Introduction to Product
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Introduction to Product

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It deal with different dimension of product, product life cycle and new product development

It deal with different dimension of product, product life cycle and new product development

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Introduction to Product Introduction to Product Presentation Transcript

  • PRESENTED BY SOMDEEP KUMAR SEN
  •  A product is anything that has the capacity to satisfy customer’s need/want/demand  A product is anything offered for attention, use or consumption that might satisfy the need/want/demand  The term product covers both goods and services
  •  The core product – the core benefit that satisfies the consumer’s need  The actual product – the specific product offering designed to satisfy the need  The augmented product – additional bundle of benefits View slide
  •  Core product benefit: Transportation  Actual product: The car itself – design, styling, quality, performance, reliability, etc.  Augmented product: Warranty, Extended warranty, credit, zero % finance, etc. View slide
  •  The product mix is the set of all products offered for sale by a company  A product mix has two dimensions:  Breadth - the number of product lines carried.  Depth - the variety of sizes, colors, and models offered within each product line  A product line is a broad group of products, intended for similar uses and having similar characteristics.
  • Product Line- I Product Line- II Product Line - III Bath Soap Detergent Beverage •Dove •Lirl •Lux •Pears •Rexona •Lifebuoy •Hamam •Jai •Breeze •Moti •Surf •Rin •Wheel •Sunlight •501 •Bru •Brook-Bond •Taaza •Tajmahal ProductDepth Product Breadth
  • LINE STRECHING  Whenever the marketer feels that they can increase the profit by either adding or dropping items from the product line, it is called Line stretching  Line Stretching can be both- upward or downward  Downward Stretching – P & G’s “Ariel” detergent begun at a premium end & then down stretched to lower market segment by introducing “Ariel Bar”  Upward Stretching- HUL’s Lifebuoy started as a hygienic bath soap, but later moved to premium segment as HUL introduced Liquid Hand-Wash
  • Line Modernization-  Even when the product is adequate, the line might need to be modernized  In modern business line modernization is carried out to gain competitive advantage as the competitors are also upgrading their products  TATA Sumo (1994) >> Sumo DX (1996) >> Sumo DI Spectra (2000)…………….. So on Line Pruning-  Company may find out that one end of its line selling well & other end is not & hence they may try to boost the demand for slower sales Line Extension-  Adding a new product line in the product mix is called Line Extension
  •  In economics and marketing, product differentiation is the process of distinguishing a product or offering from others, to make it more attractive to a particular target market  This involves differentiating it from competitors' products as well as a firm's own product offerings  Product differentiation can be achieved on the basis of price, style, packaging, size, flavor etc.
  •  The stages through which a new product idea goes through from beginning to end  It is a generic description of the way a product behaves in the market place  Every product passes through certain identifiable stages  Basically, it is a model that describes the stages a product goes through
  •  This is stage where the product is first introduced to the market  This stage is most risky and expensive as the brand awareness & the volume of sales is very low (almost zero)  This is also known as the stage of negative return
  •  The product has developed gained certain degree of brand awareness  The sales volume starts to grow quickly & the profits peak  However during the later phase of the stage sales volume starts to dip as new competitors enter the market
  •  The most profitable Stage as the product has achieved acceptance by most potential customers  Sales continue to increase but at a slower pace  Advertisement expenditures will be reduced as the brand awareness is strong  Company not only looks to extend its market share but also it looks to defend its existing one
  •  Sales begins to decline as the demand for the product decreases  The product becomes technologically obsolete  During the decline phase the firm generally have following options 1. Maintain the product & hope that the competitors will exit the market 2. Decrease the price of the product or use other pricing techniques to increase the sales 3. Reposition the product 4. Discontinue the product
  • MARKETING OBJETIVES  To create the product awareness and to attract the customers towards the product Product  They offer only on product in the market. They did not come up with the differentiated product Price  In the initial stages of the product, they offer the relatively higher price than their competitor (LIFEBUOY). Because, they want to recover their initial cost of making the product Promotion  In the initial stages, they allocated more advertising budget So that more and more customers could be attracted towards the product  In ads they targeted the early adopters, who were readiest to buy the product  The first ambassador, Leela Chitnis. Place  Distribution was selective and only covers the major cities of India to get recognition in those cities.
