Page 342 - Foundations of Marketing

Developing and Managing Goods and Services | Chapter 11 309

Emerging Trends

Applebee’s Strives to Reposition Chain as Cool

Partying, dancing, drinking, and karaoke—when hear- that younger customers tend to eat later. After 9 p.m. the
ing those descriptions, people would not likely think store logo changes to strictly “bee’s” and is illuminated
of Applebee’s. Yet in efforts to try and capture a new by a dim green light versus the bright colors used during
market, Applebee’s is repositioning itself as the place for the day. A DJ starts spinning music, karaoke begins, and
twenty- and thirty-year-old singles to go for a night out. people start dancing in the restaurant.
The company has slowly begun to experiment with the The idea was conceived when Applebee’s realized they
idea using Florida as a test market, but it is facing skepti- offer intangible services suitable for the younger crowd,
cism due to the preconceived notion most people have such as half-off appetizers, numerous cocktail options,
about the atmosphere of the restaurant. and an environment that can build new relationships.
When envisioning Applebee’s, most people equate it The repositioning of the brand as “hip” and “cool” could
with a family dining establishment. In efforts to evolve this potentially be successful. However, will the transition
vision, Applebee’s is gradually transitioning from closing attract enough customers to make the late night hours of
c
at 10 p.m. to closing at later night hours after recognizing operation worthwhile for Applebee’s?

© iStockphoto.com/CRTd
Repositioning can be accomplished by physically changing the product, its price, or its
distribution. Rather than making any of these changes, marketers sometimes reposition a
product by changing its image through promotional efforts. Finally, a marketer may reposi-
tion a product by aiming it at a different target market.

PRODUCT DELETION LO 5 . Understand how product
deletion is used to improve
product mixes.
Generally, a product cannot satisfy target market customers and contribute to the achievement
of an organization’s overall goals indefinitely. Product deletion is the process of eliminating
a product from the product mix, usually because it no longer satisfies a sufficient number of
customers. Kia, for example, discontinued its Kia Sedona with plans to replace it with a new
25
minivan. A declining product reduces an organization’s profitability and drains resources
that could be used to modify other products or develop new ones. A marginal product may
require shorter production runs, which can increase per-unit production costs. Finally, when
a dying product completely loses favor with customers, the negative feelings may transfer to
some of the company’s other products.
Most organizations fi nd it diffi cult to delete a product. A decision to drop a product may
be opposed by managers and other employees who believe that the product is necessary to
the product mix. Salespeople who still have some loyal customers are especially upset when
a product is dropped. Considerable resources and effort are sometimes spent trying to change
a slipping product’s marketing mix to improve its sales and thus avoid having to eliminate it.
Some organizations delete products only after the products have become heavy financial
burdens. A better approach is some form of systematic review in which each product is evalu-
ated periodically to determine its impact on the overall effectiveness of the firm’s product mix.
Such a review should analyze the product’s contribution to the firm’s sales for a given period,
as well as estimate future sales, costs, and profits associated with the product. It also should
gauge the value of making changes in the marketing strategy to improve the product’s per-
formance. A systematic review allows an organization to improve product performance and
ascertain when to delete products. General Motors decided to delete the Hummer, Saturn, and product deletion Eliminating a
Pontiac brands in order to lower costs, improve its reputation, and become more profitable. product from the product mix

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