PRODUCT MANAGEMENT Product Decisions Product Development Product Lifecycle
PRODUCT MANAGEMENT Product Decisions Product Development Product Lifecycle Product Management Product A product is something which is brought to the market for attention, acquisition and buying Product & Service In marketing, a product can be tangible or intangible. Tangible products are called as
goods and intangible products are called as services Levels of Product Potential Augmented Expected Generic Core Product Levels of Product How much extra benefit can be offered Extra Offers Attractive Lips
COSMETICS Hope Classification of products PRODUCT Consumer Products Convenience Business Products or Industrial Products
Materials and Parts Shopping Capital Items Specialty Unsought Supplies and Services Classification of Products Consumer Products o Purchased by consumers for personal
consumption Business Products / Industrial Products o Purchased by business concerns for further production Consumer Products Classification of consumer products o Convenience goods
o FMCG goods purchased regularly by consumer Consumer involvement very low Price of product is very low Intensive distribution channel is used The stock turnover is quite high Aggressive promotion is used
Examples : soap, detergents, cigarettes etc Shopping goods High consumer involvement Process information of product suitability, quality and price Less frequent purchase as compared to convenient goods Price of the product is quite high
Products available in selected outlets Consumer takes lot of time to search and evaluate information Consumer Products Specialty goods o o o High brand loyalty and ready to wait or spend time Companies adopt premium pricing strategy Exclusive distribution and selective communication strategy E.g.: Costly and branded music system, cars etc
Unsought goods Consumers are unaware or ignorant about the product o Marketers need heavy promotional activity and aggressive selling strategy E.g.; Insurance, funeral plots in US etc o Business Products/ Industrial Products MATERIAL AND PARTS
Raw Materials Natural Products Farm Products Manufactured Materials & Parts Components Component Parts
Product Hierarchy 1. Need Family The core need that underlies the product family 2.Product Family All the product classes that can satisfy a core need with reasonable effectiveness 3.Product Class A group of products within the product family recognized as having a certain functional coherence
4. Product Line A group of products within a produt class that are closely related because they function in a similar manner or are sold to the same customer groups or are marketed through the same types of outlets or fall within a given price ranges 5.Product Type Those items within a product line that share one of several possible forms of the products 6.Brand
The name associated with one or more items in the product line that is used to identify the source or character of the items 7. Item A distinct unit within a brand or product line that is distinguished by size, price, appearance, or some other attribute Product Line Strategies PRODUCT LINE o The group of related products which uses same
marketing effort to teach the customer. It cater to the common need of a group or class of customers PRODUCT LINE DECISIONS o The major product line decisions are Product line length Product line stretching
Product line filling Product line pruning Product line decisions 1.PRODUCT LINE LENGTH The number of items in the product line is called the product line length o The product line chain can be short or long o If short, it can add more new products and if long, it can reduce the number of products o 2.PRODUCT LINE STRETCHING o
Company lengthens its product line by stretching upwards, stretching downwards or both ways Product line decisions Line stretching decision depends on three situations: Company that operates in high end market may come up with mid class or low class targeted products. Eg. Maruti Gypsy, Nano etc o The company which operates in lower end of market may come up with high end market products. Eg. Scorpio by M & M
o If the company operates in mid segment and comes out with low end products as well as high end product, then it is called as stretching both ways. o Product line decisions C. PRODUCT LINE FILLING When more products are added in the line, it is called product line filling. Eg. Maruti Alto launched in between Maruti 800 and Maruti Zen D. PRODUCT LINE PRUNING Removing the unprofitable products from the
product line. Eg. Qualis in India Product Mix Strategies Product Mix o The number of product lines and items offered by marketer to the consumer is called as Product Mix Dimensions of Product Mix Product Mix Width The total number of product line that a company offers to the consumers. For example, Ujala has fabric care,
household insecticides, utensil cleaners, fragrances, personal care etc o Product Mix Length The total number of items that company carries within its product line. Eg. Ujala Fabric Care has got Ujala Supreme, Ujala Washing Powder and Stiff and Shine o Packaging & Labeling Packaging The processing of designing and producing the container or wrapper for a product is called as packaging o Packaging has got the following benefits:
