Marketing Management: Managing Products 14 January 2009

Marketing
Management
Managing Products
14th January 2009
Managing Products
 Product line decisions

 Product lifecycle
 Product portfolio
 Product Pricing
Product Line
 A group of products that are closely related
because they perform similar function, satisfy
same basic want, are sold to same customer
groups, are marketed through same
distribution channels or fall within same price
ranges or share some other characteristics.
 Each Product line consists of product items
 E.g. Detergent manufacturer with different
types of detergents”
Why would you extend your
Product Line?
 Product line can be extended upwards, downwards
or both ways
 Challenge for product managers is to identify the
optimal length
 Basis of decisions!
 Customer segmentation
 Consumer Desires
 Pricing breadth
 Short term gain (like sales promotions)
 Competitive intensity
 Trade Pressure (Pressure from competing retailers)
What factors would affect your
Product Line Decisions?
 Category Size: Market Potential/ Market
Size
 Product Life Cycle: Which stage of the
lifecycle is your product in? (Introduction,
growth, maturity and decline)
 Sales Cyclicity / Seasonality (change in
business cycles, change in seasons)
 Profitability that varies overtime and
business trends/ factors of production etc
Think about it!
 You are a product line manager.
 Look into each of porter five forces.
 Threat of new entrants
 Bargaining power of buyers
 Bargaining power of suppliers
 Rivalry
 Pressure from substitutes
 How does each force affect your product line
decision?
Product Life Cycle
Sales
Development Introduction Growth Maturity Saturation Decline
Growing
Growing Drop off in Time
adopters: Trial of Saturation of
selectivity usage
CONSUMERS products or users
services of purchase
Entry of May be Reliance on repeat Exit of

COMPETITION
competitors many purchase: fight for share competitors
Product Life Cycle Stages
 Product Development: Stages
 New ideas/possible inventions

 Market analysis – is it wanted? Can it be produced at a
profit? Who is it likely
to be aimed at?
 Product Development and refinement
 Test Marketing – possibly local/regional
 Analysis of test marketing results and amendment of
product/production process
 Preparations for launch – publicity, marketing campaign
 Introduction/Launch:
 Advertising and promotion campaigns
 Target campaign at specific audience?
 Monitor initial sales
 Maximise publicity
 High cost/low sales
 Length of time – type of product
Product Life Cycles Stages
 Growth:
 Increased consumer awareness
 Sales rise
 Revenues increase
 Costs - fixed costs/variable costs, profits may
be made
 Monitor market – competitors reaction?
 Maturity:
 Sales reach peak
 Cost of supporting the product declines
 Ratio of revenue to cost high
 Sales growth likely to be low
 Market share may be high
 Competition likely to be greater
 Monitor market – changes/amendments/new
strategies?
 Saturation:
 New entrants likely to mean market is ‘flooded’
 Necessity to develop new strategies becomes more pressing:
 Searching out new markets:
 Linking to changing fashions
 Seeking new or exploiting market segments
 Linking to joint ventures, acquisition – media/music, etc.
 Developing new uses
 Focus on adapting the product
 Re-packaging or format
 Improving the standard or quality
 Developing the product range
 Decline and Withdrawal:

 Product outlives/outgrows its usefulness/value
 Fashions change
 Technology changes
 Sales decline
 Cost of supporting starts to rise too far
 Decision to withdraw may be dependent on availability
of new products and whether fashions/trends will come
around again?
Strategies at each stage
 Introductory Stage: Marketing Mix

 Growth Stage: Build Brand and increase
market share
 Maturity Stage: Defend the market share
while maximizing the profit
 Decline Stage: Maintain, Harvest or
Discontinue
Product Life Cycle
Sales
Development Introduction Growth Maturity Saturation Decline
Growing
Growing Drop off in Time
adopters: Trial of Saturation of
selectivity usage
CONSUMERS products or users
services of purchase
Entry of May be Reliance on repeat Exit of

COMPETITION
competitors many purchase: fight for share competitors
THANK YOU

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Marketing

 Product line decisions

Entry of May be Reliance on repeat Exit of

 Product Development: Stages

 New ideas/possible inventions

 Decline and Withdrawal:

 Introductory Stage: Marketing Mix

Entry of May be Reliance on repeat Exit of

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