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ProductStrategyProductStrategyDefinition:ProductAproductisanythingthatcanbeofferedtoamarkettosatisfyawantorneed.Thiscaninclude:physicalgoods,ser

vices,experiences,events,places,properties,organizations,information,andideas.ProductStrategyCustomersusuallyjudgeproductson

threecriteria:•Productfeaturesandquality•Servicesmixandquality•PriceappropriatenessProductStrategyCustomerValueHie

rarchy:Whenproductsaredeveloped,fivelevelsofvalueoftenareconsidered:1.Corebenefit2.Basicproduct3.Expectedproduct4.Augmentedproduct5.Potent

ialproductProductStrategyCorebenefit:product’sfundamentalserviceorbenefitoffered.Basicproduct:productderivedfromthecore

benefit.Expectedproduct:productwithallofitsattributesandconditionsexpectedbycustomers.Augmentedproduct:p

roductwithallofitsattributesandconditionsthatexceedcustomerexpectations.Potentialproduct:productduringandafteralloftheaugment

ationsandtransformationsthatmightoccurinthefuture.ProductStrategyProductClassifications:Marketersusuall

yclassifyproductsonthebasisofthreecharacteristics:•Durability•Tangibility•Consumer/industrialuseProductStrategyD

urability:product’susefullife.Tangibility:aproduct’sdegreeofsubstantive-nessConsumer/Industrialuse:whousesit,consumersorbus

inessesProductStrategyOtherimportantmarketingconsiderationsinclude:•Packaging•Labeling•WarrantiesandguaranteesProductStrategyP

ackaging:Severalfactorshavehelpedpackagingbecomeimportanttomarketers.Theyinclude:•Self-servicenaturalofmostretailstores•Consumeraffluenceandthew

illingnesstopayalittlemore•Theimportanceofcompanybrandsandimages•OpportunitytoinnovateProductStrategyPackagingmustachieveanum

berofobjectives,including:•Identifythebrand•Communicatedescriptiveandpersuasiveinfo•Facilitateproducttransportatio

nandprotection•Assistinhomestorage•AidinproductconsumptionProductStrategyAllpackagingelementsmustfitproductpricing,advertising

,andothermarketingactivities.Testingpackagingelementsbeforemakingtheproductavailableforsalehasbecomeanormalandnecessaryactivityforbusinesses.Prod

uctStrategyLabeling:Allpackagedproductsrequirelabels.Labelsperformseveralimportantfunctions:•Identifytheproductand/orb

rand•Describetheproduct•PromotetheproductProductStrategyLabelsusuallyarenoteternal.Asgenerationspassandsocietieschange,labelso

ftenneedtochangedorupdatedinordertocontinueattractingcustomers.ProductStrategyWarrantiesandguarantee

s:Awarrantyisaformalstatementofexpectedproductperformancebythemanufacturer.Theyarelegallyenforceable.Aguaranteeisapromisetored

uceperceivedriskandprovideassurancethattheproductisdependable.ProductStrategyOfferingwarrantiesandguaranteescanhelpmarketaproduct.Ifextraorex

tendedwarrantiesareofferedinexchangeforasmallfee,theycanbeprofitabletoo.However,becareful.Overpromisingandunderdeliveringthroughwa

rrantiesandguaranteescanbeabigmoneyloser.ProductStrategyNewProductsWhatisanewproductforacompany?Itisaproductt

hathasbeenacquiredfromanothercompanyordevelopedbythecompanyitself.ProductStrategyNewProducts:SixCategories•New-to-the-worl

dproducts•Newproductlines•Additionstoexistingproductlines•Improvementsandrevisionstoexistingproducts•Re-positioning•Costreductio

nsProductStrategyMostnewproductsfail.Reasons:•Market/marketingfailure(smallsizeofthepotentialmarket,noclearproductdifferentiation,poorposit

ioning,misunderstandingofcustomerneeds)•Financialfailure(lowinvestmentreturn)•Timingfailure(toolateortooearly)•Technicalfail

ure(productdidnotwork,baddesign)•Organizationalfailure(didnotfitwellwithorganizationalculture,lackofsupport)•Environmentalfailure(governmentregula

tions,macroeconomicfactors)ProductStrategyNewproductdevelopment,stages:1.Ideageneration2.Ideascreening3.Conce

ptdevelopmentandtesting4.Marketingstrategydevelopment5.Businessanalysis6.Productdevelopment7.Markettesting8.CommercializationProductStr

ategyMostproductshavelifespans,meaningtheycanbemarketableforweeksordecades,butatacertainpointintimeinthefutureconsumerswillnolongerbeint

erestedintheproductandbuyit.Theselifespansoftenarereferredtoastheproductlifecycle.Howacompanypositionsanddifferentiatesaproductduri

ngthislifespanshouldchangeovertime,dependingatwhichlifecyclestagetheproducthasentered.ProductStrategyProductLifeCycleStages:1.

Introductionstage2.Growthstage3.Maturitystage4.DeclinestageProductStrategyAproduct’slifecyclestageoftenwillhelpdeterminew

hatwouldbethebestmarketingobjectivesandstrategiestofollow.Thefollowingtablesgiveinformationandsuggestionsaboutproductsateachlifecyclestage.Pro

ductStrategyCharacteristicsIntroductionGrowthMaturityDeclineSalesLowsalesRapidlyrisingsalesPeaksalesDecliningsalesCostsHighcostp

ercustomerAveragecostpercustomerLowcostpercustomerLowcostcustomerProfitsNegativeRisingprofitsHighprofitsDecliningprofitsC

ustomersInnovatorsEarlyadoptersMiddlemajorityLaggardsCompetitorsFewGrowingnumberStablenumberbeginningtodecline

DecliningnumberProductStrategyMarketingObjectivesIntroductionGrowthMaturityDeclineCreateproductawarenessandtrialMaximizemarketsi

zeMaximizeprofitwhiledefendingmarketshareReduceexpenditureandmilkthebrandProductStrategyStrategiesIntroductionGrowthMaturityD

eclineProductOfferbasicproductOfferproductextensions,service,etc.DiversifybrandsPhaseoutweakitemsormodelsPriceChargecostplusPricetopenetratemarketP

ricetomatchorbeatcompetitorsCutpriceDistributionBuildselectivedistributionBuildintensivedistributionBuildmoreintensivedistributionGose

lective,profitableoutletsonlyAdvertisingBuildproductawarenessamongearlyadoptersBuildawarenessandinterestinthemassmarketStressbranddiff

erencesandbenefitsReduce,buttrytoretainloyalbuyersSalesPromotionUseheavysalespromotiontoenticetrialReducetotakeadvantageofheavy

consumerdemandIncreasetoencouragebrandswitchingReducetominimallevel