PRODUCT DECISIONS

Product mix: set of all product lines Width: # of product lines Length: # of products in lines Depth: # of versions of each product carried Consistency: how closely related the product lines are

Product Line Decisions: Product Mix

Width Detergent ABC Soap

# product lines (3) Shampoo

Adapted from Kotler, McDougall and Picard, p.360

 Product Mix Decisions

A firm may lengthen or widen its product mix A Company may decide to add variations that will attract new users A product may be pruned or altered

11-3

Two-Way Product-Line Stretch: Marriott Hotels

Economy High Standard

Quality

Good

Superior

Price

Above AboveAverage ge Average

Marriott (Middle managers) Courtyard (Salespeople)

Marriott Marquis (Top executives)

Low

Fairfield Inn (Vacationers)

TENSATOR :THE INNOVATOR

Tensator :small company ,not known for its innovation. The company's Sales and Marketing Director Terry Green stated that I'm a very firm believer that innovation doesn't need to be revolutionary. There's nothing my company has done that couldn't be done by anyone else'. Tensator is in a light engineering business which manufactured the Constant Force Spring, a device used in the manufacture of car seat belts throughout Europe. In 1978 , the CEO put forward plans for the use of the Constant Force Spring in the production of queuing barriers for supermarkets and banks, etc. He persuaded the company to focus on this new product idea. Research was undertaken where customers, current and potential, were asked to give opinions on the viability of such a product and how it could improve on the products that were currently available.

TENSATOR THE INNOVATOR

Tensabarrier was launched. By 1996, the product was being exported to thirtysix countries and accounted for 3 million turnover. There are now a variety of Tensabarriers in a variety of shapes and forms. There is a boltdown barrier and a special checkout version which incorporates an electronic movement sensor to prevent theft. Tensator launched thirteen new products in the years 1995 and 1996. Total turnover had risen more than threefold since 1988 to 10 million,

What are new products????

Stages in the new-product process

Marketing information and methods used in the new-product process

Mattels Barbie

Why should laboratory and safety tests be done?

Why do new products fail?

One study estimated that as many as 80% of new consumer packaged products failed. Only about 40% of new consumer products are around 5 years after introduction WHY???????????????????????? Overestimated market Poor design Incorrect positioning Error in pricing Poor marketing Cost overrun Competition

LIST OF FAILED PRODUCTS?????

The product lifecycle (PLC)

Products need managing throughout their working lives. This requires deciding: What products should be created. The best time to launch them and introduce them to the public. How to capitalise on a products strengths and iron out any weaknesses. When an older product is past its prime and needs modification or withdrawal from the market

Stages in PLC

Task

Identify products at different stages of the life cycle