Think Marketing

Third Edition

Chapter 9
Product Management

Copyright © 2019 Pearson Canada Inc. 9-1

Learning Objectives
1. Explain the different organizational structures used to
manage brands.
2. Describe the steps in the new product development
process
3. Discuss key decisions involved in managing current
products.
4. Identify the stages in a product’s life cycle and discuss
how a brand manager’s decisions are influenced at each
stage.
5. Explain how the product adoption process influences the
length and shape of a product’s life cycle.
Copyright © 2019 Pearson Canada Inc. 9-2
Product Management
Product management concerns three key areas:

1. The internal organization structure for managing current

products.

2. The allocation of resources for developing new products.

3. Dealing with changing market conditions as products

progress through their life cycles.

Copyright © 2019 Pearson Canada Inc. 9-3

Organizational Structures for Managing
Brands (1 of 4)
Brand Management – A brand manager is assigned
responsibility for the development and implementation of
marketing programs for a specific product or group of
products.
Example: Brand Manager for Head and Shoulders

Category Management – A category manager is assigned

responsibility for developing and implementing marketing
activity for a group of products or product lines.
Example: Category Manager for all P&G line of shampoos

Copyright © 2019 Pearson Canada Inc. 9-4

Organizational Structures for Managing
Brands (2 of 4)

Copyright © 2019 Pearson Canada Inc. 9-5

Organizational Structures for Managing
Brands (3 of 4)
Target Market Management – Marketing activity is
managed based on the requirements of different customer
groups.
Example: Industry, governments and consumers may require the same
product but make buying decisions based on different criteria.

Regional Management – Marketing activities are managed

based on the needs of customers in different geographical
locations.
Example: Each region (Ontario, Quebec, etc.) have managers who
devise plans that fit regional needs.

Copyright © 2019 Pearson Canada Inc. 9-6

Organizational Structures for Managing
Brands (4 of 4)
Continental and Global
Management – large multinational
companies devise and implement
marketing strategies on a
continental or global scale.
Example: Airbnb’s online marketplace
allows people to list and book
accommodations—from inexpensive to
luxury—in 192 countries around the
world.

Copyright © 2019 Pearson Canada Inc. 9-7

New Product Decisions

Copyright © 2019 Pearson Canada Inc. 9-8

Product Management Decisions
All aspects of the marketing mix are managed to maximize
profit. Key product decisions embrace:
• Product Modifications
• Product Mix Expansion (Stretching)
• Brand Design and Packaging
• Maintenance or Withdrawal (Planned Obsolescence)

Copyright © 2019 Pearson Canada Inc. 9-9

Product Mix Expansion: Applied

Copyright © 2019 Pearson Canada Inc. 9 - 10

Packaging and Branding Decisions: Applied

Copyright © 2019 Pearson Canada Inc. 9 - 11

The Product Life Cycle

The variables of time, sales and profits are the determinants

or a product’s stage in the life cycle.
Copyright © 2019 Pearson Canada Inc. 9 - 12
Extending the Product Life Cycle (1 of 2)

Many brand managers attempt to rejuvenate brands and

extend their life cycles for as long as possible
Copyright © 2019 Pearson Canada Inc. 9 - 13
Extending the Product Life Cycle (2 of 2)
As products age the manager introduces rejuvenation
strategies to extend the life cycle.
• Attract New Markets
• Alter Product (Improvements)
• Introduce New Product Lines (Line Extensions)
• Change Other Marketing Mix Elements

Copyright © 2019 Pearson Canada Inc. 9 - 14

Extending PLC: Applied
Alter the Product

Copyright © 2019 Pearson Canada Inc. 9 - 15

 Stages in Lifecycle
Figure 9.17 Each stage of the product life cycle relates to a firm’s
marketing objectives and marketing mix decisions.
Stage in Life Cycle
Introduction Growth Maturity Decline
Competition None or a few More (3–5) Many (late entrants) Fewer as brands drop
out
Marketing objective Awareness and trial Preference via product Encourage brand Potential withdrawal
purchase differentiation loyalty (extend the life
cycle); potential
rejuvenation
Product Initial product Line extensions Complete product mix Some items dropped;
maintain core product
Price Tends to be high Competitive pricing Potentially lower price Lower price but
(easier to drop price if based on intensity of to protect market share attempt to remain
necessary) competition profitable
Distribution Limited; hard to obtain Expanded based on Peak distribution; Much less; distributors
initially consumer acceptance potential to lose drop unpopular
distribution if not products
among top sellers
Marketing Emphasis on Emphasis on product Reminder-oriented Reduce or cut
communications advertising and social benefits to differentiate; advertising; promotions expenditures
media for brand high budget to encourage loyalty; completely; preserve
exposure; high budget expenditure to remain spend only what is profits
expenditure competitive necessary

Copyright © 2019 Pearson Canada Inc. 9 - 16

Length of Product Life Cycle

Copyright © 2019 Pearson Canada Inc. 9 - 17

The Adoption Process
Adoption refers to a series of stages a consumer passes
through on the way to purchasing a product on a regular
basis.

Copyright © 2019 Pearson Canada Inc. 9 - 18

Adopter Categories

Copyright © 2019 Pearson Canada Inc. 9 - 19