Product Strategy

Question 1

What is a product strategy?

Answer 1

• lies at the very heart of the organization: defines what the organization does and why it exists
• creates a product offering that is a bundle of physical, service and symbolic attributes designed to satisfy customers needs and wants
• strives to overcome commoditization by differentiating product offerings via services and symbolic elements of the offering

Question 2

What is the product portfolio?

Answer 2

• consists of a group of closely related product items (product lines) and the total group of products offered by the firm (product mix)
• used in both consumer and business markets
• used by most companies due to the advantages of selling a range of products compared to one

Question 3

What are the potential benefits of offering a large product portfolio?

Answer 3

• economies of scale
• standardization
• package uniformity
• sales and distribution efficiency
• equivalent quality benefits
• power in the supply chain

Question 4

What are the characteristics of service products?

Answer 4

• services are intangible
• simultaneous production and consumption
• perishability
• heterogeneity
• client based relationship

Question 5

What are the challenges of service products?

Answer 5

1. Balancing supply (capacity) with demand
2. Time and place dependency of demand
3. Difficult in evaluating service quality prior to purchase
4. Inconsistency of service quality, difficult to standardize
5. Difficulty in tying offerings to customer needs

Question 6

What is a service gap analysis? What are potential reasons for the gap?

Answer 6

Method in service quality measurement, tool. It identifies gaps between customer expectation and the actual service provided at different stages of service delivery.

Reasons:

1. Misunderstanding of customer expectations (difference between what we think customers expect and what they actually expect) do marketing research!
2. Misspecification of standards (difference between our understanding of consumer expectations and standards set for delivery) carry out blue print!
3. Incorrect application of standard( difference between blueprint and employees actions) carry out audit , mystery shopping.
4. Poor communication and unkept promises
5. Dissatisfied customers ( perception based on WOM)

Question 7

What is new product development?

Answer 7

“Vital part of a firms aim to sustain growth and profits”

• depends on the firms ability to create a differential advantage for the new product
• customer perception of newness is critical

Question 8

What are the 6 strategic options to the newness of products?

Answer 8

1. New-to-the-world products: pioneering effort by a firm that leads to the creation of an entirely new market
2. New product lines: represents new offerings by the firm, but are introduced to established markets
3. Product line extensions: supplement an existing product line with new styles, models, features or flavors
4. Improvements or revising of existing products: which offer customers improved performance or fester perceived value
5. Repositioning: targeting existing products at new markets or segments
6. Cost reductions: modifying products to offer performance similar to competing products at a lower price

Question 9

What are some of the reasons for new product/venture failure?

Answer 9

• failure to offer a unique benefit
• underestimating the competition
• product design is not as good as it could be
• product development costs are higher than expected
• incorrectly positioned in the market, not advertised, or over-priced
• an over estimated market size

Question 10

What steps does the new product development consist of?

Answer 10

1. Idea generation
2. Idea screening
3. Concept testing (focus groups)
4. Business analysis
5. Product development
6. Test marketing
7. Commercializations

Question 11

What is branding strategy?

Answer 11

• involves selecting the right combination of name, symbol, term or design that identifies a specific product
• has two parts: the brand name (words, letters and numbers) and the brand mark (symbols, figures or design)
• it is critical for product identification is the key factor in differentiating s product from its competitors

Question 12

What are the marketing advantages of strong brands?

Answer 12

• I rocked perception of product performance
• greater loyalty
• less vulnerable to competition and crises
• larger margins
• Inelastic consumer response to price increases
• elastic consumer response to price decreases
• greater trade cooperation
• increase in effectiveness of IMC
• licensing opportunities
• brand extension opportunities

Question 13

What are the limitations of product life cycle?

Answer 13

• most products never get past the development stage
• most successful products never die
• the length of each stage depends on the action of other firms
• the Plc forces managers to consider the future of their industry and their brand

Question 14

What are the different stages of the PLC?

Answer 14

1. Development stage:
   - no sales revenue, negative cash flow and high risk. Complements such as understanding of desired uses and benefits should be established and analysis of feasibility of product concept. (Test marketing is conducted at this stage)
2. Introduction stage: rising customer awareness, extensive marketing expenditures, rapidly increasing sales revenue. (Expand and strengthen supply chain relationships and channels, set pricing objectives)
3. Growth stage: rapidly increasing sales revenue, rising profits, market expansion and increasing number of competitors. (Establish strong, defensible marketing position, achieve financial objectives that relay investment) shifts to customer retention and building brand loyalty.
4. Maturity stage: sales and profit plateaus, shift from customer acquisition to customer retention and strategies to hold or steal market share, no for,swill enter the market, longest stage.
5. Decline stage: time of persistent sales and profit decreases, attempts to postpone the decline or strategies aimed at harvesting or divesting the product. ( consider market segment potential, market product position, firms price and cost structure and rate of market deterioration)

Question 15

What are the marketing strategy goals during the growth stage?

Answer 15

• leverage the products perceived differential advantages
• establish clear product and brand identity
• creat unique positioning
• maintain control of product quality
• maximize availability of the product
• maintain or enhance the products profitability to partners
• find ideal balance between price and demand
• keep an eye on competition

Question 16

What are the goals and strategies during the maturity stage?

Answer 16

Goals:

1. Generate cash flow
2. Hold market share
3. Steal market share

Four strategic options to achieve these goals:

1. Develop new product image
2. Find and attract new users to the product
3. Discover new applications for the product
4. Apply new technology to the product

Question 17

What are the steps involved in creating favorable positioning?

Answer 17

1. Identify the characteristics, needs, wants and benefits desired by the market
2. Examine all current and potential competitors in the market
3. Compare the position of your offering with the position of the competition for each key need, want, preference or benefit desired by target market
4. Identify unique position that focuses on customer benefits that competition isn’t offering
5. Develop marketing program to leverage firms position and persuade customers
6. Continually reassess the target market, firms position and competitors offerings to ensure marketing program stays on track and to identify potential opportunities

Question 18

What is a perceptual map?

Answer 18

• represent customers perceptions and preferences spatially by means of visual display