Marketing Management Online lecture 5 UPDATED.pptx

buisn

1. DISCOVER . LEARN . EMPOWER Defining Product, Product Mix, Product Mix Strategies Session Name: Product And Product Decisions Delivered By : Rohit Guleria Assistant Professor, USB-MBA Course Name: Marketing Management

2. Product Decisions 2 Product Decisions CO Number Title Level CO1 To understand the scope of Marketing, Marketing Mix, Marketing Environment, Market, Segmentation, Targeting and Positioning and their role in Marketing of products and services. Remember   CO2 To understand the Product and Pricing Decisions, New Product Development Process, Pricing Process, Policies and Strategies and apply them in formulating marketing strategies in ethical context. Understand   CO3 To understand the Promotion and Distribution Decisions, Channel Design, Selection and Management of Intermediaries and apply them in marketing of products and services in ethical context. Understand Course Outcome Will be covered in this lecture

3. Product The Best Way to hold customers is to constantly figure out how to give them more or less. (1) Anything that can be offered to a market for acquisition, use, or consumption that might satisfy a want or need. (2)

4. Service and Experience Service — Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. (3)

5. Product Decisions Product Innovation (4) Product Standardization (5) Product Elimination (6) Product Diversification (7)

6. Every year, tens of thousands of new consumer products are launched in the United States. But how many of those products survive the ultra-competitive market? According to Harvard Business School professor, Clayton Christensen, 95% of those new products fail.

7. Product Innovation (8) The development and market introduction of a new, redesigned or substantially improved good or service. Examples of product innovation by a business might include a new product's invention; technical specification and quality improvements made to a product; or the inclusion of new components, materials or desirable functions into an existing product.

8. Reasons for Product Innovation (9) Responding to trends and customer needs Utilization of excess capacity Developing a unique selling point Increasing competition Uplifting the standards of living of people For economic growth Progression of human well-being For better returns For business survival Reputation and goodwill

9. Product Standardization (10) Product standardization refers to marketing a product in the overseas markets with little change except for some cosmetic changes such as modifying packaging and labelling . Generally, products with high technological intensity such as heavy equipment’s, plants and machinery, microprocessors, hard disks, projectors etc. are marketed as standardized products across the world. Some of the consumer products with global appeal, viz. Big Mac, Coke, Budweiser, Heineken, etc., are also marketed as globally standardized products.

10. The benefits associated with using standardized products in international markets include: (11) i . Projecting a global product image ii. Catering to the global customers moving across countries iii. Cost savings in terms of economies of scale in production iv. Economy in designing and monitoring various components of the marketing mix v. Facilitates in developing the product as a global brand

11. Importance and Merits- Customer view Buying Facility Using Facility Protection Fair price Market information Seller View Selling facility Wider market Loan facility Increase in goodwill

12. Product Elimination (12) Product elimination is the decision to drop a product from the portfolio based on its poor market performance. The market demand for such products has been dipped to none and hence product elimination or closure is carried out. Product elimination can also mean that only product under an umbrella brand needs to be stopped and not the entire portfolio.

13. Reasons for Product Elimination

14. Example of Product Elimination (13) Apple dropped its once upon a time market leading product- the iPod because with the advent of smartphones, the market demand for iPod declined suddenly. Because Apple iPod was doing well with high market share, iPod found itself in the harvest phase. But as demand declined further and so was the share of Apple, it moved into the dog phase and was subsequently eliminated. This is an example of product elimination.

15. Product Diversification (14) Product diversification  is the practice of expanding the original market for a  product . This strategy is used to increase the sales associated with an existing  product  line, which is especially useful for a business that has been experiencing stagnant or declining sales

16. Diversification Strategies 1. Concentric diversification (15) Concentric diversification involves adding similar products or services to the existing business. For example, when a computer company that primarily produces desktop computers starts manufacturing laptops, it is pursuing a concentric diversification strategy.   2. Horizontal diversification (16) Horizontal diversification involves providing new and unrelated products or services to existing consumers. For example, a notebook manufacturer that enters the pen market is pursuing a horizontal diversification strategy.  

17. 3. Conglomerate diversification (17) Conglomerate diversification involves adding new products or services that are significantly unrelated and with no technological or commercial similarities. For example, if a computer company decides to produce notebooks, the company is pursuing a conglomerate diversification strategy. Of the three types of diversification techniques, conglomerate diversification is the riskiest strategy. Conglomerate diversification requires the company to enter a new market and sell products or services to a new consumer base. A company incurs higher research and development costs and advertising costs. Additionally, the probability of failure is much greater in a conglomerate diversification strategy.

18. ADVANTAGES & Disadvantages OF DIVERSIFICATION (18) As the economy changes, the spending patterns of the people change. Diversification into a number of industries or product line can help create a balance for the entity during these ups and downs. There will always be unpleasant surprises within a single investment. Being diversified can help in balancing such surprises. Diversification helps to maximize the use of potentially underutilized resources. Certain industries may fall down for a specific time frame owing to economic factors. Diversification provides movement away from activities which may be declining. Entities entirely involved in profit-making segments will enjoy  profit maximization . However, a diversified entity will lose out due to having limited investment in the specific segment. Therefore, diversification limits the growth opportunities for an entity. Diversifying into a new market segment will demand new skill sets. Lack of expertise in the new field can prove to be a setback for the entity. A mismanaged diversification or excessive ambition can lead to a company over expanding into too many new directions at the same time. In such a case, all old and new sectors of the entity will suffer due to insufficient resources and lack of attention. A widely diversified company will not be able to respond quickly to market changes. The focus on the operations will be limited, thereby limiting the innovation within the entity.

19. Branding (19) Branding is a process which involves creating a specific name, logo, and an image of a particular product, service or company. This is done to attract customers. It is usually done through advertising with a consistent theme. Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers. A brand is a name, term, symbol,  or other feature that distinguishes an organization or product from its rivals in the eyes of the customer. Brands are used in business, marketing, and advertising.

20. Features of Branding Targetability (20) Awareness (21) Loyalty (22) Consistency (23)

21. Packing and Packaging (24) The words packing and packaging often confuse us, as they play a very significant role in the field of Marketing and are used in the context of covering or wrapping the product for proper storage and transportation. While  packing  is more about protection, the  packaging  is focuses on the design and appearance of the product which makes it attractive. Example- Amul milk is stored in tetra packs to preserve for longer periods as milk is a product that perishes fast. The tetra packs provide the freshness needed to keep milk in good condition while ach pack having a logo of a girl in it, the blue white colour of the pack and photo of milk in it indicates the packaging part of it,

22. THANK YOU