Think Marketing Canadian 2nd Edition Tuckwell Solutions Manual

THINK Marketing Canadian 2nd Edition
Tuckwell Solutions Manual

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Chapter 9: Product Management
CHAPTER 9
PRODUCT MANAGEMENT
Learning Objectives
LO1: Explain the different organizational structures used to manage brands.
LO2: Describe the steps in the new product development process.
LO3: Discuss key decisions involved in managing current products.
LO4: Identify the stages in a product’s life cycle and discuss how a brand manager’s
decisions are influenced at each stage.
LO5: Explain how the product adoption process influences the length and shape of a
product’s life cycle.
CHAPTER HIGHLIGHTS
Product management focuses on three key areas:
• the internal organization structure for managing current products

• the allocation of resources for the development of new products
• dealing with changing market needs, especially as products progress through
their life cycles
LO1: Explain the different organizational structures used to manage brands.
A. Organizational Structures for Managing Brands
Contemporary marketing organizations employ various management structures and

systems that provide efficiency in developing and marketing brands and products. Some
of the more common management systems are as follows (see Figure 9.1 in the
textbook):
1. Brand Management
An individual is assigned complete marketing responsibility for a product or group of

products. A brand manager (product manager or category manager) is responsible for
all aspects of the marketing mix. Decisions on product, price, distribution, and marketing
Copyright © 2016 Pearson Canada Inc. 9-148

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communications are made in the interests of achieving the stated goals of the
organization, namely increasing sales, profit, and market share.
2. Category Management
An individual is assigned responsibility for a portfolio of brands in a category (e.g.,

products in the same market segment: household cleaning products, baking products, or
toothpaste). In this system, the category manager adopts a more generalized view of the
business than would a brand manager. Leading supermarkets and other mass
merchandisers work with their suppliers to cooperatively manage categories of products
instead of individual brands.
Supermarkets in Canada have used category management systems (space management

systems) for some time. Consequently, manufacturer's management structures have
changed to reflect market realities. The move by manufacturers toward category
management will continue. It encourages a more cooperative marketing effort (a
partnership) in the channel of distribution.
3. Target Market Management
This system recognizes that different customers have different needs that require different
strategies. A multi-divisional company (e.g., Bell Canada) with diverse customer groups
uses this type of management system.
4. Regional Management
In this system decision making is decentralized based on geography. Each region has a
staff of marketing and sales personnel who develop programs unique to the region (e.g.,
Atlantic, Quebec, Central, West).
5. Continental and Global Management
As markets become smaller and growth in domestic markets dries up, pursuing global
markets becomes a priority. In this system brands may be managed on, say, a North
American basis (continental) or on a global basis. Under such a management structure a
company hopes to implement successful ideas anywhere regardless of the original
sources. A continental structure has negatively affected the marketing operations of many
Canadian divisions of U.S.-based companies. Key brand decisions are being made in the
United States, meaning less unique marketing strategies for Canadian consumers. The
often-used phrase "Think globally and act locally" is a common salute among
multinational marketers. In terms of brand strategy it is more efficient to offer the same
brand name product in as many regional markets as possible. Airbnb, for example, makes
marketing decisions globally as the accommodations listed on its site cover 192 countries
around the world. Despite offering its website in 21 languages, the brand identity is
consistent around the world (see Figure 9.2).

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LO2: Describe the steps in the new product development process.
B. A Closer Look at Product Decisions
1. New Product Decisions
A new product is a product that is truly unique and that meets needs that have been
previously unsatisfied (e.g., Google Glass wearables). Advancing technology creates
these unique opportunities. Most new products fall into the line extension category (new
varieties, new flavours, and new sizes). New innovations can be protected by patent.
Some organizations ignore patent protection laws and introduce look-alike products
referred to as knock-offs.
There are seven steps in the new product development process (see Figure 9.4):
a. Idea Generation
Good ideas and concepts are selected from all available sources, both inside and
outside the organization. Smart organizations encourage their employees to generate
new product ideas.
b. Screening
Those ideas that do not offer financial promise are eliminated quickly. Senior
executives look for ideas that fit the strategic direction the company is taking.
c. Concept Development and Testing

