PRODUCT - chapter 1

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Presentation Transcript

PRODUCT : 

PRODUCT

Definition : 

Definition . Product is the need- satisfying offering of a firm. “Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need, include physical objects, services, persons, organizations, & ideas is called product”. “A product represents the promise a company makes to satisfy one or more physiological and/or psychological need of the market at a given moment

Simple Way of Defining Product : 

Product Variety Quality Design Features Brand Name Packaging Sizes Services Warranties Returns Simple Way of Defining Product

Product Differentiation : 

Product Differentiation Form – size, shape etc Features Performance Quality Conformance Quality Durability Reliability Repairability Style

Services Differentiation : 

Services Differentiation Ordering Ease Delivery Installation Customer Training Customer Consulting Maintenance & Repair

Basic - Product Classification : 

Basic - Product Classification Durability & Tangibility Nondurable goods – tangible goods consumed in one or two uses Durable goods – tangible goods – long lasting Services – intangible, inseperable,variable, supplier credibility & adaptability

Consumer Goods Classification : 

Consumer Goods Classification

Consumer Products : 

Consumer Products

Basic - Product Classification : 

Basic - Product Classification Industrial Goods Material & Parts – Raw Material- Farm, natural + Component Material , Component Parts Capital Items – facilitate developing or managing finished products, Installation, Equipment Supplies & business services – Maintenance & repair items, operating suppliers, business advisory services

Product Mix : 

Product Mix A product mix (product assortment) is the set of all products & items a particular seller offers for sale.

Product Mix Dimensions : 

Product Mix Dimensions Width –different product lines Length – total number of items in mix Depth – variants offered of each product in the line Consistency – closely related the various product lines are in end use C:\Documents and Settings\Sheetal\Desktop\product width & length.xls

Product Line decisions : 

Product Line decisions Product line length too long – when profits increase by dropping a product in the line too short – when profits increase by adding products to the product line Line pruning – capacity restrictions to decide

Product Mix : 

Product Mix

Five Product Levels : 

Five Product Levels

Product Levels : 

Product Levels Core Benefit – service / benefit Basic Product – turn basic benefit into basic product Expected Product – attributes & conditions buyer normally buy Augmented Product – exceeds customer expectation Potential Product – encompasses all the possible augmentations

Example of Product Levels: Mobile handsets : 

Example of Product Levels: Mobile handsets 1. Core benefit: Communication 2. Basic product: Features and design – small size, sliding, flip open, etc. Quality level – excellent quality Brand name – Nokia, LG, Sony, Samsung Packaging – attractive outer package 3. Expected product: Looks good, light weight, easy to operate, battery durable with long standby time, colour display, polyphonic ring tones. 4. Augmented product: With FM Radio, MP3 player, camera, voice dialling, etc. 5. Potential product: With Internet, e-mail, camcorder for videos, TV channels, Global Positioning System (GPS)

Product Life Cycles : 

Product Life Cycles Introduction Growth – slow sales growth Growth – rapid market acceptance & substantial profit improvement Maturity – slowdown in sales growth, profit stabilizes or decline Decline – sales downward drift & profit erode

PLC : 

PLC

PLC concept analyze – Product Category : 

PLC concept analyze – Product Category A product form – washing detergent A product – liquid detergent A brand – Godrej Ezee

The competitive cycle : 

The competitive cycle Pioneer Introduction Growth of Industry Excess capacities High Inventories Reduction In margins New entrants discouraged Existing companies consolidate Weaker companies withdraw Pioneer increases share

Strategies - Introduction : 

Strategies - Introduction Skimming the market Penetrating the market Must have sufficient resources to withstand the initial losses and heavy promotion costs Incremental selling efforts at this stage is highest

Strategies - Growth : 

Strategies - Growth Improves quality and adds features Adds new models and variants Enters new market segments Increases distribution coverage and adds new channels Shifts communication from awareness to preference building Scale economies enable it to lower prices to attract the next level of price conscious buyers

Strategies - Maturity : 

Strategies - Maturity Most products are in this stage Price wars are inevitable. Scramble for market share The fittest survive Market modification, product modification, marketing mix modification can help extend the maturity stage

Strategies - Decline : 

Strategies - Decline Withdrawal Rationalisation of products Harvesting whatever is possible Divesting the product

Market Evolution : 

Market Evolution Emergence Growth Maturity Decline