1. PRODUCT DECISIONS
Prof. Prashant Kumar Gupta
Jain College Of MBA and MCA

2. PRODUCT CONCEPT
Potential
Product
Augmented
Product
Expected
Product
Basic
Product
Core Benefit

3. CORE BENEFIT:
Service or benefit the consumer is actually buying
Eg: Sleep and rest in case of a hotel guest
 BASIC PRODUCT:
Service or benefit is given more tangibility
Eg: Hotel room includes bed, towel, desk, etc.
 EXPECTED PRODUCT:
Attributes and conditions buyers usually expect
Eg: Clean room, fresh towels, etc.
 AUGMENTED PRODUCT:
Product that exceeds expectations
Differentiation takes place at this level
 POTENTIAL PRODUCT:
All possible augmentation result into potential product


4. PRODUCT AUGMENTATION
Some points should be noted:
 Augmentation adds to cost
 Augmentation soon becomes expectation

5. PRODUCT CLASSIFICATION

DURABILITY & TANGIBILITY
Non-Durable Goods
 Durable Goods
 Services


CONSUMER GOODS CLASSIFICATION
Convenience Goods
 Shopping Goods
 Specialty Goods
 Unsought Goods


INDUSTRIAL GOODS CLASSIFICATION



Material & Parts
Capital Items
Supplies

6. PRODUCT DIFFERENTIATION

FORM


FEATURES


Probability that product will not malfunction
REPAIRABILITY


Measure of products life under normal conditions
RELIABILITY


Low, average, high or superior performance
DURABILITY


Acts as a supplement
PERFORMANCE


Shape, size, physical structure
Ease of fixing the product
STYLE

Look and feel that the buyer gets

7. PRODUCT HIERARCHY
It stretches from basic needs to particular items that
satisfy them.
 There are six levels which can be understood with
the example of insurance.

1.
2.
3.
4.
5.
6.
Need Family
Product Family
Product Class:
Product Line
Product Type
Item
Security
Savings & Income
Financial Instrument
Life Insurance
Term Life insurance
ICICI Prudential

8. PRODUCT LIFE CYCLE

9. MARKETING STRATEGIES
:INTRODUCTION
Sales
Low sales
Costs
High cost per customer
Profits
Negative
Marketing Objectives
Create product awareness
and trial
Product
Offer a basic product
Price
Use cost-plus
Distribution
Build selective distribution
Advertising
Build product awareness among early
adopters and dealers

10. MARKETING STRATEGIES
:GROWTH
Sales
Rapidly rising sales
Costs
Average cost per customer
Profits
Rising profits
Marketing Objectives
Maximize market share
Product
Offer product extensions, service, warranty
Price
Price to penetrate market
Distribution
Build intensive distribution
Advertising
Build awareness and interest in the mass
market

11. MARKETING STRATEGIES
:MATURITY
Sales
Peak sales
Costs
Low cost per customer
Profits
High profits
Marketing Objectives
Maximize profit while defending
market share
Product
Diversify brand and models
Price
Price to match or best competitors
Distribution
Build more intensive distribution
Advertising
Stress brand differences and benefits

12. MARKETING STRATEGIES
:DECLINE
Sales
Declining sales
Costs
Low cost per customer
Profits
Declining profits
Marketing Objectives
Reduce expenditure and milk the brand
Product
Phase out weak items
Price
Cut price
Distribution
Go selective: phase out unprofitable outlets
Advertising
Reduce to level needed to retain
hard-core loyal customers

13. NEW PRODUCT DEVELOPMENT
Idea Generation
Product
Development
Test Marketing
Idea Screening
Business Analysis
Commercialisation
Concept
Development &
Testing
Marketing Strategy
Development

14. NEW PRODUCT DEVELOPMENT
:IDEA GENERATION
It is a systematic search for new product ideas
 Sources of idea generation may be internal or
external


Internal Idea Sources
Find ideas through R&D
 Ask employees through programs


External Idea Source
Ideas from customers directly or indirectly
 Distributors and retailers


15. NEW PRODUCT DEVELOPMENT
:IDEA SCREENING
 Purpose
is to reduce number of ideas
generated
 Identify good ideas and drop bad ones
 Review done by a committee

