OHT 8.1 © Pearson Education Limited 2003 Brassington and Pettitt: Principles of Marketing, 3rd Edition Product management

OHT 8.1

© Pearson Education Limited 2003Brassington and Pettitt: Principles of Marketing, 3rd Edition

Product management

OHT 8.2


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 product’s strengths and iron out any weaknesses.

• When an older product is past its prime and needs modification or withdrawal from the market.

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The product lifecycle (PLC)

Figure 8.1

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The introduction phase

• Priority is to generate widespread awareness of the product among the target segment and to stimulate trial of the product.

• Innovative products need to build primary demand.

• Where introducing products to an existing market - offer to different segments of other additional benefits and features.

• This phase has heavy demands on marketing resources.

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The growth phase

• The aim here is for a rapid increase in sales.

• Need to build as much brand preference and loyalty as possible.

• Profits hopefully will rise rapidly during this phase.

• Towards the end of this phase need to consider product modifications or improvements.

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The mature phase

• The product achieves as much as it is going to.

• Heavy price competition and increased marketing expenditure may be required to retain brand loyalty.

• Distribution channels may need careful handling during this phase.

• The market may be heavily saturated and largely stable.

• Need to consider ways to rejuvenate products to stop them going into decline.

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The decline phase

• Once a product goes into decline for market based reasons, it is almost impossible to stop it.

• Decline can be as a result of a number of reasons, e.g. environmental or technological issues or poor management.

• This phase can absorb a great deal of management time for relatively little reward.

• Marketers have to decide whether to slow the decline down or to milk the product.

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The shape of the PLC

Figure 8.2

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Market evolution

Three components are involved in market evolution:

• The way customers adopt new products and react to innovation.

• The evolution and acceptance of technology.

• The impact of competition.

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Technological impact

• Technology evolves over time.

• Technological innovation can be used to extend the product lifecycle by helping to refresh and update a product.

• Technological innovation can also shorten a lifecycle by rendering a product obsolete.

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Classifying competitors

Competitors can be classified according to their timing in entering a market, e.g.:

• Pioneers.

• Early imitators.

• Early differentiators.

• Early nichers.

• Late entrants.

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Competitors and the PLC (1 of 3)

Table 8.1

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Table 8.1 cont.

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Table 8.1 cont.

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Managing the product mix

• Retain and maintain existing products so that they continue to meet their objectives.

• Modify and adapt existing products to take advantage of new technology, merging opportunities or changing market conditions.

• Delete old products close to the end of working lives.

• Introduce a new flow of products to maintain/improve sales and profit levels.

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Positioning products

Considering a product in the context of the competitive space it occupies in the market, defined in terms of attributes that matter to the target audience.

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Stages in product positioning

• Stage 1 - detailed market research to establish the attributes that are important to market segments.

• Stage 2 - research to shortlist existing products in the market against the customers’ attributes.

• Stage 3 - research to establish what the target market considers to be the ideal level for each attribute, how they rate each brand’s attributes in relation to the ideal and to each other.

• Stage 4 - Development of perceptual maps which helps to visualise competitive actions.

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Repositioning and modifying products

There are 3 main areas for repositioning and product improvement:

• Quality - reliability, durability, dependability, speed, taste, colour, price, packaging, etc.

• Design - appearance, texture, taste, smell feel or sound, etc.

• Performance.

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Product range management

• Extending the product line length and depth - extending upwards or downwards.

• Filling the product range.

Documents

OHT 8.1 © Pearson Education Limited 2003 Brassington and Pettitt: Principles of Marketing, 3rd Edition Product management