http://www-rohan.sdsu.edu/~renglish/370/notes/chapt11/index.

htm A way to trace the stages of a product's acceptance from its introduction to its demise. One of the most familiar concepts in marketing A prevalent marketing management tool Refers to the life of the product category The time a product category spends in a stage of the product life cycle may vary from a few weeks Does not predict how long a product category will remain in any one stage A tool to help marketers understand where their product is now what may happen which strategies are normally appropriate.

A. Introduction Stage Sales grow slowly Create awareness High production costs Frequent product modification Skimming pricing High failure rate,

Promotion strategy focuses on primary demand for the product category developing product awareness

Intensive personal selling to retailers and wholesalers is required.

B. Growth Stage Characteristics Sales grow at an increasing rate. Large companies may acquire small pioneering firms. Promotion emphasis heavy brand advertising

Gaining wider distribution is a key goal Toward the end of this stage

prices normally fall

Development costs have been recovered

C. Maturity Stage

Sales continue to increase but at a decreasing rate

Annual models of many products

Product lines are widened or extended Heavy promotions to both the dealers and consumers are required.

D. Decline Stage

Signaled by a long-run drop in sales. The rate of decline is governed by a. how rapidly consumer tastes change or b. how rapidly substitute products are adopted. Strategies

Deletion.

Harvesting

Some Dimensions of the Product Life Cycle 1. .To prevent slipping into decline E. Extended introductory period. Shape of the Product Life Cycle There are several distinctive life-cycle curves Each type suggests different marketing strategies Significant education of the customer is required. Length of the Product Life Cycle There is no exact time that a product takes to move through its life cycle Mass communication shortens life cycles 2.

Sales begin immediately Little learning is required by the consumer Benefits of purchase are readily understood. Most often appear in women’s and men’s clothing styles. .

Length of the cycles may be years or decades. . The Product Level: Multiple life cycles (class and form) may exist. Rapid sales on introduction Equally rapid decline. 3. Often novelties and have a short life cycle.

Product class Product form 4. a concept called the diffusion of innovation. or spreads. . through the population. The Life Cycle and Consumers A product diffuses.

Innovators .

Early Adopters Early Majority .

Late Majority .

Laggards Common reasons for resisting a product in the introduction stage are usage barriers value barriers risk barriers .

psychological barriers Product Characteristics and the Rate of Adoption Complexity Compatibility Relative advantage Observability Trialability .

Modify the Market Market . Modify the Product Altering a product’s characteristic to try to increase and extend the product’s sales. C. B.Trialability Marketing Implications of the Adoption Process Two types of communication aid the diffusion process The effectiveness of different messages and appeals depends on the type of adopter targeted. Role of a Product Manager Product manager is responsible for marketing products through the successive stages of their life cy Product (or brand) manager manages the marketing efforts for a close-knit family of products or bra Three ways to manage: modify the product modify the market reposition the product. II. MANAGING THE PRODUCT LIFE CYCLE A. quality performance appearance.

. Reposition the Product Product repositioning Four factors that trigger a repositioning action are: Reacting to a Competitor’s Position.modification strategies involve: D. Reaching a New Market. Catching a Rising Trend.

.Changing the Value Offered.

BRANDING AND BRAND MANAGEMENT Branding Decisions Brand Brand name Brand mark Trade name Trademarks Legal term indicating the owner's exclusive right to use the brand or part of the brand. Sets severe penalties for trademark infringement. The MARK has to be used continuously to be protected Rights to a trademark continue for as long as it is used. 2. Others are prohibited from using the brand without permission. Phrases. The injured party can sue for triple damages and recovery of any profit. Generic product name identifies a product by class or type and cannot be trademarked . Lanham Act of 1946 protects Trademarks 1. A service mark performs the same functions for service businesses. Shapes and Color combinations may also qualify for trademark protection. Abbreviations.III. Symbols.

Benefits of Branding Identification Encourages repeat sales Facilitates New Product Introduction product counterfeiting has been a growing problem. Counterfeit products can steal sales from the original manufacturer or hurt the company’s reputatio Some Branding Concepts Brand Equity .

Brand Equity Brand Loyalty Brand Identity Master Brand A. 1. Creating Brand Equity Brand equity is created by marketing programs . Consumers are often willing to pay a higher price for a product with brand equity. 2. Brand equity provides a competitive advantage. Brand Personality and Brand Equity Brand Equity has two distinct advantages: 1.

2.Forge strong. 4. Elicit the proper consumer responses to a brand’s identity and meaning. and unique consumer associations and experiences with a brand Sequential four-step building process: 1. . Attention to how consumers think and feel about a brand. 5. Valuing Brand Equity Brand equity is a financial advantage for the brand owner. 3. Create a consumer-brand resonance evident in an intense. Develop positive brand awareness and an association in consumer’s minds with a product class o brand an identity. active loyalty relationship between co brand. Establish a brand’s meaning in the minds of consumers. 2. favorable.

