Product Planning and Development

1. Product Planning and Development Marketing Co-Op

2. Product Planning Making decisions about features that are needed to sell a business’s products, services or ideas Product Features • Packaging • Labeling • Branding • Services • Warranties

3. Product Planning Allows a business to • Coordinate existing products and features • Add new products • Delete products that are no longer attracting customers

4. KRAFT Company: Kraft Kool-Aid Nabisco Maxwell House Oscar Mayer Post Cereal products Product Mix All the different products that a company makes or sells

5. Product Mix another example SC Johnson

6. Product Mix another example Procter and Gamble

7. Product Mix To determine a company’s product mix, a business needs to identify: • Its target market • Its competitors • The image it wants to project • The product mix must be periodically reviewed to determine if products need to be expanded, modified, decreased, or eliminated

8. Product Lines Product line – a group of closely related products sold by a business

9. Product Items Product item – a specific model, brand, or size of a product within a product line

10. Product Width and Depth The width and depth of a company’s product offerings defines the product mix

11. Product Width The number of different product lines soldby one manufacturer

12. Product Depth The number of product items within each specific product line • From one brand name

13. Gillette Product Mix Width vs. Depth Width Depth

14. Product Mix Strategies Develop completely new products for existing lines Drop existing product to allow room for new products Expand or modify existing product lines

15. Product Life Cycle • A representation of the stages that a product goes through during its life • There are 4 stages of the life cycle • Introduction • Growth • Maturity • Decline

16. Product Life Cycle Dollars Maturity Sales Growth Decline Introduction Profit Obsolete Time

17. Managing the Introduction • Company is focused on • Promotion and Production • Getting the customers attention • Building sales and customer awareness • Costs in this stage are high, therefore this is the least profitable stage

18. Managing the Growth • There is an increase in sales and profits • Most of the target market knows about and buys the product • Company now focuses on • Customer satisfaction • Competing with rival companies

19. Managing the Maturity • Sales level off and slow down • More competition exists • Most of target market owns the product • Company starts to think of ways to improve the product

20. Developing Existing Products Companies constantly evaluate their product mix to see if they can further expand their product lines or modify existing products to keep them from moving into the decline stage. • Helps to reach new markets and increase overall sales • Can be very expensive • Increased inventory • More promotion • Additional storage and distribution

21. Line Extensions Introducing new product items, or services to meet customer needs

22. Product Modifications An alteration in a company’s existing products

23. Managing the Decline • Sales fall and there is profit loss • Ways to keep the product alive • Sell or license the product • Recommit to the product line – try to increase advertising and promotion • Discount the product • Regionalize the product – sell only in areas with strong customer loyalty • Modernize or alter the product • Delete the product from the line

24. Deleting a Product There are several reasons why a company may decide to eliminate a product item or line • Obsolescence • Loss of Appeal • Change in company objective • Replacement with new products • Lack of profit • Conflict with other products in the line