Building a Marketing Plan: Chapter Six: Planning for Products and BrandsBEP120 January 31, 2011 CHAPTER SIX Planning for Products and Brands From Building a Marketing Plan By Ho...

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Our next article is also a HBR article and is the follow up to the first article. The article is "Planning for Products and Brands" (Wong 2011). HRB #BEP120. You can find it in the HBR Coursepack at the following link:


















Building a Marketing Plan: Chapter Six: Planning for Products and Brands BEP120 January 31, 2011 CHAPTER SIX Planning for Products and Brands From Building a Marketing Plan By Ho Yin Wong, Kylie Radel, and Roshnee Ramsaran-Fowdar © 2011 by Business Expert Press. All rights reserved. Harvard Business Publishing distributes in digital form the individual chapters from a wide selection of books on business from publishers including Harvard Business Press and numerous other companies. To order copies or request permission to reproduce materials, call 1-800-545-7685 or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise – without the permission of Harvard Business Publishing, which is an affiliate of Harvard Business School. For the exclusive use of L. Machuca, 2023. This document is authorized for use only by Liliana Machuca in BUS 5614 taught by CHARLES BRYANT, Florida Institute of Technology from Jan 2023 to Jul 2023. http://www.hbsp.harvard.edu/ ibe-wong-book.indb xvi 5/31/11 12:22 PM For the exclusive use of L. Machuca, 2023. This document is authorized for use only by Liliana Machuca in BUS 5614 taught by CHARLES BRYANT, Florida Institute of Technology from Jan 2023 to Jul 2023. CHAPTER 6 Planning for Products and Brands Because of the dynamic nature of the markets, organizations need to plan and develop existing products and search for new products in order to survive. New products introduced or tested on the market have a failure rate as high as 95%.1 Th us it is imperative that every area of the product be carefully analyzed and planned so that continuing marketing decisions can be formulated from facts relevant to the total product. Based on the situation analysis, and information in relation to seg- mentation, positioning, and buying behavior gathered from market research, you are able to plan your marketing mix. Planning your product strategy is usually the fi rst step in developing marketing mix strategies. In other words, a product plan is not a stand- alone plan. It needs to be integrated with other marketing mix tools. While planning a product strategy, you need to understand the characteristics of the product, the behavior of the product life cycle, and the features that can create a strong brand. All these aspects need to be thoroughly analyzed prior to writing a product plan. Learning Objectives After studying this chapter, you will be able to • appreciate the concept of product life cycle, • master the new product development process, • understand the concept of positioning or repositioning, • identify the key decisions involved in branding. ibe-wong-book.indb 79 5/31/11 12:24 PM For the exclusive use of L. Machuca, 2023. This document is authorized for use only by Liliana Machuca in BUS 5614 taught by CHARLES BRYANT, Florida Institute of Technology from Jan 2023 to Jul 2023. 80 BUILDING A MARKETING PLAN Product Life- Cycle Decisions and Strategies Sales of an organization’s products tend to follow a typical pattern of development over time, named the product life cycle, as shown in Figure 6.1. Taking into consideration repeat purchases, not just fi rst- time sales, the product life cycle attempts to recognize distinct stages in the product’s sales pattern. Th ese distinct stages are product development, introduc- tion, growth, maturity, and decline. During product development, a new product goes through various stages such as product idea screening and prototype and market tests. A new product may be dropped if it costs too much to produce or the responses are not positive from the market tests. Introduction is the period during which a new product is entering a market. Th e sales of the new product rise slowly. However, since organizations provide heavy promo- tion to inform and educate target customers, and there is signifi cant need to develop initial distribution networks, this usually means a loss situation. Growth is the stage where customers accept the product, distribu- tion is expanding, promotion is heavy, repeat purchases are obtained from customers after initial trial, and positive word- of- mouth publicity spreads. Both sales and profi ts grow rapidly due to more customers and Figure 6.1. Product life cycle. ibe-wong-book.indb 80 5/31/11 12:24 PM For the exclusive use of L. Machuca, 2023. This document is authorized for use only by Liliana Machuca in BUS 5614 taught by CHARLES BRYANT, Florida Institute of Technology from Jan 2023 to Jul 2023. PLANNING FOR PRODUCTS AND BRANDS 81 lower unit costs of the product. At the same time, market growth attracts competitors, most of whom either attempt to imitate or add new features to the already introduced product. Maturity is the stage characterized by the extent of competition in the market. Product sales are stable or grow slowly, at best, since a certain amount of product loyalty is already established. Th ere are three impor- tant attributes of mature markets:2 1. Repeat sales become much more extensive than fi rst- time sales. 