Product PlanningCh. 30 ME

Product Planning, Mix and Development

Section 30.1

Product – is anything a person receives in an exchange

Product Planning – involves making decisions about what features should be used in selling a business’s products, services or ideas.

Product Planning

Product Mix – includes all the different products that a company makes or sells

The types and number of products to be carried must be based on the objectives, the image, and the market of the business

Product Mix

Product Line – is a group of closely related products manufactured or sold by a businessProduct Item - is a specific model, brand, or size of a product within a product line

Product Items & Lines

Product Width – refers to the number of different product lines a business manufactures or sellsProduct Depth – refers to the number of items offered within each product line

Product Widths & Product Depth

Product Mix Strategy – is a plan for determining which products a business will make or stock

1. Developing new products2. Developing existing products3. Deleting a product or product line

Product Mix Strategies

Seven Step Process of New Product Development1. Generating ideas2. Screening ideas3. Developing a business proposal4. Developing the product5. Testing the product with consumers6. Introducing the product (commercialization)7. Evaluating customer acceptance

Developing New Products

Line Extensions – is intended to be a different product that appeals to somewhat different needs of consumersProduct Modification – is an alteration in a company’s existing product

Developing Existing Products

Reasons for deleting a product or product lines:1. Obsolescence2. Loss of appeal3. Changes in company objectives4. Replacement with new products5. Lack of profit6. Conflict with other products in the line

Deleting a Product or Product Line

Sustaining Product Sales1. Section 30.2

Product Life Cycle – represents the stages that a product goes through during its life

The Product Life Cycle

Introduction – focuses on efforts of promotion and production

Growth – success as shown by increasing sales and profit

Maturity – sales level off or slow down Decline

Sell or license the product Recommit to the product line Discount the product Regionalize the product Modernize or alter the product offering

Managing the Product

Product Planning – is the image that a product projects Goal – is to set the product apart from the competition Types of Positioning:

Price and Quantity Features and Benefits Relation to the Competition Relation to Other Products in Line

Product Positioning

Category Management – is a process that involves managing product categories as individual business units Category Manager – is responsible for all brands for

one generic product category Manufacturers can customize a product mix with a

category according to customer preference on a store-by-store basis Planogram – is a computer-developed diagram that shows

retailers how and where products within a category should be displayed on a shelf at individual stores

Category Management