. Licensing also assists companies in entering global markets with minimal risk. or other property for a royalty or a fee. Licensing Licensing is a contractual agreement whereby a company allows another firm to use its brand name secret. C.. Picking a Good Brand Name A good brand name should . Can appreciate in value when effectively managed Can lose value when not managed properly.Established brands are considered intangible assets. B.

Multiproduct branding Makes possible line extensions .A good brand name should D. Branding Strategies 1. Manufacturer Branding.

Too many uses for one brand name can dilute the meaning. Adds value to products that are generally perceived to be homogeneous shopping goods.Subbranding combines a family brand with a new brand. Allows for brand extension Using a current brand name to enter a completely different product class. Co-branding The use of a combination of brand names to enhance the perceived value of a product May be used to identify product ingredients or components. multibranding Use when each brand is intended for a different market segment. . May be used when two organizations wish to collaborate to offer a product.

2. Promotional costs are higher with multibranding. Use the same brand name for the same product across all countries in the European Union. Often called private labeling or reseller branding Use the brand name of a wholesaler or retailer. Euro-branding. Private Branding. Private Brands Advantages of Manufacturer's Brands to retailers or wholesalers Can enhance retailer's image can carry lower inventory manufacture gets the blame for problems Disadvantages (risks) of Manufacturer Brands retailers or wholesalers . Manufacturer's Brands vs. Makes Pan-European advertising and promotion programs possible.Has become more complex in the global marketplace.

Generic Branding. Low cost.Lower margins 3. 4. no frills Popular in late 1970's 30%-40% cheaper than national brands 20%-25% cheaper than store brands good market share in some categories IV. a no-brand product that competes on price. A compromise between manufacturer and private branding A firm markets products under its own name and that of a reseller The segment attracted to the reseller is different from the manufacturer’s own market. PACKAGING AND LABELING . Mixed Branding.

Packaging component .

Creating Customer Value through Packaging and Labeling Packaging Functions Contain and Protect Products .Label A.

Facilitate Recycling Reduce Environmental Damage Facilitate Storage Facilitate Use Wholesalers & Retailers want .

particularly by offering different sizes for different segments. .packages that Consumers want packages that are Packaging is often used to segment markets. Functional Benefits. Communication Benefits. Convenience Product protection Storage. 2. 1. Create perception in the consumer’s mind. Can connote status economy product quality. Consumer protection 3. as in the case of L’eggs. Perceptual Benefits. Label information  Packaging can also have brand equity benefits.

Global Trends in Packaging 1.S. European countries have been trendsetters in packaging guidelines and environmental sensitivity. U. 2.S. New packaging technology to extend shelf life (the time a product can be stored) and prevent spoila special applications for less-developed countries. Health and Safety Concerns A majority of U. Labeling Persuasive labeling . and European consumers believe that companies should make sure products and of the cost. and disposal of packaging material continue to receive much attention. composition.B. C. firms marketing in the EU have responded to these guidelines and ultimately benefited consum Firms are using life-cycle analysis (LCA) to examine the environmental effects of their packaging at sources and production through distribution and disposal. Environmental Sensitivity The amount.

V.Informational labeling Universal Product Codes (UPC) Nutrition Labeling and Education Act of 1990 Requires detailed nutritional information on most food packages Establishes standards for health claims on food packaging. PRODUCT WARRANTY A warranty is a statement indicating the liability of the manufacturer for product deficiencies. .

There are various types of product warranties with different implications for manufacturers and cust Warranties are important in light of increasing product liability claims. Warranty Strategy Product Warranties Warranty Express Warranty full warranty limited-coverage warranty . This issue is hotly contested between companies and consumer advocates.

Implied Warranty Magnuson-Moss Warranty Federal Trade Commission Improvement Act .

.w weeks to decades.

.Profit is minimal or negative Stimulate trial Limited product models Penetration pricing Little competition High marketing costs Informing about product benefits. Profits are healthy Differences between brands. Many competitors enter the market.

Company retains the product but reduces marketing support Promote more frequent use of the product by current customers Find new target markets for the product Find new uses for the product Price the product below the market . Dropping a product from the company’s product line. Falling demand forces many competitors out of the market A few small specialty firms may still manufacture the product. Prices and profits begin to fall. The marketplace is approaching saturation An emphasis on product style rather than function marginal competitors begin dropping out of the market. is the most drastic strategy. Sales volume has created economies of scale.profits reach their peak.

Develop new distribution channels Add new ingredients Delete old ingredients Make a dramatic new guarantee consume r products usually have shorter life cycles than business products Rate of technolo gical change shortens product life cycles. .

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Variat ions within the class Such as the comp uting capab ility of game conso les. . ation.Entire produ ct categ ory or indust ry Such as video game conso les and softw are.

50% Much more relian t on group norms .Eager to try new ideas and produ cts Have highe r incom es Better educa ted than nonin novat ors 2.

34% . neigh bors.Orient ed to the local comm unity Tend to be opinio n leade rs. 13. Rely on friend s. and opinio n leade rs for infor matio n and norms .50% Collec t more infor matio n Evalu ate more brand s than early adopt ers.

