managing product 1markets

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´Product strategy begins with a strategic vision´Product strategy begins with a strategic vision

that states where a company wants to go,that states where a company wants to go,how it will get there, and why it will behow it will get there, and why it will besuccessful.´ successful.´

´Product strategy is like a roadmap, and like a´Product strategy is like a roadmap, and like aroadmap it¶s useful only when you know roadmap it¶s useful only when you know where you are and where you want to go.´ where you are and where you want to go.´




Product Platforms

Product 1

Product 2

Product 3

Product 1A

Product 1B Product 1C

Element A

Element B

Element C

Segment A

Segment B

Segment C

Common Platform

Elements

Unique product

elements and

common channel

elements of product line

Product 5




Core benefit

Basic product

Expected product

Augmented product

Potential product

5 product levels




Core benefits ± fundamental level of customer

expectations

Basic product ± turning the product into basic

product

Expected product ± with a set of attributes, and

condition buyers normally the consumer expects

when they want to purchase Augmented product- exceeds customer

expectations. Branding and positioning at this

level

Potential product ± which encompasses allpossible augmentations and transformations for

future undergo.




The Product and Product Mix




Product Classification

Durability 1. Non durable goods

Repeatedly purchasing goods.

Available in most of the locations

Charge less

2. Durable goods-

Are tangible goods normally survive many

uses, refrigerators, machine tools clothing.

Services




Consumer goods classification

Convenience goodsConvenience goods ± ± frequently, immediatelyfrequently, immediatelyand with minimum effort .and with minimum effort .

Staples ± consumers purchase on a

regular basis or routine basis.

Eg. Milk, bread,toothpastes, soaps ,biscuits.

Impulse- purchased without any planning

or search effort. Eg. Chips, chocolates,

candy barsEmergency- purchased when a need is

urgent . Eg. Umbrellas, raincoats.

..





Specialty goodsSpecialty goods ± ± unique characteristics or unique characteristics or brand identification for which a sufficientbrand identification for which a sufficient

number of buyers are willing to make anumber of buyers are willing to make a

special purchasing effort.special purchasing effort. EgEg ± ±cars, stereos,cars, stereos,

photographic instruments.photographic instruments.Unsought goodsUnsought goods ± ± those the consumer doesthose the consumer does

not normally think of buying such asnot normally think of buying such as

detectors, life insurance, encyclopedias anddetectors, life insurance, encyclopedias and

reference booksreference books





Shopping goodsShopping goods ± ± that are consumer that are consumer characteristically compares on such bases ascharacteristically compares on such bases as

suitability , quality, price, and style.suitability , quality, price, and style.

Homogeneous- Products that vie with each other

in a market but which (from the consumersviewpoint) have little or no differentiation

in terms of features, benefits, or quality and are,

therefore, forced to compete in price or availability.

Eg - Vegetables, fruits, home appliances, cameras. Heterogeneous ± differ in product features and

services that may be more important than price.




Industrial -Goods Classification

± Materials and parts ± Natural products

± Farm products

± Manufactured materials and parts(processmaterials)

± Component materials & parts

Capital items

± Installations

± Equipment




Materials and

parts

Raw materials

Farm products Wheat ,cotton,livestock, fruits

Natural products Fish, lumber, crude

petroleum, iron ore

Process materials Component materials ±

used for processing the

finished product

1. Pig iron made into

iron

2. Yarn to cloth3. Alcohol to perfumes

Component parts-

which needs little or no

finishing. Readily sold

to the industries. Ready

to use.

1. Engine

2. Carburetor

3. Wheels

4. Seats

5. Glass panes

6. Small motors




Capital equipment Accessory equipments 1. Mechanical tools

2. Computers

3. Calculators4. Furniture

Installations 1. Factories

2. Offices

3. Heavy equipment

like generators, drill

presses, elevators

Consumable supplies-

they often referred as

the MRO items

1. Paper

2. Pencil

3. Oils

4. Paints

5. Brooms6. Handy tools

7. Replacement tools

8. Office stationary¶

9. Electricity

10.water




Services differentiation

Ordering case

Delivery

Installation Customer training

Maintenance and repair

Returns




Product Hierarchy

Each product is related to obtain other

products.