At this stage the idea is presented in visual form to consumers to find out their
reactions to it. The company proceeds with ideas where interest is high.
d. Business Analysis
A financial review of ideas that consumers reviewed positively is undertaken.
Production and marketing costs and revenue and profit projections are analyzed. Ideas
are ranked according to financial promise. Many companies got burned when
forecasting demand for low carbohydrate products. What was supposed to be a trend
was nothing more than a one-year fad. The anticipated sales and profits did not
materialize.
e. Product Development
The idea becomes a physical product. A prototype is developed that meets the needs
of potential customers. Further consumer research is conducted and the prototype is
refined. Many key decisions are made at this stage since the company is spending
money in development. The type and quality of parts and materials, the method of
production, and the time required for start-up are all considered. Production and
marketing departments work closely together at this stage. This stage determines the
feasibility of producing goods profitably.

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f. Test Marketing and Marketing Planning

An introductory marketing plan is developed for a test market situation. Consumer
reaction to the product and the marketing strategy is assessed at this stage. Several test
markets may be conducted to formulate more conclusive evidence that the product
will succeed.
g. Commercialization
Full-scale production and marketing occurs. The product is introduced regionally or
nationally according to the needs and expectations of consumers.
LO3: Discuss key decisions involved in managing current products.
2. Product Modification Decisions
This includes changes in style (automobiles), colour (washing machines), function (golf
equipment), and quality (improve or cost reduce to save money). Electronic devices
constantly innovate to add features, and some companies modify products and packaging
to appeal to consumers’ interest in environmentalism.
3. Product Mix Expansion Decisions
Product mix decisions concern the width and depth of a product line. The addition of new
products and the extension of existing products, often referred to as product stretching,
are the lifeblood of growth-oriented companies.
4. Packaging and Brand Design Decisions
The decision to change the design of a package is made possibly to change or improve
the image of the product; for example, newly designed beer cans that keep beer colder for
longer periods offer an advantage for early adopters of the technology. Reducing the
amount of packaging to meet environmental objectives is another management
consideration. Changing logos and other elements of corporate identity can also aid in
repositioning the company in the mind of consumers.
5. Product Maintenance or Withdrawal Decisions
This is the decision to keep a product on the market or pull it from the market. Such a
decision is usually based on the profitability of the product and the direction a company
wants to pursue. If products or entire divisions of a company no longer fit they are sold
off. For example, Chrysler eliminated its Cruiser line in 2010.
Many companies use planned obsolescence, where products are deliberately outdated
before the end of their useful life, by stopping the supply or introducing a newer version
(e.g., computer hardware and software).

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LO4: Identify the stages in a product’s life cycle and discuss how a brand manager’s decisions are
influenced at each stage.
C. The Product Life Cycle
Products go through a series of phases known as the product life cycle. The variables of
time, revenue, and profit determine the stage of the cycle a product is in. See Figure 9.9
for an illustration of these variables and their effect on each stage.
1. Introduction Stage
The introduction stage is characterized by a period of slow sales growth since the product
is new and not widely known. Losses are frequent because of the high marketing
expenditures to generate demand and awareness for the product. Trial incentives and
widespread use of media advertising are common at introduction. High prices also prevail
since it is easier to lower prices at a later stage than raise them. Achieving desired
distribution is difficult since the product is not well known or in demand. Establishing a
web presence is now very important for new products (e.g., it’s a good way to provide
information well in advance of an introduction).
2. Growth Stage
This stage is a period of rapid consumer acceptance where sales rise rapidly, as do
profits. The presence of competitive brands at this stage generally means that aggressive
marketing activity for the original product remains high. The goal is to protect and build
market share as the market is expanding. The emphasis of activity shifts from merely
generating awareness to include creating a preference.
Depending on the degree of competition, the organization maintains or perhaps increases

its marketing investment at this point. Advertising messages stress product differentiation
(unique selling points) and more targeted media are employed since more is known about
the consumer who buys the product. A greater variety of promotional incentives are used
to achieve trial and repeat purchase objectives. Price strategies remain flexible and are
often determined by competitive prices. Distribution is easier to achieve since the product
is in demand.
3. Mature Stage
At this stage the product has been widely accepted by consumers. Sales growth is
marginal or marginal declines in volume occur. Encouraging repeat purchase by loyal
consumers is the key to maintaining a long-lasting and strong position in this stage (e.g.,
Molson and Labatt or Coke and Pepsi battling for loyalty). Fringe brands often drop out
at this stage, leaving the market to a core group of competitors. Marketing budgets are
usually cut back and there is an emphasis on cost control.

