PRODUCT STRATEGY: THE PRODUCT P:
DEVELOPING A PLAN TO MANAGE THE PRODUCT/SERVICE, OR PRODUCT-SERVICE OFFERING
BUSN 319: Week 4
Dr. Deborah Helman
AGENDA
- In the news…
- Course Project
- Product Strategy and Tactics
- Freitag
- Recording:
IN THE NEWS… STAN’S DONUTS
https://www.bbc.com/news/world-us-canada-52663603
THE CORONAVIRUS PANDEMIC DEALT A HARD BLOW TO BUSINESSES AROUND THE WORLD. IN THE US ECONOMISTS ESTIMATED THAT MORE THAN 100,000 SMALL BUSINESSES HAVE PERMANENTLY SHUT BECAUSE OF THE HEALTH CRISIS. AMONG THOSE ARE ICONIC INSTITUTIONS THAT HAVE SURVIVED FOR DECADES, STAN'S DONUTS IN LOS ANGELES IS ONE OF THEM….
The first was location – the sea air that blew into his shop from the Pacific Ocean some five miles away – he never used air conditioning, even at the height of the LA summer, to avoid spoiling the perfect atmospheric conditions
The second reason was the skill that went into making the doughnuts
And the third, simply, was love
Stan Berman says there are three reasons his doughnuts were so good…
Prime real estate: less than two blocks away from the UCLA campus and opposite the Fox Bruin and Fox Village cinemas where glamorous premieres would frequently take place.
Different from most doughnuts, even though I used the same flour, and shortenings and toppings
His idea was: I'm going to make something you really like. Tell me what you like and I'm going to try and make something for you as a doughnut so you will come in for yours – I did that for hundreds of people.
An array of flavors – cherry, chocolate, cinnamon, peanut butter packed into a display case that "blasted" people when they walked into the tiny room. Stan was selling thousands of doughnuts every day.
He believes part of his success was due to him always being "the finisher” – even in old age, he would go into the shop every day – he'd make the icing, clean the pots and sweep the floors.
He was a perfectionist and expected the same attention to detail from his small team of staff. The doughnut he'd give away to customers after a friendly chat at his shop was also important
Coronavirus "killed the business”, sales dropped 40% and that did not cover labor. We had to make the choice of whether to stay open by going into my father's savings and it wasn't worth it – without the pandemic we would have continued….
The Brand Story: Stan took over his shop in the heart of LA's bustling Westwood Village neighborhood more than 55 years ago. The recipe for success included: a differentiated product that was loved, location, celebrities, choice, attention to detail and a unique experience…..
Create a Marketing Plan - Each student will work on and submit this plan as an individual
- You work for Apple in the marketing innovation department – your task - is to identify a market opportunity and develop a pilot marketing plan to launch the new product in a test market in the USA. A pilot marketing plan allows you to test your plan in a small market prior to a national roll out.
Objectives
- The Course Project gives students the opportunity to synthesize all of the concepts in the BUSN319 Marketing course in a comprehensive marketing plan for a new product (a good or service). This approach enables students to combine functional expertise based on their own work experience and field of study.
Week 1-2: Marketing Plan – Project Proposal (20 points) – please use the document in FILES
During Week 1, select a product or service for the marketing plan, and thereafter, all related assignments (the draft in Week 4 and the final marketing plan in Week 7) must be on that same topic.
Deliverable: Complete the project proposal
Your topic must be for a new product (a good or service) for Apple. Because this is an applied project and not a research paper, please be creative !
Write a brief but informative description of your product, including the following:
A description of the product/service
Marketing goals
Who a typical customer might be
Submit a copy of the Proposal document to the Week 1: Course Project Proposal Upload module in Canvas for grading by your instructor – this deliverable can be submitted in Week 1 or Week 2.
Week 4: Rough Draft – Marketing Plan
- You will submit a substantial but rough draft to your instructor for grading and feedback. Be sure to read Appendix A in the text and use the marketing plan outline from the Files folder in Canvas. It is recommended that you start working on your draft in Week 2 after your topic is approved . Set up your document with all the required headings and sub-headings and bullet point the key ideas, decisions and data that you have for each section. The is is not an essay or a research paper – this is a professional planning document.
Week 8: Final Marketing Plan
- Your final marketing plan must be 10-12 pages in length, cover all sections of the marketing plan outline, use at least three research sources other than your textbook, and follow all APA guidelines.
WEEK 4: DRAFT MARKETING PLAN (100 POINTS)
At the end of Week 4, you will submit a rough draft to me for grading and feedback.
Be sure to read Appendix A in the text and use the marketing plan outline embedded as a link and from the Files folder in Canvas.
Complete as much as you are able in order to get an initial draft - set up your document with all the required headings and sub-headings and bullet point the key ideas, decisions and data that you have for each section.
Context: Business Plans are Nested & The Marketing Plan should be Aligned with Corporate Objectives – and be clear about goals etc….
