Chapter_6_Product Management

Question 1

Product line, product mix width and product mix depth

Answer 1

Product line - A group of products that are closely related either because they function in a similar manner.
Product width - the number of product lines a company markets
Product depth - the number of brands within each product line

Question 2

What is product?

Answer 2

A Product is a bundle of physical, service, and symbolic attributes designed to enhance buyers’ want satisfaction

Question 3

What are marketing do to a product?

Answer 3

Enhance brand, quality, packaging, styling features for improve core benefit of product.

Question 4

Classification of Consumer Products

Answer 4

Convenience Goods: Bread, milk, eggs etc.
Shopping Goods: Washer and dryer, furniture etc.
Specialty Goods: Luxury cars, designer clothes etc.
Unsought Goods: Cancer insurance, pre-need funeral plans
Impulse items(冲动消费物品）

Question 5

Classification of Industrial Products

Answer 5

• Installations • Accessories
• Raw Materials
• Component Parts/Materials
• Supplies

Question 6

Why need multiple product lines?

Answer 6

• Protection from competition
• Increased growth and profits
• Offset sales fluctuations (like seasonal fluctuation)
• Greater market impact
• Economical resource usage
• Avoidance of obsolescence (避免淘汰)

Question 7

Four Stages of the Product Life Cycle

Answer 7

1. Introduction stage.
2. Growth stage (competition enter this stage)
3. Maturity stage (price goes down)
4. Decline stage.

Question 8

What is skimming price & penetration price.

Answer 8

product pricing strategy by which a firm charges the highest initial price that customers will pay and then lowers it over time.
This approach contrasts with the penetration pricing model, which focuses on releasing a lower-priced product to grab as much market share as possible

Question 9

How to know if entering the growth stage?

Answer 9

Increase of industry sales

Question 10

Different stages with different strategy （see week_6, slide 12)

Answer 10

1. Introduction stage - Gain awareness
2. Growth stage - Stress differentiation
3. Maturity stage - Maintain brand loyalty
4. Decline stage - harvesting, deletion

Question 11

What aspect does packaging provide?

Answer 11

• Protection
• Identification
• Information
• Usage enhancement
• Disposal enhancement
• Channel acceptance enhancement

Question 12

What can labeling do?

Answer 12

helps customers by:
• Identifying the manufacturer, country of origin, ingredients
• Reporting expiration dates, content grading
• Explaining product use
• Warning about potential misuse
• Providing care instructions
• Serving as a communications link between the user, eventual buyers, and the company

Question 13

What does warrant do?

Answer 13

• Implied Warranties (product suppose to do sth)

* Express Warranties(written warranties, good for marketer).

Question 14

Brand definition

Answer 14

A name, term, sign, symbol, or design or a combination of them intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

Question 15

What are the benefits of branding?

Answer 15

For Buyer:
• Product Quality Identification
• Shopping Efficiency
• Attention to New Products
For Seller:
• Easier Order Processing (just say the brand name)
• Legal Protection
• Brand Loyalty
• Segmentation
• Corporate Image
For Society:
• Consistent Product Quality 
• Innovation
• More Information

Question 16

Types of Brand Names

Answer 16

• suggests a function (Mr clean)
• imply a high level of excellence (A1)
• ordinary words (Camel)
• initials or numbers (BMW)
• promises or results
• ease of application
• product in use
• pleasant connotations
• promise of reward

Question 17

What is Brand Equity

Answer 17

Added value to the product. Like Dole banana

Question 18

Reasons for Product Failure

Answer 18

• Not heeding marketing research findings
• Market size overestimation
• Product design
• Positioning
• Advertising
• Pricing
• Development Costs
• Competition

Question 19

What is Booz Allen Hamilton new product development process?

Answer 19

1. New Product Strategy Development
2. Idea Generation
3. Screening and Evaluation
4. Business Analysis
5. Development
6. Testing
7. Commercialization

Question 20

What are Booz Allen Hamilton findings?

Answer 20

Average new product success rate in terms of meeting goals = 65%
• 1/7 successfully developed
• Spending on R&D and marketing
• Median number of new products
• Contribution to sales growth
• Contribution to profits

Question 21

Why need new product strategy ?

Answer 21

If no new product strategy, the success rate of new product is 1/53. If have new product strategy, rate is 1/7.

Question 22

What contribute to the sales and and profit?

Answer 22

New product.

Question 23

Strategic Role of Most New Products

Answer 23

Externally Driven
• Defend Market Share - 43%
• Establish Foothold in New Market - 38%
• Preempt Market Segment - 34% 
Internally Driven
• Maintain Position as Product Innovator - 47%
• Capitalize on Distribution Strength - 34%
• Exploit Technology in a New Way - 28%
• Provide a Cash Generator - 14%
• Capacity Utilization - 8%

Question 24

Sources of New Product Ideas

Answer 24

• Internal
External
• Customers
• Competitors
• Distributors & Suppliers
• Other Sources

Question 25

Idea Screening and Evaluation

Answer 25

* DropError | * Go Error

Question 26

Determinants of Rate of Adoption for a new product

Answer 26

* RelativeAdvantage * Compatibility (compatible with culture) * Complexity (Lower the complexity, the faster new product adopt) * Trialability * Observability