1.1. what is product
TRANSCRIPT
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Product Concepts
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Objectives To Understand the Concept of a Product
To Understand How to Classify Products
To Become Familiar With the Concepts ofProduct Item, Product Line, and ProductMix and Understand How They AreConnected
To Become Familiar With the ProductAdoption Process
To Understand Why Some Products Fail andSome Products Succeed
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Good
Service
Idea
Whats a Product?
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Product
A product is anything that can be offered to
the market to satisfy a want or need
Levels Core benefit that the customer is really buying
In a hotel, customer is buying rest and sleep
Basic product through which the core benefit is
delivered to the consumer
A room, bed, bathroom, desk, closet
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Product
Expected product the set of attributes that the consumers
expect as obvious along with the product (otherwise
dissatisfaction)
Clean bed, pillow, fresh towel, soap, lamp, fan etc.
Augmented product attributes / features that exceed
consumer expectation which leads to happiness of the
consumer
TV with cable, good interior design & dcor, good food etc.
Cost benefit trade off
Todays augment tomorrows expected
Easy to copy
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Product
Potential product all possible augmentation and
transformation that the product may go through
in future which leads to customer delight
Bar inside the room, fruit bowl, computer facilities etc.
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Classifying Products
Consumer
vs.
Business
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Consumer Products
ConvenienceStaples,
impulse,emergency
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Consumer Products
Shopping
Homogenous
Heterogeneous
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Consumer Products
Specialty
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Consumer Products
Unsought
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Installations
Accessory Equipment
Business Products
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Business Products
Raw Materials
Component Parts
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Business Products
Process Materials
Supplies
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Business Services
Business Products
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Product Line
& Product Mix
Product Item
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LAMPSLAMPS
TableTableCeilingCeiling
TrackTrack
DeskDesk
Product Line
Product Line
& Product Mix
SelectedSelected
Acme Furniture Co.Acme Furniture Co.
ProductsProducts
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ProductProduct
Line 1Line 1
ProductProduct
Line 2Line 2
ProductProduct
Line 3Line 3
SelectedSelected
Acme Furniture Co.Acme Furniture Co.
ProductsProducts
TABLESTABLESKitchenKitchen
Dining RoomDining Room
EndEnd
CoffeeCoffee
OutdoorOutdoor
ConferenceConference
ComputerComputer
CHAIRSCHAIRSDining RoomDining Room
Living RoomLiving Room
BedroomBedroom
OutdoorOutdoor
DeskDesk
LAMPSLAMPSTableTable
CeilingCeiling
TrackTrack
DeskDesk
Product Line & Product Mix
Product Mix
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ProductProduct
Line 1Line 1
ProductProduct
Line 2Line 2
ProductProduct
Line 3Line 3
SelectedSelected
Acme Furniture Co.Acme Furniture Co.
ProductsProducts
TABLESTABLES
KitchenKitchenDining RoomDining Room
EndEnd
CoffeeCoffee
OutdoorOutdoor
ConferenceConference
ComputerComputer
CHAIRSCHAIRS
Dining RoomDining RoomLiving RoomLiving Room
BedroomBedroom
OutdoorOutdoor
DeskDesk
LAMPSLAMPS
TableTableCeilingCeiling
TrackTrack
DeskDesk
Product Line & Product Mix
Length of Product line
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ProductProduct
Line 1Line 1
ProductProduct
Line 2Line 2
ProductProduct
Line 3Line 3
SelectedSelected
Acme Furniture Co.Acme Furniture Co.
ProductsProducts
TABLESTABLESKitchenKitchen
Dining RoomDining Room
EndEnd
CoffeeCoffee
OutdoorOutdoor
ConferenceConferenceComputerComputer
CHAIRSCHAIRSDining RoomDining Room
Living RoomLiving Room
BedroomBedroom
OutdoorOutdoor
DeskDesk
LAMPSLAMPSTableTable
CeilingCeiling
TrackTrack
DeskDesk
Product Line & Product Mix
Width of Product Mix
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Product line Analysis
Understand each product lines market profile andperformance
Sales and profit
Market profile Identification of significant product attributes of each product in
the different product lines
Identification of competition in the market (different levels) foreach product
Comparison of the positioning theme against the variouscompetitors against the backdrop of the characteristics of thetarget markets
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Product related decisions
The profiling and analysis of performance
leads to some decision making by the product
/ brand managers
Optimal product line length
Line modernization
Line featuring
Line pruning etc.