ANSOFF’S PRODUCT/MARKET MATRIX:
IDENTIFYING MARKETING OBJECTIVES – MARKETERS SELECT AN OBJECTIVE AND DEVELOP A MARKETING PLAN TO ACHIEVE THOSE OBJECTIVES
HOW TO COMPETE:
PORTER’S GENERIC COMPETITIVE STRATEGIES – SUGGESTS POSITIONING OPTIONS – LOW COST/LOW PRICES OR HIGH COST/HIGH PRICES – MULTIPLE SEGMENTS OR NICHE MARKETING
| Broad | Cost Leadershipe.g. Walmart | Differentiatione.g. Nordstrom |
| Narrow | Cost Leadership (Focus)e.g. Dollar Tree | Differentiation (Focus)e.g. LUSH |
*
MARKETERS MUST MANAGE THE PRODUCT AS IT GOES THROUGH THE PLC AND MAKE CHANGES TO THE MARKETING MIX – DIFFERENT STRATEGIES ARE USED FOR DIFFERENT STAGES
AT THE SAME TIME CUSTOMERS CAN BE GROUPED IN RELATION TO WHEN THEY WILL ADOPT THE PRODUCT – WE NEED TO PERSUADE THE INNOVATORS AND EARLY ADOPTERS – SO THAT THEY INFLUENCE THE MAJORITY TO ADOPT…
BCG MATRIX:
PORTFOLIO MANAGEMENT
BCG (Boston Consulting Group) Growth-Share Matrix:
How to manage the brand portfolio – invest in stars, milk the cows, ditch the dogs…wait and see what the question marks do…
THE MARKETING MIX: KEY DECISION AREAS
THE MARKETING MIX MIGHT BE MORE COMPLEX DEPENDING ON THE BRAND
THE MARKETING MIX:
THE SWEET SPOT – INTEGRATED AND CONSISTENT TO ADD VALUE
Promotion
NEED TO KNOW – PRODUCT STRATEGY:
THE AUGMENTED PRODUCT
Differentiation
PRODUCT STRATEGY:
WHAT ARE WE OFFERING – WHAT DIRECTION DO WE WANT TO PURSUE FOR THE LONGER TERM IN TERMS OF WHAT PRODUCTS AND OR SERVICES – AND TO WHICH GROUP OF CUSTOMERS?
Options – :
Develop new products – NPD process and pipeline
Differentiate existing products
Retire old products
Build a product portfolio (e.g. BCG matrix)
Is this a product, a service or a product-service?
What bundle of features/benefits are being offered?
How is the brand positioned in the market?
How is the product managed through the product life cycle (PLC)
Brand issues – how is the product/service developed and managed as a brand?
Product range dimensions – what width and depth across product categories can we afford to offer?
Packaging – how do we differentiate the product – make it attractive, make the product safe, environmentally friendly?
Product service support and warranties – do we need to add this and what will it cost the company?
PRODUCT STRATEGY QUESTIONS ….
Who is the target customer?
What bundle of features/ benefits are being offered?
Is this a new product or a product modification?
Product differentiation: Need to offer points of parity and points of difference
Differentiation: Through product form, features, customization, performance, reliability, “repairability”, style
Product-service combinations: Many products also have service components – e.g. a cell phone needs a network connection
Products may be non-durable or durable
Consumer goods classification: Convenience, shopping, specialty, unsought
Product system: Mix, assortment, depth, length, width, consistency
Developing New Products and Services
SERVICES AND PROFESSIONAL SERVICES
Services marketing typically refers to both B2C and B2B services, and includes services like telecommunications services, financial services, all types of hospitality services, car rental services, air travel, health care services and professional services (Doctors, Lawyers and Accountants)
Services include all economic activities whose output is not a physical product or construction, it is generally consumed at the time it is produced (e.g. haircut, dental cleaning), and provides added value in forms such as convenience, amusement, timeliness, comfort or health, that are essentially intangible. Marketers have to make the intangible, tangible – like a vacation – you need to see it to believe it!
7ps – Product, Price, Place, Promotion; plus People, Process and Physical Environment
Is it a Product a Service – or a Product-Service?
SO, WHAT IS A PRODUCT?
A product is anything that can be offered to a market to satisfy a want or need, including physical goods, experiences, events, persons, places, properties, organizations, information and ideas
Freitag:
– UK 2009 – 2 mins
– Design Museum 2012 – 7 mins
– Effectuation – 2010 – 10 mins
– Agile Business Design 2013 – 17 mins
Product strategy is a plan that guides the development of a bundle of features that the target customer perceives (hopefully) as a unique and valuable bundle of benefits
A marketing manager develops a marketing mix (a unique value proposition) that will appeal to the target segment and this positions the brand in the marketplace
A marketing manager needs to consider strategy and tactics
Product features are only product benefits if the target customer perceives them as such
Products must be managed carefully through the product lifecycle – and it is important to have a pipeline of new products
The marketing mix must be managed carefully and integrated to add value – e.g. constant discounting impacts the brand and trains customers to only respond to sales promotions
WEEK 4: KEY TAKE-AWAYS
SOURCES TO EXPLORE
- American Marketing Association –
- Consulting Companies: McKinsey and Company, LEK, Deloitte, BCG
- Harvard Business School Publishing –
- Fastcompany
- The Economist
- Wired
- BBC World News
- Euromonitor
- Strategyzer
- census.gov, bls.gov, cia.gov
- Survey Monkey
- Pew Research
- Ted Talks
- What is product strategy: .
VIDEO
The Persuaders
Generation Like
KNOW YOUR UVP: UNIQUE VALUE PROPOSITION
BRANDS ARE UVPS, THESE ARE BUNDLES OF BENEFITS THAT SATISFY CUSTOMERS – EACH BRAND COMPRISES:
Functional Benefits
Emotional Benefits
Self-Expressive Benefits
Think about benefits in relation to price (Value?) – this is what the consumer does:
Price + Benefits = Value
A BRAND IS:?
A bundle of benefits
A code
Brands are what the consumer thinks they are
…and, brands are assets
BRANDS ARE:…
A name
A term
A symbol
(or anything else)
That differentiates a product/service from all the others in the marketplace