M.Jakkaraiah Asst.professor PBR VITS KAVALI

A

product is anything that can offered to market for attention, acquisition ,use, consumption that might satisfy a want or need.

PRODUCTS

Tangible products

Intangible products

GOODS

SEVICES

tangibility Associated attributes Features of product

Intangible attributes

Exchange value

Customer satisfaction

Unexpected features

Potential product Augmented product Expected product Generic product Core benefit

Luxury features Expected features Basic features

Basic product

Durable products

Consumer products,Business products

Durable

Non-durable

Services

Shopping Products Convenience Products

Specialty Products

Unsought Products

. . To satisfy information needs & buying motives

Convenience goods consumers use minimal effort for frequently purchased low cost items

Staples

goods

Emergency

Impulse

purchases

Shopping

considerable effort to evaluate

goods - consumers make a

Consumers make product comparison(s), They seek information before purchase, they are not impulsive Moderate substitutions are made Products last a considerable time Monetary & social costs may be high

Attribute-basedPlasma LCD screen

Price-basedLOW PRICE

WARRANTY REMOTE CONTROL PICTURE SIZEHomogeneous products select on price Heterogeneous products select on benefits

Materials

and parts

Raw materials and parts Manufactured materials and parts

Capitals

items

1.installation 2.equiptment

Suppliers

and business services

1.maitainance and repair items 2.operating suppliers

Farm

products

Natural

products

1.installation

2.equiptment

1.mainteinance

2.operating

and repair items

suppliers

Product Item

The

assortment of products that a company offers to a market Width how many different product lines? Length the number of items in the product mix Depth The no. of variants offered in a product line Consistency how closely the product lines are related in usage

Product LineLAMPS Table Ceiling Track Desk

Product MixProduct Line 1LAMPS Table Ceiling Track Desk

Product Line 2TABLES Kitchen Dining Room End Coffee Outdoor Conference Computer

Product Line 3CHAIRS Dining Room Living Room Bedroom Outdoor Desk

Home Depot, Lowes

WIDTH

Tata Motors BUS

Tata Steel BARS PLATES

Tata Tea Tata DTH GEMINI TEA

# of lines = 4 LORRY # of items = 12CARS

D E P T H

A wide product mix facilitates one stop shopping

Width (# of product lines)

HAIR CARE

SALTY SNACKS

DENTAL CARE

SOFT DRINKS

Shampoo Chips

Tooth Brush Cola

Tooth Paste Ginger Ale Conditione Nuts r Dental Floss Root Beer Crackers Hair Spray

Changes

in market demand Cost of production Quantity of production Changes in company desire Competitors actions and reactions

Expansion

of product mix Contracting or dropping the product mix Alteration of existing product s Trading up/trading down stratagies

Planning Forecasting Marketing

of products of a company is product management

To design product stratagies To spot market opportunities To develop strategies for each stage of product life cycle To generate new product ideas

New product : New to the company even it is in the world Types of new products 1.New to the world 2.New to the firm 3.Addition to existing product line 4.Improved and revised 5.Reduction in cost

To

meet consumer needs and wants To meet competition To increase profits To avoid threats from substitutes

New Product Development ProcessStep 1. Idea Generation Systematic Search for New Product Ideas Internal sources

CustomersCompetitors

DistributorsSuppliers

Step 2. Idea Screening

Process

to spot good ideas and drop poor

ones Technically feasibility Financially viable

Step 3. Concept Development & Testing1. Develop Product Ideas into Alternative Product Concepts

2. Concept Testing - Test the Product Concepts with Groups of Target Customers

3. Choose the Best One

Step 4. Marketing Strategy Development

Part One - Overall:

Target Market Planned Product Positioning Sales & Profit Goals Market SharePart Two - Short-Term:

Products Planned Price Distribution Marketing BudgetPart Three - Long-Term:

Sales & Profit Goals Marketing Mix Strategy

Step 5. Business Analysis Step 6. Product DevelopmentBusiness Analysis Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives

If No, Eliminate Product Concept

If Yes, Move to Product Development

Step 7. Test MarketingStandard Test MarketFull marketing campaign in a small number of representative cities.

Controlled Test MarketA few stores that have agreed to carry new products for a fee.

Simulated Test MarketTest in a simulated shopping environment to a sample of consumers.

Introducing the product into the market

Sales and Profits ($) Sales

Profits Time

Product DevelopmentLosses/ Investments ($)

Introduction

Growth

Maturity

Decline

Sales Costs ProfitsMarketing Objectives

Low sales High cost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus Build selective distribution Build product awareness among early adopters and dealers

Product Price Distribution Advertising

Growth Stage of the PLCSales Costs ProfitsMarketing Objectives Rapidly rising sales Average cost per customer Rising profits Maximize market share Offer product extensions, service, warranty Price to penetrate market Build intensive distribution Build awareness and interest in the mass market

Product Price Distribution Advertising

Maturity Stage of the PLCSales Costs ProfitsMarketing Objectives Peak sales Low cost per customer High profits Maximize profit while defending market share Diversify brand and models Price to match or best competitors Build more intensive distribution Stress brand differences and benefits

Product Price Distribution Advertising

Decline Stage of the PLCSales Costs ProfitsMarketing Objectives Declining sales Low cost per customer Declining profits Reduce expenditure and milk the brand Phase out weak items Cut price Go selective: phase out unprofitable outlets Reduce to level needed to retain hard-core loyal customers

Product Price Distribution Advertising

PRODUCT PRICESALES PROMOTION

Offer a basic product Cost +profit Heavy expenditure to create trails Build selective distribution Build product awareness among early adopters and dealers

Distribution Advertising

Growth Stage of the PLCProduct PriceOffer product extensions, service, warranty penetrate Price Build intensive distribution Build awareness and interest in the mass market Consumer demo

DistributionAdvertising Sales promotion

Maturity Stage of the PLCProduct Price Distribution AdvertisingDiversify brand and models Price to match or beat competitors Build more intensive distribution Stress brand differences and benefits Encourage to brand switching

Sales promotion

Decline Stage of the PLCProduct PricePhase out weak items Cut price Go selective: phase out unprofitable outlets Reduce to level needed to retain hard-core loyal customers Reduce to minimal level

DistributionAdvertising Sales promotion

Overestimation of Market Size Product Design Problems Product Incorrectly Positioned, Priced or Advertised Costs of Product Development Competitive Actions Technical problems Poor planning Inadequate promotion Poor packing Fault pricing

Adopt Trail Evaluation Interest Awareness

Potential product Augmented productExpected Product

Generic product

Core Benefit