Download - product.ppt
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PRODUCTPRODUCT
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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.
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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
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PRODUCT DIMENSIONSPRODUCT DIMENSIONS
Managerial dimensions- Core product- The related product features- The related product servicesConsumer dimensionsSocial dimensions
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PRODUCTS CLASSIFICATIONPRODUCTS CLASSIFICATION
UnsoughtProducts
UnsoughtProducts
SpecialtyProductsSpecialtyProducts
ShoppingProducts
ShoppingProducts
ConvenienceProducts
ConvenienceProducts
ConsumerProducts
ConsumerProducts
IndustrialProducts
IndustrialProducts
PRODUCTSPRODUCTS
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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
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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
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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
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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
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Types of industrial Types of industrial productsproducts Raw Materials Equipments ( installations,
accesory equipments.plant and machinery)
Fabricated parts and materials Operating supplies
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New-Product Development New-Product Development and and Life-Cycle StrategiesLife-Cycle Strategies
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DefinitionDefinitionNew Product Development
◦Development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts.
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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.
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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
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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
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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.
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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
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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
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Product Life Product Life CycleCycle
Time
ProductDevelop-
ment
Introduction
Profits
Sales
Growth Maturity Decline
Losses/Investments ($)
Sales andProfits ($)
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Product Life-Cycle Product Life-Cycle StrategiesStrategiesThe Product Life Cycle (PLC) has
Five Stages
◦Product Development, Introduction, Growth, Maturity, Decline
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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
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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
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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
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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
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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
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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
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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
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Product Life-Cycle Product Life-Cycle StrategiesStrategies
Product development
IntroductionGrowthMaturityDecline
Declining salesLow cost per
customerDeclining profitsLaggards are
targetedDeclining competition
PLC Stages PLC Stages
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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