2. Customers are knowledgeable about the alternatives, so brand pref- erences become well established. 3. Few major technical advances will be forthcoming, so it is diffi cult to obtain technology improvement that can lead to a signifi cant competitive advantage. As a result, new organizations fi nd it unattractive to enter the market while existing organizations struggle to increase their market shares. Price competition is a normal phenomenon at this stage since the market is already crowded with organizations. Decline is the phase during which the product becomes obsolete and the loss of appeal to the customer results in sales decreases with the con- sequent rapid loss of profi ts. Two main reasons contribute to the decline of a product: 1. A better or a cheaper product enters the market that can fulfi ll the same need. Th e introduction of DVDs has pushed video cassettes virtually out of the market, for example. 2. Customers grow tired of a product— for instance, a shoe style. Strategic Implications of the Product Life Cycle Th e product life cycle can act as a planning tool, providing indicators to marketers about changes in behavior of a product, thus allowing mar- keters to react in time. In other words, the product life cycle can guide marketers who can adapt their marketing strategy to the developments of the product life cycle. It is diffi cult to generalize the most appropriate strategy for each stage of the product life cycle. Nevertheless, marketers ibe-wong-book.indb 81 5/31/11 12:24 PM For the exclusive use of L. Machuca, 2023. This document is authorized for use only by Liliana Machuca in BUS 5614 taught by CHARLES BRYANT, Florida Institute of Technology from Jan 2023 to Jul 2023. 82 BUILDING A MARKETING PLAN might need to follow diff erent strategies for dealing with the product in diff erent stages of the product life cycle. Introduction Stage During the introduction stage, a basic product is introduced to the market. It is not a onetime eff ort. Marketers need to conduct continual research and development to reduce the product’s imperfections. Further, eff orts need to be made to enhance the product’s value. A general formula to study the product’s value from the customer point of view is Value = benefi ts / required resources Marketers can provide customers with better value by enhancing the ben- efi ts or by reducing the required resources, or doing both. Growth Stage During the growth stage, marketers need to compare their own product with their competitors’ so as to improve the product. Marketers need to enhance the product’s value with new features and benefi ts. Product lines can also be expanded to stimulate the growth stage. An example is the introduction of diff erent fl avors of chewing gum to expand an organiza- tion’s chewing gum product life cycle. Extra services, such as a warranty, can be included in the product mix for manufacturing goods. Maturity Stage Common strategies available for marketers to deal with a product during the maturity stage of its life cycle include the following: • Improving quality of the product with an aim to encourage repeat purchases and building customer loyalty • Modifying the product to attract new customers • Seeking new applications for the product (e.g., chewing gum may be marketed for use by smokers as a tooth- whitening product) ibe-wong-book.indb 82 5/31/11 12:24 PM For the exclusive use of L. Machuca, 2023. This document is authorized for use only by Liliana Machuca in BUS 5614 taught by CHARLES BRYANT, Florida Institute of Technology from Jan 2023 to Jul 2023. PLANNING FOR PRODUCTS AND BRANDS 83 Decline Stage Marketers face a challenging situation during the decline stage, but a number of strategies are available. Marketing and production programs must go through strict scrutiny to ensure effi ciency. Marketers can ratio- nalize the product line so that only the most competitive products are left in the range. If none of these strategies work, the last resort is to phase out the product. Pruning a product is not an easy task because marketers get attached to the product after a length of time, but bold actions are neces- sary to support a phaseout. The Development