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In this stage advertising tends to give way to various forms of promotion and price
discounting. The objective is to conserve money, not spend it. The goal is to generate
profits that can be reinvested in the development of new products. See Figure 9.12 for an
illustration of this impact.
Generally most products remain in the mature stage for a long period, so product
managers are accustomed to implementing strategies for mature brands. A manager has
the option of adopting a defensive strategy to try and maintain market share or an
offensive strategy to try and rejuvenate the brand.
Defensive strategies protect market share (preserving loyalty is a priority). Promotions

that encourage loyalty include cash refunds, contests, and giveaways. Such offers
encourage repeat purchase and multiple purchases. To protect market share prices are
often dropped. Distribution will remain stable if reasonable discounts and allowances are
still offered to distributors. For insight into investing in maintaining market share in the
mature stage, see the Think Marketing box For Coke, the Challenge Is Staying
Relevant.
In the mature stage attempts are made to rejuvenate a brand. Strategic plans are devised
to extend the product life cycle. See the following section for more details.
4. Extending the Product Life Cycle (See Figure 9.13)
The most commonly used strategies for extending the life cycle of a product (playing
offence when the product is in the mature stage) are the following:
a. Attract New Markets

This strategy involves geographic expansion or going after new demographic target
markets. An example of geographic expansion is the successful brand East Coast
Lifestyle adapting for the west coast.
b. Alter the Product

This strategy changes the characteristics of a product to attract new users, such as
improvements in quality, features, and style. For example, Frito-Lay reformulated its
products by using cottonseed oil with new frying techniques to achieve a better
tasting, lighter, and crunchier chip. Danone introduced dinosaur-shaped bottles of
drinkable yogurt for children.
Companies may also include bonus packs, which give customers more weight or
volume for the same price as the original size.
c. Add New Products

New products can be added to an existing product line, termed a line extension, via
different scents, product formats (liquid form in addition to solid form), and flavours
(e.g., light versions of existing products and exotic flavour combinations in juice
drinks, canned fruits, and ice cream). For example, chewing gum makers have entered

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into the nutraceutical market by offering enhanced gums. It is predicted that the
extremely popular Greek yogurt products will see line extensions in everything from
vitamins to skin care.
d. Changing Other Marketing Mix Elements

Altering other elements of the marketing mix (price, marketing communications, and
distribution).
5. Decline Stage
Sales drop rapidly and profits erode during this stage. Products become obsolete as many
consumers shift to innovative products entering the market. Price cuts are common as a
means of protecting market share. Objectives centre on planning and implementing the
withdrawal of the product from the market. Marketing budgets are cut to minimize
potential losses. See a summary of key marketing influences on the product life cycle in
Figure 9.16.
D. The Length of the Product Life Cycle
The length and shape of a product life cycle have many variations; see Figure 9.17. The
common variations include the following:
a. Instant Bust
A product with great potential that flops almost immediately upon introduction (e.g.,
Pepsi A.M., a breakfast cola, or Crystal Pepsi, a clear Pepsi).
b. Fad
A product that enjoys a short but successful selling season—usually one season (e.g.,
Beyblades and mood rings).
c. Fashion
A product that enjoys recurring success (in and out of fashion over the long term). The
alligator-emblazoned polo shirt (a shirt for preppies in the 1980s) recently made a
comeback. Very recent trends away from casual business wear back to business suits
sees companies such as Indochino and its custom-made suits in fashion again (see
Figure 9.18).
LO5: Explain how the product adoption process influences the length and shape of a product’s life cycle.
E. Product Adoption Process
The degree to which consumers accept or reject a product is the measure of its success or
failure. Product adoption is concerned with two areas: adoption, or individual
acceptance, and diffusion, or market acceptance.

