Chapter 9- Product 2

Saturday, September 29, 2018 12:24 PM

LO1 Product Objectives

Product Management

• A systematic (and usually team based) approach

to coordinating all aspects of a product's
strategy development and execution.
• Effective product planning is guided by
continuous process of product management.

Product Objectives
Product Objectives

• Clearly stated product objectives provide focus

and direction.
○ Should support broader marketing objectives
of business unit.
○ Should be consistent with firm's overall
mission.
• To be effective, objectives must be "SMART":
○ Specific
○ Measurable
○ Achievable
○ Relevant
○ Time-bound

Example Objectives
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Product Line

• Line Length
○ Is determined by the number of SKUs (Stock
Keeping Units) in a product group
• Product width
○ Number of lines (different groups) offered.
• Product Mix
○ Total set of products offered (seven in this
example)
• Cannibalization
○ Loss of sales in one line that are taken by
another line (iPhone takes iPod)

Quality as an Objective 1

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Quality as an Objective 2

There are several methods (E.g. QFD) designed to

help companies be "market oriented." One in the
book in Total Quality Management (TQM).

• TQM-Focuses on satisfying customer needs and

attempts to cross boundaries within companies
using a concept that everyone is a customer.

Other corporate initiatives that are not

(necessarily) focused on the costumer:
• Lean- Efficiency (more profit by streamlined
processes).
• Six Sigma- Effectiveness (more profit by higher
quality) goal is <3.4 defects per million

International Quality Guidelines

The International Organization of Standardization

(ISO) for many international management standards.
Companies are often expected to be certified as
complaint to do business in the European Union.
Many U.S. Companies comply with these standards a
a means of improving their business, gaining acces
to EU markets, or because U.S. regulators
incorporate these standards.
• ISO 9001- Quality management
• ISO 14000- Environmental management
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a means of improving their business, gaining acces
to EU markets, or because U.S. regulators
incorporate these standards.
• ISO 9001- Quality management
• ISO 14000- Environmental management
• ISO 22000- Food Safety
• ISO 26000- Social responsibility
• ISO 21001- Information Security

Product Quality

• These are characteristics of product quality,

meaning the ability to satisfy customer
expectation.
• For high-involvement (Considered purchases),
these represent risks to the consumer and,
therefore, objections to overcome and needs to
be met.
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LO4 Product Management
Organizing Product Management

• In large firms, product management is usually

organized in one of three (four) ways.
• Category Managers- for example, all snack foods
• Brand Managers- for example, all Pepsi-branded
products.
• Market Managers- can be a geographic (e.g., New
England) or segment (e.g., over 50 segment)
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Organizing new product mgmt.

• Launching new products is so important, many

firms pay special attention to the introductory
phase of the product life cycle (PLC).
• In larger firms, existing cross-functional term
are [so ineffective] that small groups are
formed with specialists from different areas to
create new products.
○ These groups, often called Skunk Works* are
venture teams located (so as to be isolated)
away from the main company.
*This term originated at Lockheed Martin in the
1940s and later designed and built the U-2, SR-17,
and many other aircraft.

LO2 Product Lifecycle

Product Lifecycle 1
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LO2 Product Lifecycle
Product Lifecycle 1

• Many products have long lives, while other fads

that are "here today, and gone tomorrow"
• The product life cycle (PLC) is a useful way to
explain how market response and marketing
activities change over the life of a product.

Product Lifecycle 2

• Different products move at different rates

through this general framework.
• Many products (up to 95% by some measures) neve
leave the introduction stage.
• Growth stage is where the tipping point occurs
and profit start to shrink.
• Products decline when they no longer meet
consumer needs.
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Life Cycle Characteristics
LO3 Branding & Packaging
Brand Mark (A.K.A "Logo")

• Logo
○ Is a graphic design element related to a
brand name
○ Not all brand names are associated with a
distinct logo
○ Technically, not all logos are a brand mark
(i.e., carry any brand promise for the
consumer)
• Good Logo Designs
○ Are natural- neither too simple nor too
complex
○ Are readily recognized
○ Convey same meaning to all target market
members
○ Evoke positive feelings
○ Are suited for periodic updating

Intellectual Property
Intellectual Property

• Trademarks (Words, phrases…)

○ 10 year renewable periods; $275-$325 fee
○ Registered: ® or pending: TM
• Copyrights (authorship…)
○ Must be in tangible medium (e.g. Music that
is scored)
○ Life of author plus 70 years (from $35)
○ If "work for hire," 95 years from date of
publication or 120 years from its creation,
whichever expires first
○ © for all but recordings, ® for recordings.
• Patents (inventions, discoveries)
○ 20 years, not renewable (can renew improvements)
○ Utility, design, and plant patents
○ Filing fee: $190 small entity; $380 normal (utility
patent)
○ Patent number is issued (after a long process)

What defines new?

• The USPTO expects the idea being patented to be

"Novel"
• Copyrighted material has to be sufficiently
creative to win protection.
• Taylor Swift recently won a lawsuit against her
for plagiarism because the judge found the
phrase "the players gonna play, play, play,
play, play, and the haters gonna hate, hate,
hate, hate, hate." To be insufficiently
creative.
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 play, play, and the haters gonna hate, hate,
hate, hate, hate." To be insufficiently
creative.

Brand Architectures

• Masterbrand-
• Endorsed-
• Individual-

Domain Names
• ICANN (Internet Corporation for Assigned Names
and Numbers) administers names and numbers used
on the internet:
• Internet Protocol (IP) numbers like,
192.168.1.12. ICAAN assigns blocks of numbers
instead of individual IP addresses
• Top-level Domain (TLD) names like edu, cc, com,
gov…
• On oct. 1 2016, ICANN became a fully
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 192.168.1.12. ICAAN assigns blocks of numbers
instead of individual IP addresses
• Top-level Domain (TLD) names like edu, cc, com,
gov…
• On oct. 1 2016, ICANN became a fully
independent, public private partnership. Prior
to that, it was contracted exclusively by the
National Telecommunications and Information
Administration, part of the US Department of
Commerce.

Packaging Functions

Effective Packaging
,
Effective Packaging

"VIEW" model:
• Also considers: • Visibility: The packag
out on the shelf and t
○ Choice of packaging attention
material and the image • Information: the prese
it projects warnings, directions,
○ Environmental impact information , product
of packaging code, recipes, or any
information.
○ Cost/effort to • Emotional Appeal: Simi
consumer to dispose of product packages can g
package specific benefits are
○ Can the consumer store brand. Shape, color, m
and easily open the messages.
package? • Workability: Does the
onto the retail shelf
protect the product?

Packaging regulations

• Fair Packaging and Labeling Act (1966):

○ Federal legislation to make labels more
helpful to consumers by providing useful (an
honest) information.
• Nutrition Labelling and Education Act (1990):
○ Law requires food labels to state how much
fat, saturated fat, cholesterol, calories,
carbohydrates, protein, and vitamins are in
each product.
ge's ability to stand
to attractive

ence or absence of
nutritional
information, UPC
other written

ilar to brand names,

give cues to suggest
provided by the
material all send

package fits easily

and can be stacked,

nd