Chapter 12: Product Strategy

Product Development Process

• Idea generation → Product screening → Concept testing → Business Analysis → Product development → Testing marketing → Commercialization

Product Life Cycle

The stages a product goes through from introduction to decline, including introduction, growth, maturity, and decline phases.

Introductory Stage

Marketers focus on making consumers aware of the product and its benefits

Growth Stage

The phase in the product life cycle where sales increase rapidly, profits rise, and marketing efforts expand to capture growing market share.

Maturity Stage

The period during which sales growth slows, market saturation occurs, and competition intensifies, leading to a focus on differentiation and maintaining market share.

Decline Stage

The final phase in the product life cycle characterized by a decrease in sales and profits, leading to reduced marketing efforts and possible product discontinuation.

Branding

The process of naming and identifying products. Brand (term, symbol, design, or combination),Brand name, and brand mark (distinctive design ex: McDonald’s arches, Nike’s swoosh).

Trademark

A legally registered symbol, word, or phrase that represents a company or product, providing exclusive rights and protection against unauthorized use.

Quality

The standard of a product's features, performance, and durability that determines its suitability for meeting consumer needs and preferences.

Logo

A graphic design or symbol that represents a brand, often used for instant recognition and recall of the brand's identity.

Price Skimming

A pricing strategy where a product is initially set at a high price to maximize profits from early adopters before gradually lowering the price to attract more price-sensitive customers.

Penetration Price

A pricing strategy where a product is introduced at a low price to attract customers quickly and gain market share, then potentially raised later.

Psychological Pricing

A strategy that considers the psychological impact of pricing on consumer behavior, often pricing products at just below a round number (e.g., $9.99$ instead of $10$) to make them appear cheaper.

Discounts

Reductions in the price of products or services to encourage purchases, often used to boost sales volume, clear inventory, or reward customer loyalty.

Retailers

Businesses that sell goods directly to consumers, often providing a variety of products in physical or online stores.

Wholesaler

A business entity that purchases goods in large quantities from manufacturers and sells them in smaller amounts to retailers or other businesses, often acting as an intermediary in the supply chain.

Promotion Strategy

A plan to communicate and deliver the value of a product to target customers, involving activities such as advertising, sales promotions, and public relations to generate interest and stimulate sales.

Integrated Marketing Communications

A strategic approach that coordinates all promotional activities to provide a consistent message across various channels, ensuring that audiences receive a unified and cohesive marketing message.

Advertising

The practice of promoting products or services through paid announcements across various media, aiming to inform and persuade potential customers.

Advertising Campaign

A series of coordinated promotional messages and activities designed to achieve specific marketing objectives within a defined period.

Personal Selling

A selling technique where a salesperson interacts directly with potential customers to educate, inform, and persuade them to purchase a product or service.

Publicity

The practice of gaining public visibility or awareness for a product, service, or brand through media coverage without direct payment, often through press releases or events.

Advertising Purpose

Advertising for the informative or persuasive.

Advertising Impact

Advertising calls for action

Advertising Cost

what companies pay for advertising .

Advertising Duration

How often advertising is repeated

Buzz Marketing

A variation of traditional advertising where marketers attempt to create a trend

Sales Promotion

Direct inducements offering added value or some other incentive for buyers to enter into an exchange (Includes store displays, premiums, samples and demonstrations, coupons contests and trade shows)

Push Strategy

A marketing strategy aimed at promoting products by pushing them onto consumers, often through aggressive advertising and promotional tactics.

Pull Strategy

A marketing strategy that focuses on creating demand for a product so that consumers actively seek it out, often through promotions and advertising.

Promotional Positioning

uses promotion to create and maintain an image of a product in buyers’ minds

Marketing creates…

value through the marketing mix

Companies with an effective marketing mix gain…

competitive advantage