PRODUCT
Building Customer Value
Presented By: Jatin Vaid
What is a Product?
A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a need or want.
Products
Levels of products
Core customer value Actual Augmented Potential
Product classification
PRODUCTS
CONSUMER PRODUCTS INDUSTRIAL PRODUCTS
CONVENIENCE
MATERIALS & PARTS
SHOPPING
CAPITAL ITEMS
SPECIALITY
SUPPLIES & SERVICES
UNSOUGHT
I. Consumer Goods
Products and services bought by final consumers for personal consumption
i) Convenience Products
Goods that customers buy frequently Minimum of comparison Minimum buying efforts Readily available E.g. detergents, soft drinks, cigarettes, chocolates, candy
ii) Shopping Products
Less frequently purchased Carefully compared on suitability, quality, price and style Time and effort spend by consumers Distributed through fewer outlets E.g. furniture, clothing, cars, jewellery, airline services
iii) Specialty Goods
Goods & services with unique characteristics or brand identification. Buyers make a special purchase effort More expensive Not purchased frequently E.g. Sports cars, high priced photographic equipment, designer clothes.
iv) Unsought Products
Products that the consumer either doesnt knows about or doesnt normally think of buying Require lot of advertising, and personal selling E.g. Life insurance, funeral services, donations for charity, blood donations
II. Industrial Goods
Goods purchased for further processing or for use in conducting a business
i) Materials and parts
i.
ii.
iii.
iv.
Raw materials, mfg materials & parts. Sold directly to industrial users Price & Service are important marketing factors Branding & advertisement are less important
ii) Capital items
Aid the buyers production or operations E.g. factory, offices, gen-sets, drill press, elevators, lift trucks,
iii) Supplies and Services
Supplies are convenience products of industrial field. E.g. lubricants, coal, papers, pencils, nails, broom
Services are supplied under contract E.g. maintenance, repairs, consulting, legal.
Product Decisions
Marketers make product decisions at three levels: Individual product decisions Product line decisions Product Mix decisions
1. 2. 3.
1. Individual Product Decisions
a)
Product attributes : The characteristics of a product that
bear on its ability to satisfy stated or implied customer needs. Quality Features Style & Design
b)
c)
Branding: A name, term, sign symbol, design or a combination
of these that identifies the product or service of one seller or group of sellers and differentiate them from those of competitors.
Packaging: The activities of designing and producing the
container or wrapper for a product.
d)
Labeling: Labels are simple tags attached to products. The
identify the brand, origin, contents and use instructions.
2. Product Line Decisions
A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through similar outlets, or fall within given price range. Product Line Length: No. of items in a product line.
1)
3. Product Mix Decisions
Product Mix is set of all product lines and items that a particular seller offers for sale.
1)
2)
3)
4)
Product Mix Width: No. of different product lines, a Co. carries. Product mix Length: Total No. of items the Co. carries within its product lines Product Mix Depth: No. of versions offered of each product in the line. Product Mix Consistency: How closely related are various product lines are in end use.`
The New Product Development Process
The development of original products, product improvements, modifications and new brands through the firms own product development efforts.
1. 2. 3. 4. 5. 6. 7. 8.
Steps:
Idea generation Idea screening Concept development and testing Marketing strategy development Business analysis Product development Test marketing commercialization
Steps of New Product Development Process
1. 2. 3. 4.
5. 6. 7. 8.
Idea generation: The systematic search for new product ideas. Internal sources (brainstorming) External sources ( distributors, suppliers) Idea Screening: Screening new ideas to spot good ones and drop poor ones. Review Committee (real, win, worth it) Concept development: An attractive idea developed in to a product concept, stated in consumer terms. Marketing strategy development: Designing an initial marketing strategy for a new product. Target market, market share, planned price, distribution, budget, sales, profit goals. Business analysis: A review of sales, costs and profits according to Co objectives. Product development: Developing the product concept into a physical product. Test marketing: Products are tested in realistic market settings. Commercialization: introducing a new product into the market.
Product life cycle
The course that a products sale and profits take over its lifetime. Products have limited life Product sales pass through distinct stages Profits rise and fall at different stages Organizations require to pursue different strategies
Stages of PLC
Stage 1: Introduction Stage 2: Growth Stage 3: Maturity Stage 4: Decline
1. Introduction Stage
A period of slow sales growth as product is introduced in the market. Profits are non existent because of heavy expenses Highest ratio of promotion expenses to sales.
2. Growth Stage
A period of rapid market acceptance and substantial profit improvement
3. Maturity Stages
A slowdown in sales as product has achieved acceptance by most potential buyers. Profits stabilize or decline because of increased competition
4. Decline Stage
Sales show a downward drift and profits erode.
PLC Strategies
INTRO
INFORM POTENTIAL CM INDUCE PRDT TRIALS SECURE DISTRIBUTION FOCUS ON INNOVATORS
GROWTH
IMPROVE PRDT QUALITY ADD NEW MODELS ENTERS NEW SEGMENTS SHIFT FROM PRDT AWARENESS ADVT TO PRDT PREF ADVT LOWERS PRICE TO ATTRACT PRICE SENSITIVE CMS
MATURITY DECLINE
DIVERSIFY BRANDS PRICE MATCH BEST COMPTT STRESS ON BRAND DIFFERENCES INCREASE SALES PROMOTION TO ENCOURAGE BRAND SWITCHING PHASE OUT WEAK PRDTS CUT PRICES GO SELECTIVE: PHASE OUT UNPROFITABLE SALES PROMOTION REDUCED
