Product PlanningProduct PlanningUnit 9Unit 9

Product Planning

• How are decisions made to introduce new products and delete old old ones?

Unit 9 Vocabulary• Aseptic Packaging• Blisterpacks• Brand• Brand Extension• Brand Label• Brand Licensing• Brand Mark• Brand Name• Category Management• Cause Packaging• Co-Branding• Descriptive Label• Generic Brands• Grade Label• Label• Mixed Brand• Mixed Bundling

• National Brands• Package• Planograms• Price Bundling• Private Distributor Brands• Product Depth• Product Item• Product Life Cycle• Product Line• Product Mix• Product Modification• Product Planning• Product Positioning• Product Width• Trade Name• Trade Character• Trademark

Unit 9 EssentialQuestion

• What processes and techniques are used to develop, maintain, and improve a product/service mix in order to utilize market opportunities?

• What is the nature and scope of the product/service management function?

Essential Question 1 Product Planning

What is Product Planning?

• Product Planning: The decisions made about what features should be used in selling of a business’s products.

• These decisions relate to:– packaging– labeling– warranties

– guarantees– branding– product mix

What is Product Planning?• Product Mix: All the different products

that a company makes or sells.– Product Line: A group of closely related

products manufactured or sold by a business.– Product Item: A specific model, brand, or size of

a product within a product line.– Product Width: The number of different product

lines a business manufactures or sells.– Product Depth: The number of product items in a

product line.

What is Product Planning?• A well defined product plan allows a

business to:– Create sales opportunities.– Design appropriate marketing programs. – Develop effective advertising campaigns.– Coordinate the product mix offered to

customers.– Add new products.– Delete older products that no longer appeal to

customers

• How do businesses determine which products to produce and sell?

Essential Question 2 Product Planning

Determining what to produce or sell

• Businesses will use different product mix strategies to determine what to produce or sell.

• Product mix strategies depend on:– Resources– Objectives– Past and current sales– Consumer trends

• How are products/services positioned in the market place?

Essential Question 3 Product Planning

Product Positioning• Product positioning: Efforts a

business makes to identify, place and sell its products in the marketplace.– Positioning by price and quality:

• Ex: Ford Motor Company positions its Focus as an economical passenger car while still emphasizing quality.

Product Positioning

– Positioning by features and benefits:• Ex: Oil of Olay was positioned as a premium facial

moisturizer and cleanser to keep skin soft and young.

– Positioning by unique characteristics:• Ex: Cell phones that can text message or take

pictures and send them.

Product Positioning– Positioning in relation to the

competition:• Ex: Warner-Lambert Company introduced Cool

Mint Listerine by positioning against the “theraputic” benefits of Original Listerine and the “cosmetic” benefits of Scope.

– Positioning in relation to other products in a line:

• Ex: Binney & Smith introduced washable crayons and positioned them as a specialty item in the company’s Crayola crayon line.

• What is the concept of product mix and product/service branding?

Essential Question 4 Product Planning

Product Mix Strategies• Developing New Products

– Follows six steps:• Generate Ideas

• Screen Ideas

• Develop a Business Proposal

• Test the product with consumers

• Introduce the product

• Evaluate customer acceptance

Product Mix Strategies• Developing Existing Products

– Line Extensions: Adding new product lines, items or services.

• Ex: Tylenol

– Product Modifications: An alteration to an existing product:

• New and different varieties

• Formulations

• Colors

• Styles

• Features

• Sizes

Product Mix Strategies

• Deleting a Product or Product Line– Obsolescence– Loss of Appeal– Changes in Company Objectives– Replacement with New Products– Lack of Profit– Conflict with other products in the line

• What is the nature of product bundling?

Essential Question 5 Product Planning

What is Product Bundling?

• Multiple products or components packaged together into one bundled solution.

• BUSINESSES• Introduce New Products

• Acquire New Customers

• Higher Profits

• Increase Product Turnover (distressed inventory)

Benefits for Businesses and Customers

• CUSTOMERS– Save Money– Perception of Greater Value– Low Risk to Try New Products

Benefits for Businesses and Customers

Examples

1. Astound

2. X-Box

3. Happy Meal

• What is the nature of corporate branding?

Essential Question 6 Product Planning

Branding, Packaging, and Labeling

• Brand: Name, design or symbol that identifies the products of a company.– Brand Name:

• Word or group of words that can be spoken.

• Ex: Nike, Coca-Cola Classic, Cover Girl, Tylenol

– Brand Mark:• Symbol, design, distinctive coloring, or lettering

Branding, Packaging, and Labeling

– Trade Name:• Identifies the company or a division of a particular

corporation.

– Trade Character:• A personified brand mark.

Branding, Packaging, and Labeling

– Trademark:• When used, it is followed by the registered trademark

symbol ®

Branding, Packaging, and Labeling

• Package: Physical container or wrapping for a product.

• Label: Information tag, wrapper, seal, or imprinted message that is attached to a product or package.

• How do you identify product opportunities?

Essential Question 7 Product Planning

• Changes in life cycle

• Changes in technology

• Changes in market/society

• Changes in economy

New Product Opportunities

• Find the opportunities when you find the gaps!

• Gap=the difference between what is currently available and what is needed/desired

Finding the GAPS!

• Product planning does not end when a product is new!

• Must decide what to do with existing products as they change through the life cycle

Changes in Life Cycle

Product Life Cycle Maturity

Introduction

Growth

Decline

Delete or Reinvent • What do we do when a product

declines?• Have to decide to modify or delete • THIS IS AN OPPORTUNITY

• Smartphones– Voice recognition technology

• Siri

• GPS – Garmin, Tom Tom

– Google Maps

• Social Media

Changes in Technology

• Health Conscience – McDonalds Happy Meal

• Apple Slices, Milk

– Salads, wraps

– Bottled water

• Convenience

• Entertainment– Games, music, movies, culture

Changes in Market/Society

• Economic downturn– Created opportunity for new product

and product expansion• Generic brands, discount stores, low cost

alternatives and substitutes

Changes in Economy

• Market research – Surveys

• Asking customers what they would like, what's lacking

– Focus Groups

– Sales records• Where are sales decreasing/not improving?

– Competitors • What are our competitors offering that we aren’t?

• What are they doing better than us?

Ways To Find the Gaps

• What methods/techniques can be used to generate a product idea?

Essential Question 8 Product Planning

New Product Categories

• Products that create a new market or niche segment.– Paper disposable diapers.

• Additions or line extensions to existing products.– New flavors and new sizes of existing products.

New Product Categories

• Product improvements.– Cars.– Cell phones

• Repositioned products.– Tums repositioned itself to feature its high

calcium content as a benefit for women's health.

Product Development

• The first step is to generate new business ideas that are unique.– Can the product be

• Repositioned• Improved• Brought out in a new size, flavor, or

package?

Product Development

• Techniques used to generate new product ideas:– Periodically screen your products and compare them

with competitors' products, with an eye toward: • improving attributes of products

• combining the features/benefits of several separate products into a single new product

– examining users' needs that are not being met by current competitive products

– using idea-generating methods like brainstorming