brand Equity
• Provides a Competitive Advantage
• Consumers Willing to Pay a Higher Price
11-28
FIGURE 11-6 The customer-based brand
equity pyramid
11-29
LO 11-3
BRANDING AND BRAND MANAGEMENT
BRAND PERSONALITY AND BRAND EQUITY

Creating Brand Equity
• Develop Positive Brand Awareness
• Establish a Brand’s Meaning
• Elicit the Proper Consumer Response
• Create Intense Brand Loyalty
11-30
LO 11-3
BRANDING AND BRAND MANAGEMENT
BRAND PERSONALITY AND BRAND EQUITY

Valuing Brand Equity
• Provides a Financial Advantage
• Brand Licensing
11-31
LO 11-3
BRANDING AND BRAND MANAGEMENT
PICKING A GOOD BRAND NAME

Should Suggest Product Benefits

Should Be Memorable and Positive

Should Fit the Company or Product Image

Should Have No Legal/Regulatory Restrictions

Should Be Simple and Emotional

Should Have Positive Phonetics/Semantics
11-32
LO 11-3
MARKETING INSITE
Have an Idea for a Brand Name? Check First!
11-33
FIGURE 11-7 Alternative branding strategies
11-34
LO 11-3
BRANDING AND BRAND MANAGEMENT
BRANDING STRATEGIES

Multiproduct Branding
(Family or Corporate Branding)
• Product Line Extensions
• Subbranding
• Brand Extensions
• Co-Branding
11-35
LO 11-3
BRANDING AND BRAND MANAGEMENT
BRANDING STRATEGIES

Multibranding
• Fighting Brands

Private Branding (Private Labeling
or Reseller Branding)

Mixed Branding
11-36
LO 11-3
Kimberly-Clark’s Huggies
Which branding strategy is used?
11-37
LO 11-3
Black & Decker and Dewalt Tools
Which branding strategy does each use?
11-38
LO 11-4
PACKAGING AND LABELING PRODUCTS
CUSTOMER VALUE AND COMPETITIVE ADVANTAGE

Packaging

Label
• Communication Benefits
• Functional Benefits
• Perceptual Benefits
11-39
LO 11-4
MARKETING MATTERS
Pez Heads Dispense More Than Candy
11-40
LO 11-4
PACKAGING AND LABELING PRODUCTS
CHALLENGES AND RESPONSES

Connecting with Customers

Environmental Concerns

Health, Safety, and Security Issues
• Shelf Life

Cost Reduction
11-41
LO 11-4

PRODUCT WARRANTY
Warranty
• Express Warranties
• Limited Coverage Warranties
• Full Warranties
• Implied Warranties
11-42
VIDEO CASE 11
P&G’S SECRET DEODORANT: FINDING
INSPIRATION IN PERSPIRATION
11-43