The Risks of Product Line Planning
As a manufacturer, there are many important decisions that must be made when introducing new product lines and making product lines changes.In addition to product development and marketing costs, most retail chains require slotting allowances regardless of whether your product is a hit or a flop.In many cases, these slotting allowances can run from $10,000 to $40,000 or more per item.
While some industry experts advise manufacturers to build the slotting fees into the cost, the competitive environment won’t permit it.Further, while some retailers may provide trial terms, under these programs the manufacturer must still agree to invest in expensive merchandising packages that may include in-store radio, newspaper advertising.
What is Strategic Product Line Planning?
Strategic product line planning involves a proactive marketing research technique that determines the optimal set of product combinations (ex: such as colors, flavors, scents, sizes, etc.) that minimize marketing risks (retail space limitations, stock-outs, poor visibility, etc.) and maximize the difference among items to avoid perceived similarity.This approach provides manufacturers with answers before they invest in product development and marketing launch plans.
A Real World Example
Smokey Forest Bratwurstis considering the introduction of a new line of low-fat Bratwurst.Currently, their R&D kitchen and Marketing department is considering the recipes from 18 SKU’s to include in the new line.However, the Marketing department has a limited budget and needs to narrow the initial offering to the 3 to 5 SKU’s that offer the greatest uniqueness, highest potential for profitability and strongest consumer appeal over the entire product line.
The Strategic Product Line Planning Solution
Our research method uses a sophisticated analytical procedure that evaluates the economic utility of each item in conjunction with all possible combinations of SKU’s being considered.By using mathematical game theory, we derive scores for each SKU being considered with respect to all possible SKU’s.Once the scores are ranked, the set of SKU’s offering the highest scores represents the priority for inclusion into your optimal product line.
In addition to providing the brand manager with strategic decisions at the R&D stage, our Strategic Product Line Research provides a roadmap for success for the future addition of SKUs.
ABOUT: THE MARKETING ANALYSTS
THE MARKETING ANALYSTS was founded in Dallas, Texas and has satellite offices in Naples, Florida; Bulgaria; Germany; Egypt and Russia to provide a one-stop solution for high quality, low cost solutions for your special marketing needs.Initially launched as a marketing research company, we now provide a variety of integrated marketing solutions including web site design, search optimization, proofing and language translation services.Our team is highly talented and consists of Marketing Ph. D’s, Marketing Managers, Mathematicians, Computer Science Engineers and Language Translators who hold advanced degrees from respected universities known around the world.
With direct access to highly skilled talent pools in eastern european, we are able to leverage all activities to effectively meet each of our client’s unique objectives.
Our strategic mix of marketing-based services include:
·Analytical Marketing Research
·Predictive Marketing Models
·Predicitive Data Mining and AI
International Translation & Localization Services:
·Websites with Search Optimized Content
·Industry specific documents
Web Design & Development:
·Predictive Ad Response
Our unmatched professionalism and commitment to achieving results guarantees the highest level of client service, every time. We look forward to the opportunity to serve you.