PRODUCT MANAGEMENT

PRODUCT & PRODUCT RELATED DECISIONS

&

NEW PRODUCT DEVELOPMENT & PRODUCT

LIFE CYCLE

What is a product?

A product is a bundle of satisfaction that a customer buys. It represents a solution to a customer’s problem and satisfies his needs. It is a combination of tangible and intangible benefits.

A product can be defined as a bundle of attributes that satisfies a consumer.

Anything made keeping in mind consumers can be called as a product as it is formed with an intension to satisfy consumers’ needs.

Essentials of a product:

Product should have utility Need satisfying capacity With various features Selling point It is heart of the marketing mix It must have proper name and

identity

A product has its total product personality which includes the following component:

The basic constituent ie. Physical aspect Associated features ie. Features, merit,

uses Brand name given to the product Package used Label attached to the product

For example: Refrigerator

•Cold Storage

•Chilling effect

•Multiple preservation

•Storage

•Add on features-colour, appearance, design, energy efficiency,

•Brands identification

Definition Of product

• Philip Kotler: “A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objects, services, persons, places, or organizations, and ideas.”

• William Stanton: “A product is a set of tangible attributes including packaging, colour, price, quality and brand plus the services and reputation of the seller. A product may be a good, service, place, person or idea.”

What constitutes of a product? [Component/Levels of product]

A product planner should think about the product at three levels:

first needs- identify the core consumer needs the product will satisfy.

Then design the actual products And find ways and means to augment it

further to create bundle of satisfy consumers.

For example – Digital Camera

Core Benefits

activity of photography

Actual product•Price: Rs. 27500/-•Quality: Instant camera, Polaroid lenses, high zoom & resolution, can be JPEG, GIF, TIFF format, Camera SLR (Single Lens Reflect),•Style: image display-LCD, Touch screen function, •Packaging: light-proof box (camera body), System lenses, The lighter portrait (shutter)• Brand name: Sony well known brand, icon recognizable, •Features: USB connector, modes, flash, stored can vary the type,, memory card storage, Movie camera, user friendly

Augmented product:

Discounts: Available special retail outlets only

Guarantee:2 yrs lenses & 1yr on parts

Sales promotion :Deepika Padukone, ads, new series launches,

After sales services: at sony specialized outlets spread across country.

Carry packaging

Future Product:

•Projector

•Long hours recording

•Slide picture to viewing object

Future

Augmented

Actual

Core

Core product

Wrist watch

Package

Brand

ColorAttributes

Mannual

Warranties After sales

Installation

Complain managementPayment options

Replacement & Return policies

Delivery pt & system

Total product concept: Source “Marketing management by Rajan Saxena” Adaptation from Theodore Levitt, ibid

Core product: It means the basic product benefits or purpose for

which it is produced. The physical characteristic of a product remains the

same only its utility differs from one customer to another.

Before designing the product needs to define the core benefit of the product.

Actual product: tangible offer made to the target audience keeping

with their requirement. It is build around the core product with well

perceived characteristics of the product attributes.

Augmented product:

intangible component along with the actual and core components is called augmented product.

Augment means to increase. It refers to add on services provided along with the product to retain and attract consumers.

• Future product: The potential product consists of everything that

might be done to attract and hold customers.

Product mix

Product mix means the number of product carried by a firm at a given point of time i.e. composition of products offered for sale by a firm.

For example : Samsung-television, music system, cellphones, microwave, refrigerators

Bajaj Electrical-household name in India, has almost 90 product ranging from low value products like bulb to high price consumer durables like mixer, bikes-scooters, etc.

It consists of product line and product items. It has four dimensions: LCDW Length: Total number of items included. Consistency: Degree of similarity bwt product

line with respect to end use, technology, production techniques, & distribution channel.

Depth: Number of versions offered by the firms (size, packaging, colour, etc)

Width: Different product line ( different models offered) firm carries.

Product line:

Different products that are closely related to each other by virtue of satisfying a particular class of needs, being used together, distributed through same channel or processing common physical or technical characteristics.