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Optimal Product line length
Line stretching (up market ~ down market)
Downward
Upward
Two way
Line Filling
Self cannibalization
JND (just noticeable difference)
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Markets for a hotel chain
Economy Standard Good Superior
High TopExecutives
Above
Average
Middle
Managers
Average Salespeople
Low Vacationers
Quality
Price
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Other Product line decisions
Line modernization
Style
Design etc.
Line featuring
Which product items to be used as show piece toattract consumers for the whole product range
Line pruning (removal of deadwoods)
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Brand Decisions
A name, term, sign, symbol, design or
combination of them, intended to identify the
goods and services of one seller or group of
sellers and differentiate them from
competitors
Sellers promise to deliver a specific set of
features, benefits and services constantly tothe buyers
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Brand Decisions
A brand communicates the following six levelsof meanings
Attributes
Benefits
Values
Culture
Personality User
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Brand Decisions
To brand or not to brand
Brand sponsor decision
Manufacturer brand (HLL, Bajaj etc.) Distributor brand (private brand) (Shopper Stop)
Licensed brand (Parker, Levi etc.)
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Brand Decisions
Brand name decisions
Individual name (Lux, Liril etc.)
Blanket family name (Amul products, Godrej
product lines etc.)
Separate family names (TISCO, TELCO, TCS etc.)
Company Individual name (Bajaj Chetak, Bajaj
Super etc.)
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Brand Decisions
Brand strategy decisions
Line extension
Brand extension
Multi-branding
New brands
Co-brands
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Brand Decisions
Brand repositioning decision
Brand should be repositioned
Brand should not be repositioned
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Packaging
Packaging includes the activities of designing and
producing the containers for the products
Levels
Primary
Bottle containing the shampoo
Secondary
The cardboard box containing the bottles
Tertiary Shipping package
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Packaging
Factors influencing the growing use of
packaging in marketing
Self- service
Consumer affluence
Company and brand image
Innovation opportunity
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Labeling
May be a simple tag or complex graphics
May carry only the brand name or a lot of otherinformation
May be voluntary or enforced by law Functions
Identification
Gradation
Description Promotion
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Adoption Process
Awareness
Interest
Evaluation
Trial
Adoption
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Adoption Process
Product Adopter Categories
100% of
eventual
adopters
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2.5% Innovators
Adoption Process
Product Adopter Categories
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2.5% Innovators
13.5% Early Adopters
Adoption Process
Product Adopter Categories
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2.5% Innovators
13.5% Early Adopters
34% Early Majority
Adoption Process
Product Adopter Categories
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2.5% Innovators
13.5% Early Adopters
34% Early Majority34% Late Majority
Adoption Process
Product Adopter Categories
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2.5% Innovators
13.5% Early Adopters
34% Early Majority34% Late Majority
16% Laggards
Adoption Process
Product Adopter Categories
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Why Some Products Fail and Others
Succeed
Failure to Meet Customer Needs
Poor Timing Market Conditions
Ineffective or Inconsistent Branding
Technical or Design Problems
Overestimation of Market Size
Poor Promotion Insufficient Distribution
80 to 90% Fail. Why?
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The Emerging Marketing Environment
Increased competition
Proliferation ofbrands and Product
categories
Increased choice to the consumer
Transformation from a Sellers Market toa Buyers Market
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Total Product Concept
Servicization of Products andProductization of Services
Differentiation-Both Tangible and
Intangible Vectors of Differentiation
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The more commoditised the market the more
branding matters.
Anything can be branded.
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HP,Motorola ,Intel
What is an opportunity can only be decided
if there is a strategy. Otherwise, there is no
way to tell what genuinely advances the
organisation towards its desired results,
and what is diversion and splintering of
resources.-- P.F.Drucker
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New Product Development
Product-Line Strategy
Product Platform Strategy
Product
Strategy
Vision
Product Strategy Process Structure
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Strategic window concept
Strategic inflection point
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OK, YOU SHOULD NOW . . .
Understand the Concept of a Product
Understand How to Classify Products
Be Familiar With the Concepts of Product Item,Product Line, and Product Mix and Understand HowThey Are Connected
Understand the Concept of Product Life Cycle andIts Impact on Marketing Strategies
Be Familiar With the Product Adoption Process
Understand Why Some Products Fail and SomeProducts Succeed
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Thank You