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Adoption is a series of stages a consumer passes through on the way to purchasing a

product on a regular basis (see Figure 9.19).
• Awareness: The consumer learns about a product's existence.
• Interest: The consumer seeks and accepts messages that provide information.
• Evaluation: The consumer evaluates the benefits offered against the need to be
satisfied.
• Trial: The consumer responds to an incentive to make an initial (trial) purchase.
• Adoption: The consumer uses and purchases the product regularly.
Diffusion of innovation is the manner in which different market segments accept and
purchase a product. Consumers are classified on the basis of how quickly or how slowly
they adopt a product (see Figure 9.20). There are five categories of adopters:
• Innovators: The first group of consumers (risk takers) to accept a product (a

very small percentage of the population).
• Early Adopters: A larger group of opinion leaders who try new products when
they are new. They are influenced by status and prestige.
• Early Majority: The initial phase of acceptance by the mass market.
• Late Majority: The remainder of the mass market acceptance group. This group
is usually lower in social and economic status.
• Laggards: The last people to purchase a product. Typically, this group does not
like change.
Innovators and early adopters have moved on to other new products by the time the mass
market starts buying a product. In technology markets, trends suggest that there are many
more early adopters adopting new products earlier than before.
ADDITIONAL ILLUSTRATIONS OF KEY CONCEPTS
1. Innovators Continue to Add Line Extensions to Products
Just in time for Christmas, Bluetooth manufacturer Jawbone is extending its product line
with new wearables at both ends of the price spectrum. Its lower end “pod” titled Up
Move tracks user basics such as steps, calories burned, and sleep and can be attached to a
wristband or clipped to clothing. It retails for about $50. The product is designed to entice
“newbies” to the area of self-monitoring and is a mass-market device not designed for
early adopters.

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For more sophisticated users, Jawbone has introduced its higher-priced model called
UP3, retailing for $180. This new device is much like the earlier introduced Jawbone
Up24 band, but it adds data around resting heart rate. Both devices sync with Jawbone’s
free app.
Smartwatches, activity trackers, and other wearables are seeing an explosion in new
product innovation as companies compete to outdo one another in feature offerings and
consumer relevance.
Adapted from Lauren Goode, “Jawbone Joins Pre-Holiday Wearable Race,” November 4, 2014,
http://recode.net/2014/11/04/jawbone-joins-pre-holiday-wearable-race-with-50-up-move-and-a-new-up3-
wristband/.
2. New Marketing Management Structure at GM
Effective June 1, 2008, GM moved away from a regional general manager system to a
brand management system managed from Detroit headquarters.
In the new system there are four key high-ranking brand executives with the brands being
divided as follows: Buick-Pontiac-GMC; Cadillac-Hummer-Saab; Chevrolet; and Saturn.
Each manager will run his or her channel as separate businesses. All managers report to
the vice-president of vehicle sales, service, and marketing.
Adapted from Jean Halliday, “New GM Brand Czars Will Influence Product,” Advertising Age, April 28,
2008, pp. 3, 143.
3. Canada Dry: New Tea Product Enters Soft Drink Market
Seizing a real opportunity in two growth segments of the beverage market (tea and
sparkling beverages), Canada Dry launched Sparkling Green Tea Ginger Ale. The
marriage of these two categories is a compelling way to meet consumer demand, said
Andy Bayfield, vice-president and general manager of Canada Dry Mott’s Inc.
To entice consumers the brand promises “real green tea and the refreshing taste of
Canada Dry Ginger Ale—together in perfect harmony. Feel good about what you drink.”
Adapted from Kristin Laird, “Canada Dry Is Bubbling Over Green Tea,” Marketing Daily, May 9, 2008,
www.marketingmag.ca/daily.
4. Product Life Cycle: What Goes Around Comes Around
Go back to 2008, and one of the hottest sellers in the lawn care market is the manual lawn
mower. Sales of manual lawnmowers with the cart-wheeling blades are on the rise.
Officials attribute the surge to increased environmental concerns, the faltering economy,
and higher gasoline prices.

