Objectives. Describe the steps in product planning Explain how to develop, maintain, and improve a product mix
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1 Product Planning
2 Objectives Describe the steps in product planning Explain how to develop, maintain, and improve a product mix
3 Vocabulary Terms 1. Product Mix 2. Product Line 3. Product Item 4. Product Depth 5. Product Width
4 Product Planning Making decisions about what features should be used in selling a business s products, services, or ideas. Decisions relate to features such as: Packaging, labeling, and branding Warranties and support services
5 Product Planning Allows Businesses To: Coordinate existing products and features Add new products Delete products that no longer appeal to customers
6 Product Mix All of the different products that a company makes or sells. A retailer s product mix is made up of all the different products the store sells. Click on products to see Proctor and Gambles extensive product mix!
7 Product Mix Kraft is another great example! Hundreds of products in 5 areas: Snacks Beverages Cheese Groceries Convenience Meals Kraft s key brands include: Kraft, Kool-Aid, Maxwell House, Nabisco, Oscar Mayer, and Post.
8 Product Mix Adding more products, may not result in increase sales, sometimes it can take away sales from existing products. Pepsi One takes away from Diet Pepsi sales The type and number of products that a retail store offers must be based on the image the business is trying to project and the market they are trying to reach
9 Product Line A group of closely related products manufactured or sold by a business. related products of various sizes, types, colors, qualities, or prices. Example: range of desktop and laptop computers manufactured by Dell. Apple s Product Line Secret
10 Product Item A specific model, brand or size of a product within a product line. Retailers generally carry several product items for each product line they sell Macy s carries many styles and sizes of Guess Jeans for men, women, and kids
11 Product Width The number of different product lines a business makes or sells A retailer that sells three brands of jeans (Levi s Lee, and Guess) has a product width of three
12 Product Depth Number of product items offered with in each product line Red Lobster specializes in seafood dinners and has great depth within a narrow product line. You can order shrimp prepared 16 different ways.
13 Width and Depth Product Width Kohl s Department store stocks several brands of jeans: Lei, Levi s, J-Lo, & Wrangler which demonstrates product width. Product Depth The product depth is the number of sizes, price ranges, colors, and styles for each brand of jeans (Lei jeans have boot cut, flare, low rise, ankle etc).
14 Gillette Product Mix Blades And Razors P R O D U C T L I N E S.P R O D U C T L I N E S Toiletries Writing Instruments Lighters I T E M S MACH 3 Sensor Trac II Atra Swivel Double-Edge Lady Gillette Super Speed Twin Injector Techmatic Series Adorn Toni Right Guard Silkience Soft and Dri Foamy Dry Look Dry Idea Brush Plus Paper Mate Flair Cricket S.T. Dupont
15 Determining a Product Mix To determine its product mix, a business must: Identify its target market Identify its competitors Decide on the image it wants to project
16 Product Mix Strategies The plan for how the business determines which products it will make or carry 1) Develop new product lines or add new products to existing lines 2) Expand or modify current lines 3) Drop existing products
17 Key Steps in Product Development Step 2 Screen Ideas Step 3 Develop Business Proposal Step 4 Develop Product Step 5 Test Product Step 6 Introduce Product Step 7 Evaluate Customer Acceptance
18 Developing Existing Products Two ways of developing existing products are: line extensions product modifications
19 Line Extensions A different product that appeals to different consumers Line extensions add new product lines, items, or services. Tylenol Flu, Tylenol Cold, and Tylenol Allergy Sinus are line extensions of the original Tylenol Product.
20 Line Extension
21 Product Modifications An alteration in a company s existing product Modified products may be offered in new and different varieties, formulations, colors, styles, features or sizes.
22 Write down as many Oreo product modifications you can think of. Sign up to bring an Oreo product modification to the next class!
23 Deleting a Product or Product Line Obsolescence Loss of appeal Conflict with current company objectives Replacement with new products Lack of profit Conflict with other products in the line What products can you think of that are obsolete or have a loss of appeal?
24 Activity Case Study New Coke Work with your table group to find an article online that discusses the introduction of this product and then answer the following questions: 1. Why did Coca-Cola introduce New Coke and what were they hoping to accomplish? 2. Explain the impact New Coke had on Coca-Cola Classic in the marketplace. 3. What type of product mix strategy was Coke employing by adding this product to Coke s product mix? 4. Explain the success/failure/surprises encountered during this campaign. Write down the questions and your responses. Be prepared to discuss your responses as a class! We will move next door and talk about this at 1:00.
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