Product and Service Management

Product Planning

And Or

Service Planning

STANDARD 11 You will understand the concept of product planning and how it relates to marketing. Objective 1: Understand product planning, mix, and development.

Explain the nature and scope of the product/service management function. Explain the concept of the product mix. Plan a product mix. Define: Product, good, service Product/service management task are affected and influenced by many factors, both

within a company and outside

Objective 2: Understand sustaining product sales.

Identify the impact of product life cycles on marketing decisions. Describe factors used by marketers to position products/businesses.

Objectives

Have you ever thought about who’s responsible for those products and what their job duties entail?

What do you think is necessary to make a new product successful?

How do businesses develop new product and position it for sale?

Why do businesses need to

introduce new products?

Product planning: (or service planning) involves obtaining, developing, maintaining, and improving a product or service mix in response to market opportunities.

Products Planning

http://www.imagacademy.org/warner%20lessons/8%20Product%20Service%20Management/37%20Product%20Planning%20and%20Development/37%20Product%20Planning%20and%20Development.html

http://images.businessweek.com/ss/06/10/yamaha/source/5.htm

Product: is anything a person receives in an

exchange. It can be either a good or a service.

Good: a tangible object that can be manufactured or produced for resale to create value

Service: an intangible activity preformed in exchange for payment to create value

Product Planning

Product Mix: includes all of the different products that a company makes or sells.

Product Planning

Importance of Product or Service planning

Sales and profits improve if offering the right products and the right time to the customer

Market share increases and the ability to beat the competition

New products can bring new customers

Product Planning

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Importance of Product Mix

Appealing to the target market

Helping to present a consistent company image

Affecting profitability

Helping deal with competition

Product Planning

Product line: group of closely related products manufactured or sold by a business

Product Planning

Product item: a specific model, or brand of a product in a product line.

Product Planning

Product Width: refers to the number of different product lines a business manufactures or sells.

Breadth: Carrying items in many different product categories. Offering several different types of service under one roof. Narrow or wide

Product Planning

Product Depth

Refers to the number of items offered within each product line. Shallow or deep.

Product Planning

• LAY'S® Balsamic Sweet Onion Flavored Potato Chips • LAY'S® Barbecue Flavored Potato Chips • LAY'S® Cajun Herb & Spice Flavored Potato Chips • LAY'S® Cheddar & Sour Cream Flavored Potato Chips • LAY'S® Chile Limon Flavored Potato Chips • LAY'S® Chipotle Ranch Flavored Potato Chips • LAY'S® Classic BLT Flavored Potato Chips • LAY'S® Classic Potato Chips • LAY'S® Creamy Garden Ranch Flavored Potato Chips • LAY'S® Deli Style Original Potato Chips • LAY'S® Dill Pickle Flavored Potato Chips • LAY'S® FLAMIN' HOT® Flavored Potato Chips • LAY'S® Garden Tomato & Basil Flavored Potato Chips • LAY'S® Honey Barbecue Flavored Potato Chips • LAY'S® Honey Mustard Flavored Potato Chips

• LAY'S® Hot & Spicy Barbecue Flavored Potato Chips

Products move through the product life cycle and require different marketing strategies at each stage.

These stages are the basis for product planning.

Introduction

Growth

Maturity

Decline

Product Life Cycle

http://www.beasuccessfulentrepreneur.com/product-lifecycle-do-you-know-where-your-business-is/

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Activity: Think of products that have been around most

of your lives. For example, Coca-Cola, Barbie, etc.

Describe the different ways in which the product was

marketed at different times.

What are the stages the products go through?

Does each stage require different marketing strategies?

Product Life Cycle

The Key steps in product planning

Generate Ideas

Screen Ideas

Develop the Business Proposal

Test the Product Concept

Develop the Product

Commercialization

Evaluate Customer Acceptance

New Product Planning Steps

First Step

Generate Ideas Brainstorm for new product ideas

Ideas for new products can come from a variety of sources-

Employees,

customers,

sales representatives,

retailers,

family members

New Product Planning Steps

http://www.cesaroni.com/design_services/phase1product_research.php

Screen ideas

Identify any ideas that will potentially be unworkable

New Product Planning Steps

Test the Product concept

This means getting feedback from potential customers about the potential product

Is the target market interested in this product?

Is it the right time to introduce this product?

New Product Planning Steps

Business Proposal Conduct a feasibility analysis

Market size

Potential sales

Cost

Profit potential

Overall competitive environment

Level of risk

Production requirements

Time needed to create

Production efficiency

New Product Planning Steps

Develop the Product This is a lengthy step that

could take months or even years to finish

Prototype: during this step a working model of the product is tested, modified, and retested -

New Product Planning

Commercialization Introducing the product to

customers

This is an expensive step

New Product Planning

Evaluate Customer Acceptance Keep a close eye on-

sales,

profit,

market share,

and how well the product is meeting company goals.