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American Lawn Mower Company reports a sales increase of +70% versus a year ago
(June 2008 versus June 2007). Will the trend continue?
American Lawn Mower also reports that manual mower sales average 300,000 units a
year, about the same as an electric mower. By comparison roughly 6 million gas-powered
mowers are sold each year. Entry-level push mowers ($150–$250) are cheaper than gas
mowers ($150–$400).
Adapted from “It’s Clean, and It Saves Some Green,” Globe and Mail, June 21, 2008, p. B10.
5. Labatt Breweries Introduces New Line Extensions
Labatt Breweries of Canada will celebrate its signature Blue brand's 60th anniversary by
introducing three new line extensions: Blue Lime, Blue Dry, and Blue 55. These new
beers are the first additions to the Blue line in English Canada since Blue Light.
Blue Lime will compete in the growing lime beer category, while Blue Dry is a 6.1%
alcohol version of Blue with a crisper, drier finish. Labatt Blue 55 is the extra light
alternative at only 55 calories. Labatt will also showcase its new packaging for the Labatt
Blue brand.
Beer drinkers are brand loyal but have different needs depending on the occasion, season,
and so on. The three variants will provide Blue drinkers with alternatives while staying
within the Blue brand.
Adapted from Chris Powell, “Labatt Adds to Blue Product Line,” Marketing Magazine, July 15, 2011,
www.marketingmag.ca.
6. New Products and New Packaging Keeps Leaders Ahead
Whether it’s new packaging, new products, or new pricing policies, P&G is constantly
finding ways to keep the competition playing catch-up. It singlehandedly changed the
rules of the laundry category overnight by moving to concentrated formulas in both
powder and liquid, thereby forcing other competitors to spend huge dollars adjusting,
often with adverse consequences.
Industry leaders protect their future by changing the rules. Here are a few proven
strategies:
• Introduce a new product that shakes up the category (e.g., skin care products for
men—all big brands now have competing lines)
• Develop a new technology that makes everything else look like yesterday's news
(e.g., RIM’s BlackBerry and Apple’s iPhone)
• Brand something that was never branded (e.g., Intel)

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CLASSROOM MANAGEMENT STRATEGIES
Here are some ideas for generating class discussion and participation:
1. Clearly distinguish the various product management systems and ask for student input
on why there is so much variation. As discussion unfolds try to make them understand
that the best system is the one that serves the customers the best. It is also important to
show how Canadian management decisions are influenced by decisions in other
countries. Ask students if it is possible to implement a truly global strategy. This will get
them thinking about the external environment and the influence of culture and language.
2. Getting students to understand the product life cycle and the corresponding
implications for marketing can be introduced by saying “the lines tell the story.” Have the
students examine the sales and profit lines (curves) for each stage in the product life
cycle. Once they know what is happening to sales and profit, ask them why this is so?
Factor in the threat of competition in the early growth stage. They will start to establish
various objectives and identify the activities that will achieve them.
3. Select and project several products and have students brainstorm in groups where the
product sits on the life cycle. Have students also identify marketing strategies used with
each product and whether these correspond with the marketing influences mentioned in
the text.
4. Managing a product in the mature stage is difficult. Most products are mature, so how
much do you invest in marketing and what activities do you undertake? The simplest way
to generate discussion is to identify some mature companies that are in some trouble.
Some good examples might be General Motors or Ford, McDonald’s, Coca-Cola, and
Levi-Strauss & Company (Levi’s jeans). These are successful companies that are
floundering. Can the students identify the external trends that are affecting their
businesses? What would the students recommend to turn things around?
5. Extending a brand name by adding line extensions or giving a new product an existing
brand name is often a safe strategy to follow. Ask the students for some examples of
brand names that have been extended into other product categories. Does it always make
sense? For example, Dove is a popular soap brand, but Unilever has extended the name
into other personal care categories. How far can a brand name be extended?
6. Pick a popular product (e.g., Oreo cookies or Cheerios) and have students compete to
see which team can come up with the greatest number of line extensions—the more
creative the better! Ideation sessions sometimes see the best ideas being shaped from the
strangest places!
7. Have students do some online research to track down information about a major
product relaunch (not a typical strategy for a mature product). It may not be the norm, but
periodically a company will try and reinvent the wheel by placing a lot of marketing
support behind a “new look.” What did they do? What were the results? Was it a

