Formulating Industrial Product          Strategy      BY. PROF. RAGHAVENDRAN V
Industrial Product Strategy                                   2 Industrial products have distinctive features vis-à-vis  ...
Product Decisions                                  3 Important decisions in industrial product   management are:      Ma...
Product Decisions                                  4Product mix decision: it pertains to the type of products and product ...
Factors demanding change in Product Strategy                             5IM must understand that product strategy is flex...
Industrial Product Life Cycle and Strategies                                            6 PLC theory or concept, used to ...
Industrial Product Life Cycle and Strategies                                      7 According to theory, products tend to...
Other shapes of the PLC for Industrial Products                                              8 Product Life-Cycle for Hig...
Other shapes of the PLC for Industrial Products                                 9 Product Life-Cycle for Commodity produc...
International Product Life- Cycle                               10 Exporting products to other countries takes place  aft...
Application of PLC theory to Marketing Strategies                            11 Introduction Stages: Some industrial prod...
12 Growth Stage: Industrial marketer should focus  marketing on three areas i.e.1) Improve product design2) Improve distr...
13 Maturity Stage: as number of competitors entering  into the market is more. MS to be used in this stage  are1) Enter i...
14 Decline stage: here price competition is severe.   Here Industrial Marketer should withdraw the   product from the mar...
Locating Industrial Product in their life-cycle                            15 The PLC are caused by time. It depends on n...
Developing product strategies for existing products                            16 Developing product strategies for exist...
Steps involved in developing product strategies                                            17Product Evaluation Matrix:   ...
18Perceptual Mapping Technique:                                    High Quality         W                                 ...
19Deciding Product Strategies: Based on 2 techniques,  IM can now decide one of the strategy options  mentioned below.1) M...
New Product Development                                 20 One of the challenging tasks faced by an industrial  firm is t...
214) Additions to the existing product lines with   additional markets.5) Repositioning existing products to new market   ...
Factors Responsible for failure of New Industrial                    Products                           22 New products d...
Factors Responsible for success of New Industrial                   Products                           23 Product superio...
The new product development process                               24 The seven stage of new development process are:I.   ...
Marketing of Business Services                               25Classification of Industrial Services: Products supported ...
Assignment time: submit on or before 29th Oct’                           261. Explain the factors that influence changes i...
End of the Module 4                                     27                           BY PROF. RAGHAVENDRAN VBy Prof. Ragha...
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Business Marketing, VTU,Module 4

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Business Marketing, VTU,Module 4

