978-0136074892 Solution Manual Chapter 07 Part 2

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·Portfolio approach is also called The Growth Share Matrix. (Figure 7.7

Page 201 Growth Share Matrix)

·The two dimensions of the Growth Share Matrix are relative market

share and market growth and incorporate the following definitions:

·The market is defined as the served market or market segment

·Market share is defined as relative share (Figure 7.7 Page 201

Growth Share Matrix)

·Market growth is the sales growth rate in the served market

E. Mass Customization

1. Changes in information technology have permitted a fundamental change in

product line policy: from company-supplied to customer-demanded variations

(mass customization or customerization)

2. System is developed to take a product or service that is widely marketed and

offers it many different configurations to customers’ specifications

3. Choiceboards are online interactive systems that allow customers to design their

own products

4. Examples of mass customization are:

·Ross Controls

·Nike and Converse (www.nikeid.com and www.converse.com)

·Stamps.com

·M&Ms (www.mymms.com)

5. Four different approaches to mass customization:

·Collaborative customizers (individuals help determine their needs)

·Adaptive customizers (offer one standard but offer the ability for customer

to alter it to their own specs)

·Cosmetic customizers (products presented differently to each customer)

·Transparent (present products to each customer without telling them the

products have been customized for them)

F. Packaging and Product Design

1. Packaging decisions have both functional and strategic implications for a

product

2. Functional perspective: Protect contents, etc.

3. Strategic: Helps differentiate product from others

4. Illustration: Heineken DraughtKeg (http://heinekendraughtkeg.com)

Page 204

Teaching Tips and Strategies from Barbara S. Faries, MBA

The purpose of this chapter is focus on areas of product decision-making. Although

some product-related issues were discussed in Chapter 2 as part of the development of a

marketing strategy, this chapter expands those discussions and includes other relevant

topics for marketing managers.

Key Terms and Concepts Introduced Include:

·Product features

·Product line

·Packaging

·Product design

·Global marketing

·Position

·Joint space

·Multidimensional scaling (MDS)

·Original equipment manufacturer (OEM)

·Global marketing

·Product line strategy

·Cannibalization

·Mass customization

·Customerization

·Choiceboards

Note: Two recurring themes in this Instructor’s Manual are the first two items:

·Link theory to practice.

·Engage students to link work experience to the concepts demonstrated in

the text.

·Instructors are encouraged to link theory to practice by finding current examples

in the business environment that demonstrate the key concepts above.

·If your class contains those already working in the field, have them describe how

the concepts in theory match those in the actual workplace.

A large portion of this chapter is devoted to branding and the key concepts behind

brands, brand equity, and the implications branding has on the overall marketing efforts of

a company. I generally suggest discussing these concepts in terms of well-known brands

and have the students discuss the brands with which they are familiar.

As important as branding, are the key decisions that they must make as product or

marketing executives such as: product feature decisions, positioning decisions, product line

decisions, product differentiation decisions, and other closely related strategic decisions

that they will make as senior level executives. I also discuss The Boston Consulting

Group’s Growth Share Matrix as it relates to the product life cycle and the accompanying

decisions that products in the life cycle will require. If available, I suggest using a real life

example to demonstrate how a product might progress through the life cycle and what the

differences in the decision-making process might be at each stage.

Finally, it is important to discuss the concept of return on investment (ROI). From

an executive’s viewpoint, this is key term. I often point out to the students that sometimes a

large investment in product marketing may not make sense in terms of the low expected

return on the investment required. I often integrate ROI into the discussion of The Boston

Consulting Group’s Matrix and ask them to consider investments in terms of the life cycle.

Within this context, I also suggest a discussion on resource allocation. How does a

manager allocate resources under difficult circumstances? How does this effect product

decision-making? Is ROI a consideration? How does resource allocation effect product line

extensions or expansion?

1. Pick two companies with different branding strategies (i.e., corporate parent

brands vs. distinct product brands). Why do you think they are using different

branding approaches?

2. Choose a brand that you think is weak in the minds of customers. Using the

framework shown in Figure 7.1, what are the elements of brand equity that are

deficient for this product?

3. Given the two brand names Nabisco and Mercedes Benz, choose several brand

extensions that you believe make sense and several that do not. Explain why.

4. Are there some product categories that are more amenable to global branding than

others are? What are the general characteristics of those that work and those that

do not?

company to adjust to cultural and environmental differences inherent in marketing in a

global marketplace. A discussion regarding product customization to accommodate cultural

5. In late 2002, Dell Computer Corporation decided to start selling “white boxes,”

unbranded PCs, to computer distributors who then put their own or some other

private label brand name on them. Do you think this was a good idea? Why or why

not? (Hint: Dell killed the idea in 2005)

6. Give several examples of brands that have been recently repositioned. How has this

been implemented and for what reason?

7. Are there some kinds of products and services that can more easily mass customized

than others can? Are there any negatives to mass customization?

Exercises, Activities, and Projects

Purpose: To help students link theory to real life.

To demonstrate the important implications product decisions have on the business

success or failure of a product or company.

·Have the students take a product (either from their own companies or another)

and walk through The Growth Share Matrix and the implications for changes in

product decisions at each stage.

·Have the students create an ROI model based on the above or another product

of their choice.

·Have the students discuss a product with which they are familiar or from their

own business experience. Discuss the various product decisions that were made

either from launch stage or through the product life cycle and the issues

associated with the ultimate outcome.