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worthwhile venture? This assignment should be planned in advance so the students are
ready to discuss in class. It is a good example when discussing the product life cycle or
the new product development process.
ANSWERS TO EXPERIENCE MARKETING
Situation 1
Students must proceed through the stages in the marketing planning process. As part of
the brand analysis, students should recognize that the product being introduced into the
United States is in its introduction stage. When a marketing mix strategy is developed,
students should consider strategies to maximize initial reach and then extend the product
life cycle.
ANSWERS TO END-OF-CHAPTER QUESTIONS
Review Questions
1. What are the four different organizational structures or systems used to manage
brands? (LO1)
The four different organizational structures/systems used to manage brands include the
following:
a) Brand Management: The brand manager is assigned responsibility for designing
and implementing marketing programs for a specific product(s).
b) Category Management: A category manager is responsible for a group of products
(a category such as laundry detergents at P&G). The manager is responsible for
plotting the strategy for all products to maximize sales and market share.
c) Regional Management: Marketing strategies are developed to meet the unique
needs of a geographic area (e.g., Atlantic Canada). Marketing and sales personnel
are located in that region.
d) Target Market Management: Marketing strategies are devised based on the nature
of an industry or a group of customers in an industry (e.g., marketing to the
electronics industry differently than the chemical industry).
2. Which management system or structure is the business-to-business market moving

toward? (LO1)
The business-to-business market is moving toward target market management systems.
3. List the steps in the new product development process. What are some ways companies
generate ideas for new products? (LO2)
The seven steps in the new product development process are idea generation, screening,
concept development and testing, business analysis, product development, test marketing
and marketing planning, and commercialization. Ideas for new products may come from

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staff, suppliers, customers, research, or the competition. Some companies employ a

dedicated research and development division for this purpose.
4. Which step in the new product development process involves assessing market demand
for a product, calculating the costs of producing and marketing the product, and
predicting sales revenue and profit? (LO2)
The business analysis step involves assessing market demand, costs, and predicting sales.
5. What are the specific marketing decisions a brand manager is responsible for? (LO3)
The brand manager is responsible for developing and implementing all marketing
strategies for a product or group of products so that profit is generated for the company.
The manager makes decisions involving all elements of the marketing mix.
6. What is a reason a company might practise planned obsolescence? (LO3)
A company may practise planned obsolescence to encourage consumers to make

purchases of upgraded models.
7. What is the product life cycle? Describe strategies an organization could use to extend
the life cycle of a mature product. (LO4)
The product life cycle includes the introduction stage, which is a period of slow growth
and little or no profit (losses). Marketing objectives focus on achieving awareness,
interest, and trial. The growth stage is a period of rapid sales growth, and profits start to
appear and then rise rapidly. The goal in this stage is to create a brand preference through
product differentiation. In the mature stage there is marginal sales growth and then
marginal decline. Profits peak at the mature stage. The main marketing objective is to
extend the life cycle of the product. This can be done by attracting new markets, altering
the product, adding new products, and changing the marketing mix. In the decline stage,
sales drop rapidly as do profits. Therefore, the goal is to prepare for the potential
withdrawal of the product.
8. What is the difference between a fad and a fashion life cycle? (LO4)
The difference between a fad and a fashion life cycle is that a fad is reasonably short
(selling for only a season or a few) whereas a fashion is recurring, meaning what is in
style now will be in style again.
9. Outline the five distinct steps in the adoption process. How might an understanding of
this process influence marketing strategies and decisions? (LO5)
The five distinct steps in the adoption process include awareness, interest, evaluation,
trial, and action. Understanding this process allows marketers to tailor their marketing

