The document discusses various aspects of product development and management, including defining what a product is, different levels of a product, types of new products, and the product development process. It also covers the product life cycle model and strategies for different phases, such as building brand loyalty in the growth phase and product differentiation or withdrawal in the decline phase. Various concepts are explained through examples, figures, and questions.

1. PRODUCTDECISIONSCHAPTER 6

3. Have you come across
any NEW PRODUCT
DEVELOPMENTS
recently?

10. these

12. © Juta and Company Ltd, 2012 12
What is a Product (pg.164)
‘A product is a physical good or service which is obtained by the consumer
and which has the aim of satisfyingtheneeds of theconsumer
as a result of the product’s direct use, with additional factors, services and
perceptions of the product such as being useful, desirable or convenient.’

14. © Juta and Company Ltd, 2012 14
Actual, physical product
which is offered to the
consumer. E.g. design,
features, brand, quality.
Figure6.1(pg. 165)
Five Product Levels
Using
each level
to add
more
customer
value
Production Image
Potential Product
Augmented Product
Tangible Product
CORE
PRODUCT
Dominant benefit the user expects.
Physical & non-
physical “extra’s”
that add value.
E.g. Delivery,
installation,
guarantees
Potential
Developments &
Adjustments
How the product is
perceived by
consumers

15. ?

20. © Juta and Company Ltd, 2012 20
Actual, physical product
which is offered to the
consumer. E.g. design,
features, brand, quality.
Figure6.1(pg. 165)
Five Product Levels
Using
each level
to add
more
customer
value
Production Image
Potential Product
Augmented Product
Tangible Product
CORE
PRODUCT
Dominant benefit the user expects.
Physical & non-
physical “extra’s”
that add value.
E.g. Delivery,
installation,
guarantees
Potential
Developments &
Adjustments
How the product is
perceived by
consumers

22. Identify how the 5 product levels were implemented by the “Smart Racket”:

24. PRODUCT/
BRAND
PRODUCT/
BRAND

25. IF YOU HAD TO BE A
WHICH WOULD YOU CHOOSE?
WHY?

27. © Juta and Company Ltd, 2012 27
The Meaning of Brands (pg.
181)
A name, symbol, sloganordesignthat is created with the
aimof identifyinga seller, manufacturer, provider of a
product or service, or the product or service itself.

34. © Juta and Company Ltd, 2012 34
Types of New Products (pg.
192)
NEW-TO-THE-WORLDPRODUCTS
NEW-TO-THE-MARKETERPRODUCTS
LINE EXTENSIONS
REPOSITIONEDPRODUCTS
IMPROVEDPRODUCTS

35. LINE EXTENSIONS

36. Improvements

37. Improvements

39. © Juta and Company Ltd, 2012 39
THE NEWPRODUCT DEVELOPMENT PROCESS (pg.
193)
THE NEWPRODUCT DEVELOPMENT PROCESS:
1.Idea generation
2.Idea screening
3.Concept testing
4.Business analysis
5.Product development
6.Test marketing
7.Commercialisation
8.Review of market performance

41. © Juta and Company Ltd, 2012 41
IDEA GENERATION (pg. 195)
Customers
Competitors
Employees and R&D staff
Top Management
IDEA SCREENING
Marketing Factors
Production Factors
Development Factors
Financial Factors

47. © Juta and Company Ltd, 2012 47
THE NEWPRODUCT DEVELOPMENT PROCESS (pg.
193)
THE NEWPRODUCT DEVELOPMENT PROCESS:
1.Idea generation
2.Idea screening
3.Concept testing
4.Business analysis
5.Product development
6.Test marketing
7.Commercialisation
8.Review of market performance

50. © Juta and Company Ltd, 2012 50
Figure 6.10 (pg. 204)
Category of Adopters:
Differences in peoples readiness to try a new product

51. Address the five characteristics of
acceptance:
-RELATIVE ADVANTAGE
- Emphasise the advantage of using a product.
-COMPATIBILITY
- Match the product with consumer’s values and
experiences
-COMPLEXITY
- Make product user-friendly
-DIVISIBILITY
- Use samples, demonstrations and free offers.
-COMMUNICABILITY
- Beneficial results of product should be observed.