It a group of products offered by a single firm that have similar uses. Example- shoes(BATA)

Under this the firm adds product to the product line.

The ideal product mix is an issue that varies from firm to firm and may be hard to define.

The following situations may suggest that the firm has a sub-optimal product mix:

a. Excess capacity in a firm’s manufacturing, warehousing, or transportation facilities

b. High proportion of profits from a small percentage of product items

c. Insufficient use of sale force contacts & skilld. Steadily declining sales/ profit

PRODUCT MIX HLLSKIN CARE

FAIR N LOVELYSUNSCREENLIRIL TALCPEARS FACE WASH

SOAP

BREEZEDENIMDOVEFAIR N LOVELYHAMANJAILIFE BUOYLIRIL SOAPLIRIL SHOWER GELLUX INTERNATIONALMOTIPEARSREXONASAVLON

DETERGENTS

RIN SUPREMERIN CAKESUPER 501SURFSURF BOXSURF INTERNATIONAL

TOOHT PASTE

CLOSE UPPEPSODENTPRPSODENT 2IN1

SHAMPOOS

CLINIC ALL CLEARCLINIC PLUSLUXSUNSILK

Product Line

Product line consist of LCDW

Length: Total number of items included. Consistency: Degree of similarity bwt product

line with respect to end use, technology, production techniques, & distribution channel.

Depth: Number of versions offered by the firms (size, packaging, colour, favours, etc)

Width: Different product line( different models offered) firm carries.

Product mix of Cadbury

Product mix decision:

Important and fundamental of all marketing strategy decision. Decisions involved are:

1. Expansion of product mix -increase number of product lines or depth

2. Contraction of product mix -reduce the product line 3. Alteration of existing product -Improve the existing products 4. New uses of the existing product -show more uses than the

core use5. Trading up and trading down -Trading up: adding a higher

priced prestige value to existing lower priced product; Trading down: Adding lower priced product to its prestige product

6. Product differentiation

Product life Cycle Movement through different stages A product is born grows lustily, attains a

dynamic maturity & then enters its declining years.

Understood through analysis of environ. PLC comparison to human life cycle Represented by sales & profit of a product over

a period of time. Philip Kotler “the product life cycle is an attempt

to recognize distinct stages in the sales history of the product”

PLC –heart of marketing strategy PLC lengthy & costly process Stages of PLC:

i. Introduction

ii. Growth

iii. Maturity

iv. Decline

v. Withdrawal

Introductory Stages/market Pioneering stage:1. Launch of the product

2. Preceded by product planning & Development

3. High operational cost

4. Lack market support

5. Consumer-trail basis approach

6. low / no awareness of the product

7. Strategies:

PRICE

PROMOTION

Rapid Skimming

Slow Skimming

Rapid penetration

Slowpenetration

HIGH

LOW

LOWHIGH

Growth Phase:1. Cultivation of selective demand-focus on Covered

market

2. Increase in competition

3. Softening of pricing / competition oriented pricing

4. Operation on economical levels

5. Gaining market support

6. Strong service network & distribution

7. Product modification & improvement

8. Entry of substitutes

Maturity stage:1. Slow growth rate of sales & profit

2. Marked as the peak stage

3. Cutthroat competition

4. Enjoy economies of scale

5. Saturation stage

6. Pricing intensified

7. Increase in marketing cost

8. Product mix- product line altered

Decline stage:1. Sales gradually fall

2. Reduction demand

3. Consumer switch over to competitor

4. Expenditure brought down

5. Consumer attitude-old product

6. Vacuum

7. Reduce pricing to survive

Withdrawal stage:1. Dead market

2. Existence without much returns

3. Introduce new product and withdraw old ones

4. No demand

New product development Introducing new product in the market Adding new product to existing product line Constant changing environment dynamics Enjoy benefits of initial demand Different from product modification or innovation

Why New product development needed?

1. Meeting growing & changing needs

2. Pressure from environment change

3. Earning more profit

4. Extending product line

Steps/ stage in New Product Development Process

Generating new product idea Idea screening Concept testing Business viability Actual development of the product Market test Test marketing Commercialization / large scale production