McGraw-Hill/Irwin

Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 10, YOU SHOULD BE ABLE TO:

LO1

LO2

LO3

Explain the product life-cycle concept.

Identify the ways that marketing

executives manage a products life
cycle.
Recognize the importance of branding
and alternative branding strategies.
10-2

LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 10, YOU SHOULD BE ABLE TO:

LO4

LO5

Describe the role of packaging,

labeling, and warranties in the
marketing of a product.
Recognize how the 4 Ps framework is
expanded in the marketing of services.

10-3

GATORADE: BRINGING
SCIENCE TO SWEAT

10-4

FIGURE 10-1 How stages of the product life

cycle relate to a firms marketing objectives
and marketing mix actions

10-5

FIGURE 10-1A Stages of the product life

cycle and its total industry sales and total
industry profit

10-6

FIGURE 10-1B How stages of the product

life cycle relate to a firms marketing
objectives and marketing mix actions

10-7

LO1

CHARTING THE PRODUCT LIFE CYCLE

INTRODUCTION STAGE

Product Life Cycle

Stimulate Trial

Primary Demand

Selective Demand

Skimming Strategy

Penetration Pricing

10-8

FIGURE 10-2 Product life cycle for the

stand-alone fax machine for business use:
1970-2014

10-9

LO1

CHARTING THE PRODUCT LIFE CYCLE

GROWTH STAGE

Rapid Sales Growth

More Competitors

Repeat Purchasers

New Features

Broad Distribution
10-10

LO1

CHARTING THE PRODUCT LIFE CYCLE

MATURITY STAGE

Industry/Product
Sales Slow

Profit Declines

Product Differentiation

Fewer Competitors
10-11

LO1

CHARTING THE PRODUCT LIFE CYCLE

DECLINE STAGE

Industry/Product
Sales Drop

Environmental Changes

Deletion

Harvesting
10-12

LO1

MARKETING MATTERS
Will E-Mail Spell Extinction for Fax Machines?

10-13

LO1

CHARTING THE PRODUCT LIFE CYCLE

FOUR ASPECTS

Length of the Product Life Cycle

Shape of the Product Life Cycle

Generalized Life Cycle
High-Learning
Product

Fashion
Product

Low-Learning
product

Fad
Product
10-14

FIGURE 10-3 Alternative product life cycle

curves based on product types

10-15

LO1

CHARTING THE PRODUCT LIFE CYCLE

FOUR ASPECTS

The Life Cycle and Consumers

Diffusion of Innovation
Innovators

Late Majority

Early Adopters

Laggards

Early Majority

10-16

FIGURE 10-4 Five categories and profiles of

product adopters (diffusion of innovation)

10-17

LO1

CHARTING THE PRODUCT LIFE CYCLE

FOUR ASPECTS

The Life Cycle and Consumers

Barriers to Adoption
Usage
Value
Risk
Psychological
10-18

LO2

MANAGING THE PRODUCT LIFE CYCLE

ROLE OF A PRODUCT MANAGER

Product/Brand Manager Responsibilities

Product Life Cycle
New Product Development
Marketing Program Implementation
Data Analysis
CDI

BDI
10-19

LO2

USING MARKETING DASHBOARDS

Knowing Your CDI and BDI

Category Development Index (CDI) and Brand Development Index (BDI)

10-20

LO2

MANAGING THE PRODUCT LIFE CYCLE

MODIFYING THE PRODUCT OR MARKET

Product Modification
Product
Bundling

New
Characteristics

Market Modification
Finding New
Customers

Increasing a
Products Use
Creating a New
Use Situation

Dockers
Ad

10-21

LO2

MANAGING THE PRODUCT LIFE CYCLE

REPOSITIONING THE PRODUCT

Product Repositioning

Reacting to a Competitors Position

Reaching a New Market

Catching a Rising Trend

10-22

LO2

MANAGING THE PRODUCT LIFE CYCLE

REPOSITIONING THE PRODUCT

Changing the Value Offered

Trading Up
Trading Down
Downsizing

10-23

LO2

MAKING RESPONSIBLE DECISIONS

Consumer Economics of Downsizing
Get Less, Pay More

10-24

LO3

BRANDING AND BRAND MANAGEMENT

Branding

Brand Name
Logotype (Logo)

Trade Name

Trademark

10-25

LO3

BRANDING AND BRAND MANAGEMENT

BRAND PERSONALITY AND BRAND EQUITY

Brand Personality

Brand Equity
Provides a Competitive Advantage
Consumers Willing to Pay a Premium
10-26

FIGURE 10-5 The customer-based brand

equity pyramid

10-27

LO3

BRANDING AND BRAND MANAGEMENT

BRAND PERSONALITY AND BRAND EQUITY

Creating Brand Equity

Develop Positive Brand Awareness
Establish a Brands Meaning
Elicit the Proper Response
Create Intense Brand Loyalty
10-28

LO3

BRANDING AND BRAND MANAGEMENT

BRAND PERSONALITY AND BRAND EQUITY

Valuing Brand Equity

Provides a Financial Advantage

Brand Licensing

10-29

LO3

BRANDING AND BRAND MANAGEMENT

PICKING A GOOD BRAND NAME

Should Suggest Product Benefits

Should Be Memorable and Positive

Should Fit the Company or Product Image

Should Have No Legal or Regulatory

Restrictions

Should Be Simple and Emotional

10-30

FIGURE 10-6 Alternative branding strategies

10-31

LO3

BRANDING AND BRAND MANAGEMENT

BRANDING STRATEGIES

Multiproduct Branding
(Family or Corporate Branding)
Product Line Extensions
Subbranding
Brand Extension
Co-Branding
10-32

LO3

BRANDING AND BRAND MANAGEMENT

BRANDING STRATEGIES

Multibranding
Fighting Brands

Private Branding (Private Labeling

or Reseller Branding)

Mixed Branding
10-33

LO3

Kimberly-Clarks Huggies
What branding strategy is used?

10-34

PACKAGING AND LABELING PRODUCTS

LO4

CREATING CUSTOMER VALUE AND

COMPETITIVE ADVANTAGE

Packaging

Label

Communication Benefits
Functional Benefits

Perceptual Benefits
10-35

LO4

MARKETING MATTERS
Creating Customer Value Through Packaging
Pez Heads Dispense More Than Candy

10-36

PACKAGING AND LABELING PRODUCTS

LO4

PACKAGING AND LABELING

CHALLENGES AND RESPONSES

Connecting with Customers

Environmental Concerns

Health, Safety, and Security Issues

Shelf Life

Cost Reduction
10-37

PRODUCT WARRANTY

LO4

Warranty
Express Warranties
Limited Coverage Warranties
Full Warranties
Implied Warranties
10-38

LO5

MANAGING THE MARKETING OF SERVICES

THE SEVEN Ps OF SERVICES

Seven Ps of Services Marketing

Product (Service)
Branding

Price
Off-Peak Pricing
10-39

LO5

MANAGING THE MARKETING OF SERVICES

THE SEVEN Ps OF SERVICES

Place (Distribution)

Promotion
Publicity
Public Service Announcements (PSAs)
10-40

LO5

MANAGING THE MARKETING OF SERVICES

THE SEVEN Ps OF SERVICES

People
Customer Experience Management (CEM)

Physical Environment

Process
Capacity Management
10-41