product management - Introduction to the concept
- 1. PRODUCT MANAGEMENT Prepared by: Dr. SHAMINI T V
- 2. • A product is anything that can offered to market for attention, acquisition ,use, consumption that might satisfy a want or need. What is a product ?
- 3. PRODUCT • Product refers to all kinds of physical goods & intangible services that a company offers to its customers • A customer will buy a product that offers highest quality, best performance, most feature
- 4. Products that are marketed include • Physical goods • Services • Experiences • Events • Persons • Places • Properties • Organizations • Information • Ideas
- 6. Features of product Features of product Associated attributes Intangible attributes tangibility Exchange value Customer satisfaction
- 7. Potential product Augmented product Expected product Generic product Core benefit Levels of product Unexpected features Luxury features Expected features Basic features Basic product
- 8. • Core – What the customer needs/wants • Actual/expected – What the customer gets • Augmented – services or secondary products for the actual product Product Level Definitions Augmented Product Actual Product Core Product
- 9. Core benefit Basic product Expected product Augmented product Potential product Five Product Levels
- 10. Core product - Indicate core benefit or service - Explains what the buyer really buys - Basic step in designing products - Defines problem solving benefits/ services that consumers seek - Standardization of technology does not lead to much of difference from competing firms
- 11. Basic Product • At this level, the core benefit is turned into a basic product. • Basic step in designing products • Unbranded, plainly packaged, less expensive
- 12. Expected product •Expected/ formal/ tangible product - Represents basic requirements, a customer finds essential to buy a product - Includes brand name, features, design, packaging, quality level, styling, styling, attributes, instructions manual etc
- 13. Augmented product • After sales services • Delivery points & systems • Installation ( bulky products) • Customer education & training • Customer complaint management • Payment options (high end products) • Replacement/return policy • Guarantees/ warranties • Toll free number, etc
- 14. Potential Potential/Future product Includes all possible improvements (under given technological, economical, competitive conditions Helps to attract & retain customers These offerings differ from 1 market to another because of varying competitive conditions Driving force- to retain competitive advantage.
- 15. PRODUCT MIX • Product mix also known as product assortment, refers to the total number of product lines that a company offers to its customers.
- 20. Consistency
- 21. Consumer Goods Classification • Buy frequently and immediately.(pen, noodles, cigarette, tea etc.) Convenience Goods • Buy less frequently.(clothes, shoes, mobile, electronics etc.) Shopping Goods • Special purchase efforts.(car, motorbike, Rolex watch, gold , land and building etc.) Specialty Goods • New innovations.(gift items, decorative items etc.) Unsought Goods
- 23. Product Life Cycle Examples • Introduction - holographs • Growth - tablets/phablets • Maturity - laptops • Decline - typewriters
- 24. Introduction Stage The introductory stage is viewed as fairly risky and quite expensive because large amounts of money is spent on advertising and other tools of marketing communications to create consumer awareness in sufficiently large numbers, and encourage trial. 3D Televisions: 3D may have been around for a few decades, but only after considerable investment from broadcasters and technology companies are 3D TVs available for the home, providing a good example of a product that is in the Introduction Stage.
- 25. Growth Stage The growth stage of life cycle is characterised by a sharp rise in sales. Only a small percentage of new products introduced survive to reach the growth stage. Tablet PCs: There are a growing number of tablet PCs for consumers to choose from, as this product passes through the Growth stage of the cycle and more competitors start to come into a market that really developed after the launch of Apple’s iPad. Another example is NANO car.
- 26. Maturity Stage Most products after surviving competitive battles, winning customer confidence and successful through growth phase enter their maturity stage. The sales plateau, and this flattening of sales usually lasts for some time because most products in the category have reached their maturity stage, and there is stability in terms of demand, technology, and competition. Laptops: Laptop computers have been around for a number of years, but more advanced components, as well as diverse features that appeal to different segments of the market, will help to sustain this product as it passes through the Maturity stage.
- 27. Decline Stage Decline stage sets in when customer preferences change due to the availability of technologically superior products and consumers’ shift in values, beliefs, and tastes to products offering more value.
- 28. Implications and Limitations of Product Life Cycle Concept Product life cycle concept shows a framework to spot the occurrence of opportunities and threats in a product market and the industry. This can help firms to reassess their objectives, strategies, and different elements of marketing programme.
- 29. Introduction- HUL • Hindustan Unilever Limited (HUL) is India's largest FMCG company, touching the lives of two out of three Indians with over 20 distinct categories in home & personal care products and food & beverages.
- 30. INTRODUCTION-LUX 1916 LUX launched in USA as Laundry soap 1929 LUX launched in India 1925 LUX launched in USA as Toilet soap 1960 LUX went colored
- 31. PRODUCT PORTFOLIO • A product portfolio is the range of items sold by a business. It can be analysed using the Boston Matrix.
- 32. PRODUCT PORTFOLIO MATRIX (BCG MATRIX) • Product portfolio matrix (BCG matrix) is designed to help with long- term strategic planning, to help a business consider growth opportunities by reviewing its portfolio of products to decide where to invest, to discontinue or develop products. It's also known as the Growth/Share Matrix.
- 33. BCG Matrix • Boston Consulting Group (BCG) Matrix is a four celled matrix developed by BCG, USA. It is the most renowned corporate portfolio analysis tool. It provides a graphic representation for an organization to examine different businesses in it’s portfolio on the basis of their related market share and industry growth rates.
- 39. BCG Matrix The BCG matrix, invented by the Boston Consulting Group, is a tool that allows to classify and evaluate the products and services of a business. It is a decision making tool in order to balance the activities of a company among those which make profits, those who ensure growth, those which constitute the future of the firm or those who are its heritage. With this tool one is able to define the development policy of the company. The matrix will position the products/services in two ways: 1.The rate of growth of the market ; 2.The market share of a product offered facing the competitors.
- 40. Cash Cows These are products or services which are mature and generate profits and cash, but need to be replaced because the future growth will be lower. Dogs These products are positioned in a declining market and highly competitive. The company wants to get rid of soon as they become to expensive to maintain. The company must minimize the « dogs ».
- 41. Question marks They do not generate profits unless the company decides to invest resources to maintain and even increase the market share (become potential stars). They have a high demand for liquidity and the company must ask the question: Invest or give up the product? Stars These are promising products for the company, they even can be considered as leaders of the industry. The strategy is to boost these products by appropriate investments to monitor the growth and maintain a position of strength. These products require a large amount of cash but also contribute to the company's profitability.