Nguồn: Krishna K Havaldar (2010), Business Marketing, McGraw Hill, 3rd edition, p171. New position High quality[r]
Trang 1Chapter 5 Industrial Product Strategy
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DINH Tien Minh (Ph.D.) University of Economics HCMC
Objectives
2
product
strategy
applications
strategies
Content
5.1 Definition of an industrial product
5.2 Changes in product strategy
5.3 Industrial product life-cycle and strategies
5.4 Developing product strategies
5.5 Branding in Business Market
Trang 25.1 Definition of an industrial product
not only as a physical entity, but also as a
complex set of economic, technical, legal and
personal relationship between the buyer and
the seller.
Nguồn: Webster F.E., Jr., Industrial Marketing Strategy, John Wiley & Sons,
2 nd edition, p.106.
5
5.1 Definition of an industrial product
suppliers
6
5.1 Definition of an industrial product
product is a combination of :
made differentiable by adding tangible benefits
styling and quality
maintenance, repair service, warranties…
Nguồn: Krishna K Havaldar (2010), Business Marketing, McGraw Hill,
3rd edition, p42
Trang 35.1 Definition of an industrial product
Technical assistance
Spare
Parts
Maintenance
Timely Delivery
Payment term
Augmented Product Enhanced Product Generic Product
Features
Fundamental
Benefits
8
5.1 Definition of an industrial product
An industrial marketer should be aware of what
constitutes a total product package in the
mind of prospective customers
(Tangible and Intangible Benefits)
5.1 Definition of an industrial product
Tangible benefits: Product quality (less noise,
simple or easy operation)
Intangible benefits: Availability of Spare parts,
Technical assistance, Training
Trang 45.2 Changes in product strategy
11
5.2 Changes in product strategy (cont’)
strategy:
changes of customer’s needs and continue to
satisfy by making changes in its products
storing raw material, the firm’s need have
changed for vertical stacking from 2m to 6m
height in order to save space and money.
12
5.2 Changes in product strategy (cont’)
strategy (cont’):
require either the product modification or make
existing product obsolete
getting replaced by fiber optic telecom cables.
Trang 55.2 Changes in product strategy (cont’)
strategy (cont’):
the use of wood for window, door and partition
frame and recommends the use of steel and
aluminum frames in order to save natural
environment.
14
5.2 Changes in product strategy (cont’)
strategy (cont’):
sales and profits, the industrial firms decide to
drop, or modify, or develop new (substitute)
“maturity” or “decline” stages in PLC
5.3 Industrial PLC and Strategies
Trang 65.3 Industrial PLC and Strategies (cont’)
Nguồn: Krishna K Havaldar (2010), Business Marketing, McGraw Hill, 3rd edition, p166.
A General Model of the PLC
Sales
and
Profits
+
0
_
Industry
Sales
Industry Profits
Introduction Growth Maturity Decline
Slower rates
Time
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5.3 Industrial PLC and Strategies (cont’)
Nguồn: Krishna K Havaldar (2010), Business Marketing, McGraw Hill, 3rd edition, p167.
The PLC for High-tech products
Time Sales
NPD = New Product Development cost and time are high
I&G = Introduction and Growth period are long
M = Maturity period is very short (rapid change in technology)
D = Decline period
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5.3 Industrial PLC and Strategies (cont’)
The PLC for Commodity products
Nguồn: Krishna K Havaldar (2010), Business Marketing, McGraw Hill, 3rd edition, p167.
Time Sales
The demand remains relatively inelastic, especially in monopolistic market.
The sales does not experience a decline due to the absence of competition.
Trang 75.3 Industrial PLC and Strategies (cont’)
the PLC:
20
5.3 Industrial PLC and Strategies (cont’)
5.3 Industrial PLC and Strategies (cont’)
strategies:
• Some products get accepted rapidly, the marketing
strategy should be evolved to meet intense
competition.
• For slowly accepted product, marketing strategy
should concentrate on market development efforts.
Example: Hand-held electronic calculators replaced
mechanical calculators in a very short time.
