1. Product Strategy Development

2. Outline:
• Selection Of Product Strategy
• Benefits Of Strategy
• Elements Of Product Strategy
• Positioning
• Managing Brand Equity
• Product Strategy Over Life Cycle

3. Selection Of Product Strategy
• Where are we headed
Growth Vs Profit

4. Selection Of Product Strategy
• How will we get there
Existing / New customers
- Customer targets
- Competitive targets
- The proposition
(General Offerings)

5. Selection Of Product Strategy
• What will we do
How to implement core strategy

6. Benefits Of Strategy
• Co-ordination
among functional
areas of organization

7. Benefits Of Strategy
• Allocation of
resources

8. Benefits Of Strategy
• Superior market position
i) Something competitor cant do.
ii) Something competitor will not do.
iii) Competitor will be at disadvantage if
they do it.
iv) It causes us to gain if the competition
does it.

9. Hierarchy of objectives
Level 0- Company Mission/Vision
Level 1- Corporate Objectives
Corporate Strategies
Level 2- Divisional Objectives
Divisional Strategies
Level 3- Product/Brand Objectives
Brand Strategies
Level 4- Program Objective
Tactics

10. Elements Of Product Strategy
Setting objectives
- SMART objectives

11. Selection Of Strategic
Alternatives
 Increasing Sales/Market share
 Increasing Profitability

12. Selection Of Strategic
Alternatives

13. Increasing Sales/Market Share
Market Development Strategies
Market Penetration Strategies

14. Increasing Profitability
Decreasing Inputs
Increasing Outputs

15. Positioning
The place a product occupies in consumers’ minds relative
to competing products.

16. Positioning Example
eBay’s positioning: No
matter what “it” is, you can
find “it” on eBay!

17. Positioning Example
To (target segment and need) our (brand) is a
(concept) that (point-of-difference).
“To busy mobile professionals who need to
always be in the loop, Blackberry is a wireless
connectivity solution that allows you to stay
connected to people and resources while on
the go more easily and reliably than the
competing technologies.”

18. Positioning Maps: Luxury SUVs
Price vs. Orientation Dimensions

19. Positioning Strategy
 Competitive advantages
 Points of Parity
 Points of Difference => Differentiation
Positioning results from differentiation and competitive
advantages.
Positioning may change over time.

20. Sources of Differentiation
– Product Design
– Quality
– Additional Services
– Image
– People (Staff)
– Price
– Other

21. Choosing the Right Competitive Advantages
 The best competitive advantages are…
 Important
 Distinctive
 Superior
 Communicable
 Pre-emptive
 Affordable (to company and consumer)
 Profitable
Moral: Avoid meaningless differentiation.

22. Positioning Errors
 Under-positioning:
 Not positioning strongly enough.
 Over-positioning:
 Giving buyers too narrow a picture
of the product.
 Muddled Positioning:
 Leaving buyers with a confused image
of the product.

23. Generic Product Positions
& Value Propositions

24. Managing Brand Equity
• Brand name is an asset
• It requires to combat lower-priced
competitors by reemphasize the brand names
• Brand recognition is important
• Brands are engaged in global warfare against
counterfeiters and “knockoffs”

25. Brand Equity as described by Aaker
• Brand Loyalty
• Brand Awareness
• Perceived Quality
• Brand Association
• Other Brand Assets

26. Measuring Brand Value
In order to measure brand equity, it is helpful to
measure it.
These measures focus on the image of brands
(i.e. the customer’s view)

27. Relation to Customer Strategy
• Customer Acquisition
• Customer retention
• Customer Expansion
• Customer Deletion

28. Product Strategy Over the Life Cycle
A company’s positioning and differentiation strategy
must change as the product, market, and
competitors change over the product life cycle(PLC).
To say that a product has a life cycle is to assert four
things:
1. Products have a limited life.
2. Product sales pass through distinct stages, each
posing different challenges, opportunities, and
problems to the seller.

29. Cont…
3. Profits rise and fall at different stages of the product
life cycle.
4. Products require different marketing, financial,
manufacturing, purchasing, and human resource
strategies in each life-cycle stage.

30. Product Life Cycles
• Introduction: A period of slow sales growth as the
product is introduced in the market. Profits are
nonexistent because of the heavy expenses of the
product introduction.
• Growth: A period of rapid market acceptance and
substantial profit improvement.
• Maturity: A slowdown in the sales growth because
the product has achieved acceptance by most
potential buyers. Profits stabilize or decline because
of increased competition
• Decline: Sales show a downward drift and profits
erode.

32. Introduction Growth Maturity Decline
Characteristics
Sales Low sales Rapidly rising Peak sales Declining sales
sales
Costs High cost per Average cost per Low cost per Low cost per
customer customer customer customer
Profits Negative Rising profits High profits Declining profits
Customers Innovators Early adopters Middle majority Laggards
Competitors Few Growing number Stable number Declining
beginning to number
decline

33. Introduction Growth Maturity Decline
Marketing Creating product Maximizing Maximizing profit Reduce
Objectives awareness and market share while defending expenditure and
trial. market share milk the brand.
Strategies
Product Offer a basic Offer product Diversify brands Phase out weak
product extensions, and items products
service, warranty models
Price Charge cost-plus Price to Price to match or Cut price
penetrate market best competitors’
Distribution Build selective Build intensive Build more Go selective:
distribution distribution intensive phase out
distribution unprofitable
outlets.
Advertising Build product Build awareness Stress brand Reduce to level
awareness and interest in difference and needed to retain
among early the mass market benefits. hard-core loyals
adopters and
dealers

34. Cont…
Introduction Growth Maturity Decline
Strategies
Sales Promotion Use heavy sales Reduce to take Increase to Reduce to
promotion to advantage of encourage brand minimal level.
attract trial heavy consumer switching
demand
Sources: Chester R. Wasson, Dynamic competitive strategy and product life cycles (Austin, TX: Austin press,
1978); John A. Weber, “planning Corporate Growth with Inverted PLCs.” Long Range Planning(0ct. 1976);
“The Realities of the PLC”, Quarterly Review of Marketing (summer 1976)

36. The Product Life Cycle and the Boston Matrix
Importance of
(3) Cash from ‘C’
(2) ‘A’ is at maturity
Sales (1) Cash from ‘B’
maintaining a
The product
used tocash cow.
balance support
used to of products
stage – support
portfolio –‘D’ and
in throughfour
growth of funds for
(1) (2) (3) ‘C’the portfolio at
Generates growth
productsto finance
different in the of
possibly stages of
the development
stage and to
portfolio Boston
the PLC ‘D’.strategy
extension ‘A’ now
launch –
‘D’
Matrix helps with the
for ‘B’? a dog?
possibly
analysis
D
B
A C
Time