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Product Planning

Product Planning. Sustaining Product Sales Chapter 30.2. What is a 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. The Product Life Cycle. Dollars. Maturity.

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Product Planning

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  1. Product Planning Sustaining Product Sales Chapter 30.2

  2. What is a 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

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

  4. 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 of the cycle

  5. 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

  6. 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

  7. 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

  8. Product Positioning • The efforts a business makes to identify, place, and sell its products in the marketplace • The goal is to set the product apart from the competition • A number of strategies can be used to position products in the marketplace • Positioning by price and quality • Positioning by features and benefits • Positioning in relation to the competition • Positioning in relation to other products in the line

  9. Positioning by Price and Quality • A company may offer an economy line, a mid-priced line, and a luxury line • Stresses high price as a symbol of quality or low price as an indication of value Economy Line Mid-priced Line Luxury Line

  10. Positioning by Features and Benefits • Products are often associated with a feature, attribute, or consumer benefit

  11. Positioning in Relation to Competition • Some businesses position their products to compete directly with the products of other companies VS VS

  12. Positioning in Relation to Other Products in a Line • Individual products may be positioned in relation to other products in the same line Zire Tungston Trio Original Palm Pilot Additional Features MP3 player View Photos Play Video Clips Additional Features E-mail Surf the Web Additional Features Cell Phone Service

  13. Repositioning • When a product reaches the decline stage of the product life cycle it must be changed – or repositioned • Repositioning – changing the identity or image of a product to redirect or expand the target market

  14. Examples: Pledge Pledge Commercial

  15. Examples: Cheerios Cheerios Commercial

  16. Category Management • A process that involves managing product categories as individual business units • A category may include a group of product lines with the same target market and distribution channels • Goal – to put manufacturers and retailers in closer touch with customer needs

  17. Planograms • A computer developed diagram that shows retailers how and where products should be displayed on the shelf…maximizing the products potential

  18. Assignment • Get the Orange Textbooks • Complete the questions from Chapter 30.2 • Questions 1-3 on page 647 • Questions 7, 8, 9, 10, 11 on page 649

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