Product hierarchy lists out levels toidentify product from basic needs to

particular items

that satisfy those needs.




Need Family:

Core need that underlines the existingof a product family

Product Family:

All product classes that satisfy a core needwith reasonable effectiveness.

Product Class: Group of products within product familyrecognized to have certain functional

coherence

Group of items within a product line thatshare one of several possible forms of

productProduct Type




Product hierarchy- Defined as an organizational chart that

depicts the array of products offered in a

given market.

Product ± the automobile

Product class- cars, bikes

Product form ± again cars can be divided

into sports and utility cars even the trucks

too

Variations in the form ± cars with 2 doors,

cars with 4 doors, etc.,

Next level into brands




Product line

The products are closely related to eachother Under different categories

Sold to same customer groups

For example, all the courses a universityoffers constitute its product mix; courses in

the marketing department constitute a

product line; and the basic marketingcourse is a product item.




Product mix

The set of all products that an organization

offers to its customers consist of different

product lines and categories




Product width

The different product lines with product

categories

Product Length The length of the product mix is the total

number of items in that mix

The average length is calculated byTotal number of items(total length)

--------------------------------------------------

number of lines




Product consistency

Consistency refers to the closeness

exhibited by the products lines and

production requirements, distribution end

usage etc.,




Product line analysis

Sales profit analysis

Market profit




Product line analysis ± through

sales profit analysis The company will do the analysis on the

margin it get through the different product

lines sales and profit.Core product

Staples

Specialties

Convenience items ETC.,




Product line length

Companies seeking high market share &market growth will generally carry high

product line

But companies seeking high profitabilitywill carry shorter lines consisting of

carefully chosen items.

Sales force & distributors pressure on

complete products as the customersseeks.




Product lengths types

Line stretching

1. Down market stretch

2. Up market stretch3. Two way stretch

Line filling

Line modernization, featuring and pruning




Line stretching

A company indulge in line stretching when itstretches its products line beyond the current

range of products.

Line stretching provide a wide variety of

products or goods under the same umbrella Adding new products to the same product

line needs less time and cost as compared to

introducing a new product or brand &forecasting the demand & sales is much

easier for these products.




Multiproduct branding strategy whereby a

firm markets one or more new products

under an already established and well

known brand name.

The objective is to serve different

customers needs or market segments

while taking advantage of the widespreadname recognition of the original brand.




Down stretching

For value priced goods

As the retailers look forward for so many

sales promotional activities Counter attack strategy to the competitors

company




Up

market stretches

Wish to enter the high end market to

achieve more growth or simply to position

themselves in the high market

Two way stretch Companies serving middle market might

stretch their line in both directions bothupward and downward.




Line Filling Is carried out by adding more products to the

existing range of the product line. They opt for line filling when

To reach incremental profit

To satisfy sales & distribution people whocomplain missing items in the line

To utilize the excess production capacity of

manufacturing unit

To keep the competitors at bay




LIMITATIONS Weaker lines ± some times extension of the

product lines to the point of super saturation, where

it happens to be like it cannot be explained by the

sales personnel the benefits of the products neither

the difference

Lower brand loyalty ± when marketers increase

the number of products mindless under the same

brand umbrella, it often leads to reduction in brand

loyalty. It risks disruption of well set buying patters

and habits.




Under exploitation of ideas ± while

concentrating on line extension, marketers often

overlook the fact that the idea may warrant a new

brand rather than a new product under the samebrand. It can dilute the brand image

Stagnant demand- line extension rarely increase

the demand of the total category.

Profits gained by the extending products are

short lived: competitors can quickly and easily

match the company¶s new products.

Leads to logistics, R & D and other department's

complexity in work if there is an error in

forecasting




Line modernization& Featuring

More advanced versions of products Timing improvements

Better featuring

Line pruning

The product lines that yield no profits




Product mix pricing

The types of product mix pricing The types of product mix pricing

Product line pricing

Optional feature pricing

Captive product pricing

Two part pricing

By product pricing

Product bundling pricing

managing product 1markets

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