  • Marketing Objectives  The marketing objectives of the Lux were to expand their market to the other cities of India MARKETING STRATEGIES Product  In the growth stage, the company had offered the same product in the market. Price  In this stage, the company had changed their price to some extent because of maximizing the market share. ( Slightly cut down the prices ) Place  In this stage, company had expanded their market to the other cities of INDIA. Their distribution channel was the same as in the initial stages of the product. Promotion  In the growth stage, they had increased their advertising budget as in the initial stages because of attracting the new customers or to retain the existing customers.  Sharmila Tagore, Hema Malini, Zeenat Amaan, Juhi Chawla, Madhuri Dixit, Sridevi
  • MARKETING OBJECTIVES  The marketing objective of Lux is to maximize more profit while defending the market share. And to expand the market to all the cities of INDIA. MARKETING STRATEGIES Product  The Lux has made the modification in the product by introducing  Lux Almond, Lux Orchid , Lux Fruit, Lux Saffron, Lux Chocolate, Lux Oil and Honey.etc Price  The Lux products are now available at higher prices in the market, the reason behind is that the company’s marketing objectives is to maximize more profit Place  Now Lux products are available in almost all the cities of India Promotion  In this stage Lux advertising has been reduced to some extent because of the more brand awareness in the minds of customers.  Recently, they have shown Aishwarya Rai , kareena kapoor & ShahRukh khan
  •  A product that opens up entirely a new market  A product that replaces an existing product  An old product introduced in a new market  An old product packaged in a different way  An old product marketed in a different way  A new product launched in a new market  A new product launched in an old market
  •  Throx Socks with a spare - Throx is a company that sells socks, claiming to have solved the problem of the missing sock: by selling three socks instead of two  The Fizz The screw on ice-cream top - The Fizz is a plastic cup that screws on to a plastic PET bottle allowing you to create a mobile ice cream float
  •  Neglect of market research  Inaccurate market research  Poor marketing after launch  Poor distribution  Performance below expectation  Product too complex  Market not ready for the product
  •  To add to product mix  To replace declining products  To take advantage of new technology  To maintain/increase market share  To defeat or to keep up with rivals  To maintain competitive advantage  To bring in new customers
  • Idea Generation Idea Screening Concept Testing Business Analysis Product Development Test Marketing Commercialization AmountofInvestment
  •  New Products by their very nature are the results of innovations  These innovations result from creative & free thinking  The sources of Idea generation are:  R & D Department  Production Department  Sales Team  Employees  Customers  Competitors  Market Sources
  •  The main objective of idea screening is to spot good ideas and reject poor ones  Ideas are checked for technical feasibility, financial viability & marketability  Ideas are rated according to marketing, production & strategic factors
  •  During this stage the consumers are presented with a proposed product to measure their attitude & intentions  Sample of potential buyers are presented with the product idea through a written or oral description to determine the attitudes & initial buying intentions
  •  In this stage potential profitability of the new product are evaluated  During this phase potential sales, profit, BEP , ROI, etc. are reviewed  During this phase the company analyzes the feedback of the sample of the potential buyers.  Analysts look to study the technical & the financial feasibility of the product  Several statistical analysis such regressing, hypothesis testing etc. are used during this phase
  •  R&D turns the idea into a product  Engg. & production issues are involved  Concern with design, materials, production, processes, quality & safety  Developing the product concept into a physical product
  •  Launching a product in small geographical area  A field experiment in realistic market setting  Releasing the product into a small but representative market where consumer reactions can be assessed & the marketing mix checked and adjusted Objectives  Forecast likely results of a national launch  Test the operational effectiveness of the marketing plan  To identify possible problems & customer reaction
  •  Introducing a new product in the market  Heavy promotional expenditure at the launch as the product is in the introduction stage  Product has to be well targeted and positioned  Choice of skimming or penetration pricing