Chap 14 product strategies

Product-Positioning Strategy TM 14-1 1.. Product-Overlap Strategy TM 14-4 1.. Product-Elimination Strategy TM 14-7 1.. Diversification Strategy TM 14-11 1.. PRODUCT-REPOSITIONING STRATEG

Chapter 14

Product Strategies

A Product-Positioning Strategy (TM 14-1)

1 Positioning a Single Brand

2 Positioning Multiple Brands

B Product-Repositioning Strategy (TM 14-2 and TM 14-3)

1 Repositioning among Existing Customers

2 Repositioning among New Users

3 Repositioning for New Uses

C Product-Overlap Strategy (TM 14-4)

1 Competing Brands

2 Private Labels

3 Dealing with Original Equipment Manufacturers (OEMs)

D Product-Scope Strategy (TM 13-5)

1 Single Product

2 Multiple Products

3 System of Products

E Product-Design Strategy (TM 14-6)

1 Standard Products

2 Customized Products

3 Standard Product with Modifications

F Product-Elimination Strategy (TM 14-7)

1 Harvesting

2 Line Simplification

3 Total-Line Divestment (TM 14-8)

G New-Product Strategy (TM 14-9)

1 Product Improvement/Modification (TM 14-10)

2 Product Imitation

3 Product Innovation

H Diversification Strategy (TM 14-11)

1 Concentric Diversification

2 Horizontal Diversification

3 Conglomerate Diversification

I Value-Marketing Strategy (TM 14-12)

1 Quality Strategy

2 Customer-Service Strategy

3 Time-Based Strategy

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PRODUCT-POSITIONING STRATEGY

Positioning refers to placing a brand in that part of

the market where it will have a favorable reception

compared to competing products

PRODUCT-REPOSITIONING STRATEGY

A product may need repositioning if:

 A competitive entry has been positioned next to

the brand

 Consumer preferences have changed

 New customer-preference clusters have been

discovered with promising opportunities

 A mistake has been made in the original

positioning

PRODUCT-REPOSITIONING STRATEGY

Perceptual Map of Brand Images

PRODUCT-OVERLAP STRATEGY

This strategy refers to a situation in which a

company decides to compete against its own

brand

PRODUCT-DESIGN STRATEGY

A business unit may offer a standardized or a

custom-designed product The decision is based

on factors such as:

 What are our capabilities?

 What business are we in?

PRODUCT-ELIMINATION STRATEGY

When a product reaches the stage where

continued support is no longer justified

because performance is falling short of

expectations, it is desirable to pull the product

out of the marketplace

Poor performance is characterized by:

 Low profitability

 Declining sales

 Technological obsolescence

 Mature or declining phase of the product life

cycle

 Poor fit

Divestment may occur for several reasons For

example:

 There is no longer a strategic connection

between the base business and the part to be

divested

 The business experiences a permanent

downturn, resulting in excess capacity for which

no profitable alternative use can be identified

 There may be inadequate capital to support the

natural growth and development of the business

 It may be dictated in the estate planning of the

owner that a business is not to remain in the

family

 Selling a part of the business may release

assets for use in other parts of the business

where opportunities are growing

 Divestment can improve the return on

investment and growth rate both by ridding the

company of units growing more slowly than the

basic business and by providing cash for

investment in faster-growing, higher-return

operations

NEW-PRODUCT STRATEGY

New-product development is an essential activity

for companies seeking growth

Growth may occur through:

 Product improvement/modification

 Product imitation

 Product innovation

PRODUCT IMPROVEMENT/MODIFICATION

Product-Change Options after Competitive Tear-Down

DIVERSIFICATION STRATEGY

Firms diversify when:

 Their objectives can no longer be met within the

product/market scope defined by expansion

 Retained cash exceeds the total expansion

needs

 Diversification opportunities promise greater

profitability than expansion opportunities

VALUE-MARKETING STRATEGY

Value-marketing strategy stresses real product

performance and delivering on promises It has

three aspects:

 providing a product that works as claimed;

 accompanied by decent service;

 delivered on time