Adopt becau se most of their friend s have alrea dy done so. For them, adopt ion is the result of press ure to confo rm. Are older than the other s Tend to be below avera ge in incom e and educa tion. 34% Do not rely on the norms of the group .

Indep enden t becau se they are traditi onbound Have the lowes t socio econo mic status Are suspic ious of new produ cts Aliena ted from an advan cing societ y 16%

product is incompat ible with existing habits product provides no incentive to change physical, economic , or social

cultural differenc es or image.

The degree of difficulty involved in understanding and using a new product. Slows diffusion. The degree to which the new product is consistent with existing values and product knowledge, past experiences, and current needs. Incompatibility slows diffusion. The degree to which a product is perceived to be superior to existing substitutes. Speeds diffusion The degree to which the benefits and other results of using a new product can be observed by others and communicated to target customers. Speeds diffusion is the degree to which a product can be tried on a limited basis. Speeds diffusion

eir life cycles. . cts or brands.Word-of-mouth communication Marketing to consumers d. Finding new users.

Competitor’s position is adversely affecting sales and market share. consumer interest in “functional foods” that offer health and dietary benefits beyond nutrition inspired repositioning of oatmeal. . Creating new use situations. Reposition a product by changing one of four marketing mix elements. For example. Changing consumer trends can also lead to repositioning a product. Changing the place a product occupies in a consumer’s mind relative to competitive products.Increasing use among existing users. Repositioning a product allows it to reach a new market.

Trading up Reduc ing the numb er of featur es Lower qualit y Lower price.addin g value to the produ ct (or line) Additi onal featur es Highe r qualit y mater ials. Trading down . Reduc ing the conte nt of packa ges witho ut chang ing packa ge size and maint aining the packa ge price.

design. Some still are! aspirin formica® sheetrock® band-aid® kerosene styrofoam® dry ice magic marker® trampoline . such as symbols commercial. The element of the brand that cannot be spoken. That part of the brand that can be spoken. All of the products below were trademarked. term. Failure to protect trademarks may make product names generic. legal name under which a company does business. symbol..A name. or combination thereof that identifies a seller's products and differentiates them from competitors' products.

. the added value a given brand name gives to a product beyond the functional benefits provided. The value of company and brand names.dumpster® nylon vaseline® escalator ping-pong® yo-yo The brand allows the product to be differentiated from others and serves as an indicator of quality to consumers Because a familiar brand is more quickly accepted by consumers. eputation.

Leads to repeat purchases. . or customer benefit is mentioned. important to developing brand loyalty A brand so dominant in consumers' minds that they think of it immediately when a product category. use situation.Often represented by the premium a consumer will pay for one brand over another when the functional benefits provided are identical Consistent preference for one brand over all others. product attribute.

t class or need to give a ween consumers and the .

and positive. Be simple and emotional. Be memorable.nd name. Fit the company or product image. . Have no legal or regulatory restrictions. distinctive. patent. trade Describe product benefits.

Use one name for all its products. Called blanket branding strategy Called family branding strategy. .Be carefully checked for prior impressions or undesirable images in different languages and cultures..

.giving each product a distinct name.

n. Advantages of Private Brands to retailers or wholesalers Higher gross margin Manufacturer can not discontinue ties consumer to dealer ties salespeople to dealer dealer controls marketing mix Disadvantages (risks) of Private brands to retailers or wholesalers .

Higher marketing costs Must buy in large quantities Dealer gets the blame for problems risk of lower perceived quality .

Integr al part of the packa ge Typic ally identi fies th e pr od uc t or br an d W ho m ad e it .any contai ner in which it is offere d for sale and on which label infor matio n is conve yed.

1.W he re an d w he n it w as m ad e H o w it is to be us ed Pa ck ag e co nt en ts an d in gr ed ie nt s. spoilage tampering children Theft Packagin g Promotes Products . 2. 4. 3.

Brand Image is often closel y linked to packa ging  Are easy tosh st ip or e st oc k on sh el ve s.Conve nienc e and utility of the packa ge can differ entiat ea produ ct from the comp etitio n Last oppor tunity to influe nce shopp ers befor e they buy. .

Easy to handl e Easy to open Easy To reuse .Prote ct the produ ct Preve nt spoila ge or break age Exten d shelf life.

sitivity. regardless ent spoilage is being developed with Focuses on a promotional theme or logo Information for the consumer is secondary.ention. aging at every stage from raw material ucts and packages are safe. d consumers outside the EU as well. .

.Helps consumers in making proper product selections Helps lower cognitive dissonance May include care and use information may explain construction figures Introduced in 1974 Many Retailers will not stock products without s.

and customers. made in writing has no limits of noncoverage. specifically states the bounds of coverage areas of noncoverage. . Guarantees the quality or performance of a good or service. A protection and information device for consumers.

Often assign responsibility for product deficiencies to the manufacturer. Manufacturer that promises a full warranty must meet certain minimum standards. A limited warranty must be conspicuously promoted by the manufacturer Otherwise a full warranty is assumed. . All sales have an implied warranty under the Uniform Commercial Code.Unwritten guarantee that a good or service is fit for the purpose for which it was sold.