The United States Edition of Marketing Management, 14e. 19-1

19-1
Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from
the United States edition of Marketing Management, 14e.
Co-Branding
 Two or more well-known brands are combined

into a joint product or marketed together in some
fashion
 Same-company
 Joint-venture
 Multiple-sponsor
 Retail
19-2
Ingredient Branding
 Co-branding. Example Intel Inside
19-3
Packaging
 All the activities of designing and producing the

container for a product
19-4
Packaging
Used as a marketing tool Packaging objectives

• Self-service • Identify the brand
• Consumer affluence • Convey descriptive and
• Company and brand persuasive information
image • Facilitate product
• Innovation opportunity transportation and
protection
• Assist at-home storage
• Aid product consumption
19-5
Packaging
19-6
Labeling, Warranties, and
Guarantees
 Labeling
 Identifies, grades, describes, and
promotes the product

 Warranties
 Formal statements of expected product
performance by the manufacturer

 Guarantees
 Promise of general or complete
satisfaction
19-7
Exhibit 5-8
See Page 164 Product Life Cycle
Sales
Introduction Growth Maturity Decline
Marketing “Wean” product Maximize Fight for Minimize

Objectives in market ma rke t share ma rke t share effort a nd t ime
early to m aintain
ma rke t
Time
Irwin/McGraw-Hill Slide 28 © The McGraw-Hill 19-81999

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from Companies, Inc. Companies,
Technology Chasm
19-9
The Product Life Cycle
Introductory Stage
• A firm works to stimulate demand for the new market entry.
• Technical problems are common during the introductory
stage.
Growth Stage
• Sales volume rises rapidly during the growth stage
• Success attracts competitors
• A firm may need to make improvements and changes to a
product during this stage.
19-10
The Product Life Cycle (2 of 2)
Maturity Stage
 Sales or a product category continue to grow
 Differences between competing products diminish. available
supplies exceed industry demand for the first time.
 Heavy promotional outlays emphasize any differences that
still separate competing products.
Decline Stage
 Innovations or shifts in consumer preferences bring about
an absolute decline in industry sales.
 Sales fall, profits for the product category decline.
 Companies gradually drop the declining items.
19-11
Extend the Product Life Cycle
• Increasing frequency of use or users
• Finding new uses for the product
• Changing package size, label, or quality.
19-12
Line Stretching
 Down Market Stretch

 Up-Market Stretch
 Two-Way Stretch
19-13
Diffusion 5
The process by which the adoption of

an innovation spreads.
19-14
Categories of Adopters
Innovators
Early Adopters
Categories of
Adopters
in the Early Majority
Diffusion Process
Late Majority
Laggards
19-15
Categories of Adopters 5
Percentage of Adopters
Early Early Late

Innovators Adopters Majority Majority Laggards
2.5% 13.5% 34% 34% 16%
Time
19-16
Innovators: Description
• 2.5% of population
• Venturesome
• Very eager to try new ideas
• Acceptable if risk is daring
• More cosmopolite social relationships
• Communicates with other innovators
19-17
Early Adopters: Description
• 13.5% of population
• Respected
• More integrated into the local social system
• The persons to check with before adopting a new
idea
• Category contains greatest number of opinion
leaders
• Are role models
19-18
Early Majority: Description
• 34% of population
• Deliberate
• Adopt new ideas just prior to the average time
• Seldom hold leadership positions
• Deliberate for some time before adopting
19-19
Late Majority: Description
• Skeptical
• Adopt new ideas just after the average time
• Adopting may be both an economic necessity
and a reaction to peer pressures
• Innovations approached cautiously
19-20
Laggards: Description
• Traditional
• The last people to adopt an innovation
• Most “localite” in outlook
• Oriented to the past
• Suspicious of the new
19-21
Product Characteristics and
the Rate of Adoption
Complexity
Compatibility
Product
Characteristics
Predict Rate of Relative Advantage
Adoption
Observability
Trialability
19-22
Marketing Implications
of the Adoption Process
Word of Mouth
Communication
Aids the
Diffusion Process
Direct from
Marketer
19-23
Product Life Cycle
Introductory Growth Maturity Decline
Stage Stage Stage Stage Product
Category
Sales
Dollars
Product
Category
Profits
0
Time
19-24
Diffusion Process and PLC Curve
Introduction Growth Maturity Decline
Product
life cycle
Sales
curve
Early majority
Late majority
Early adopters
Innovators
Laggards
Diffusion
curve
19-25
19-26
Case Discussion Format
 How did Hastings make Netflix a success?

