Chapter 10

Chapter 10 Product mix strategy

In this chapter, we focus on 5

parts:
1 What is a product
2 Brand and trademark
3 Product line decision
4 Product life-cycle
5 Development strategies of New
product
Chapter 10 Product mix strategy

1 What is a product

 1.1 Definition
 1.2 Levels of product
 1.3 Product classifications
 1.4 Physical product
 1.5 Product mix
Chapter 10 Product mix strategy

1.1 Definition
 (1) Defined in GB/T19000
●results or outcomes of act, work, produce
and labor ： physical product
● no other than this activities such as an
action, a work, a production or labor ：
invisible produce or service.
Chapter 10 Product mix strategy

1.1 Definition
(2) Defined by Philip Kotler

Anything that can be offered to a market for attention,

acquisition, use, or consumption that might satisfy a want
or need.

Physical products Properties

Services Information
Persons Organizations
Places Experiences
Ideas
Chapter 10 Product mix strategy

1.2 Levels of product

core
benefit
Chapter 10 Product mix strategy

 1.3 Product classifications

(1) Consumer products
Convenience products
Shopping products
 Specially products

 Unsought products

(2) Industrial products

Material and Part
Supplies and Business service
Capital items
Chapter 10 Product mix strategy


1.3 Product classifications
(3) Durability and Tangibility
 Non-durable goods
 Durable goods
 Services
Chapter 10 Product mix strategy

1.5 Product mix

 The set of all product lines and items that a
particular seller offers for sale.
 Width:the number of different product lines the
company carries.
 Length:the total number of items the company
carries within its product lines.
 Depth:the number of variants offered of each
product in the line.
 Consistency:how closely related the various product
lines are in end use, production requirements,
distribution channels, or some other way.
Chapter 10 Product mix strategy

2 Brand and Trademark

2.1 What is brand and trademark
2.2 Level of brand loyalty
2.3 Brand Equity
2.4 Brand strategy
Chapter 10 Product mix strategy

2.1 What is brand and trademark

2.1.1 Brand
(1) Definition:A name,term,sign,symbol,or
design,or a combination of these,that
identifies the maker or seller of a product or
service.
Chapter 10 Product mix strategy

2.1 What is brand and trademark

2.1.1 Brand
(2)The function of the brand
A brand is essentially a seller`s promise to
consistently delivery a specific set of
features, benefits, and services to the
buyers.
The best brands convey a warranty of
quality.
Chapter 10 Product mix strategy

2.1 What is brand and trademark

2.1.1 Brand
(3) A brand can convey up to six levels of
meaning ：
●Attributes ●Culture
●Benefits ●Personality
●Values ●User
Chapter 10 Product mix strategy

2.1 What is brand and trademark

2.1.2 Trademark
●Trade mark ： a pattern or a design for use by
somebody in particular ， it’s registered in
brand-mark bureau or knowledge property
right management department, and preserved
by legal regulations.
●The brand and trademark are important industrial
property of the enterprise which can be
negotiated.
Chapter 10 Product mix strategy

2.2 Level of brand loyalty

●Customer will change Brands, especially for

price reasons. No customer loyalty.
●Customer is satisfied. No reasons to change.
●Customer is satisfied and would incur costs by
changing brand.
●Customer value the brand and sees it a friend.
●Customer is devoted to the brand.
Chapter 10 Product mix strategy

2.3 Brand Equity

●The company will enjoy reduced marketing costs because
of the high level of consumer brand awareness and
loyalty.
●The company will have trade leverage in bargaining with
distributors and retailers since customers expect them to
carry the brand.
●The company can charge a higher price than its
competitors because the brand has higher perceived
quality.
●The company can more easily launch brand extension
since the brand name has high credibility.
●The brand offers the company some defense against fierce
price competition.
Chapter 10 Product mix strategy

2.4 Brand strategy

(1)Brand sponsor (2)Brand strategy

Line extensions
Manufacturer brand
Brand extension
Distributor brand
Multi-brands
Licensed brand
New brands
Chapter 10 Product mix strategy

2.4 Brand strategy

(3)Product category
Existing new
Line extension Brand extension
Existing

d
n
arB
eman Multi-brands New brands
new
Chapter 10 Product mix strategy

2.4 Brand strategy

(4)Brand Name Decision
●Individual Brand Name
●Blanket family Name For All Product
●Separate Family Names For All Products
●Company Trade Name Combined With
Individual Product Names
Chapter 10 Product mix strategy