of New Products As discussed in the product life- cycle section, products often decline and fi nally may fade out. Organizations need new products to replace them to ensure growth. Th e product life cycles for many products are getting shorter on account of intense competition. Th us the task of developing new products becomes of even greater importance for marketers. A number of critical issues must be examined for new product devel- opment. Marketers should continuously think about new products and cannot aff ord to wait until products reach the decline stage. Marketers also will need to ensure top management’s commitment in terms of fi nan- cial and organizational support to facilitate new product development. New product development is a continuous process, and competitors’ products should be factored into the development process. An evaluation of competitors’ products in the new product development process can have a far- reaching impact on achieving a competitive advantage. New product development should be futuristic and in line with changing mar- ket trends, and a product new to the organization may not necessarily be new to the market. In principle, there are two main approaches to add new products to an existing range. One is to acquire products from other organizations, and the second is to develop new products internally. Th e fi rst approach can obtain a new product faster than the second strategy. However, the organization might need to pay a premium to buy an existing prod- uct from another organization. Organizations have three main ways to acquire new products:3 ibe-wong-book.indb 83 5/31/11 12:24 PM For the exclusive use of L. Machuca, 2023. This document is authorized for use only by Liliana Machuca in BUS 5614 taught by CHARLES BRYANT, Florida Institute of Technology from Jan 2023 to Jul 2023. 84 BUILDING A MARKETING PLAN 1. By purchasing another organization or simply buying a product line 2. By obtaining a license or a franchise 3. By purchasing patents (however, this may be a cumbersome and lengthy process) As previously indicated, developing new products in- house usually takes longer in comparison to the acquisition approach. However, the organization can learn a lot if develops its own new products. Th e new product development process can become knowledge capital for the orga- nization that might give it a competitive advantage. The New Product Development Process Principally, new product development is a sequential process: “Th e new product development process involves a series of activities by which an organization generates new product ideas, evaluates them, and devel- ops them into new products that enter the marketplace.”4 Facing three options at each stage, marketers must decide whether to proceed to the next stage (“go”), drop the product (“no go”), or seek additional infor- mation. Th e decision of “go” from one stage to another signifi es further commitments of time and fi nancial resources. Th e new product develop- ment process may be divided into six stages as shown in Figure 6.2. Figure 6.2. The new product development process. ibe-wong-book.indb 84 5/31/11 12:24 PM For the exclusive use of L. Machuca, 2023. This document is authorized for use only by Liliana Machuca in BUS 5614 taught by CHARLES BRYANT, Florida Institute of Technology from Jan 2023 to Jul 2023. PLANNING FOR PRODUCTS AND BRANDS 85 Idea Generation Th e aim of the idea generation stage is to create a pool of ideas for pos- sible new products and to refi ne those ideas into precise
Answered Same DayJan 24, 2023

Answer To: Building a Marketing Plan: Chapter Six: Planning for Products and BrandsBEP120 January...

Shubham answered on Jan 25 2023
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The article that provides an overview of the key strategies and considerations for planning and development of the successful products and brands. It includes discussing the importance of market research in identifying consumer needs and trends, as well as the competitive landscape. It then goes on to cover topics such as product development, branding, and positioning, emphasizing the need to create a unique value proposition and a strong brand identity (Wong, Radel and Roshnee, 2011). The development of new products depends on the series of activities that is required for generation of new products ideas along with evaluation. It aims for the generation of stage for creation of pool of ideas that is required for possible new products and it can help in refining ideas that includes the concept that is useful for specifying products. The purpose for screening can help in determine the idea of products that can help in justifying along with further examination.
The article also covers the importance of...
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