mba notes for student of all uni on india
- 1. MARKETING MANAGEMENT UNIT – III The product – Classification of products - Product Life Cycle (PLC) – New product planning - Product Modification - Elimination – Product failure – Branding – Features – Types of brands – Packaging – Functions - Kinds.
- 2. What is a product? A product is any offering by a company to a market that serves to satisfy customer needs and wants. It can be an object, service, idea, etc.
- 5. Consumer Goods Classification Convenience Unsought Shopping Specialty Consumer Product Classifications Convenience Products Shopping Products Specialty Products Unsought Products (1) Products of which consumers are unaware (2) Products that consumers do not consider purchasing until a need or emergency arises
- 6. Product classifications Consumer products Industrial product Organizations, persons, places, and ideas
- 7. Specialty Products Unsought Products Shopping Products Buy less frequently > Gather product information > Fewer purchase locations > Compare for: • Suitability & Quality • Price & Style Convenience Products Special purchase efforts > Unique characteristics > Brand identification > Few purchase locations New innovations > Products consumers don’t want to think about. >Require much advertising & personal selling Buy frequently & immediately > Low priced > Many purchase locations > Includes: • Staple goods • Impulse goods • Emergency goods Consumer-Goods Classification
- 8. Industrial Goods Classification Materials and parts Supplies/ business services Installations
- 9. Product Life-Cycle Strategies The course of a product’s sale and profit over it lifetime. It involves four distinct stages: Introduction, Growth, Maturity, And decline. Not all products follow this cycle
- 10. Sales & Profit Life Cycles Introduction Growth Maturity Decline Time Sales & profits ($)
- 11. Introduction stage The product life-cycle stage in which the new product is first distributed and made available for purchase.
- 12. Growth stage The product life-cycle stage in which a product’s sales start climbing quickly.
- 13. Maturity stage The stage in the product life cycle in which sales growth slows or levels off. Modify the market,the product,and the marketing mix.
- 14. Decline Stage The product life cycle stage in which a product’s sales decline
- 15. Definition New Product Development Development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts.
- 16. New Product Development Strategy New products can be obtained via acquisition or development. New products suffer from high failure rates. Several reasons account for failure.
- 17. Causes of New Product Failures Only 10% of new consumer products are still on the market and profitable after 3 years. Industrial products failure rate as high as 30%. Overestimation of Market Size Product Design Problems Product Incorrectly Positioned, Priced or Advertised Costs of Product Development Competitive Actions To create successful new products, the company must: understand it’s customers, markets and competitors develop products that deliver superior value to customers.
- 18. New Product Development Process Idea Generation and Screening Concept Development and Testing Marketing Strategy Business Analysis Product Development Test Marketing Commercialization
- 19. New Product Development Process Step 1. Idea Generation Systematic Search for New Product Ideas Internal sources: Company employees at all levels, R & D External idea sources: Customers Competitors Distributors Suppliers
- 20. Process to spot good ideas and drop poor ones Criteria Market Size, Product Price, Development Time & Costs, Manufacturing Costs, Rate of Return Executives provide a description of the product along with estimates of market size, product price, development time and costs, manufacturing costs, and rate of return. Evaluated against a set of company criteria for new products. New Product Development Process Step 2. Idea Screening
- 21. New Product Development Process 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 idea for a possible product that the company can see itself offering. detailed version of the idea stated in meaningful consumer terms.
- 22. New Product Development Process Step 4. Marketing Strategy Development Part Two - Short-Term: Outlines the product’s planned price, distribution, and marketing budget. Part Three - Long-Term: Describes the long-run sales and profit goals, marketing mix strategy. Marketing Strategy Statement Formulation Part One - Overall: Describes the target market, planned product positions, sales, market share, and profit goals.
- 23. New Product Development Process 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.
- 24. Brand A name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.
- 25. The Role of Brands Identify the maker Simplify product handling Organize accounting Offer legal protection
- 26. The Role of Brands Signify quality Create barriers to entry Serve as a competitive advantage Secure price premium
- 27. Advantages of branding Easy for the seller to track down problems and process orders Provide legal protection of unique product features Branding gives an opportunity to attract loyal and profitable set of customers It helps to give a product category at different segments, having separate bundle of benefits It helps build corporate image It minimises harm to company reputation if the brand fails
- 28. Brand Strategy Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Three levels of positioning: Product attributes Least effective Benefits Beliefs and values Taps into emotions Key Decisions
- 29. Brand Strategy Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Good Brand Names: Suggest something about the product or its benefits Are easy to say, recognize and remember Are distinctive Are extendable Translate well into other languages Can be registered and legally protected Key Decisions
- 30. Brand Strategy Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Manufacturer brands Private (store) brands Costly to establish and promote Higher profit margins Licensed brands Name and character licensing has grown Co-branding Advantages / disadvantages Key Decisions
- 31. New Product Development Process 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
- 32. Commercialization Must decide on timing (i.e., when to introduce the product). Must decide on where to introduce the product (e.g., single location, state, region, nationally, internationally). Must develop a market rollout plan.
- 33. Packaging: The 5th P All the activities of designing and producing the container for a product.
- 34. What is the Fifth P? Packaging, sometimes called the fifth P, is all the activities of designing and producing the container for a product.
- 35. Packaging Includes the activities of designing and producing the container for a product Packaging is done at three levels - primary - secondary - shipping
- 36. Designing packaging Packaging concepts Technical specifications Engineering tests Visual tests Dealer tests Consumer tests Packaging innovations Environmental considerations
- 37. Packaging has been influenced by… Self-service Consumer affluence Company/brand image Innovation opportunity