What Threats and Challenges did Netflix
face? Why did Hastings want to split the
business?
 How did Blockbuster fail?
 How does the membership model and pay
per view model work?
 What could Hastings have done differently?
19-27
Competitive Landscape
Advantages Disadvantages
Redbox Low price Limited selection
Convenient location Must return DVD to
Instant availability avoid per day charge
Illegal File sharing Free Low quality
Wide selection of titles Security risks (virus)
Unethical
Hulu Many titles are free Most videos have
Good quality frequent ads
Wide selection of TV
episodes Premium titles require
Exclusive classic content monthly fee
On Demand Included in cable TV Must pay for expensive
(Cable) subscriptions cable
Variety of titles Limited menus
Limited advertising
Netword Websites Popular episodes free Only recent titles 19-28
High quality streaming
available. Ads
Disruptive Technologies in the
Video Rental Sector
Technolo VHS Tapes Computer DVD Streamin File Sharing
gy data g
base/Network Video
Year 1977 1985 1997 2000 2003

Introduced
Feature Low Quality Tracks High Initially Free

customer Quality slow
Re-recordable preferences Facilitates
Not Low Copyright
Expensive Centralizes recordable quality Violations
membership video
Wears out over Inexpensiv Security risks
time e Initially Slow
Does not expensive
wear out (VOD) Lower quality
videos
19-29
19-30
Historic Perspective –
Time for Technology to Spread to 25% of
Population
Household electricity (1873) 46 yrs
Telephone (1875) 35 yrs
Automobile (1885) 55 yrs
Air Travel (1903) 54 yrs
Radio (1903) 22 yrs
PC (1975) 15 yrs
Cellular phone (1984) 13 yrs
Internet 7 yrs
Ipod 5 yrs
19-31
Industries < 30 Years Old
 Personal Computers  Healthful living products

 Biotechnology  Electronic paging
 Wireless cable TV  CAD/CAM
 Fast oil changes  Voice mail technology
 PC software  Cellular phone services
 Desktop information  CD-ROM
 Wireless  Internet publishing &
communications/ shopping
handheld devices/ PDAs
19-32
Industries < 30 Years Old – MORE!
 Desktop computing  Large, scalable, wind &

 Virtual imaging solar power systems
 Convenience food  Biofuels & bio materials
superstores  Cloud computing
 Pet care services
 Voice over internet
applications
 Green buildings
19-33
Ansoff’s Matrix (Product/Market Matrix)
Existing Markets New Markets
Market Penetration Market Development

New Products
Product Development Diversification
19-34
Categories of New Products
New to the World
Additions
Improvements
Repositionings
Cost reductions
19-35
The Innovation of Chotukool
19-36
Factors That Limit
New Product Development
 Shortage of ideas
 Fragmented markets
 Social and governmental constraints
 Cost of development
 Capital shortages
 Faster required development time
 Shorter product life cycles
19-37
Ways to Find Great New Ideas
 Run informal sessions with customers

 Allow time off for technical people to putter on
pet projects
 Make customer brainstorming a part of plant
tours
 Survey your customers
 Undertake “fly on the wall” research to
customers
19-38
More Ways to Find Great Ideas
 Use iterative rounds with customers

 Set up a keyword search to scan trade
publications
 Treat trade shows as intelligence missions
 Have employees visit supplier labs
 Set up an idea vault
19-39
Drawing Ideas from Customers
 Observe customers using product

 Ask customers about problems with products
 Ask customers about their dream products
 Use a customer advisory board or a brand
community of enthusiasts to discuss product
19-40
Demand-First Innovation and
Growth (DIG) Framework
Demand Landscape
Opportunity Space
Strategic Blueprint
19-41
Idea Generation:
Creativity Techniques
 Attribute listing
 Forced relationships
 Morphological analysis
 Reverse assumption analysis
 New contexts
 Mind mapping
19-42
Lateral Mapping
 Gas stations + food

 Cafeteria + Internet
 Cereal + snacking
 Candy + toy
 Audio + portable
19-43
Concept Testing
 Communicability and believability

 Need level
 Gap level
 Perceived value
 Purchase intention
 User targets, purchase occasions,
purchasing frequency
19-44
Prototype Testing
 Alpha testing
 Beta testing
 Rank-order method
 Paired-comparison method
 Monadic-rating method
 Market testing
19-45
Consumer Goods Market Testing
 Sales-Wave Research
 Simulated Test Marketing
 Controlled Test Marketing
 Test Markets
19-46
Test Market Decisions
 How many test cities?

 Which cities?
 Length of test?
 What information to collect?
 What action to take?
19-47
Timing of Market Entry
 First entry
 Parallel entry
 Late entry
19-48

The United States Edition of Marketing Management, 14e. 19-1

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

The United States Edition of Marketing Management, 14e. 19-1

Uploaded by

Copyright:

Available Formats

19-1

 Two or more well-known brands are combined

 Co-branding. Example Intel Inside

 All the activities of designing and producing the

Used as a marketing tool Packaging objectives

promotes the product

performance by the manufacturer

Introduction Growth Maturity Decline

Marketing “Wean” product Maximize Fight for Minimize

Irwin/McGraw-Hill Slide 28 © The McGraw-Hill 19-81999

 Down Market Stretch

The process by which the adoption of

Early Early Late

Introduction Growth Maturity Decline

 How did Hastings make Netflix a success?

Year 1977 1985 1997 2000 2003

Feature Low Quality Tracks High Initially Free

 Personal Computers  Healthful living products

 Desktop computing  Large, scalable, wind &

Existing Markets New Markets

Market Penetration Market Development

Product Development Diversification

 Run informal sessions with customers

 Use iterative rounds with customers

 Observe customers using product

 Gas stations + food

 Communicability and believability

 How many test cities?

You might also like