Lecture Marketing (12/e): Chapter 11 – Kerin, Hartley, Rudelius

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LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 11, YOU SHOULD BE ABLE TO:

LO 11-1

Explain the product life-cycle concept.

LO 11-2

Identify the ways that marketing
executives manage a product’s life cycle.

LO 11-3

Recognize the importance of branding
and alternative branding strategies.

LO 11-4

Describe the role of packaging, labeling,
and warranties in the marketing of a
product.
11­2


GATORADE: BRINGING SCIENCE TO
SWEAT TO WIN FROM WITHIN



Creating the
Gatorade Brand



Building the
Gatorade Brand

11­3


FIGURE 11-1 How stages of the product life
cycle relate to a firm’s marketing objectives
and marketing mix actions

11­4


FIGURE 11-1A Stages of the product life cycle
and its total industry sales and total industry
profit

11­5


FIGURE 11-1B How stages of the product life
cycle relate to a firm’s marketing objectives
and marketing mix actions

11­6


LO 11-1

CHARTING THE PRODUCT LIFE CYCLE
INTRODUCTION STAGE



Product Life Cycle



Trial



Primary
Demand



Selective Demand



Skimming Pricing



Penetration Pricing

11­7


FIGURE 11-2 Product life cycle for the standalone fax machine for business use: 1970-2014

11­8


LO 11-1

CHARTING THE PRODUCT LIFE CYCLE
GROWTH STAGE



Rapid Sales Growth



More Competitors



Repeat Purchasers



New Features



Broad Distribution
11­9


LO 11-1

CHARTING THE PRODUCT LIFE CYCLE
MATURITY STAGE



Industry/Product Sales Slow



Profit Declines



Product Differentiation



Fewer Competitors
11­10

LO 11-1

CHARTING THE PRODUCT LIFE CYCLE
DECLINE STAGE



Industry/Product Sales Drop



Environmental Changes



Deletion



Harvesting
11­11


LO 11-1

Chevy Spark and Amazon Kindle
Which stage of the product life cycle?

11­12


LO 11-1

Soft Drinks and Fax Machines
Which stage of the product life cycle?

11­13


LO 11-1

MARKETING MATTERS
Will E-mail Spell Extinction for Fax Machines?

11­14


LO 11-1

CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS OF THE PRODUCT LIFE CYCLE



Length of the Product Life Cycle



Shape of the Product Life Cycle
• Generalized Life Cycle
• High-Learning
Product

• Fashion
Product

• Low-Learning
product

• Fad
Product
11­15


FIGURE 11-3 Alternative product life cycle
curves based on product types

11­16


LO 11-1



CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS OF THE PRODUCT LIFE CYCLE

The Product Level: Class and Form

• Product Class
• Product Form

11­17


FIGURE 11-4 Prerecorded music product life
cycles by product form

11­18


LO 11-1



CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS OF THE PRODUCT LIFE CYCLE

The Life Cycle and Consumers
• Diffusion of Innovation
 Innovators

 Late Majority

 Early Adopters

 Laggards

 Early Majority

11­19


FIGURE 11-5 Five categories and profiles of
product adopters (diffusion of innovation)

11­20


LO 11-1



CHARTING THE PRODUCT LIFE CYCLE
FOUR ASPECTS OF THE PRODUCT LIFE CYCLE

The Life Cycle and Consumers
• Barriers to Adoption
 Usage

 Risk

 Value

 Psychological

11­21


LO 11-2



MANAGING THE PRODUCT LIFE CYCLE
ROLE OF THE PRODUCT/BRAND MANAGER

Responsible for the Following:
• Product Life Cycle
• New Product Development
• Marketing Program Implementation
• Data Analysis
 CDI

 BDI
11­22


LO 11-2

USING MARKETING DASHBOARDS
Knowing Your CDI and BDI

Category Development Index (CDI) and Brand Development Index (BDI)

 % of a Product Category's Total U.S. Sales in a Market Segment 
CDI = 
 × 100
% of the Total U.S. Population in a Market Segment

 % of a Brand's Total U.S. Sales in a Market Segment 

BDI = 
× 100
 % of the Total U.S. Population in a Market Segment 

11­23


LO 11-2



MANAGING THE PRODUCT LIFE CYCLE
MODIFYING THE PRODUCT OR MARKET

Product Modification
• Product
Bundling



• New
Characteristics

Market Modification
• Finding New
Customers

• Increasing a
Product’s Use
• Creating a New

Use Situation

Dockers
Ad

11­24


LO 11-2

MANAGING THE PRODUCT LIFE CYCLE
REPOSITIONING THE PRODUCT



Product Repositioning



Reacting to a Competitor’s Position



Reaching a New Market



Catching a Rising
Trend



Changing the Value Offered
• Trading Up

• Trading Down

• Downsizing
11­25