Trang 85.3 Industrial PLC and Strategies (cont’)
strategies (cont’):
• Improve product design (benefits, features to cover
wider segments of the market).
• Improve distribution (stronger availability).
• Reduce the price as increased volume of production
(economies of large scale).
Example: In India, with additional feature like camera
and increased number of dealers, LCD projector prices
were reduced.
23
5.3 Industrial PLC and Strategies (cont’)
strategies (cont’):
think of?
• Enter new market.
• Keep the existing customers satisfied.
• Cut Marketing, production and other costs to maintain
profit margins.
24
5.3 Industrial PLC and Strategies (cont’)
strategies (cont’):
• Withdraw the product from the market.
• Develop a substitute product.
• Reduce marketing and other expenses.
Example: The decline tends to proceed rapidly since
new technologies make established products obsolete
Trang 95.3 Industrial PLC and Strategies (cont’)
But how to locate industrial products
in their life cycle?
26
5.3 Industrial PLC and Strategies (cont’)
three to five years based on information to be
collected for an industrial firm for a product, on
quantity and value of sales, profits, market share,
number of competitors and prices
5.3 Industrial PLC and Strategies (cont’)
product performance, new product introduction,
diversification or expansion plans
over next three to five years
product’s position on its life-cycle curve
Trang 105.4 Developing Product Strategies
29
products in the existing markets
additional markets
segments
5.4 Developing Product Strategies (cont’)
30
New product development process:
5.4 Developing Product Strategies (cont’)
Trang 11 For the existing products , the following
steps should be taken:
existing products by using Product Evaluation
Matrix (PEM).
5.4 Developing Product Strategies (cont’)
32
5.4 Developing Product Strategies (cont’)
Product Evaluation Matrix
Nguồn: Developed by Yoram Wind and Henry Claycamp – Krishna K Havaldar
(2010), Business Marketing, McGraw Hill, 3rd edition, p170.
Company
Sales
Profitability
Below
Target
Target Above Target Below Target Target Above Target Below Target Target Above Target
Industry
Sales
Market Share
Dominant
Growth Marginal
Average
Dominant
Stable Marginal
Average
Dominant
Decline Marginal
Average
S1 S
Competitor P
For the existing products , the following
steps should be taken:
technique, examine the relative strengths and
comparison to competitors’ products
5.4 Developing Product Strategies (cont’)
Trang 125.4 Developing Product Strategies (cont’)
Perceptual Mapping Technique
Nguồn: Krishna K Havaldar (2010), Business Marketing, McGraw Hill, 3rd edition, p171.
New position High quality
Low quality
Weak
services
Strong services
B
C
A1
A Old position
35
For the existing products , the following
steps should be taken:
product strategies:
Maintain or continue the products and its strategies.
Modify the product and/or change the mkt strategies.
Eliminate or drop the product or the product line.
Add new products or new product lines
5.4 Developing Product Strategies (cont’)
36
Product Elimination
Dropping the product or product line is one of the most
controversial decisions because many stakeholders are
threatened by this decision A firm should therefore
consider the following factors:
5.4 Developing Product Strategies (cont’)
Nguồn: Krishna K Havaldar (2010), Business Marketing, McGraw Hill, 3rd edition, p172.
Trang 135.5 Branding in Business Markets
38
5.5 Branding in Business Markets (con’t)
sign, design, or a combination of them, intended
to identify the goods or services of one seller and
differentiate them from those of competitors
Krishna K Havaldar (2010), Business Marketing, McGraw Hill, 3rd
edition, p172
5.5 Branding in Business Markets (cont’)
It’s measured by answering these questions:
1 Customers are willing to pay a higher price.
2 Customers take less time to decide the orders.
3 Customers give a higher share of their purchase
requirements.
4 Less likelihood of customers switching to
competitors’ offerings.
Source: Krishna K Havaldar (2010), Business Marketing, McGraw Hill, 3rd
edition, p172.
Trang 145.5 Branding in Business Markets (cont’)
Brand Equity
1.
Brand Awareness
2
Perceived Quality
3
Brand Associations
4
Brand Loyalty
5.
Other
Values
Brand Equity
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