53. Page 206-216
The Product Life Cycle

55. © Juta and Company Ltd, 2012 55
INTRODUCTION Phase (pg. 210)
 LOWsales, LOW
Profits and HIGH
costs
 Innovative products:
No direct
competition
 Difficult to persuade
retailers to carry the
product.
 Informpotential
customers
 Create Awareness
 Induce product trial
 4P’s Strategies (pg.
211)
 Rapid skimming strategy
 Low skimming strategy
 Rapid penetration strategy
 Slow penetration strategy
CHARACTERISTIC
S
STRATEGIES

57. © Juta and Company Ltd, 2012 57
GROWTHPhase (pg. 212)
 Rapid increase in sales
and profits due to:
 Increased awareness, trial
and satisfaction.
 New competitors enter,
attracted by the
opportunities:
 'Me too' products
 Improved operation costs
and methods
 Brand loyalty comes into
play
 Build Brand loyalty
 Customers: Early
 PRODUCT DECISIONS:
 Service/Support Strategy
becomes important: after-sales
service, expert advice.
 DISTRIBUTION DECISIONS:
 Expand market coverage
 Maximum exposure
 Prevent delays
 PRICE DECISIONS:
 Slight/ drastic price reductions
 PROMOTION DECISIONS:
 Create secondary demand
 Inform, remind and convince
them to buy
CHARACTERISTIC
S
STRATEGIES

59. © Juta and Company Ltd, 2012 59
Strategies: MATURITY Phase (pg.
335)
 This phase presents major
challenges for marketers:
 Reduced prices and increased
marketing costs lead to reduced
profits
 Increased competitive activity
 Saturated market penetration
 Brand switching occurs
 Product differentiation, possible
modifications and/or range
expansion must be considered
 Use marketing communications
to:
 Emphasize differentiation and/ or
Retain the existing marketing
strategy
Retaining the current product and
revise othermarketing instruments
1. Changing price
2. Changing market
communication
3. Changing distribution
4. Changing price, marketing
communication and
distribution
Changing all the marketing
instruments
 Product differentiation –
improved quality, improved
product characteristics,
improved styling
 Product range extensions –
extended product range
CHARACTERISTICS STRATEGIES

61. © Juta and Company Ltd, 2012 61
Strategies: DECLINE Phase (pg.
335)
 Shift in consumer tastes
and/or technological
developments
 Declining sales and profits-
despite marketing efforts
 Customers: Laggards
 Management needs to
decide:
 Withdrawing marketing support
and leaving the product to run
its own course naturally
 Eliminating the product
 Continue with the existing
marketing strategy
 Revise existing marketing
strategy partly or entirely
 Withdraw product from all
markets
CHARACTERISTIC
S
STRATEGIES

62. The Many
Parts of the
Product &
Brand Puzzle
Types of
Products
Product Line & Mix
Decisions
Product Line
Decisions
Benefits of Branding
Types of
Brands
Packaging&
Labelling

67. TOPIC 1: CLASSIFYING PRODUCTS
Explain the following product concept/s and provide as many South
African examples as possible (pg. 168-170)
Sub-Topic Explanation SA Examples
Durable goods
Nondurable goods
Services
REVIEW YOUR TOPIC…

68. REVIEW HOW YOU WILL BE ASSESSED…

71. READ AND SUMMARISE…

72. Consumer products van be classified as…
DURABLE
CONSUMER EXPECTS:
A product that can be
used over a LONG period
of time: at least 3 years!
BUSINESSES AIM:
Big purchase= Big support
NON-DURABLE
CONSUMERS
EXPECT:
A product that can be
used/consumed over s
SHORT period.
The benefits of these
goods fade after one of
few uses.
BUSINESSES AIM:
Create HABIT
SERVICES
CONSUMERS
EXPECT:
100% intangible offering
BUSINESSES AIM:
Create tangible cues to
make service offering
stand out.
Most Tangible Most Intangible

73. Durable

74. Non-Durable
Create a HABIT

75. Services
Create Tangible
Cues

77. Group
Leaders to
come to the
front to pick a
topic for next
Wednesday’s
presentation
session
Visit Blackboard
for more
information
Bring your study
guide along