Product management and product life cycle

CONCEPT OF A PRODUCT:
Acc. to PHILIP KOTLER “A product is
anything that can be offered to a market for
attention, acquisition, use or consumption. It
includes physical objects, services,
personalities, places, organizations and
ideas.
 Product occupies a dominant position in
marketing mix {one of the 4 p’s}
 Key element of the marketing programme.
 Before making decisions about pricing,
promotion, distribution firm has to decide
about the product.




Product have two aims:
1. Profit maximization
2. Wealth maximization [customer
satisfaction]



Product policies decision from an important
basis for the firms competitive advantages in
the market place.
Consumers perceives the product from
different angels. This perception are to be
combined in the form of product image.

Consumer point
of view

Company point
of view

Needs
Wants
Personality

Prestige
Income
Educatio
n

Product
Product
image

Price

Promotion
Place

VARIOUS USE OF A PRODUCT:
I general view, product is defined as everything the
purchaser gets in exchange of money is a product.
TECHNICAL / MANUFACTURING POINT OF VIEW:
A product consists of various of raw materials put
together so, that the end result serves a useful
purpose of consumption.
ECONOMIC POINT OF VIEW:
A product consists of a bundle of utilities [value]
involve in various product features and
accompanying services.

FROM THE CONSUMERS POINT OF VIEW:
What a desire are not the product but satisfying the
experiences.
DEFINITION:
“ A product is a complex of tangible, intangible and
external attributes including functional, social and
psychological utilities or benefits”.
A product has as bundle of physical services and a
symbolic attributes expected to yield satisfaction or
benefits to the buyers. This concept has actually led to
defining the product as the total product.

PRODUCT PLANNING:

Product planning has been defined by American Marketing
Association as “ The act of marketing out & supervising the
search, screening, development and communication of new
Products, the modification of existing lines and the
Discontinuous of marginal or unprofitable items.”
STEPS/ PROCESS:
1)
2)
3)
4)
5)
6)
7)

Evaluation of the idea, market & the product
Evaluation of company resources
Finding out customer specifications
Developing the product
Testing the product
Marketing the product
Evaluating the result {feedback}

SIGNIFICANCE OF PRODUCT PLANNING
{IMPORTANCE}
“IF YOU FAIL TO PLAN, YOU’RE PLANNING TO FAIL”

1)
2)
3)
4)
5)
6)

Basis of marketing programme
For survival
To face competition
To minimize risk
Instrument of growth
To discharge social responsibilities

PRODUCT OBJECTIVES & STRATEGIES:
1) Product policy
 Product mix
 Product item
 Product line
2) Elements of product policy
 Product planning & development
 Product line
 Product standardization
 Product identification {branding}
 Product style
 Product packaging

PRODUCT MIX
Product mix
Product
Breadth

Product
depth

Product
consistency

FACTORS INFLUENCING PRODUCT MIX:
1) Population increase
2) Changes in level of the income of the buyers
3) Changes in consumer behaviour
4) Other reasons
 Marketing influences {competition, place, media}
 Product influences
 Financial influences

NEW PRODUCT – DEVELOPMENT: {V.V.IMP}

1)
2)
3)
4)
5)

Product planning deals with changes in:
The kinds of goods or services offered
The number/kinds of products or different lines
that the company offers
The width of assortment within each product line
offered
The quality levels/ levels acceptable to various
classes of customers
The degree of distinctiveness [different]

The following are the basic changes that may be
required in product planning:
1) Improving the existing products
2) Weeding [unprofitable items] out profitable of
the product line
3) Expansion of the current product line
[diversification]s
4) New product development for the present
customers
5) New product for new customers

NEW PRODUCT DEVELOPMENT STAGES:
1) EXPLORATION OF IDEAS / IDEA GENERATION:
 R&D
 Distributors
 Competitors
 Customers
 Employees
 Professional investment/ marketing agencies
2) SCREENING OF IDEAS:
 Expanding each idea into full product concept
 Collecting facts & opinion to decide whether the product
idea could be converted into a business proposition
 Technology
 Assessing each idea for its potential value for its company

3) BUSINESS ANALYSIS:
 Future study on each idea in detail
 Determining the desirable market features for the product
& its feasibility
 Developing specification & establishing a definate
programme for the product
4) DEVELOPING THE PRODUCT:
Idea on the paper is turned into product on a hand.
5) TESTING:
 Concept testing
 Product testing
 Test marketing

a) CONCEPT TESTING:
 To evaluate the relative merits of several new product
proposals
 To determine whether the product idea is to be abounded or
modified
 To determine the size of potential market
 To guide the management to adopt suitable policies

b) PRODUCT TESTING:
 To assess proper product performance
 To minimise the risk attached to full scale launching of a
new product
 To identify the most productive market segments
 To collect necessary data of responsiveness from the
customers

c) TEST MARKETING:
 To evaluate a complete marketing plan including
advertisement, distribution, sales, pricing etc…
 To determine media mix, channels e.t.c
 To forecast sales volume
6) COMMERCIALISATION:

 Completing final plans for production & marketing
 Initiating, co-ordinated production & selling programmes
 Checking results at regular intervals

WHY NEW PRODUCTS FAIL IN THE MARKET ???
REASONS:









Inadequate market analysis
Product defect
Higher cost
Poor timing [proper]
Competition
Insufficient marketing effort
Inadequate sales force
Weakness in distribution

*** v.imp PRODUCT LIFE CYCLE [PLC]:
There are 4 stages of product life cycle.
I. Introduction
II. Growth
III. Maturity
IV. Decline
Introduction

Growth

Maturity

Sales /
Profit
volume

bep
TIME

Decline

 Products have a limited life
 Products sales pass through different stages each posing
different challenges, opportunities & problems to the seller
 Profits rise & fall at different stages of PLC
 Products require different
marketing, financial, manufacturing, purchasing, human
resources strategies in each stage of the PLC
DEFINITION:
Acc. To PHILIP KOTLER “ The product life cycle is an attempt
to recognise distinct stages in sales history of the product.”

