3. PART THREE
Business Marketing Programming
• Chapter 8 Developing and Managing Products
• Chapter 9 Business Marketing Channels
• Chapter 10 Managing Customer Relationships
• Chapter 11 Communicating with the Market
• Chapter 12 IMC
• Chapter 13 Sales and Sales Management
• Chapter 14 Pricing and Negotiating for Value
8-3
5. THE BENEFIT CONCEPT
How the Product or Service Satisfies
BENEFIT:
A Need
A Bundle of Benefits and a Collection
PRODUCT:
of Solutions to Needs and Wants
A Benefit That Satisfies a Customer
COMPETITIVE
ADVANTAGE: Better than A Competitor’s Product
Benefits
8-5
7. PRODUCT MANAGEMENT TOOLS
• THE PRODUCT DEVELOPMENT
PROCESS
• THE PRODUCT LIFE CYCLE
• PRODUCT PORTFOLIO MANAGEMENT
TOOLS
• BCG MATRIX
• GE MATRIX 8-7
8. THE BCG MATRIX:
MEASURING MARKET GROWTH
AND MARKET SHARE
BCG Matrix
Question
Stars Marks
Market Growth
Rate Cash
Dogs
Cows
Market Share Relative to Nearest Competitor
8-8
9. GE MATRIX MEASURING MARKET
ATTRACTIVENESS AND BUSINESS STRENGTH
GE Matrix
Market Attractiveness
• Growth
• Diversity
• Competitive
Structure Change
• Technology Change
• Social Environment
Business Strength
• Size of Market & Share
• Company Growth Rate
• Profit
• Margins
• Technology Platform
• Image
• People
8-9
10. PRODUCT MANAGEMENT LEVELS
THE PRODUCT LINE
THE PRODUCT CATEGORY
THE PRODUCT
TECHNOLOGY
THE PLATFORM
8-10
11. KEY PRODUCT
MANAGEMENT DECISIONS
1. WHICH PRODUCT TO INTRODUCE
2. WHICH PRODUCTS TO KEEP
3. WHICH PRODUCTS TO PROMOTE
4. WHAT LEVEL OF PROMOTION TO PROVIDE
(LOW TO HIGH)
5. WHAT PRODUCTS TO CONTINUE OR DELETE
8-11
12. PRODUCT LIFE CYCLE DECISION POINTS
Rapid expansion of distributors
Product line expansion
Niche marketing Strongly defend home-market Cut low-gross-margin products
Continued heavy promotion niches from the line
Sales force incentives and Prune product lines Withdraw from channels in order
management Emphasize gross contribution of their unprofitability
Search for new sources for rather than market share and Freeze R& D and product
supply sales volume modifications
Need to balance supply and Review logistics: prune costs
Sales Freeze advertising and
demand Reduce pioneering sale force promotions
Stock-out and back-order effort, more telemarketing Attempt to maintain price to the
damage control More trade than consumer end
promotion Buy back remaining stock and
Introduce flankers, private redistribute
Redirect focus & promotion labels, generics Maintain spare parts and service
Invest in expanding production Reinvest in market research Consider divesting while it is a
Build inventory & R&D going concern
Expand distributor network Use promotions to increase
Train expanded sales force heavy-user loyalty
Institute marketing controls Freeze investment in plant
Invest heavily in advertising Productivity review
Target on best prospects: Special trade promotions to
innovators and enthusiasts keep channels happy
Use most loyal distributors Focused attacks on vulnerable
Use free samples competitors
Use public demonstrations Long-term price reduction or
and trade shows at least a short-term price
Use publicity and endorsements promotion
Use specialist media & catalogs Keep plant at maximum
capacity and subcontract
excess
Development Introduction Growth Maturity Decline Time
8-12
13. PRODUCT LIFE-CYCLE: A NEW LOOK
Product Kill the
Develop- product
ment
Find New Repeat Life
Introduction Growth Maturity Decline
R&D Uses Cycle
Test Find New
Marketing Markets
8-13
14. PRODUCT DEVELOPMENT PROCESS:
A NEW LOOK
EVALUATION
LAUNCH
BETA TESTING
PRODUCT DEVELOPMENT
SPECIFYING FEATURES
SCREENING AND PRELIMINARY
INVESTIGATION
IDEA GENERATION
8-14
15. MAKING A PRODUCT SUCCESSFUL
1. Have close ties with a well defined market to
anticipate customer needs.
2. Company is highly integrated and market-oriented
3. Company has a competitive advantage in
technology and production capability
4. Company has a strong marketing proficiency
5. New product launch adequately financed
8-15
16. WINNING THE NEW PRODUCT CONTEST
• FOCUS ON CORE COMPETENCY
(WHAT YOU DO BEST FOR A COMPETITIVE ADVANTAGE)
PLUS
• PROVIDE GREATEST VALUE TO CUSTOMER
EQUALS
• SUCCESSFUL PRODUCT
8-16
