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MARKETING

MANAGEMENT
PRODUCT
MANAGEMENT

SESSION
THREE
(b)

Session Objectives
Understand the product lifecycle concept, its influence on
marketing strategies and its limitations.
Appreciate the importance of product positioning and how
it both affects and is affected by marketing strategies.
Understand the scope and implications of the various
decisions that management can take with regard to
product ranges, including deletion.
Define the role and responsibilities of the product or brand
manager.

Product Management Defined


The job of the product manager is to manage the
Product through its lifetime, from launch, through
any modifications, to its eventual demise.

Tasks of the Product Manager

Produce annual product plan

Specify actions, resources and strategies

Justify investments of resources

Product Life Cycle Defined


The Product Lifecycle is a concept suggesting that
a product goes through various stages in the course
of its life: introduction, growth, maturity and decline

The Product Life Cycle


Introduction
stage

Growth
stage

Maturity
stage

Revenue

Industry
sales

Industry
profits
0

Time

Decline
stage

Product Life Cycle variations

Product Life Cycle variations

Brand Variables Affecting PLA

Positioning

Personality

Identity

Brand name

Diffusion of Innovation Defined

The Diffusion of Innovation is a concept suggesting


that customers first enter a market at different times,
depending on their attitude to innovation and new
products, and their willingness to take risks.
Customers can thus be classified as innovators,
early adopters, early majority, late majority and laggards.

Percentage adopting

Diffusion of Innovation

2.5%
Innovators

13.5%
Early
adopters

34%

34%

Early
majority

Late
majority

Time

16%
Laggards

Factors Affecting Rate of Adoption


Relative
advantage
Perceived
risk

Compatibility

Communicability

Complexity
Divisibility

Competitor Timing Entry

Pioneers
Early imitators
Early differentiators
Early nichers
Late entrants

The Boston Consulting Group Growth-Share Matrix (BCG)


Relative

Market

Stars

Question Marks

Cash Cow

Dogs

Rate
Growth
Market

Share

The Boston Consulting Group Growth-Share Matrix (BCG)


Stars

Build sales and/or market share


Invest to maintain/increase
leadership position
Repel competitive challenges

Question Marks

Cash Cows

Hold sales and/or market


share
Defend position
Use excess cash to support
stars, selected problem
children and new product
development

Build selectively
Focus on defendable niche
where dominance can be
achieved
Harvest or divest the rest

Dogs

Harvest or
Divest or
Focus on defendable niche

Existing

New / Related

Existing

Market
Penetration or
Expansion

Market
Development

New/
Related

Product
Development

Enter New
Markets

Products

Ansoff Matrix: Product Growth Strategies

Markets

Strategic Options for Increasing


Sales: Market Penetration
Increase sales volume

Market
Penetration or
Expansion

Market
Development

Product
Development

Enter New
Markets

Market penetration

Win competitors customers

Market expansion

Buy competitors

Product development

Discourage competitive entry

Market development

Entry into new markets

Strategic Options for Increasing


Sales: Market Expansion

Market
Penetration or
Expansion

Market
Development

Product
Development

Enter New
Markets

Increase sales volume

Market penetration

Market expansion

Convert non-users

Product development

Increase usage rate

Market development

Entry into new markets

Strategic Options for Increasing Sales: Product Development

Increase sales volume

Market penetration

Market
Penetration or
Expansion

Market
Development

Product
Development

Enter New
Markets

Market expansion

Product line extension

Product development

Product replacement

Market development

Innovation

Entry into new markets

Strategic Options for Increasing Sales: Market Development


Increase sales volume

Market
Penetration or
Expansion

Market
Development

Product
Development

Enter New
Markets

Market penetration

Market expansion

Product development

Promote new uses

Market development

Enter new segments

Entry into new markets

Strategic Options for Increasing Sales: Entry into New Markets


Increase sales volume

Market
Penetration or
Expansion

Market
Development

Product
Development

Enter New
Markets

Market penetration

Market expansion

Product development

Market development

Entry into new markets

New products

Session 3b: Key Terms

_____

is a concept that suggests customers first enter a


market at different times, depending on their attitude to
innovation and new products, and their willingness to
take risks.

A brand

which is marketed with a standardised offering


across different European countries is called a _____.

Session 3b: Key Terms

_____

means adding further product items into a


product line to extend coverage of the market.

_____

means adding further product items into a


product line to fill gaps within the range.

Session 3b: Key Terms

The

_____ suggests that a product goes through various


stages in the course of its life including introduction,
growth, maturity and decline.

What

title is used to describe the individual responsible


for the day-to-day management and welfare of a
product or family of products at all stages of their
product lifecycle?

Session 3b: Key Terms

The

_____ is the set of different products that an


organisation produces, ideally balanced so that some
products are mature, some are still in their growth stage
while others are waiting to be introduced.

Session 3b: Key Terms

_____

refers to the development of a product and


marketing strategy that places the brand as close as
possible in the minds of target customers to their ideal in
terms of important features and attributes and clearly
differentiates it from the competition.