Product Life Cycle
Four stages that product goes through over its life: introduction, growth, maturity, and decline.
Trial
The initial purchase of a product by a consumer
Introduction Stage
Stage of the product life cycle when product is introduced to its intended target market
Primary demand
Demand for a product category rather than for a specific brand
Selective Demand
demand for a specific brand
Skimming
help the company recover costs of development as well as capitalize on the price insensitivity of early buyers
Penetration pricing
a pricing policy whereby a firm charges a relatively low price for a product initially as a way to reach the mass market
Repeat Purchasers
people who tried the product, were satisfied, and bought again
Maturity Stage
the product life-cycle stage in which sales growth slows or levels off
Decline stage
The product life-cycle stage in which a product's sales decline
Deletion
Dropping the product from the company's product line
Harvesting
When a company retains the product but reduces marketing costs
Four Aspects of the Product Life Cycle
length, shape of their sales curves, how they vary with different levels of products, and the ate at which consumers adopt products
Generalized life cycle
product life cycle curve
High-learning product
one for which significant customer education is required and there is extended introduction period
low-learning product
A product for which the benefits are clearly seen by the consumer.
Fashion product
a product that is introduced, declines, and then seems to return (e.g. - pantyhose)
Fad
something that is very popular for a short time, then forgotten
Product class
entire product category or industry
Product form
pertains to variations within the product class
Diffusion of innovation
the process by which the use of an innovation, whether a product or a service, spreads throughout a market group over time and over various categories of adopters
Brand manager
a manager who has direct responsibility for one brand or one product line; called a product manager in some firms
Product modification
involves altering a product's characteristic, such as its quality, performance, or appearance, to increase the product's value to customers and increase sales
Market modification
a strategy in which a company tries to find new customers, increase a product's use among existing customers or create new use situations.
Product repositioning
changes the place a product occupies in a consumer's mind relative to competitive products
Trading Up
adding a higher-priced product to a line to attract a higher-income market and improve the sales of existing lower-priced products.
Trading Down
reducing the number of features, quality or price
Branding
combination of name, words, symbols, or design that identifies the product and its source and distinguishes it from competing brands
Brand name
a word, letter, or group of words or letters that differentiates one seller's goods and services from those of competitors
Trade name
a commercial, legal name under which a company does business.
Trademark
the exclusive right to use a brand or part of a brand
Product counterfeiting
involves low-cost copies of popular brands not manufactured by the original producer
Stop Counterfeiting in Manufactured Goods Act
government passed act in 2006 which makes counterfeiters subject to 20-year prison sentances and $15 million in fines
Brand Personality
a set of human characteristics associated with a brand name
Brand Equity
the added value a brand name gives to a product beyond the functional benefits provided
Creating Brand Equity
Brand awareness->brand performance/brand imagery->consumer judgments/consumer feelings->consumer-brand connection
Brand licensing
an agreement whereby a company permits another organization to use its brand on other products for a licensing fee
Picking a good brand name
The name should: suggest the product benefits; memorable, distincitve, positive; fit company image; no legal or regulatory restrictions; simple and emotional
Branding Strategy
Multiproduct Branding Strategy > Multibranding Strategy > Private Branding Strategy > Mixed Branding Strategy
Multiproduct branding
a company uses one name for all its products in a product class
Family branding
marketing several different products under the same brand name
Product line extensions
the practice of using a current brand name to enter a new market segment in its product class
subbranding
combines a corporate or family brand with a new brand to distinguish a part of its product line from others
brand extension
extending an existing brand name to new product categories
co-branding
placing two or more brand names on a product or its package
Private branding
Product made by a manufacturer and sold to a retailer who in turn resells it under its own name.
Mixed Branding
a firm marketing products under it's own name and that of a reseller because the segment attracted by the reseller is different from its own market
Benefits of Packaging and Labeling
1. Communication Benefits. 2. Functional Benefits. 3.Perceptual Benefits.
Packaging and Labeling Challenges and Responses
1. Connecting with Customers
2. Environmental Concerns
3. Health, Safety, and Security Issues
4. Cost Reduction