Product Concepts & Management

Introduction
To marketers, products are bundles of benefits delivered to the customer. The form in which these benefits are delivered can be both tangible and intangible.
At the intangible end of the product spectrum are services.

Product strategy is derived from the company's marketing objectives

influenced by how products are organised by line and range, and also by the product life cycle.

The Product - A Definition

A product is a physical good, service, idea, person or place that is capable of offering tangible and intangible attributes that individuals or organisations regard so necessary, worthwhile or satisfying that they are prepared to exchange money, patronage or some other unit of value in order to acquire it.

What is product management?

Examples of levels of competition

Key Product Management functions

Product Mix Product Line Product Mix decision Product Line Addition / Deletion Product Abandonment

Levels of Product Hierarchy

Product needto satisfy a need e.g. feet protection Product classa family of products having similar function e.g. all shoes Product linea group of products with closely related functions e.g. sports shoes Product typeproducts within a line having similar form e.g. basket-ball shoes Branda name representing a product or line e.g. Nike Item (Stock Keeping Unit)a unit item e.g. one pair of Nike basket-ball shoe

What Are Key Strategy Planning Decisions Related to Product?

Physical good, service or most often some of both Branding Packaging Warranty Life Cycle Management and Product Development

Components of the Market Offering

Value-based prices

Attractiveness of the market offering

Product features and quality

Services mix and quality

CUSTOMERS DO NOT BUY PRODUCTS. THEY BUY BENEFITS AND SATISFACTION. ---Peter Drucker

Product classifications
Products can be classified according to their durability and tangibility.
Non-durable products are goods consumed quickly and used on one or a few occasions, e.g. beer, soap. Durable products are used over an extended time and may last for years, e.g. fridge.

Marketers also divide products and services into two other classifications: consumer and industrial products.

Consumer products
Bought to satisfy personal and family needs.
Classified according to consumer shopping habits:

Convenience products
Purchased frequently, minimum comparison and buying effort.

Shopping products
Process of selection, compared on bases of quality, suitability, price and style.

Unsought products
Consumer does not know about the product or perceives no need for it.

Marketing considerations for consumer products

Industrial products
Products bought for further processing or the purposes of resale.
Distinction based upon the purpose for which the product is purchased.

Materials and parts

Raw materials. Manufactured materials and parts.

Capital items
Installations. Accessory equipment.

Supplies and services

Electricity to power the machines making shirts.

TOTAL PRODUCT CONCEPT

Guarantees & Warranties Styling Attributes Instruction Manual Payment Quality Options Consumer Complaint Management Augmented Product

After Sales Service Colour Delivery Points & System Brand Name

Formal Product

Core Product

Packaging Consumer Education & Training

Installation

Future Product

Levels of a product
Core product
problem-solving service or core benefits that consumers are really buying when they obtain a product.

Formal product ( basic & expected)

incorporates the quality, features and design, brand name, packaging and other attributes that combine to deliver core product benefits.

Augmented product
incorporates the consumer services and benefits built around the core and actual products which in itself enhances functioning and use of the product..

Definition of Lipstick
A crayon-like oil-based cosmetic used in coloring the lips, usually in a tabular container. Make-up that is used to color the lips.

Benefits of Lipstick
Core ( different)

Basic (1st stage of Formal)

Look good Look different Look photogenic Enhance looks Retain moisture Freshness Hide irregularities Face lift Perfection

Long lasting Grace,style,poise Heighten personality Look attractive Smokers to change lip color Look presentable & complete Different shades

Benefits- Lipstick (Contd.)

Expected (2nd stage of Formal)

Fragrance Formal look Social acceptance Impress guys Shining lipsticks associated with diamonds Juicy effect Reflect Mood.

To have a smooth talk To feel the taste throughout the day Demonstration effect Safety To give Shape to your lips

Benefits- Lipstick (Contd.)

