Product in Marketing Management, PLC, New Product Development Process, Classification

1. PRODUCT –
Building Customer Value
Presented By:
Jatin Vaid

2. 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.

3. Products

4. Levels of products
 Core customer value
 Actual
 Augmented
 Potential

5. Product classification
PRODUCTS
CONSUMER INDUSTRIAL
PRODUCTS PRODUCTS
CONVENIENCE MATERIALS & PARTS
SHOPPING CAPITAL ITEMS
SPECIALITY SUPPLIES & SERVICES
UNSOUGHT

6. I. Consumer Goods
 Products and services
bought by final
consumers for
personal consumption

7. i) Convenience Products
 Goods that customers
buy frequently
 Minimum of comparison
 Minimum buying efforts
 Readily available
 E.g. detergents, soft
drinks, cigarettes,
chocolates, candy

8. 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

9. 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.

10. iv) Unsought Products
 Products that the
consumer either doesn’t
knows about or doesn’t
normally think of buying
 Require lot of advertising,
and personal selling
 E.g. Life insurance,
funeral services,
donations for charity,
blood donations

11. II. Industrial Goods
 Goods purchased for
further processing or
for use in conducting
a business

12. i) Materials and parts
i. Raw materials, mfg
materials & parts.
ii. Sold directly to
industrial users
iii. Price & Service are
important marketing
factors
iv. Branding &
advertisement are less
important

13. ii) Capital items
 Aid the buyers’
production or
operations
 E.g. factory, offices,
gen-sets, drill press,
elevators, lift – trucks,

14. 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.

15. Product Decisions
Marketers make product decisions at
three levels:
2. Individual product decisions
3. Product line decisions
4. Product Mix decisions

16. 1. Individual Product Decisions
 Product attributes : The characteristics of a product that
bear on its ability to satisfy stated or implied customer needs.
 Quality
 Features
 Style & Design
 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.
 Labeling: Labels are simple tags attached to products. The
identify the brand, origin, contents and use instructions.

17. 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.

18. 3. Product Mix Decisions
Product Mix is set of all product lines and items
that a particular seller offers for sale.
2) Product Mix Width: No. of different product lines, a Co.
carries.
3) Product mix Length: Total No. of items the Co. carries
within its product lines
4) Product Mix Depth: No. of versions offered of each
product in the line.
5) Product Mix Consistency: How closely related are
various product lines are in end use.`

19. The New Product Development
Process
 The development of original
products, product improvements,
modifications and new brands
through the firm’s own product –
development efforts.
 Steps:
3. Idea generation
4. Idea screening
5. Concept development and testing
6. Marketing strategy development
7. Business analysis
8. Product development
9. Test marketing
10. commercialization

20. Steps of New Product Development Process
 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.

21. Product life cycle
 The course that a product’s 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

22. Stages of PLC
 Stage 1:
Introduction
 Stage 2:
Growth
 Stage 3:
Maturity
 Stage 4:
Decline

23. 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.

24. 2. Growth Stage
 A period of rapid market acceptance and
substantial profit improvement

25. 3. Maturity Stages
 A slowdown in sales as product has
achieved acceptance by most potential
buyers.
 Profits stabilize or decline because of
increased competition

26. 4. Decline Stage
 Sales show a downward drift and profits
erode.

27. PLC Strategies
INTRO GROWTH MATURITY DECLINE
INFORM IMPROVE PRDT DIVERSIFY PHASE OUT
POTENTIAL CM QUALITY BRANDS WEAK PRDTS
INDUCE PRDT ADD NEW PRICE MATCH CUT PRICES
TRIALS MODELS BEST COMPTT
SECURE ENTERS NEW STRESS ON GO SELECTIVE:
DISTRIBUTION SEGMENTS BRAND PHASE OUT
DIFFERENCES UNPROFITABLE
FOCUS ON SHIFT FROM INCREASE SALES
INNOVATORS PRDT SALES PROMOTION
AWARENESS PROMOTION TO REDUCED
ADVT TO PRDT ENCOURAGE
PREF ADVT BRAND
SWITCHING
LOWERS PRICE
TO ATTRACT
PRICE
SENSITIVE CMS