PLC concerns with the study of degree of product
acceptance by the market overtime. It includes major raises &
falls of sales during
its life.

PLC STAGES:
I. INTRODUCTION STAGE:
• Huge selling & promotion cost are required to increase
awareness of the customers.
• Price is kept high to recover high development,
production & marketing cost
• Marketer has to tackle technical and production
problems
• Sales are low and increasing at a lower rate.
• There is loss or negligible profit
• There is no competition.

II. GROWTH STAGE:
• Sales increase rapidly as a result of consumer
acceptance of the products.
• Company can earn maximum profits.
• Competitors enter the market due to attractive profits
• Price is reduced to attract more customers
• Distribution network is widened and improved
• Necessary primary changes are made in products to
remove defects
• Company enters the new segments and channels are
selected.

III. MATURITY STAGE:
a) Growth maturity
b) Stable maturity
c) Decline maturity
•
•
•
•
•

Sales increase at decreasing rate
Profits starts declining
Marginal competitors leave the market
Customer retention is given more emphasis
Product, market & marketing mix modifications are
undertaken.

IV. DECLINE STAGE :
• Sales fall rapidly
• Profits fall more rapidly than sales
• Product modification is adopted
• Gradually, company prefers to shift resources to new
products.
• Most of the sellers withdraw from the market

• Promotional expenses are reduced to realise a little profit.

BRANDING, PACKAGING, LABELLING [BPL]
STRATEGIES:
I.

BRANDING:

A brand is a name, term, symbol or design or a
combination of them which is intended to identify the goods or
services of one seller or a group of sellers and to differentiate
them from those of competitors
•
•
•
•
•
•
•

Brand name
Brand mark
Trade mark
Branding
Trade name
Patents
Copy rights

FUNCTIONS OF BRANDING:
• Branding helps in product identification &
distinctiveness to a product
• Indirectly it denotes the quality or a standard of a
product.
• It eliminates imitation products.
• It ensures legal rights on the product.
• It helps in advertising and packaging activities.
• It helps to create and sustain brand loyalty to particular
products.
• It helps in price differentiation of products.

CLASSIFICATION OF BRANDS:
I.
•
•
•
•
•
•

Manufacturer’s brands :
National
Regional
Advertising brands
Single brands
Multiple brands
Individual brands

II. DISTRIBUTER’S BRANDS:
• Private brand
• Store brand
• Dealer brand
• House brand

KINDS OF BRANDS:
1.
2.
3.
4.

Coined name – e.g: parker pen
Arbitrary name { not related to product }
Suggestive name – e.g : boost
Descriptive name – e.g : glucose – D

CHARECTERISTICS OF A BRAND NAME:

•
•
•
•
•

Easy
Read and understand
Remember
Appropriate
It should be descriptive name

II. PACKAGING:
FUNCTIONS OF PACKAGING:
• Two assemble and arrange the products in the desired form
• To identify the contents the brand and the maker [ product
differentiation is perfected to the function]
• To protect the contents from product line through final use/
consumption
• To provide a suitable product mix [
size, weight, grade, package]
• To facilitate retailer’s functions
• To facilitate transportation, storing, warehouse, handling
• To enable the display of contents
• To encourage repurchase
• To help in complying with legal requirements
• To provide opportunity and space for advertising.

KINDS OF PACKAGING:
1. Family packaging – same for all products
2. Reuse packaging – e.g: soap case, hand wash
3. Multi packaging:
More than 1 product is packed e.g: tooth paste &
brush, natraj pencil with sharpener and eraser.

PROBLEMS IN PACKAGING:
1. High cost of production/packaging
2. Appearance
3. Kinds of designs
4. Convenience
5. Reuse purpose
6. AIDA [ Attention, Interest, Desire, Action]

III. LABELLING:
Label is a small slip placed on or near anything [product]
to denote its nature, contents, ownership, destination etc….
FUNCTIONS:
1. It gives definiteness to a product & therefore the
identification of a product is easy.
2. It stresses the standard & other special features of the
product
3. It enables the manufacturer to give clear instructions to the
consumer about use of the product
4. By mentioning prices undue price variations caused by the
intermediaries are avoided
5. It encourages to produce only standardized & quality
products
6. It provides a method for manufactures by which a contact

KINDS OF LABELS:
1. Brand labels – e. g: cosmetics, sweets, chocolates etc…
2. Grade labels – e. g: clothes [silk]
3. Descriptive labels [ uses of product] – e. g: milk food
4. Informative labels – e. g: medicines

ADVANTAGES OF LABELLING :
1.
2.
3.
4.
5.

Social service
Avoids price variations
Helps advertising
It helps to assess the superiority of a product
It is a guarantee for the standard of a product

DISADVANTAGES :
1.
2.
3.
4.

No use for illiterate people
Increase cost of a product
It is effective only where standardization is compulsory
Comparison ultimately ends in discarding one product in
favour of other.

IMPORTANT QUESTIONS : [ESSAYS]
1. Explain the new product development process with
suitable examples ? [pg. 561 in Philip Kotler (13 e)]

2. Define PLC ? Explain the stages and strategies to be
taken in PLC ? [ Pg. 291 in Philip Kotler (13e)]
3. Define product ? Explain product level classification &
substitute your answer with suitable examples ? [ pg. 310
in philip kotler (13e)]
4. Explain PLC & its implications for marketers ?
a) Mobile phones/ cell phones
b) Colour t. v

Product management and product life cycle

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