2.4 Brand strategy

 (4)Brand Name Decision
●It should suggest something about the product’s benefits;
●It should suggest product qualities;
●It should be easy to pronounce, recognize, and remember;
●It should not carry poor meanings in other countries and language.
Interesting stories: AIDS;Eastern Wind means wind come from
Siberia, Santana ;Passat means dead in Shanghai dialect;‘Nova’ in
Spanish means ‘can't go’, etc.
Chapter 10 Product mix strategy

3 Product line decision

3.1 Product line define
3.2 Product line analysis
3.3 Product line length
3.4 Product line modernization
3.5 Product line characteristicization
Chapter 10 Product mix strategy

3.1 Product line define

A group of products that are closely
relates because they perform a similar
function, are sold to the same customer
groups, are marketed through the same
channels, or fall within given price
ranges.
Chapter 10 Product mix strategy

3.1 Product line define

 Example:
产 项目 m 项目 n
品 … …
项
目 … …
项目 2 项目 2
项目 1 项目 1

系列 1 系列 k 产品线
Chapter 10 Product mix strategy

3.2 Product line analysis

Sales volume and profit
Line manager of products should know
sales amount and profit of the project of
the products.
Market position and prospect
Line manager of products should
analyses how the one's own products line
made a reservation .
Chapter 10 Product mix strategy

3.3 Product line length

line stretching
Stretch line downward
Stretch line upward
Stretch line both ways 
line filling
Reasons: reaching for extra profits 、
Satisfying dealers 、 using excess capacity 、
Being the leading full-line company 、 Plugging
holes to keep out competitors
Chapter 10 Product mix strategy

3.4 Product line modernization

Pay attention to two points
The question is that a products line
should be modernized gradually or
modernized quickly
choose the best opportunity of
improving the products , not too late
either too early 
Chapter 10 Product mix strategy
3.5 Product line characteristicization

 The line manager of products chooses one

or minority produce having models in the
products line to sell with characteristic.
Low-grade products----make it serve as"
cheap goods which opens up the sale".
High end products----In order to improve
the grade of the products line
Chapter 10 Product mix strategy

4 product life-cycle

4.1 Definition of Product life-cycle

4.2 Five distinct stages
4.3 Product life-cycle strategies
Chapter 10 Product mix strategy

4.1 Definition of Product life-cycle

●the period of a type/kind of product is being manufactured and
sold lastingly. It lasts from R&D, trial production and selling to
ceasing production and selling because of lack of enough
consumer or appearance of replacements or competitive product.
● product life-cycle usually includes five distinct stages as R&D,
introduction, growth, maturity, decline.
Chapter 10 Product mix strategy

4.2 Five distinct stages

Product development
Introduction
Growth
Maturity
Decline 
Chapter 10 Product mix strategy

4.2 Five distinct stages

Sales and
profits
($)
Sales

Profits

0 Time
Product Growth Decline
develo-
Losses- pment Introduction Maturity
investment ($)
Chapter 10 Product mix strategy

4.3 Product life-cycle

strategies
(1)Introduction 
Rapid-skimming strategies
Slow-skimming strategies
Rapid-penetration strategies
Slow-penetration strategies
In a word, a manager must stress on “accurate”.
Chapter 10 Product mix strategy

4.3 Product life-cycle

strategies
(2) Growth 
Improve product quality and add new
product features and models
Enter new market segments and new
distribution channels
In a word, a manager must stress on
“splendid”.
Chapter 10 Product mix strategy

4.3 Product life-cycle

(3)Maturity
strategies

 Modify the market---trying to increase the consumption of the
current product
 Modify the product---changing characteristics such as
quality,features,or style to attract new users and to inspire more
usage
 Modify the market mix---improving sales by changing one or
more marketing mix elements

In a word, a manager must stress on “strive for”.

Chapter 10 Product mix strategy

4.4 Product life-cycle

strategies
(4) Decline 
Identify their aging products in the decline stage by
reviewing sales,market shares,costs,and profits
Decide whether to maintain,harvest,or drop each of these
declining products
Reduce various costs and hope that sales hold up or sell it
to other firms
In a word, a manager must stress on “transform”.
Chapter 10 Product mix strategy
5 Development strategies of new
product
 (1)Definition of new product:
a product that can bring consumer new satisfaction
and benefits.
 For examples:
– New type/kind of product
– Improved product: function increased, performance
improved, structure changed, advanced techniques applied,
and so on
– New packed product
– New brand product
– etc.
Chapter 10 Product mix strategy

5 Development strategies of new

product
(3) New product development method
 Independence development: to depend on own
capabilities
 Development based on techniques from else
corporation or based on import technology
 Development cooperated with each other
 Combined those