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ProductStrategyProductStrategyDefinition:ProductAproductisanythingthatcanbeofferedtoamarkettosatisfyawantorneed.Thiscaninclude:physicalgoods,servi

ces,experiences,events,places,properties,organizations,information,andideas.ProductStrategyCustomersusuallyjudgeproductsonthreecriteria:

•Productfeaturesandquality•Servicesmixandquality•PriceappropriatenessProductStrategyCustomerValueHierarchy:Whenproductsaredeveloped,fivel

evelsofvalueoftenareconsidered:1.Corebenefit2.Basicproduct3.Expectedproduct4.Augmentedproduct5.PotentialproductProductStrategyCorebenefi

t:product’sfundamentalserviceorbenefitoffered.Basicproduct:productderivedfromthecorebenefit.Expectedproduct:productwithallofitsattributesandcondition

sexpectedbycustomers.Augmentedproduct:productwithallofitsattributesandconditionsthatexceedcustomerexpectations.Potentialprodu

ct:productduringandafteralloftheaugmentationsandtransformationsthatmightoccurinthefuture.ProductStrategyProductClassifications:Mark

etersusuallyclassifyproductsonthebasisofthreecharacteristics:•Durability•Tangibility•Consumer/industrialuseProductStrategyDurability:product’

susefullife.Tangibility:aproduct’sdegreeofsubstantive-nessConsumer/Industrialuse:whousesit,consumersorbusinessesProductStrat

egyOtherimportantmarketingconsiderationsinclude:•Packaging•Labeling•WarrantiesandguaranteesProductStrategyPackaging:Severalfact

orshavehelpedpackagingbecomeimportanttomarketers.Theyinclude:•Self-servicenaturalofmostretailstores•Consumeraffluenceandthewillingnesstop

ayalittlemore•Theimportanceofcompanybrandsandimages•OpportunitytoinnovateProductStrategyPackagingmustachieveanumberofobjectives,including:•Identifyt

hebrand•Communicatedescriptiveandpersuasiveinfo•Facilitateproducttransportationandprotection•Assistinhomes

torage•AidinproductconsumptionProductStrategyAllpackagingelementsmustfitproductpricing,advertising,andoth

ermarketingactivities.Testingpackagingelementsbeforemakingtheproductavailableforsalehasbecomeanormalandnec

essaryactivityforbusinesses.ProductStrategyLabeling:Allpackagedproductsrequirelabels.Labelsperformseveral

importantfunctions:•Identifytheproductand/orbrand•Describetheproduct•PromotetheproductProductStrategyLabelsu

suallyarenoteternal.Asgenerationspassandsocietieschange,labelsoftenneedtochangedorupdatedinordertoco

ntinueattractingcustomers.ProductStrategyWarrantiesandguarantees:Awarrantyisaformalstatementofexpectedproductperformancebythemanufacturer.Theya

relegallyenforceable.Aguaranteeisapromisetoreduceperceivedriskandprovideassurancethattheproductisdependable.ProductStrategyOfferingwarrantie

sandguaranteescanhelpmarketaproduct.Ifextraorextendedwarrantiesareofferedinexchangeforasmallfee,theycanbeprofitabletoo.However,becaref

ul.Overpromisingandunderdeliveringthroughwarrantiesandguaranteescanbeabigmoneyloser.ProductStrategyNewProductsWhatisanewprodu

ctforacompany?Itisaproductthathasbeenacquiredfromanothercompanyordevelopedbythecompanyitself.ProductStrategyNewProducts:SixCategories•New-to-the-wor

ldproducts•Newproductlines•Additionstoexistingproductlines•Improvementsandrevisionstoexistingproduct

s•Re-positioning•CostreductionsProductStrategyMostnewproductsfail.Reasons:•Market/marketingfailure(smallsizeofthepotentialmarket,noclearproductd

ifferentiation,poorpositioning,misunderstandingofcustomerneeds)•Financialfailure(lowinvestmentreturn)•Timingfailure(toolateortooearly)•Techni

calfailure(productdidnotwork,baddesign)•Organizationalfailure(didnotfitwellwithorganizationalculture,lackofsupport)•En

vironmentalfailure(governmentregulations,macroeconomicfactors)ProductStrategyNewproductdevelopment,stages:1.Ideageneration2.Ideascre

ening3.Conceptdevelopmentandtesting4.Marketingstrategydevelopment5.Businessanalysis6.Productdevelopment7.Markettesting8.CommercializationProd

uctStrategyMostproductshavelifespans,meaningtheycanbemarketableforweeksordecades,butatacertainpointintimeinthefuturec

onsumerswillnolongerbeinterestedintheproductandbuyit.Theselifespansoftenarereferredtoastheproductlifecycle.Howacompanypo

sitionsanddifferentiatesaproductduringthislifespanshouldchangeovertime,dependingatwhichlifecyclestagetheproducthasentered.ProductStrategyProductLif

eCycleStages:1.Introductionstage2.Growthstage3.Maturitystage4.DeclinestageProductStrategyAproduct’slifecyclestageoftenwillhelpdeterminewhatwouldbe

thebestmarketingobjectivesandstrategiestofollow.Thefollowingtablesgiveinformationandsuggestionsaboutproductsateachlifecyclestage.

ProductStrategyCharacteristicsIntroductionGrowthMaturityDeclineSalesLowsalesRapidlyrisingsalesPeaksalesDecliningsalesCostsHighcostpercu

stomerAveragecostpercustomerLowcostpercustomerLowcostcustomerProfitsNegativeRisingprofitsHighprofitsDecliningprofitsCustomersInnovator

sEarlyadoptersMiddlemajorityLaggardsCompetitorsFewGrowingnumberStablenumberbeginningtodeclineDecliningnumberProductStrategyMarketingObjectiv

esIntroductionGrowthMaturityDeclineCreateproductawarenessandtrialMaximizemarketsizeMaximizeprofitwhiledefendingmarketshareReduceexpenditureandmi

lkthebrandProductStrategyStrategiesIntroductionGrowthMaturityDeclineProductOfferbasicproductOfferprodu

ctextensions,service,etc.DiversifybrandsPhaseoutweakitemsormodelsPriceChargecostplusPricetopenetratemarketPricetomatchorbeatcompetitorsCutpriceDist

ributionBuildselectivedistributionBuildintensivedistributionBuildmoreintensivedistributionGoselective,profitableoutletsonlyAdvertisi

ngBuildproductawarenessamongearlyadoptersBuildawarenessandinterestinthemassmarketStressbranddifferencesandbenefit

sReduce,buttrytoretainloyalbuyersSalesPromotionUseheavysalespromotiontoenticetrialReducetotakeadvantageofheavyconsumerdemandInc

reasetoencouragebrandswitchingReducetominimallevel