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mix depending on which stage the consumer is at (e.g.,, use of information versus
incentives).
10. What are the characteristics of each of the five adopter categories? (LO5)
The five adopter categories and characteristics of each are as follows:

a) Innovators are risk takers and trendsetters eager to buy new products.
b) Early adopters are opinion leaders affected by status and prestige.
c) Early majority like to buy a proven commodity, and they are in the mid-range of
social and economic status. They represent the initial phase of mass acceptance.
d) Late majority only buy established products that have been around a while.
e) Laggards do not like change. They buy the same old things and are the last group
to buy the product.
Discussion and Application Questions
1. Provide examples of brands or companies that are using the following strategies to
extend their life cycles: (a) entering new market segments, (b) altering the product, and
(c) adding line extensions. Explain the strategy in each case.
Students will be able to easily find examples for each of the brand strategies. These
strategies are applied especially in the food, automobile, and appliance product
categories.
2. In the continental and global product management section of the chapter, the concept
of using strategies from other markets was discussed. Based on what you know about
Canada and Canadian consumers (e.g., language and cultural backgrounds), is it practical
to think that an advertising campaign devised elsewhere will work in Canada? What are
the costs and benefits of utilizing such campaigns? Provide real examples to strengthen
your position on the issue.
Global management of products is taking hold in many categories. Coca-Cola and

McDonald’s both use global strategies for marketing communications. Answers to this
question will vary, but it is likely that many global strategies can and will be
implemented in English Canada. Quebec remains unique and is a mystery for many
English-Canadian companies. That being the case, it is unlikely that strategies from other
parts of the world would work in Quebec.
3. Test marketing is a step in the new product development process. In the chapter it was
stated that some marketers see test marketing as an essential step, almost a mandatory
step. Other marketers see it as a step that can be eliminated because it tips off competitors
about an organization’s pending actions. What is your opinion on this issue?
Test marketing remains important if an organization wants to reduce the financial risks
associated with a national launch without testing. The entire research process is much
quicker today because of the amount of online research available to an organization.

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Time saved there could be put to use in test markets (the real acid test for product and
marketing strategy acceptance). Better safe than sorry! That said, many marketers are
bypassing test markets feeling a sense of urgency in beating their competitors to market
with an innovative idea.
ADDITIONAL ASSIGNMENTS
1. From a predetermined list of product categories, brand name products, or services,

have students analyze the market characteristics (e.g., sales trends, nature and degree of
competition) and marketing strategies. The task is to determine the stage in the product
life cycle the products are in. A list of highly visible brands is preferable for this exercise.
2. A visit to a grocery store can be a revealing exercise in assessing line extensions of

common products. Sometimes students will see extensions they hadn’t even noticed
before. The soup aisle, cookie aisle, and cereal aisle may reveal many insights around
line extensions. A personal care/beauty and grooming department can also provide many
examples of line extensions of known brands.
3. Have students contact a company of their choosing. The task is to secure information
regarding the involvement of senior managers in the new product development process.
How active are senior managers in the decision to proceed or not to proceed with a
potential new product? What factors do they consider in making such decisions?
4. A good in-class exercise is to have students assess their buying behaviour so they can
place themselves in one of the adopter categories. Many students find they don't like the
label that is assigned to them. Such an exercise calls for an objective assessment. This
may also be assessed against different types of product categories such as electronics
versus personal care products versus food.
5. Have students conduct some secondary research on the issue of product management
systems. Which systems (brand, category, target market, etc.) are becoming more popular
or less popular in marketing today? Students should present arguments on the trends to
justify why things are changing.
6. Have the students conduct some secondary research on brand line extensions. The goal
is to identify some successes and failures. Why do some succeed while others fail? Have
students draw some conclusions about line extension strategies based on their
observations and analysis.