  1. 1. Formulating Industrial Product Strategy BY. PROF. RAGHAVENDRAN V
  2. 2. Industrial Product Strategy 2 Industrial products have distinctive features vis-à-vis consumer products. Product Strategy involves the managerial decisions about the product mix and the positioning and communication. Product Planning involves not only the product strategy described above but also the product development measures. Product Management refers to the managerial decisions pertaining to product development and product strategies through diff stages of PLC.By Prof. Raghavendran V
  3. 3. Product Decisions 3 Important decisions in industrial product management are:  Marketing segment decision  Product mix decisions  Product specifications  Positioning and communications decisionsMarketing segment decision: the first product decision to be made is the market segment decision because all other decisions- Pro mix decisions, Pro specifications, and positioning and communications depends- depend upon the target market.By Prof. Raghavendran V
  4. 4. Product Decisions 4Product mix decision: it pertains to the type of products and product variants to be offered to the target market.Product Specifications: involves specification of the details of each product item in the product mix. This includes factors like styling, shape, size and other attributes and factors like packaging and labeling.Positioning and Communications Decisions: Positioning = Image & Communication = Message and these are interrelated.By Prof. Raghavendran V
  5. 5. Factors demanding change in Product Strategy 5IM must understand that product strategy is flexible and dynamic.Industrial Marketing a product variable. Industrial Firms are required to make changes in the product strategy because of changes in  Customers needs  Technology  Government policies  Product life cycle.By Prof. Raghavendran V
  6. 6. Industrial Product Life Cycle and Strategies 6 PLC theory or concept, used to determine marketing strategies. Industry Sales Decline R Maturity u p e e Industry Profits s Growth Time IntroductionBy Prof. Raghavendran V
  7. 7. Industrial Product Life Cycle and Strategies 7 According to theory, products tend to go through different cycles or stages that begin, when they are launched. The behavior of the product life cycle depends on three factors over which management has too little or no control. These are:  Changing needs of customers.  Changes in technology  Changing competition PLC suggests that different marketing strategies are needed at different stages of PLC. It also highlights the importance of long term planning, realization, impact on profits.By Prof. Raghavendran V
  8. 8. Other shapes of the PLC for Industrial Products 8 Product Life-Cycle for High- Tech products S •For this cost and time are a high, l •Rapidly declines as technology e changes faster. s TIME NPD Introduction and Growth stage period M D a e t c NPD: New Product Development time period u l r i i n t eBy Prof. Raghavendran V y
  9. 9. Other shapes of the PLC for Industrial Products 9 Product Life-Cycle for Commodity products. •Decline is not rapid in nature S •Monopolistic markets a •Inelastic demand l e s TimeBy Prof. Raghavendran V
  10. 10. International Product Life- Cycle 10 Exporting products to other countries takes place after a new product is launched in the home(domestic) market with successful results. Foreign manufactures become competitive due to lower costs and start exporting the product to other countries. FM’s lower Cost and High volumes enable them to export the product to the country where the originally innovated and launched in the present operations in International marketing.By Prof. Raghavendran V
  11. 11. Application of PLC theory to Marketing Strategies 11 Introduction Stages: Some industrial product get accepted slowly after introduction and others are fastly accepted. This depends upon user’s habits.For slowly accepted products require high level of learning, marketing strategy should concentrate on market developments efforts. However for products that are accepted fast or have potential of rapid acceptance, MS evolve to meet intense competitionBy Prof. Raghavendran V
  12. 12. 12 Growth Stage: Industrial marketer should focus marketing on three areas i.e.1) Improve product design2) Improve distribution so that product availability to customers are strong.3) Reduce the price as increased volume of production.By Prof. Raghavendran V
  13. 13. 13 Maturity Stage: as number of competitors entering into the market is more. MS to be used in this stage are1) Enter into new markets.2) Keep satisfying the existing customers.3) Cut marketing and production cost to maintain profits margin.By Prof. Raghavendran V
  14. 14. 14 Decline stage: here price competition is severe. Here Industrial Marketer should withdraw the product from the market or develop the substitute product for replacement or reduce marketingBy Prof. Raghavendran V
  15. 15. Locating Industrial Product in their life-cycle 15 The PLC are caused by time. It depends on number of factor like industry profits, rate of change in industry sales growth, and the information about competitors. The steps involved locating a product in its life are as follows.1) Develop a trend analysis2) Analyze competitors market share, product performance, diversification or expansion plans.3) Estimate and project sales and profits of the product over the years.4) From above all, fix the product’s position on its life cycle-curve.By Prof. Raghavendran V
  16. 16. Developing product strategies for existing products 16 Developing product strategies for existing individual products and product lines is an important part of an Imr’s Marketing Plan. The following steps should be taken by IM firms.a) Evaluate the performance of all existing product/lines using product evaluation matrix.b) By using perceptual mapping technique, examine the relative strength and weakness of the company.c) Based on the above analysis, decide the product strategies for the existing product. ( to be maintained or modified or to be dropped)By Prof. Raghavendran V
  17. 17. Steps involved in developing product strategies 17Product Evaluation Matrix: Yoram Wind & Henry Claycamp Company sales Decline Stable Growth profitabilityInd Sales MarS BT Target AT BT Target AT BT Target AT Dominant S1 P Growth Average S Marginal Dominant Stable Average Marginal Dominant Decline Average Marginal DominantBy Prof. Raghavendran V
  18. 18. 18Perceptual Mapping Technique: High Quality W S e .B A1 t a r k New Position o C. n S g e r S v A e i r c Old Position v e i c e Low QualityBy Prof. Raghavendran V
  19. 19. 19Deciding Product Strategies: Based on 2 techniques, IM can now decide one of the strategy options mentioned below.1) Maintain the product and its MS2) Modify the product and/ or change or the product line.3) Eliminate the product or the product line.4) Add new products or product linesBy Prof. Raghavendran V
  20. 20. New Product Development 20 One of the challenging tasks faced by an industrial firm is the development and marketing new industrial products, due to complexities & difficult. Classifications of New products: A product that is new to the company and to the market is called a new product. They are classified1) Products that are innovative & new to the world.2) Products are new to the company, not new to the world.3) Revisions/improvements to the existing products in the existing markets.By Prof. Raghavendran V
  21. 21. 214) Additions to the existing product lines with additional markets.5) Repositioning existing products to new market segments.6) Products with substantial cost reductions without reduction performance.By Prof. Raghavendran V
  22. 22. Factors Responsible for failure of New Industrial Products 22 New products do not satisfy the needs of many potential customers. The failure results from am inadequate coordination b/w R&D and marketing. New products are not significantly different from existing products. New products do not deliver the expected performance. The companies with weak new product development process are beaten by competitors. Prices of new products are often high prices.By Prof. Raghavendran V
  23. 23. Factors Responsible for success of New Industrial Products 23 Product superiority and uniqueness is the most important success factor. Market knowledge is important. Technical and production capabilities.By Prof. Raghavendran V
  24. 24. The new product development process 24 The seven stage of new development process are:I. Idea generationII. Idea ScreeningIII. Concept development & TestingIV. Business analysisV. Product DevelopmentVI. Market testing &VII. Commercialization.By Prof. Raghavendran V
  25. 25. Marketing of Business Services 25Classification of Industrial Services: Products supported by services Pure servicesUnique characteristics of services and the Marketing Implications  Intangibility  Inseparability  Variability  Perishability  Non-OwnershipBy Prof. Raghavendran V
  26. 26. Assignment time: submit on or before 29th Oct’ 261. Explain the factors that influence changes in the product strategy?2. Explain in detail of new product development process?3. Explain in detail business services?4. Explain product evaluation matrix and perceptual techniques in detail.By Prof. Raghavendran V
  27. 27. End of the Module 4 27 BY PROF. RAGHAVENDRAN VBy Prof. Raghavendran V

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