Levels of products Core customer value Actual Augmented Potential
Product classification PRODUCTS CONSUMER INDUSTRIAL PRODUCTS PRODUCTS CONVENIENCE MATERIALS & PARTS SHOPPING CAPITAL ITEMS SPECIALITY SUPPLIES & SERVICES UNSOUGHT
I. Consumer Goods Products and services bought by final consumers for personal consumption
i) Convenience Products Goods that customers buy frequently Minimum of comparison Minimum buying efforts Readily available E.g. detergents, soft drinks, cigarettes, chocolates, candy
ii) Shopping Products Less frequently purchased Carefully compared on suitability, quality, price and style Time and effort spend by consumers Distributed through fewer outlets E.g. furniture, clothing, cars, jewellery, airline services
iii) Specialty Goods Goods & services with unique characteristics or brand identification. Buyers make a special purchase effort More expensive Not purchased frequently E.g. Sports cars, high priced photographic equipment, designer clothes.
iv) Unsought Products Products that the consumer either doesn’t knows about or doesn’t normally think of buying Require lot of advertising, and personal selling E.g. Life insurance, funeral services, donations for charity, blood donations
II. Industrial Goods Goods purchased for further processing or for use in conducting a business
i) Materials and partsi. Raw materials, mfg materials & parts.ii. Sold directly to industrial usersiii. Price & Service are important marketing factorsiv. Branding & advertisement are less important
ii) Capital items Aid the buyers’ production or operations E.g. factory, offices, gen-sets, drill press, elevators, lift – trucks,
iii) Supplies and Services Supplies are convenience products of industrial field. E.g. lubricants, coal, papers, pencils, nails, broom Services are supplied under contract E.g. maintenance, repairs, consulting, legal.
Product Decisions Marketers make product decisions at three levels:2. Individual product decisions3. Product line decisions4. Product Mix decisions
1. Individual Product Decisions Product attributes : The characteristics of a product that bear on its ability to satisfy stated or implied customer needs. Quality Features Style & Design Branding: A name, term, sign symbol, design or a combination of these that identifies the product or service of one seller or group of sellers and differentiate them from those of competitors. Packaging: The activities of designing and producing the container or wrapper for a product. Labeling: Labels are simple tags attached to products. The identify the brand, origin, contents and use instructions.
2. Product Line Decisions A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through similar outlets, or fall within given price range. Product Line Length: No. of items in a product line.
3. Product Mix Decisions Product Mix is set of all product lines and items that a particular seller offers for sale.2) Product Mix Width: No. of different product lines, a Co. carries.3) Product mix Length: Total No. of items the Co. carries within its product lines4) Product Mix Depth: No. of versions offered of each product in the line.5) Product Mix Consistency: How closely related are various product lines are in end use.`
The New Product DevelopmentProcess The development of original products, product improvements, modifications and new brands through the firm’s own product – development efforts. Steps:3. Idea generation4. Idea screening5. Concept development and testing6. Marketing strategy development7. Business analysis8. Product development9. Test marketing10. commercialization
Steps of New Product Development Process Idea generation: The systematic search for new product ideas. Internal sources (brainstorming) External sources ( distributors, suppliers) Idea Screening: Screening new ideas to spot good ones and drop poor ones. Review Committee (“real, win, worth it”) Concept development: An attractive idea developed in to a product concept, stated in consumer terms. Marketing strategy development: Designing an initial marketing strategy for a new product. Target market, market share, planned price, distribution, budget, sales, profit goals. Business analysis: A review of sales, costs and profits according to Co objectives. Product development: Developing the product concept into a physical product. Test marketing: Products are tested in realistic market settings. Commercialization: introducing a new product into the market.
Product life cycle The course that a product’s sale and profits take over its lifetime. Products have limited life Product sales pass through distinct stages Profits rise and fall at different stages Organizations require to pursue different strategies
1. Introduction Stage A period of slow sales growth as product is introduced in the market. Profits are non – existent because of heavy expenses Highest ratio of promotion expenses to sales.
2. Growth Stage A period of rapid market acceptance and substantial profit improvement
3. Maturity Stages A slowdown in sales as product has achieved acceptance by most potential buyers. Profits stabilize or decline because of increased competition
4. Decline Stage Sales show a downward drift and profits erode.
PLC StrategiesINTRO GROWTH MATURITY DECLINEINFORM IMPROVE PRDT DIVERSIFY PHASE OUTPOTENTIAL CM QUALITY BRANDS WEAK PRDTSINDUCE PRDT ADD NEW PRICE MATCH CUT PRICESTRIALS MODELS BEST COMPTTSECURE ENTERS NEW STRESS ON GO SELECTIVE:DISTRIBUTION SEGMENTS BRAND PHASE OUT DIFFERENCES UNPROFITABLEFOCUS ON SHIFT FROM INCREASE SALESINNOVATORS PRDT SALES PROMOTION AWARENESS PROMOTION TO REDUCED ADVT TO PRDT ENCOURAGE PREF ADVT BRAND SWITCHING LOWERS PRICE TO ATTRACT PRICE SENSITIVE CMS