Augmented

Potential

Beauty saloons Non-transferable Personality Classes Usage pattern for different occasions

Veggie classification

PRODUCT MATRIX FOR WRITING PENS

Product Levels
Core

Applications
Notes Writing Signing Office Use Gift

Clarity & Speed

Long Lasting.Indelible

Clarity & no smudging

Memento / Remembrance.

Basic
Light in weight & Grip, Type of pen Ink colour, free flow of ink. Smoothness. Type of pen. Ink colour Create Impression, Pen stand Instructions Customer Care, Hassle Free. Type of pen & ink, color, Grip Body Refill Casing etc... Customer Care, Long Lasting. Casing Design & pattern

Expected

Augmented

Body, Refill. Casing Instructions Customer care

Ink Color, Pen Stand Customer care Testimonials

WASHING MACHINE

WASHERS

Washing machine types

FULL Y AUT OMATIC
FRONT LOADING

SEMI AUTOM ATIC

TOP LOADING

Pulsator w ash

Agitator w ash

Tumble w ash

PARTICULARS

INDIVIDUAL

FAMILY
BULK

FAMILY
SPECILISED

FAMILY
COMPLETE

CORE

Time Management & Convenience Storage of used clothes, Non dependence on servants. Wrinkle free wash, Clothes should not get entangled Instruction manual

Zero effort wash, one time quick wash. Intensive wash, Any time easy usage, Bulk load, Capacity, Non dependence on servants. Additional/Superior fabric, Talking machine, Multiple rinse care, purifying of water, Silent wash. etc

Fabric sensitive Wash One time wash, Stain free, Optimum wash quality Durability, Preventing of clothes from becoming dull

Speedo wash

BASIC

Gentle wash, Quick wash

EXPECTED

Talking washing, Preventing of clothes from becoming dull

???
Instruction manual, Finance

???
Warranty, Instruction manual

AUGMENTED

Warranty, After sale service, Finance,

Finance, After sales service

Brands

Individual

Family

Bulk

Specialized

Complete

Whirlpool

-E-50 -S-70 -White magic Agisoak, -White magic Super NA-W-652, NA-W-607, NA-W-605A.

Hot wash H-55

F-65 FP-65

T-50 T-62

National

NA-F-551

NA-F-521

NA-F-621

LG Electrolux

WP-9031, WP-9032, WP-954S, WP-1021S, WP-1022M

------WT 7100, WT 7700, WT 8700, KARISMA WS 7500 GDS 400 GDS 550

WF-T-8519TE, Direct Drive WRT-1071

WF-T7517TE, WD-8007-CI, WD-1205CI

WD-10160F, WD-10165F, WF-S-610TD, WF-F-6627TD

Senorita plus, Elena WA-85B9.

IFB SAMSUNG

Digital, Senator. WA-11K5, SWFP10.

-Executive Elite, Executive Plus WA-75N6, WA-80K4, WA-80K5

GODREJ

GDS 650

GDF1101 GDF1201

GDF1301

PAINTS

DEFINITION OF PAINT
A substance used as a coating to protect or decorate a surface (especially a mixture of pigment suspended in a liquid); dries to form a hard coating

AUGMENTED = Soft touch feel, Washable, Waterproof ,

Additional benefit

EXPECTED = Durability , Odor free, Should not stick, Dry easily, instructions for use. BASIC = Co lour, Looks, Combinations

CORE = Decoration, Safety Of wall, Beautification, Sun light.

Product / Brand Mix

Width - number of different product lines

Length - total number of items within the lines

Depth - number of versions of each product

Product Mix all the product lines offered

4 Dimensions of the product mix

Breadth or width
Wide product mix containing many different product lines.

Length
Total number of products in the product lines

Depth
Different versions, such as size of packaging and different formulations.

Consistency
How closely related the various product lines are in end use, production requirements, distribution channels etc.

