product.ppt
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PRODUCTPRODUCT
WHAT IS A PRODUCT ?WHAT IS A PRODUCT ?
A product is anything that has a capacity to satisfy customer needs n wants.
A product is anything that can b offered to a market for attention, acquisition that satisfy a want.
The term product covers both goods and services.
DEFINITIONSDEFINITIONS
Product◦Anything offered to a market for
attention, acquisition, use, or consumption that might satisfy a need or want. It includes physical objects, services , persons, places, organisations and ideas.
PHILIP KOTLER
PRODUCT DIMENSIONSPRODUCT DIMENSIONS
Managerial dimensions- Core product- The related product features- The related product servicesConsumer dimensionsSocial dimensions
PRODUCTS CLASSIFICATIONPRODUCTS CLASSIFICATION
UnsoughtProducts
UnsoughtProducts
SpecialtyProductsSpecialtyProducts
ShoppingProducts
ShoppingProducts
ConvenienceProducts
ConvenienceProducts
ConsumerProducts
ConsumerProducts
IndustrialProducts
IndustrialProducts
PRODUCTSPRODUCTS
PRODUCT CLASSIFICATIONPRODUCT CLASSIFICATION
ConvenienceShoppingSpecialtyUnsought
Frequent purchases bought with minimal buying effort and little comparison shopping
Low priceWidespread
distributionMass promotion by
producer
Types of Consumer Products
ConvenienceShoppingSpecialtyUnsought
Less frequent purchases
More shopping effort for comparisons.
Higher than convenience good pricing
Selective distribution in fewer outlets
Advertising and personal selling
Types of Consumer Products
ConvenienceShoppingSpecialityUnsought
Strong brand preference and loyalty, requires special purchase effort, little brand comparisons, and low price sensitivity
High priceExclusive distributionCarefully targeted
promotions
Types of Consumer Products
ConvenienceShoppingSpecialtyUnsought
Little product awareness and knowledge (or if aware, sometimes negative interest)
Pricing variesDistribution variesAggressive
advertising and personal selling by producers and resellers
Types of Consumer Products
Types of industrial Types of industrial productsproducts Raw Materials Equipments ( installations,
accesory equipments.plant and machinery)
Fabricated parts and materials Operating supplies
New-Product Development New-Product Development and and Life-Cycle StrategiesLife-Cycle Strategies
DefinitionDefinitionNew Product Development
◦Development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts.
New Product Development New Product Development StrategyStrategy
New products can be obtained through development.
New products suffer from high failure rates.
Several reasons account for failure.
Stages of the New Product Stages of the New Product Development ProcessDevelopment ProcessStage 1: Idea Generation
◦ Internal idea sources: R & D
◦ External idea sources: Customers, competitors, distributors,
suppliers
Stages of the New Product Stages of the New Product Development ProcessDevelopment Process
Stage 2: Idea Screening◦ Product development costs
increase substantially in later stages so poor ideas must be dropped
◦ Ideas are evaluated against criteria; most are eliminated
Stages of the New Product Stages of the New Product Development ProcessDevelopment Process
Stage 3: Concept Development and Testing◦ Concept development creates a
detailed version of the idea stated in meaningful consumer terms.
◦Concept testing asks target consumers to evaluate product concepts.
Stages of the New Product Stages of the New Product Development ProcessDevelopment Process
Stage 4: Business Analysis◦ Sales, cost, and profit projections
Stage 5: Product Prototype◦ Prototype development and
testing
Stages of the New Product Stages of the New Product Development ProcessDevelopment Process
Stage 6: Test Marketing◦ Standard test markets◦ Controlled test markets◦ Simulated test markets
Stage 7: Commercializationo Launching of the product
Product Life Product Life CycleCycle
Time
ProductDevelop-
ment
Introduction
Profits
Sales
Growth Maturity Decline
Losses/Investments ($)
Sales andProfits ($)
Product Life-Cycle Product Life-Cycle StrategiesStrategiesThe Product Life Cycle (PLC) has
Five Stages
◦Product Development, Introduction, Growth, Maturity, Decline
Product Life-Cycle Product Life-Cycle StrategiesStrategies
Product development
IntroductionGrowthMaturityDecline
Begins when the company develops a new-product idea
Sales are zeroInvestment costs
are highProfits are negative
9 - 21
PLC Stages PLC Stages
Product Life-Cycle Product Life-Cycle StrategiesStrategies
Product development
IntroductionGrowthMaturityDecline
Low salesHigh cost per
customer acquiredNegative profits Innovators are
targetedLittle competition
PLC Stages PLC Stages
Marketing Strategies: Marketing Strategies: Introduction StageIntroduction Stage
Product – Offer a basic productPrice – Use cost-plus basis to setDistribution – Build selective
distributionAdvertising – Build awareness
among early adopters and dealers/resellers
Sales Promotion – Heavy expenditures to create trial
Product Life-Cycle Product Life-Cycle StrategiesStrategies
Product development
IntroductionGrowthMaturityDecline
Rapidly rising salesAverage cost per
customerRising profitsEarly adopters are
targetedGrowing competition
PLC Stages PLC Stages
Marketing Strategies: Growth Marketing Strategies: Growth StageStageProduct – Offer product extensions,
service, warrantyPrice – Penetration pricingDistribution – Build intensive
distributionAdvertising – Build awareness and
interest in the mass marketSales Promotion – Reduce
expenditures to take advantage of consumer demand
Product Life-Cycle Product Life-Cycle StrategiesStrategies
Product development
IntroductionGrowthMaturityDecline
Sales peakLow cost per
customerHigh profitsMiddle majority are
targetedCompetition begins to
decline
PLC Stages PLC Stages
Marketing Strategies: Maturity Marketing Strategies: Maturity StageStage
Product – Diversify brand and models
Price – Set to match or beat competition
Distribution – Build more intensive distribution
Advertising – Stress brand differences and benefits
Sales Promotion – Increase to encourage brand switching
Product Life-Cycle Product Life-Cycle StrategiesStrategies
Product development
IntroductionGrowthMaturityDecline
Declining salesLow cost per
customerDeclining profitsLaggards are
targetedDeclining competition
PLC Stages PLC Stages
Marketing Strategies: Decline Marketing Strategies: Decline StageStageProduct – Phase out weak itemsPrice – Cut priceDistribution – Use selective
distribution: phase out unprofitable outlets
Advertising – Reduce to level needed to retain hard-core loyalists
Sales Promotion – Reduce to minimal level
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