Product Management

1. © 2004 Mark H. Hansen
PRODUCTPRODUCT
MANAGEMENTMANAGEMENT

2. Product Management
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Dimensions of a Product:
• Core Product
• Tangible Product
• Augmented Product
• Promised Product

3. Product Management
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Core Product:
• what the consumer really wants
from the product
• buys bran cereal for family…
…wants healthy family
• it’s not the product itself, it’s what the
product can bring about

4. Product Management
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Tangible Product:
• the product itself
• appearance
• quality
• functionality

5. Product Management
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Augmented Product:
• the product plus accompanying services
• service/maintenance
• buying environment
• warranties & return policies

6. Product Management
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Promised Product:
• status the product will bestow
• dependability
• trade-in value
• any aspect of the product that helps
bring about the core product

7. Product Management
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Product dimensions vary from consumer
to consumer
• core and promised dimensions may be
very individual in nature
• different people buy the same
product for different reasons
• marketers need to understand
consumer behavior

8. Product Management
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Product Classifications
• convenience goods
• shopping goods
• specialty goods

9. Product Management
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Goods Products and Services Products
• goods are tangible, traditional products
• services are intangible
• simultaneous production & consumption
• difficult to evaluate
• relationships matter more

10. Product Management
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Product Strategy Formulation
Product Objectives
• Why have this product?
• growth
• using excess capacity
• market share
• target new segments

11. Product Management
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Product Strategy Formulation
Product Plan
Product Lifecycle - Five Stages
1 – Product Development
2 - Introduction
3 - Growth
4 - Maturity
5 – Decline

12. Product Management
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Product Strategy Formulation
Product Strategies
Approaches to the Market
• product differentiation
- customers see a difference
• market extension
- new uses for the product – Scotch tape
• market segmentation
- develop new products for new segments

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Product Strategy Formulation
Key Management Decisions
• product features
• packaging
• branding
• related services
• product mix
• product line decisions
• product deletion

14. Product Management
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“New” Products
How new is new?
• FTC – functionally significant or
substantial respect

15. Product Management
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“New” Products
Where do they come from?
Internal Sources:
• basic research
• applied research
• development

16. Product Management
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“New” Products
External Sources
• mergers & acquisitions
• licenses & patents
• joint ventures

17. Product Management
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New Product Development Process
• many, if not most, new products fail – Why?
8 Step Process
1 – generating new ideas
2 – screening new ideas
3 – business analysis

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New Product Development Process
4 – technical and marketing development
5 – manufacturing planning
6 – marketing planning
7 – test marketing
product testing v. test marketing
8 - commercialization

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Summary…
• successful product management depends
on understanding consumer behavior
• the “product” is multifaceted, much more
than the physical product itself
• managing the ‘stable’ of products is no
simple task