Think Marketing, 2e
A pedagogy, not just a technology.
Learning Catalytics is a “bring your own device” student engagement assessment that
allows instructors and students to work together to generate classroom discussion, guide
your lecture, and promote peer-to-peer learning with real-time analytics.
Accessing Learning Catalytics is easy. Students bring their devices to class, and then
input the login code provided by the instructor. Instructors release questions, and students
answer in real time. The results are aggregated and help direct class discussion or
assessment. They can also be saved for a more detailed analysis after class.
Below you will find a selection of Learning Catalytics questions that have been
correlated to this chapter. You can access the interactive questions by connecting to the
Learning Catalytics site through the MyMarketingLab home page.
SAMPLE QUESTIONS
Course Title: Canadian Marketing
Question Number: 2.2

Question Type: Long answer
Prompt: Provide some ideas for either product development or market development for lululemon.
Notes: This is an opportunity for students to be very creative with their answers, and may be better done
in partners. The question requires that students know the difference between market development (new
targets, i.e., seniors, plus size, kids, or new geographic markets) and product development (modified or
new products to current markets, i.e., swimsuits, lingerie, or footwear).
Course Title: Canadian Marketing
Question Number: 8.2

Question Type: Ranking
Prompt: Order these phases in the product life cycle, from earliest to latest.
Answer/Explanation: Stage 1: Product development. Stage 2: Introduction. Stage 3: Growth. Stage 4:
Maturity. Stage 5: Decline.
Notes: Revealing these stages offers the opportunity to discuss how different marketing tactics are
required at each stage. For example, a product is most likely to get media coverage and buzz in its
introduction, high ad spending during growth, more promotional-based advertising during maturity
(where many products live for years), and a reduction in spending during decline.

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LO2: Describe the steps in the new product development process.

LO3: Discuss key decisions involved in managing current products.

Product management focuses on three key areas:

• the internal organization structure for managing current products

LO1: Explain the different organizational structures used to manage brands.

A. Organizational Structures for Managing Brands

Contemporary marketing organizations employ various management structures and

An individual is assigned complete marketing responsibility for a product or group of

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An individual is assigned responsibility for a portfolio of brands in a category (e.g.,

Supermarkets in Canada have used category management systems (space management

3. Target Market Management

5. Continental and Global Management

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LO2: Describe the steps in the new product development process.

B. A Closer Look at Product Decisions

1. New Product Decisions

c. Concept Development and Testing

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f. Test Marketing and Marketing Planning

LO3: Discuss key decisions involved in managing current products.

2. Product Modification Decisions

3. Product Mix Expansion Decisions

4. Packaging and Brand Design Decisions

5. Product Maintenance or Withdrawal Decisions

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C. The Product Life Cycle

Depending on the degree of competition, the organization maintains or perhaps increases

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Defensive strategies protect market share (preserving loyalty is a priority). Promotions

4. Extending the Product Life Cycle (See Figure 9.13)

a. Attract New Markets

b. Alter the Product

c. Add New Products

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d. Changing Other Marketing Mix Elements

D. The Length of the Product Life Cycle

E. Product Adoption Process

Copyright © 2016 Pearson Canada Inc. 9-154

Adoption is a series of stages a consumer passes through on the way to purchasing a

• Awareness: The consumer learns about a product's existence.

• Trial: The consumer responds to an incentive to make an initial (trial) purchase.

• Adoption: The consumer uses and purchases the product regularly.

• Innovators: The first group of consumers (risk takers) to accept a product (a

• Early Majority: The initial phase of acceptance by the mass market.

ADDITIONAL ILLUSTRATIONS OF KEY CONCEPTS

1. Innovators Continue to Add Line Extensions to Products

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2. New Marketing Management Structure at GM

3. Canada Dry: New Tea Product Enters Soft Drink Market

4. Product Life Cycle: What Goes Around Comes Around

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5. Labatt Breweries Introduces New Line Extensions

6. New Products and New Packaging Keeps Leaders Ahead

• Brand something that was never branded (e.g., Intel)

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CLASSROOM MANAGEMENT STRATEGIES

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ANSWERS TO EXPERIENCE MARKETING

ANSWERS TO END-OF-CHAPTER QUESTIONS

2. Which management system or structure is the business-to-business market moving

The business-to-business market is moving toward target market management systems.