McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.
LEARNING OBJECTIVES (LO)
After reading Chapter 11, you should be able to:
LO1
Explain the product life cycle concept.
LO2
Identify the ways that marketing
executives manage a product’s life
cycle.
LO3
Recognize the importance of branding
and alternative branding strategies.
LO4
Describe the role of packaging,
labeling, and warranties in the
marketing of a product.
1-2
Managing Products & Brands
Brands’
Still going strong, after 170 years
1-3
Opening Story – Brands
FIGURE 11-1 How stages of the product life
cycle relate to a firm’s marketing objectives
and marketing mix actions
LO1
1-4
The Product Life Cycle
FIGURE 11-1 How stages of the product life
cycle relate to a firm’s marketing objectives
and marketing mix actions
LO1
1-5
The Product Life Cycle
The Product Life Cycle
Introduction
LO1

Product Life Cycle

Primary Demand

Selective Demand

Skimming Strategy

Penetration Pricing
1-6
The Product Life Cycle
FIGURE 11-2 Product life cycle for the
stand-alone fax machine for business use:
1970-2014. Note the four stages
LO1
1-7
The Product Life Cycle
The Product Life Cycle
Growth
LO1

Rapid Sales Increases

Repeat Purchasers

New Features

Broader Distribution
1-8
The Product Life Cycle
Honda Civic Hybrid & Amazon Kindle
Which stage of the Product Life Cycle?
LO1
1-9
The Product Life Cycle
The Product Life Cycle
Maturity
LO1

Industry/Product Sales Slow

Product Differentiation

Fewer Competitors
1-10
The Product Life Cycle
The Product Life Cycle
Decline
LO1

Industry/Product Sales Drop

Environmental Changes

Deletion

Harvesting
1-11
The Product Life Cycle
The Product Life Cycle
Dimensions of the Life Cycle

Length of the Product Life Cycle

Shape of the Product Life Cycle
• Generalized Life Cycle
LO1
• High-Learning
Product
• Fashion
Product
• Low-Learning
product
• Fad
Product
1-12
The Product Life Cycle
FIGURE 11-3 Alternative product life cycle
curves based on product type
LO1
1-13
The Product Life Cycle
The Product Life Cycle
Dimensions of the Life Cycle

The Product Level: Class and Form
• Product Class
• Product Form
LO1
1-14
The Product Life Cycle
FIGURE 11-4 Prerecorded Music Life Cycle by
Product Form. Note the life cycle of the cassette ape
LO1
1-15
The Product Life Cycle
The Product Life Cycle
Dimensions of the Life Cycle

The Life Cycle and Consumers
• Diffusion of Innovation
 Innovators
 Early Adopters
 Early Majority
 Late Majority
 Laggards
LO1
1-16
The Product Life Cycle
FIGURE 11-5 Five categories and profiles of
product adopters
LO1
1-17
The Product Life Cycle
The Product Life Cycle
Dimensions of the Life Cycle

The Life Cycle and Consumers
• Barriers to Adoption
 Usage
 Value
 Risk
 Psychological
LO1
1-18
The Product Life Cycle
Managing The Product Life Cycle
Role of a Product Manager

Product/Brand Manager Responsibilities
• Product Life Cycle
• New Product Development
• Marketing Program Implementation
• Data Analysis
 CDI
LO2
 BDI
1-19
Managing a Product Life Cycle
Marketing Dashboards
Knowing your CDI and BDI
Category Development Index (CDI) and Brand Development Index (BDI)
 % of a Product Category's Total US Sales in a Market Segment 
CDI = 
  100
% of the Total US Population in a Market Segment

LO2
 % of a Brand's Total US Sales in a Market Segment 
BDI = 
 100
 % of the Total US Population in a Market Segment 
1-20
Managing a Product Life Cycle
Managing The Product Life Cycle
Modifying the Product or Market
1. Product Modification
• Product
Bundling
• New
Characteristics
2. Market Modification
• Finding New
Customers
• Creating a New
Use Situation
LO2
• Increasing a
Product’s Use
1-21
Managing a Product Life Cycle
Managing The Product Life Cycle
Repositioning the Product
3. Product Repositioning
LO2
•
Reacting to a Competitor’s Position
•
Reaching a New Market
1-22
Managing a Product Life Cycle
Managing The Product Life Cycle
Modifying the Product or Market
•
Catching a Rising Trend
•
Changing the Value Offered
• Trading Up
• Trading Down
• Downsizing
LO2
1-23
Managing a Product Life Cycle
Branding
Brand Management

Branding

Brand Name
• Logotype (Logo)

Trade Name

Trademark
® ™
• Product Counterfeiting
LO3
1-24
Branding Strategies & Alternatives
Branding
Brand Personality & Brand Equity

Brand Personality

Brand Equity
• Provides a Competitive Advantage
• Consumers Willing to Pay a Premium
LO3
1-25
Branding Strategies & Alternatives
got2b Hair Products & Mambo Fragrances
What are their brand personalities?
LO3
1-26
Branding Strategies & Alternatives
FIGURE 11-6 Customer-based brand equity pyramid
LO3
1-27
Branding Strategies & Alternatives
Branding
Brand Personality & Brand Equity

Creating Brand Equity
• Develop Positive Brand Awareness
• Establish a Brand’s Meaning
• Elicit the Proper Response
• Create Intense Brand Loyalty
LO3
1-28
Branding Strategies & Alternatives
Branding
Brand Personality & Brand Equity

Valuing Brand Equity
• Provides a Financial Advantage
• Brand Licensing
LO3
1-29
Branding Strategies & Alternatives
Luxottica premium eyewear by Ralph Lauren
How does brand Licensing create Brand Equity?
LO3
1-30
Branding Strategies & Alternatives
Branding
Picking a Good Brand Name
LO3

Should Suggest Product Benefits

Should Be Memorable

Should Fit the Company or Product Image

Should Have No Legal or
Regulatory Restrictions

Should Be Simple and Emotional
1-31
Branding Strategies & Alternatives
FIGURE 11-7 Alternative branding strategies
LO3
1-32
Branding Strategies & Alternatives
Branding
Brand Strategies

LO3
Multiproduct Branding/Umbrella Branding
(Family or Corporate Branding)

Line Extension

Subbranding

Brand Extension

Co-branding
1-33
Branding Strategies & Alternatives
Branding
Brand Strategies

LO3
Multibranding

Fighting Brands

Private Branding (Private Labeling
or Reseller Branding)

Mixed Branding
1-34
Branding Strategies & Alternatives
Black & Decker vs DeWALT tools
What branding strategies does each firm use?
LO3
1-35
Branding Strategies & Alternatives
Packaging & Labeling Products
Creating customer value & competitive advantage
LO4

Packaging

Label

Communication Benefits

Functional Benefits

Perceptual Benefits
1-36
Packaging, Labelling and Warranties
PEZ Head-Dispensers
Creating customer value: Fun!
LO4
1-37
Packaging, Labelling and Warranties
Lays STAX vs Pringles
Competitive advantage: Which chip stacks up better?
LO4
1-38
Packaging, Labelling and Warranties
Packaging & Labeling Products
Global Trends in Packaging

Environmental Sensitivity

Health, Safety, and Security Issues
• Shelf Life
LO4
1-39
Packaging, Labelling and Warranties
Product Warranty
Various Types

Warranty
• Express Warranties
• Limited Coverage Warranties
• Full Warranties
• Implied Warranties
LO4
1-40
Packaging, Labelling and Warranties