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MARKETING 3.03

MARKETING 3.03. Product/Service Management. 4 IMPORTANT P/S MGMT TERMS. Product Mix Product Line Product Width Product Depth. Product / Service Management. Product MIX: All the different products that a company makes or sells. KRAFT Company Example: ….Kraft ….Maxwell House

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MARKETING 3.03

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  1. MARKETING 3.03 Product/Service Management

  2. 4 IMPORTANT P/S MGMT TERMS • Product Mix • Product Line • Product Width • Product Depth

  3. Product / Service Management Product MIX: All the different products that a company makes or sells. • KRAFT Company Example: • ….Kraft • ….Maxwell House • ….Kool-Aid • ….Oscar Mayer • ….Post Cereal products

  4. Product / Service Management • Product Line • Group of closely related products manufactured &/or sold by a business • Example: Kellogg’s makes all the cereals listed All product lines are apart of the product mix

  5. Product / Service Management • A product line can be determined by the following: • They function similarly • All of Chevrolets Cars are a Product Line • They are sold to the same groups of people • All of Staples Supplies sold to schools • Are marketed the same way • Are priced similarly

  6. Product / Service Management • Product Item • A specific model, brand, or size of a product within a product line.

  7. Product / Service Management • Product Mix Example • All classes AK offers • Product Line • All marketing courses offered • Product Item • Marketing • Sports Marketing • International Marketing

  8. Product / Service Management • Product Mix: • The width and depth of a company’s product offerings. • Width: number of different product lines a business manufactures or sells • Small businesses have fewer product lines; less width • Depth: number of product items within a product line • Company sells three different sizes & three different flavors they would have a product depth of 9. • Example: Chocolate = small, medium, large

  9. Product Mix Assignment • Working in groups of 1-3; you will be assigned a Company • Define Product Mix • At least 10 brands they sell • 3 Examples of Product Lines • 5 Product Items • Specific items sold by company

  10. Companies • General Motors • Mars • Nestle • Sony • Proctor & Gamble • Kraft • General Mills • Johnson & Johnson • Unilever • Kellogg’s • Coca-Cola • Pepsico • Dr. Pepper/Snapple

  11. Examples of Product Mixes

  12. Nike Example • Nike owns • Nike Golf • Nike Pro • Nike+ • Nike Skateboarding • Air Jordan • Converse • Hurley International • NikeTown Retail Stores

  13. Nike Product Mix Example • 4 Product Lines Examples • Converse • Basketball • Soccer • Clothing • Could’ve broken it down by: • Others Sports • Hurley, Golf, Jordan

  14. Product Items • Converse All Star Ox • $49.99 • Nike Club Swoosh Full Zip Hoodie • $39.99 • Nike Air Max 2013 • $179.99

  15. 3.01--- Review • Product Life Cycle • Introduction • Growth • Maturity • Decline Types of Goods Sold • Staple • Convenience • Shopping • Specialty • Fashion • Seasonal • Unsought • Industrial

  16. 3.03 • Trading Up • Trading Down • Alteration • Expansion • Contraction • Product Mix • Product Depth • Product Width • Product Line • Product Item

  17. Product Mix

  18. Assignment • Create 10 Flash cards based on the following concepts • Product Width: Contraction • Product Width: Expansion • Why would a company want to narrow its products? • Product Depth: Shallow • Product Depth: Expansion • Product Item • Trading Up • Trading Down • Alteration • Product Positioning

  19. Product Mix Example

  20. Product Mix • Product Width is either narrow or broad • Narrow Product mix occurs when a company offers a limited number of product lines • Also known as Contracting • Why would a company want to narrow its product mix? • Easier on management • Cost effective • Simplicity • Consistency

  21. Product Width: Narrowing • In 2009; General Motors (GM) filed for bankruptcy protection • They were told they needed to cut back • GMC • Cadillac • Buick • Chevy • Pontiac • Saturn • Saab • Hummer

  22. Product Width: Broadening • Companies seek to expanding their product width by making it broader • Expanding allows you • Reach more markets • Gain a competitive edge • Example of product width is Red Lobster • Specialize in seafood • Sell pasta, chicken, & steak to broaden product mix

  23. Product Depth: Expanding • Product Depth expandswhen more product items are added to a product line • Why would you expand on a product line? • Wider Variety • Greater Quantity • Dillards choosing to sell more colors, sizes, styles of Levi Jeans

  24. Product Depth: Shallow • A shallow product depth occurs when there are less products offered in a product line • Why would you contract your product depth? • Cost Effective • Example would be Red Lobster selling chicken on its menu • Usually only 2-4 menu options • Not cost effective to offer a wider variety

  25. Product Mix Strategies • Companies devise strategies for their products so that they are profitable • Existing product strategies • Alteration • Trading Up • Trading Down

  26. Product Mix Strategy: Alteration • Alteration occurs when an existing product is altered • Improve an established product with new design, new package, &/ or new uses • Example: Jeep Company

  27. Jeep Changes Over Time

  28. Product Mix Strategies • Trading Up • Occurs when a company adds a higher-priced product to a line • Trying to attract a higher-income market • Want to improve the sales of existing lower-priced products. • Prestige of high-priced item makes brand look better

  29. Product Mix Strategies • Trading Down Adding a lower-priced item to a line of prestige products to encourage purchases from people who cannot afford the higher-priced product, but want the status.

  30. Product Positioning • Positioning: actions marketers take to create a certain image of a product in the minds of the customers • In Relation to a Competitor • A common strategy when a firm is trying to solidify an advantage over another firm. • Example: Southwest Airlines promotes itself as the low-cost alternative • In Relation to a Product Class or Attribute (Features & Benefits) • http://www.youtube.com/watch?v=YUNjCx7w11k

  31. Product Positioning • In Relation to a Target Market • Focusing on the unique characteristics of specific users can also be effective. • The …For Dummies series of instruction books are attractive to people who want to learn about a topic from a source that doesn’t assume any prior knowledge on the reader’s part. • By Price and Quality • Offer economy, mid-priced, & luxury lines • High Price = Quality Ford Mustang • Low Price = Greater Value Ford Focus • Difficult to change • Absolut Vodka • http://www.youtube.com/watch?v=EL4EsZv_ltU • http://www.youtube.com/watch?v=Rt7eOs7iG2Y

  32. Class Activities • Flash Cards - After 10 minutes into a lecture or concept presentation, have students create a flash card that contains the key concept or idea. Toward the end of the class, have students work in pairs to exchange ideas and review the material. • Product Life Cycle of Mobile Phone • http://www.youtube.com/watch?v=A-y0Q9uE0MM • http://www.youtube.com/watch?v=d-ZOOhsfZ-I

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