Product management

this is ppt presentation on product management . it covers features of product ,product levels ,product classification ,product mix and product life cycle stratagies

1. M.Jakkaraiah Asst.professor PBR VITS KAVALI Welcome

2. 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.

3. PRODUCTS GOODS SEVICES Tangible products Intangible products

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

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

6. Classifying Products Durable products Consumer products, Business products

7. Durable products Durable Non-durable Services

8. Consumer Products Convenience Products Shopping Products Specialty Products . . To satisfy information needs & buying motives Unsought Products

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

10. Shopping Products Shopping goods - consumers make a considerable effort to evaluate … Consumers make product comparison(s), They seek information before purchase, they are not impulsive Moderate substitutions are made Product’s last a considerable time Monetary & social costs may be high

11. TV’s As a Shopping Product (2007 ---- 1950’s) Attribute-based Price-based PICTURE SIZE WARRANTY REMOTE CONTROL LOW PRICE Plasma –LCD screen observation Homogeneous products select on price Heterogeneous products select on benefits

12. 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

13. Raw materials Farm products Natural products

14. Manufactured materials and parts

15. Capitals items 1.installation 2.equiptment

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

17. Product Mix & Product Line Product Item

18. P roduct mix Width Length D epth Co nsistency

19. 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

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

21. 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

22. 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

23. 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)

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

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

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

27. 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

28. 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

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

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

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

32. 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

33. 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

34. 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

35. 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.

36. Step-8 commercialization Introducing the product into the market

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

38. 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

39. 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

40. 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

41. 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

42. 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

43. 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

44. 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

45. 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

46. 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

47. CONSUMER ADOPTION PROCESS Adopt Trail Evaluation Interest A wareness

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