PRODUCT MANAGEMENT

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PRODUCT MANAGEMENT INTRODUCTION

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What is a product ?:

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

PowerPoint Presentation:

PRODUCTS GOODS SEVICES Tangible products Intangible products

Features of product:

Features of product Features of product Associated attributes Intangible attributes tangibility Exchange value Customer satisfaction

Levels of product:

Levels of product Unexpected features Luxury features Expected features Basic features Basic product

Cure Benifit:

Cure Benifit

GENERIC PRODUCT:

GENERIC PRODUCT MP3 PLAYER

EXPECTED PRODUCT:

EXPECTED PRODUCT MP3 PLAYER+AIR CONDITION

AGUMENTED PRODUCT:

AGUMENTED PRODUCT MP3 PLAYER+AIR CONDITION+VIDEO

POTENTIAL PRODUCT:

POTENTIAL PRODUCT FLY IN AIR.FLOATS IN WATER. DRIVE ON ROAD MP3 PLAYER+AIR CONDITION+VIDEO

Classifying Products:

Classifying Products Durable products Consumer products, Business products

Durable products:

Durable products Durable Non-durable Services

Consumer Products:

Consumer Products Convenience Products Shopping Products Specialty Products Unsought Products

CONVENIENCE GOODS:

CONVENIENCE GOODS Staples - Emergency goods – Impulse purchases – Convenience goods – consumers use minimal effort for frequently purchased low cost items

Business products:

Business products 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

Raw materials :

Raw materials Farm products Natural products

Manufactured materials and parts :

Manufactured materials and parts

Capitals items:

Capitals items 1.installation 2.equiptment

Suppliers and business services:

Suppliers and business services 1.mainteinance and repair items 2.operating suppliers

Product Mix & Product Line :

Product Mix & Product Line Product Item

Product mix:

P roduct mix Width Length D epth Co nsistency

Product Mix:

Product Mix 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 Line & Product Mix:

LAMPS Table Ceiling Track Desk Product Line Product Line & Product Mix

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Product Line 1 Product Line 2 Product Line 3 TABLES Kitchen Dining Room End Coffee Outdoor Conference Computer CHAIRS Dining Room Living Room Bedroom Outdoor Desk LAMPS Table Ceiling Track Desk Product Mix

CONCEPTUALIZATION OF PRODUCT MIX:

CONCEPTUALIZATION OF PRODUCT MIX Tata Motors Tata Steel Tata Tea BUS LORRY PLATES GEMINI TEA Tata DTH BARS CARS WIDTH D E P T H # of lines = 4 # of items = 12 A wide product mix facilitates one stop shopping Home Depot, Lowe’s

PRODUCT MIX EXAMPLE:

PRODUCT MIX EXAMPLE HAIR CARE SALTY SNACKS DENTAL CARE SOFT DRINKS Shampoo Conditioner Hair Spray Chips Nuts Crackers Tooth Brush Tooth Paste Dental Floss Cola Ginger Ale Root Beer Width (# of product lines) Depth (# of items)

Factors influencing change in product mix:

Factors influencing change in product mix Changes in market demand Cost of production Quantity of production Changes in company desire Competitors actions and reactions

Product mix stratagies:

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

Product management:

Product management Planning Forecasting Marketing of products of a company is product management

Objectives of product management :

Objectives of 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 planning:

New product planning 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

Importance of new product:

Importance of new product To meet consumer needs and wants To meet competition To increase profits To avoid threats from substitutes

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New Product Development Process Step 1. Idea Generation Systematic Search for New Product Ideas Internal sources Customers Competitors Distributors Suppliers

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Process to spot good ideas and drop poor ones Technically feasibility Financially viable Step 2. Idea Screening

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Step 3. Concept Development & Testing 1. Develop Product Ideas into Alternative Product Concepts 2. Concept Testing - Test the Product Concepts with Groups of Target Customers 3. Choose the Best One

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Step 4. Marketing Strategy Development Part Two - Short-Term: Product’s Planned Price Distribution Marketing Budget Part Three - Long-Term: Sales & Profit Goals Marketing Mix Strategy Part One - Overall: Target Market Planned Product Positioning Sales & Profit Goals Market Share

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Step 5. Business Analysis Step 6. Product Development Business Analysis Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives If Yes, Move to Product Development If No, Eliminate Product Concept

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Step 7. Test Marketing Standard Test Market Full marketing campaign in a small number of representative cities. Simulated Test Market Test in a simulated shopping environment to a sample of consumers. Controlled Test Market A few stores that have agreed to carry new products for a fee.

Step-8 commercialization:

Step-8 commercialization Introducing the product into the market

Product Life Cycle:

Product Life Cycle Time Product Develop- ment Introduction Profits Sales Growth Maturity Decline Losses/ Investments ($) Sales and Profits ($)

Introduction Stage of the PLC:

Introduction Stage of the PLC Sales Costs Profits Marketing Objectives Product Price Low sales High cost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus Distribution Build selective distribution Advertising Build product awareness among early adopters and dealers

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Growth Stage of the PLC Sales Costs Profits Marketing Objectives Product Price Rapidly rising sales Average cost per customer Rising profits Maximize market share Offer product extensions, service, warranty Price to penetrate market Distribution Build intensive distribution Advertising Build awareness and interest in the mass market

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

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Decline Stage of the PLC Sales Costs Profits Marketing Objectives Product Price Declining sales Low cost per customer Declining profits Reduce expenditure and milk the brand Phase out weak items Cut price Distribution Go selective: phase out unprofitable outlets Advertising Reduce to level needed to retain hard-core loyal customers

Introduction Stage-Strategies:

Introduction Stage- Strategies PRODUCT PRICE SALES PROMOTION Offer a basic product Cost +profit Heavy expenditure to create trails Distribution Build selective distribution Advertising Build product awareness among early adopters and dealers

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Growth Stage of the PLC Product Price Offer product extensions, service, warranty penetrate Price Distribution Build intensive distribution Advertising Build awareness and interest in the mass market Sales promotion Consumer demo

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Maturity Stage of the PLC Sales promotion Product Price Diversify brand and models Price to match or beat competitors Distribution Build more intensive distribution Advertising Stress brand differences and benefits Encourage to brand switching

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Decline Stage of the PLC Product Price Phase out weak items Cut price Distribution Go selective: phase out unprofitable outlets Advertising Reduce to level needed to retain hard-core loyal customers Sales promotion Reduce to minimal level

Causes of New Product Failures:

Causes of New Product Failures 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

CONSUMER ADOPTION PROCESS:

CONSUMER ADOPTION PROCESS Adopt Trail Evaluation Interest A wareness

CONSUMER ADOPTION PROCESS:

CONSUMER ADOPTION PROCESS Potential product Augmented product Expected Product Generic product Core B enefit

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