16. NEW PRODUCT DEVELOPMENT
:CONCEPT DEVELOPMENT & TESTING
Idea must be converted to product
 First make a product and then test it for its appeal
 Differentiate between idea, product and image




Idea is a possible product
Product is idea tangiblised
Image is customers’ perception

17. NEW PRODUCT DEVELOPMENT
:MARKETING STRATEGY AND DEVELOPMENT
 Has
three parts
Define target market
 Planned positioning
 Sales, market share and profit goals


18. NEW PRODUCT DEVELOPMENT
:BUSINESS ANALYSIS
 Review
of sales projection
 Review of cost and profit projection
 Check whether company’s objectives
are satisfied
 Decide future strategy

19. NEW PRODUCT DEVELOPMENT
:PRODUCT DEVELOPMENT
 Converting
concept into a real product
 Requires huge investment
 First develop and test a few physical
products
 Check on various parameters

20. NEW PRODUCT DEVELOPMENT
:TEST MARKETING
 Testing
product in more real market settings
 Entire marketing program is testedbranding, positioning, distribution, price,
packaging, etc.
Three types:1. Standard Test
2. Controlled Test
3. Simulated Market Test

21. NEW PRODUCT DEVELOPMENT
:COMMERCIALISATION
 Introducing
 High
product to market
costs
 Build or rent manufacturing facility
 Timing of commercialisation is important
 Where to launch?

22. PRODUCT DIFFUSION

Process by which a new idea or new product is accepted

Rate of diffusion is the speed that the new idea
spreads from one person to the next

Adoption concerns the psychological processes an
individual goes through to embrace a new idea

Is a process by which
 An innovation
 Is communicated through certain channels
 Over time
 Among the members of a social system

23. the group
of
individuals
that
together
complete a
specific
goal
(adoption)
time
the
process of
the new
idea
traveling
from one
person to
another or
from one
channel to
the
individual
social system
Any item,
thought, or
process
that is
viewed to
be new by
the
consumer
communication
innovation
DIFFUSION PROCESS
how long it
takes for
the group
to adopt
an
innovation
as well as
the rate of
adoption
for
individual

24. ADOPTION PROCESS

25. ADOPTION PROCESS
Innovators
Adopt new ideas, risk takers
RANKING MUNDIAL DE USUÁRIOS DE INTERNET
Early Adopters
1º 2º 3º
4º Enthusiastic, like taking risks
5º
6º
Early Majority
Cautious but like to change
Late Majority
Less affluent, less
Laggards
Resist change, conservative,
educated, usually old
like tradition, old or low in
socio economic status

26. ADOPTION PROCESS
Interest
Evaluation
Trial
Adoption or Rejection
Consumer in first
expose to the
product innovation.
Lacks in
information about
the product
May only know the
name of product
and its basic
features.

27. ADOPTION PROCESS
Awareness
Evaluation
Trial
Adoption or Rejection
Consumer is
interested in
product and search
for additional
information.
He wants to know
what is it, how it
works and what its
potentialities are.

28. ADOPTION PROCESS
Awareness
Interest
Trial
Adoption or Rejection
Consumer decides
whether or not to
believe this product
or service.
Will it satisfy his
needs and
requirements.
Individual makes a
mental trial of the
idea

29. ADOPTION PROCESS
Awareness
Interest
Evaluation
Adoption or Rejection
 Consumer uses the
product on a limited
basis.
 During this stage the
individual determines the
usefulness of the
innovation and may
search for further
information about it.
 The trial stage is
characterized by smallscale experimental use,
when it’s possible.

30. ADOPTION PROCESS
Awareness
Interest
Evaluation
Trial
If trail in favorable
consumer decides
to use the product
If unfavorable the
consumer decides
to reject it.

31. MERCHANDISING PLANNING
Process by which a retailer offers
the right quantity of the right
merchandise in the right place at
the right time and meets the
company’s financial goals.
Sense market trends
 Analyze sales data
 Make appropriate adjustments


32. HOME WORK
Explain the three tests in test marketing.
 Discuss packaging as a marketing tool, requirement
of good.
 Why is there a requirement of good packaging?
 What is the role of labeling in packaging?