1.Strong brand awareness 2.Proper protection to the product 3.Helps in bulk breaking 4.Attracts a customer to buy a product o Packaging & Labeling Labeling Labeling is a piece of paper designed to carry the information about a product and its producer o Types of Labels o 1.Brand Label
Only brand name is mentioned in this label. Eg.Masafi 1.Grade Label Identify the quality of the product with a letter, figure etc Eg. Fertilizers 1.Descriptive Label Gives entire information about the product, its content, use and care. Eg. Hair Dye Labels Product Mix Strategies Product Line Depth The number of versions offered of each product in the line
Eg. Jyothi Laboratories Jeeva Natural is offered in three versions. ie. Coconut Milk with Milk Protein, Coconut Milk with Jasmine, Coconut Milk with Kasturi Manjal Product Mix Consistency If the companys product line, production and marketing are related, then it is called as product mix consistency NEW PRODUCT DEVELOPMENT New Product Development New product development is a process whereby a new product is created by the
company New product doesn't mean that absolutely new to the world It may be modification, or offered in the new market, or differentiate from the existing products New Product Development New Products are New innovative product. Eg Orkut by Google A product totally different from others. Eg. Dream liner jet by Boeing o Imitative product that are not new to the market but new to the company. Eg. Tata Salt
o o New Product Development New Product Development Process 1.Idea Generation o A new product is the result of a new idea. o Ideas are generated either from internal sources or from external sources 1.Idea Screening o Idea screening is a process whereby feasible ideas will be selected and non-feasible ideas will be rejected 1.Concept Development o The ideas should be explained as a concept.
New Product Development 4. Concept Testing The concept will be tested with a group of target customers 5. Marketing Strategy Development This involves three parts. They are: o o o Target market, sales, market share and profit goals Product price, distribution, marketing budget Marketing mix strategies and profit goals
New Product Development 6. Business Analysis Analysis of sales, cost and profit of the new product and its compatibility with the companys mission, vision and objectives 7. Product Development Real proto-type of the product will be manufactured to test its real performance 8.Test Marketing The new product will be tested in a realistic marketing situation in few test canters
The 4 Ps of marketing also will be tested 9. Commercialization The product will be aggressively launched in the market with aggressive communication strategy. YES NO NO NO NO
NO YES NO SHOULD WE SEND THE IDEA BACK FOR PDT DVPT NO DROP
COMMERCIALIZATION TEST MKTG PDT DEVPT BUSINESS ANALYSIS MKTG STRATEGY DVPT CONCEPT DVPT &
TESTING IDEA SCREENING IDEA GENERATION NEW PRODUCT DEVELOPMENT WOULD IT HELP TO MODIFY THE PDT OR MKTG
PROGRAM NO Product Life Cycle (PLC) Many of the product has a life cycle like a human being. It passes through five different stages o o o o o
Product development stage Product introduction stage Growth stage Maturity stage Decline stage Stages of Product Life Cycle (PLC) Sales & Profit Product Dvpt Stage
Introduction Stage Growth Maturity Decline PLC o Profit
PLC Product Development Stage Sales is zero in this stage, but company requires huge investment in R&D o So company incurs loss at this stage o Introduction Stage As product is new, the awareness about the product is low during this stage o Company has to spend heavy amount of money on promotion and product awareness program o Cost of product is very high and the sales is very low
o Company charges high price for the product o PLC Growth Stage Sales will grow rapidly during this stage The cost of production goes down and companies get better profit o Company reduces the price of the product o It focuses on developing better distribution during this period o Number of competitors will grow in the market o o
PLC Maturity Stage o o o o o o o Sales reaches peak level Low cost and high profit Pricing becomes competition based
Communicate product differentiation to the customers Company improves the supply chain Defend the market share Industry get consolidated PLC Decline Stage Product sales declines Promotion also declines Company phase out weak product from their product mix o The advertisement budget of the company also comes down o
o o Other Product Life Cycles Growth Slump Maturity Pattern Other Product Life Cycles Sales Volume Cycle Recycle Pattern Recycle Primary Cycle
Times Other Product Life Cycles Sales Volume Scalloped Pattern Time Other Product Life Cycles- Style Other Product Life CyclesFashion Other Product Life Cycles - Fad
Other Product Life Cycles Style, Fashion, Fad Style: A style is a basic and distinctive mode of expression appears in the field of human behavior E.g.. Style appears in home, art, clothing etc Fashion: Currently accepted or popular style in a given field of life E.g.. Cargo jeans Fad: A fashion that enters quickly, adopted with great zeal, peaks early and decline very fast E.g. Hair styling
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