New Product Planning

Develop a new product. (See activity sheets)

Activity: Focus group

Work in groups/pairs to generate ideas for a new product.

Present your ideas to a focus group of several students.

The focus group should discuss what they liked and

disliked about the products and any improvements they

might suggest. Could finalize by writing a one page report.

Activity

Developing existing products

Line extensions

Product modifications

Product Planning

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Deleting a product or product line

Obsolescence

Loss of appeal

Changes in company objectives

Lack of profit

Conflict with other products in the products in the line

Replacement with new products

Product Planning

Activity

Ask students to partner with someone and make a list of products they still use today that are 10 years old or older.

Then create another list of products they think will be obsolete in the next ten years and the reason why. Have pairs share their answers.

Activity

Positioning: a strategy in which a business creates a

certain image or impression of a product in the minds of consumers.

Product Positioning

Perception map – reviles the product positioning in customers mind Customers indicate their perception

of a product by where they place the dot.

In this instance customer perception of Twix is low priced, lower quality snack item

Where as Belgium Chocolates are perceived as high quality and high price

Product Positioning

Positioning Strategies Positioning by price and quality

Positioning by features and benefits

Positioning in relation to the competition

Positioning in relation to other products in a line

Product Positioning

Question: What is the primary goal of product positioning?

Objective 3: Understand packaging, labeling, and branding elements and strategies.

Explain the nature of branding.

Explain branding strategies.

Objective 4: Understand packaging and labeling.

Explain the functions of packaging.

Explain labeling laws.

Product Branding

What is a product brand?

It is a name, term, symbol, or design, that identifies a product

and distinguishes it from competitors’ products

Branding

Brand Name

a word, group of words, letters, or numbers that represent a product or service. Also called product brand.

Branding

Trade Name

Identifies and promotes a company or a division of a particular corporation.

The trade name is the legal name that a company uses when it does business.

Branding

Brand mark: visually recognizable and does not need to be pronounced.

Example: U.S. Postal Service’s eagle or Apple Computer’s apple.

Branding

Trade character: one with human form or characteristics.

Branding

Trademark:

a word, name, symbol, device, or combination of these elements that is given legal protection by the Federal government

Branding

Importance of Brands in Product Planning

To build product recognition and customer loyalty

To ensure quality and consistency

To capitalize on brand exposure

Branding

75% of all companies introduce a new product

each year

Types of Brands

National Brands: also called producer brands, they are owned by national manufacturers

Branding

Private distributor brands

Also called private brands, store brands, dealer brands or private labels.

Manufacture does not appear on the product.

Generic Brands

Products that do not carry a company identity

Branding

Manufacture Brand

Private brand

Brand Extension

Using an existing brand name on a new product

Brand Licensing

Allowing other companies to use their brand name

Co-Branding

Combining one or brands. Kellogg’s Pop-Tarts with Smucker’s fruit filling

Branding Strategies

What makes a good brand name? The name should describe the product’s uses.

Easy to read, pronounce, and remember

Create appealing images

Should be distinctive

Should be adaptable

Legally available

Appropriate for packaging and advertising

Branding

Brand Insistence - the goal of Branding

Definition: to be emphatic in demanding a specific brand.

How to Create Brand Insistence

The brand stands for something that is important to them

The brand connects with them on multiple levels across several senses

The brand is unique (or at least appears to be)

The brand is admirable

The brand interacts with them and does not disappoint them

The brand makes them feel good

Branding

Packaging: the physical container or wrapping for a product.

Packaging and Labeling

Functions of Packaging

Promote and sell the product

Defining Product Identity

Providing information

Expressing customer needs-various sizes, etc.

Ensuring safe use

Protecting the product

Packaging

Packaging Types

Aseptic Packaging: technology that keeps food fresh without refrigeration, such as canning or bottling

Environmental Packaging: friendly to the environment

Cause Packaging: used to promote social and political causes

Packaging

Label: is an information tag, wrapper, seal, or imprinted message that is attached to the product.

Main function is to give information

Descriptive label: information about

the product’s use, construction, care, performance, and other features

Grade Label: States quality of the product. Grade AA, A, B

Labeling

Labels must meet local and national law requirements.

Federal mandates required:

Name, address of manufacture or distributor

and quantity of contents and other items as required

Labeling Laws

Fair Packaging and Labeling Act (FLPA) of 1966 Requires mandatory labeling requirements

Federal Nutrition Labeling and Education Act 1990 protects consumers from deceptive labeling. Labels

must give nutritional information on how a food fits into an overall daily diet.

Federal Food and Drug Administration (FDA) Regulates the labeling and safety of food, drugs, and

cosmetics sold in the U.S.

Federal Trade Commission (FTC) Monitors advertising that is false or misleading.

Labeling Laws

Activity

Ask students to think of a new product that currently

does not exist. Fun and crazy ideas are OK for this

activity. Then have students using their idea to

create a line extension of the product.

Product Planning