Prerequisites for the product policy: -Marketing strategy: iutenligne resource no. 269 -Marketing objectives: iutenligne resource no. 272 -Marketing target:

Laurence Chérel - Catherine Madrid Tech de Co Bordeaux

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Prerequisites for the product policy:

-Marketing strategy: iutenligne resource no. 269

-Marketing objectives: iutenligne resource no. 272

-Marketing target: iutenligne resource no. 265

-Positioning of the offer: iutenligne resource no. 1549-Guidelines to managing the marketing mix: iutenligne resource no. 268


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Objectives in terms of content:

Define:the notion of product,the stages in the life cycle of the product,a product portfolio,a product range and its size,a brand and its functions,a new product and the stages in its sales launch.


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Objectives in terms of expertise:

• Know how to identify the different levels of the product,

• Be capable of detecting the life cycle phase in which the product is situated,

• Understand the logic behind the construction of a product portfolio, a range and a brand,

• Recognize the stages in the launch of a new product and the issues they raise.


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The place of the product policy

-The first variable in the marketing mix


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Definition of the product

The solution chosen by the company to fulfil an expressed or latent consumer need.


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From tangible product to generic product

Generic

product

global or

augmented product

Tangible product Intrinsic components

Product design, quality, brand, packaging

Delivery, installation, guarantee, after-sales, training


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The life cycle of the product

-The operating principle

-The consequences:- sales evolution,- management of the mix,- level of profit.


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The life cycle curveSalesIdeal life cycle curveTheoretical life cycle curveHigh costs, lower profitsBeginning of profitabilityPrice competitionSell-off of stocks

Introduction GrowthMaturityDeclineTime


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Limitations of the life cycle- Non-predictive model- Subjective definition of the length of the phases- The shape of the curve varies according to the product

Double life cycle sequenceGrowth-decline-stabilization cycleRenewed cycleStylesFashionsGadgets

Time


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Advantage of the life cycle

-To attract attention to a product’s limited life span

-To allow an analysis of the product life cycle in relation to:

- changes in the market- the competition, etc.


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Launch phase: managing the mix- Product: few versions, no major modifications

- Price: define the price policy logic

- Distribution: set-up in the points of sale

- Communication: publicize the product, high budget


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Growth phase: managing the mix-Product: few or no changes

- Price: few or no changes

-Distribution: broaden the distribution circuits

- Communication: maintain the effort


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Maturity phase: managing the mix

- Product: minor modifications and extension of the range

- Price: riposte to the competition

- Distribution: occupy points of sale to the maximum to check competitive intensity

- Communication: maintain the image


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Decline phase: managing the mix- Product: no expensive modifications

- Price: one-off special offers or frequent price reductions

- Distribution: abandon the most poorly-performing points of sale-Communication: possible promotional actions


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Managing a product portfolio

-A set of products managed by the company

-Search for a permanent balance between:- a level of cover of the market- a level of market share- a level of profitability- a level of sales, etc.

Adaptation of product ranges


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The product rangeDefinition:

A set of products linked together coherently by components such as the technology or the usage and which therefore form the same category.


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Range size -Width of a range:

-Number of product lines ( products that come from the same technical or commercial base)

-Depth of a range:-Number of products within each product line

- Length or extent of a range:-The sum of the products in all the lines


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Example: Candia Grandlait

Range width:5 product lines

Depth:•Semi-skimmed = 5 ref. •Whole = 3 ref.•Organic = 3 ref.•"Léger&Digeste" = 1 ref.•Fresh milk= 6 ref.

Extent = 18 products

Source: http://www.candia.fr/grandlait


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Interpreting the extent of a range

Based on Ferrandi J-M, Lichtlé M-C, (2014), Marketing, Dunod, p.132

Width Depth

Low High

Low Niche Differentiation

High Specialization Domination


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The brand

- A set of distinctive components of a product, range or company that enable customers to detect the offer proposed.

- An essential differentiation tool made up of several components : name, logo, signature, music, character or icon


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The functions of the brand -Location-Practicality-Specificity-Guarantee-Personalization-Fun

Based on Kapeferer J-N, Laurent G, (1992), “La sensibilité aux marques”, Editions d’organisation.


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Managing a brand portfolio

-Brand-product

-Brand-range

-Umbrella brand source:

http://demeteretkotler.com/2012/09/06/la-valse-des-marques-

produit-ombrelle-range/

-Brand-guarantee


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Are brands in danger?Threats?

-Changes in consumer habits • distributor brands• consumer behaviour: the role of price, information on the products

-Company errors• Spread of umbrella brands• Over-exploitation of a brand’s potential• Brand overkill


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The future of brands…Distinction:

- Established brands* legendary

* significant

* cultural exceptions

- Condemned brands * followers

* opportunistic

* bulimic


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Towards new products

Context of innovation:

- market fragmentation,

- reduction in margins and profits,

- complexity of regulations,

- development costs,

- increasingly short product life cycles


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Sources of ideas for new products

Internal sources:

- sales force, R&D, creativity groups , …

External sources:

- customers, distributors, crowdsourcing, …


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In collaboration with:

• Social and human sciences – Economics– Sociology.


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Defining a new product

. New packaging,

. Improvement of an existing product,

. New distribution method for an existing product,

. Repositioned product,

. Totally new product,

. Etc.


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Stages in the launch of a new product

Search for and screen ideas

Define the product characteristics

Define the marketing strategy and carry out a financial evaluation

Actual launch


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Types of ideas for new products

• linked to a new technology

• linked to changes in consumer habits

Based on Ferrandi J-M, Lichtlé M-C, (2014), Marketing, Dunod, p.140

New technology Former technology

New consumer habits

Breakaway innovation

Behavioural innovation

Former consumer habits

Technological innovation

Incremental innovation


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Screening ideas

Two main methods:

- analytical evaluation

- concept test


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Defining the product characteristics

- Product tests

- Packaging tests

- Brand name tests


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Defining the marketing strategy and carrying out a financial evaluation

-Marketing strategy:- Marketing goals,- Target,- Positioning,- Marketing mix.

-Financial evaluation with a view to:- The investment required,- Production and marketing costs,- The provisional sales volume and market share,- Profitability.


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The actual launch

-Production,

-Implement the marketing strategy,

-Monitor and check the results


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Process for adopting innovationCumulative frequency of individuals who have adopted the innovationNumber of adoptantsTimeEarly adoptantsInnovatorsEarly majorityLate majorityLatecomers

TimeBased on Rogers, 1995


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The factors that influence innovation

• Endogenous factors:– Relative advantage of the innovation– Compatibility – Simplicity and ease of use– Possibility of testing– Observable results

• Exogenous factors


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To summarize:

• Product policy = the heart of the company’s operational marketing

• Need to develop the product during its life so that it fits in with the expression of the positioning of the offer

• Competitive environment innovation as a Key Success Factor in adapting to changes in demand


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Further reading:

• VAN LAETHEM N., MORAN S. (2014) – La boîte à outils du Chef de produit. - Paris: Dunod, 2nd edition.

• GOTTELAND D., HAON C. (2005) –Développer un nouveau produit ; Méthodes et outils. – Paris: Pearson Education, 258 pages.


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Knowledge check quiz


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Documents

Prerequisites for the product policy: -Marketing strategy: iutenligne resource no. 269 -Marketing objectives: iutenligne resource no. 272 -Marketing target: