Differentiated Products Pennsylvania State University宾夕法尼亚州立大学差异化产品.pptVIP

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Differentiated Products Pennsylvania State University宾夕法尼亚州立大学差异化产品.ppt

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Differentiated Products AG BM 102 Commodity Products Consumer (or buyer) doesn’t care who made commodity products Commodity products are sold on price Quality matters but many sellers can provide a given quality Producers have very little customer loyalty Barriers to entry low – at least in comparison Differentiated Products These products have a distinct identity The manufacturer has some control over the price It need not sell for the same price as the competitor’s price Keys to success are product characteristics Entry very difficult Advertising Backbone of differentiated products – remind consumer of the differences Costs a lot of money Lots of effort spent Growth Hard to win customers from competitor May raise prices for a while Entering new markets can be difficult New product strategy common Rationale for New Product Development emerging demands counter competitors broaden product line product life cycle Types of New Products Innovative – Lite Beer New to firm – Sprite for Coke copied 7Up Product line extension – Vanilla Coke Product improvements – new Cheer Leading Soft Drinks by Volume2009 1 Coke 6 Diet Pepsi? 2 Pepsi-Cola 7 Sprite (Coke) 3 Diet Coke 8 Diet Mtn Dew (PepsiCo) 4 Mtn Dew (PepsiCo) 9 Fanta 5 Dr Pepper (Dr Pepper Snapple) 10 Diet Dr Pepper (Dr Pepper Snapple) World Market The Economics of Cereal Top Cereal Producers Firm 1999 2005 2008 Kellogg 32% 32% 33% General Mills 31% 26% 25% Post 16% 15% 15% Private Labels 8% 14% 14% Quaker Oats 9% 6% 7% Malt-O-Meal 3% 5% 5% Other 1% Leading Brands 2008 GM Cheerios 12.6% K Special K 5.4% P Honey Bunches of Oats 4.9% K Frosted Flakes 3.8% K Frosted Mini Wheats 3.5% K Kellogg Raisin Bran 3.0% K Froot Loops 2.6% GM Cinnamon Toast Crunch 2.4% GM Lucky Charms 2.4% Q Cap’n Crunch 2.4% Source: Tophers Breakfast Cereal Character Guide Inputs Inputs are commodity products Input supplier power is very low Cereal Company Power Moderate Sole source of branded products Some essential t