Product mix implications

Positive:
More closely reflects the segmentation of the market Closes gaps for competitor entry/meets competition Increases profile with customers and consumers

Negative
Greater costs Greater complexity Reduced concentration

Therefore objective is : optimisation of the mix

Product mix strategies

Company can add new product lines, thus widening the product mix. Company can lengthen the existing product lines to become a more full line company. It can add more product versions of each product and deepen its product mix. The company can pursue more product line consistency, or less, depending upon whether it wants to have a strong reputation in a single field or in several fields.

Product-Mix Width and Product-Line Length for Proctor& Gamble Products

Product-Mix Width Disposable Bar Soap Ivory Paper Tissue Charmin Puffs

Detergents Ivory Snow Dreft

Toothpaste Gleem Crest

Diapers Pampers Luvs

PRODUCTLINE LENGTH

Kirks

Tide
Lava Cheer

Banner
Summit Camay

Ariel

Various Product decisions

Building product lines Line stretching- DOWN MARKET & UP MARKET Line Filling Line modernization Line featuring. Multibrand strategy New product development. Innovations in core product. Extending markets by usage

The Product Life Cycle

Market Introduction

$0 Time Sales grow slowly, at a cost

The Product Life Cycle

Market Introduction

Market Growth

Market Maturity

Sales Decline

Total Industry Sales Total Industry Profit Time

$0 Sales grow slowly, at a cost Sales growth, but profits level off

Sales levels, Manage it or but profits say goodbye decline

The Product Life Cycle

Market Introduction

Market Growth

Market Maturity

$0 Time Sales grow slowly, at a cost Sales growth, but profits level off Sales levels, but profits decline

The Product Life Cycle

Market Introduction

Market Growth

Market Maturity

Sales Decline

Total Industry Sales Total Industry Profit Time

$0 Sales grow slowly, at a cost Sales growth, but profits level off

Sales levels, Manage it or but profits say goodbye decline

Avoid Confusion about PLC

Key Points About the PLC...

Product-market, not brand Markets may have different cycles

Timing of stages may vary

Strategy must change over time

The Product Life Cycle

Market Introduction Market Growth Market Maturity Sales Decline

Total Industry Sales Total Industry Profit

Rs 0

Time

Product
One of Few Variety - try to find best product Build brand familiarity All the same Battle of the brands Some drop out But favorites may be profitable for a long time!

The Product Life Cycle

Market Introduction Market Growth Market Maturity Sales Decline

Total Industry Sales Total Industry Profit

$0

Time

Place
Build Channels Maybe selective distribution More of the same, but more channel outlets available Move toward more intensive distribution Find a way to reach loyal laggards

The Product Life Cycle

Market Introduction Market Growth Market Maturity Sales Decline

Total Industry Sales Total Industry Profit

$0

Time

Promotion
Build primary demand Build selective demand Informing/Persuading Persuading/reminding

Frantically competitive!

The Product Life Cycle

Market Introduction Market Growth Market Maturity Sales Decline

Total Industry Sales Total Industry Profit

$0

Time

Price
Skim the cream at a high price or Low to penetrate faster Meet competition (especially in oligopoly) or Price dealing and price cutting or Value pricing for long-term relationships

Life Cycles and Marketing Strategy

Introduction Maximize distribution Build awareness & obtain trial Extend distribution Advertise & promote heavily

Growth

Maturity

Advertise product image Persuade customers to switch

Milk the product for profits Determine if to terminate product Plan for postmortem expenses Develop phase-out plan

Decline

Postmortem

Avoiding Decline --Extending Shape & Duration of PLC

Promote more frequent usage of the product among existing customers. Develop more uses or varied usage of the product among current users. Create new users for the product by expanding the market. Find new uses of the products.`

A NEW LOOK AT PLC

Exploit the PLC-Theoder Levitt : HBR:1965 Forget the PLC-Nariman Dhalla : HBR :1977

EVERY BUSINESS IS A GROWTH BUSINESS!-Ram Charan : 2000