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Chapter 9-Fa10 - Chapter 9 Managing the Product I Steps in...

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Chapter 9 Managing the Product I. Steps in Managing Products (see Figure 9.1 pg. 269) A. Develop Product Objectives B. Design a Product Strategy C. Make Tactical Product Decision 1. Product branding 2. Packaging and labeling design A. Product Objectives 1. General Information When marketers develop product strategies, they make decisions about product benefits, features, styling, branding, labeling and packaging. To be effective, product-related objectives must be measurable, clear, and unambiguous___ and feasible and they must indicate a specific time frame . Product objectives should consider the long-term implications of product decisions. Planners who sacrifice the long-term health of an organization to reach short-term sales or financial goals may be on a risky course. Remember the above statements when you are working on setting your personal product goals and objectives and developing your strategies to reach them! 2. Objectives and Strategies for Multiple Products – See Figure 9.2 pg. 270 Product Line strategies - Definition of product line – a firm’s total product offering designed to satisfy a single need or desire of target customers. Procter & Gamble’s line of cleaning products includes 3 different liquid dish detergent brands - By number of Variations 1) Variations in product lines can be large in number and are called full line and targets many customer segments to boost sales MP: Chapter 9 - 1
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2) Limited – line strategy – has fewer product variations and can improve firm’s image if it is perceived as a specialist with clear, specific position in the market - By Stretch 1) Upward line stretch – will add new items- higher priced and claiming more quality, bells and whistles, if a current product line includes middle and lower-end items 2) Downward line stretch – augments a line by adding items at the lower end. 3) Two way stretch – adds products at both upper and lower ends - By Filling-out strategy – means adding sizes or styles not previously available. Whenever a product line or a product family is extended, there is a risk of cannibalization (the loss of sales of an existing brand when a new item in a product line or product family in introduced). This occurs when sales of an existing brand are eaten up by the new item as the firm’s current customers switch to the new product. Product Mix Strategies - Definition of product mix – the total set of all products a firm offers for sale. - Width of the product – the number of different product lines produced by the firm are considered by marketers when planning a product mix strategy. Quality as a Product Objective (see Figure 9.4 – pg. 276) - Definition of Product Quality – the overall ability of the product to provide the benefits customers want. Quality is tied to how customers think a product will perform and not necessarily to some technological level of perfection.
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