Chapter 10: Managing Successful Products, Services, and Brands

Product Life Cycle

the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline

Introduction Stage

The first phase of the product life cycle where a product is launched into the market, aiming to build awareness and establish a customer base.

Growth Stage

The second phase of the product life cycle characterized by increasing sales, market acceptance, and the establishment of a strong customer base as the product gains traction in the marketplace.

Maturity Stage

The third phase of the product life cycle where sales growth slows or stabilizes, competition intensifies, and efforts focus on maintaining market share while maximizing profit.

Decline Stage

The fourth phase of the product life cycle characterized by a decrease in sales and profitability, where efforts may be made to revitalize the product or gradually withdraw it from the market.

Deletion

where a product is phased out due to diminished sales and profitability, leading to its removal from the market.

Harvesting

a strategy where a company reduces marketing and production costs to maximize short-term cash flow from a product in the decline stage.

Length of Product Life Cycle

the period from a product's introduction to its withdrawal from the market.

Shape of the Life-Cycle Curve

the graphical representation of the sales and profits of a product over time.

High-Learning product

a product that requires significant consumer education before adoption, leading to a longer adoption period.

Selective Demand

the demand for a specific brand or product rather than the overall category. It often arises after consumers have accepted the product category.

Skimming Strategy

A pricing strategy where a firm sets a high initial price for a new product, gradually lowering it over time to capture different segments of the market.

Low-Learning Product

a product that requires little consumer education and has a short adoption period.

Fashion Product

a product that is purchased frequently and is influenced by trends and consumer preferences. These items often have a cyclical demand and vary in popularity over time.

Fad Product

a product that experiences a rapid rise in popularity and sales, but is quickly followed by a steep decline, often due to changing consumer preferences and trends.

Product Class

a group of related products that share similar attributes and functions, often categorized for marketing purposes.

Product Form

a specific version of a product within a product class, distinguished by unique features, styles, or branding.

Diffusion of Innovation

the process by which a new idea, product, or service spreads among consumers, often characterized by different adopter categories.

Innovators

venturesome; higher educated; use multiple information sources

Early majority

deliberate; many informal social contacts

Early adopters

leaders in social setting; slightly above-average education

Late majority

skeptical; below-average social status

Laggards

fear of debt; neighbors and friends are informational sources

Usage barriers

when the product is not compatible with existing habits

Psychological barriers

beliefs or attitudes that hinder a consumer from adopting a new product or service.

Value barriers

perceived benefits of the new product do not outweigh the costs or risks associated with it.

Risk barriers

physical, economic or social

Brand manager

manages the marketing efforts for a family of products or brands

Product modification

altering one or more of a product’s characteristics to increase sales

Product Bundling

the sale of two or more separate products in one package

Category Development Index (CDI)

percentage of a product category’s total US sales in a market segment / percentage of the total US population in a market segment X 100

Brand Development Index (BDI)

percentage of a brands total US sales in a market segment / percentage of the total US population in a market segment X 100

Market modification

A strategy aimed at increasing a product's market share by finding new users or applications for the product.

Product repositioning

changes the place a product occupies in a customer’s mind relative to competitive products

Trading up

adding value to the product (or line) through additional features or higher quality materials

Trading down

reducing a product’s number of features, quality, or price

Branding

basic decision in marketing products that involves creating a unique name and image for a product in the consumers' minds to differentiate it from competitors.

Brand name

the name given to a product or service that identifies it as belonging to a specific company, used to distinguish it from others in the market.

Trademark

a symbol, word, or phrase legally registered to represent a company or product, providing exclusive rights to use it.

Brand equity

the value added to a product by having a well-known brand name, reflecting consumer perception, recognition, and loyalty.

Brand purpose

the reason a brand exists beyond making a profit, encapsulating its core values and mission, and connecting with consumers on an emotional level.

Brand Personality

the set of human characteristics attributed to a brand, shaping how it is perceived by consumers and influencing their emotional connection with it.

Brand Licensing

a contractual agreement allowing another company to use a brand's name, logo, or product in exchange for a fee or royalty.

Multiproduct Branding

a branding strategy where a single brand name is used for multiple related products

Multibranding

a branding strategy where each product in a line is given a unique brand name

Private Branding

a strategy where a retailer sells products under its own brand name, typically at a lower cost than manufacturer brands. (Walmart vs Name Brand Oreos)

Mixed Branding

a branding strategy where a company offers products under its own name and also under the names of other manufacturers.

Packaging

component of a product that refers to any container in which it is offered for sale and on which label information is conveyed

Label

a key part of packaging that provides essential information about the product, including its name, ingredients, and usage instructions.

Seven P’s service marketing

Product (Service), Price, Place (Distribution), Promotion, People, Physical Environment, Process

Line extension

the introduction of a new product variant within an existing product line, utilizing the same brand name to leverage brand equity.

Brand extension

a strategy that involves introducing a new product in a different category using an established brand name to enhance the marketability and recognition of the new product.

Off-Peak Pricing

a pricing strategy that reduces prices during low-demand periods to stimulate sales and increase revenue.

Penetration pricing

to discourage competitive entry a company can price low

Sub-branding

combines a corporate or family brand with a new brand to distinguish a part of its product line from others

Co-branding

the practice of pairing two or more strong brands to facilitate the marketing of a joint product or service for their mutual benefit

Fighting Brands

new product brands created to confront competitor brands

Capacity Management

integrating the service component of the marketing mix with efforts to influence consumer demand