Develop Product Strategy

8/9/2019 Develop Product Strategy

1/20

Developing a Product strategy

All that u needed


2/20

Product- riskiest of the marketing mix

Effect of increased pace of technology

Become obsolete before you recover money


3/20

We cover

Need to understand Product

Product strategies over PLC

Managing the industrial product line


4/20

Augmented

properties

Core & Augmented Product

Enhancedproperties

Core

Product

Compt


5/20

Product strategies involve continual change:

Any change in the consumer need

Change in technology

Change in law

Change in economics

Changes in culture

Changes in PLC any modification atmaturity


6/20

Product strategy also involves

Whether changes are required in existing

product?

Whether products should be added / dropped?


7/20

INDUSTRIAL PRODUCT MANAGEMENT

Industrial product manager is very vital in this: Forecasts

Does market sensing

Does customer linking

Product and marketing managers

When?

Series of product & one market

One product line several markets What is hybrid


8/20

Sales & Profit Life Cycles

IntroductionIntroductionvisionariesvisionaries

GrowthGrowthPragmatistPragmatist

MaturityMaturityConservativesConservatives

DeclineDeclinelaggardslaggards

TimeTimeSales

Sales

&&

profits

profits

($)

($)


9/20

The Product Life Cycle


10/20

Offering Development

Stage-TECHNOPHILES

No sales volume offering still being

developed.Product is not yet completely defined.Profits do not exist.Development at whose insistence?Promotion may be oriented towardspublicity about technological developments.Heavy investment to prepare the offering

to satisfy customer needs.


11/20

Offering Introduction

Stage-visionaries

Low Product sales volume.

is somewhat basic little need for competitivedifferentiation.Profits are typically negative.Supplier experiments growing pain and customer pains

of uncertaintyLow learning- OK (electronic calculator)New offering a logical extension of existing- it mustbe OK with the customer (Int Mktg)High learning- takes time (Elec typewriter)


12/20

Offering Growth

Stage- pragmatist

Good news- Product is accepted

Bad news- likely to attract competitionImprove designMarket penetration pricing may be appropriate as competitorsbring pressure on high margins.Profits increase - new adopters accept product.Accordingly, product differentiation becomes important todistinguish the offering from competitors (and to help protectmargins.)Promotion serves to remind/reinforce decisions.Distribution is often important in the training and education ofcustomers.


13/20

Offering MaturityStage-Conservatives

Profits have peaked, competition fights over market

share.Promotion reinforces buyer decisions and focuses onsupplier reputation and value.Distribution strives to serve all market sub-segments.

Time to think of new product offeringsPrice is a major component of the marketing mix.New customers do not replace sales volumes as oldcustomers move to newer products- value migrations


14/20

Offering DeclineStage

laggards

Consolidation usually occurs among suppliers

Product line is reduced to minimize productvariation efforts are made by remainingcompetitors to operate at productive rates.Promotion reduced to minimal levels toaccommodate existing customers.Price, particularly associate with a long-termcontracts, is a major part of the marketing

mix.


15/20

How Can You Determine Wherean Offering Is in the PLC?

Develop and review trend information for the pastcycles. Profit / sales ratio Examine changes in the number and nature of

competitors.-

South Korea into LA why not I as well Review short-term competitive tactics are

competitors pricing to utilize new capacity or improveshort term sales volume?

Are new product introductions aimed at segmentscurrently served by existing offerings?

Will a competitor innovate your product out ofbusiness? It is better to obsolete yourself instead ofgetting it done by competitors

Do unto yourself what you would have done to others


16/20

Perceptual Map

0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.60.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6-1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2-1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2

1.01.0

0.80.8

0.60.6

0.40.4

0.20.2

-0.2-0.2

-0.4-0.4

-0.6-0.6

-0.8-0.8


17/20

IntroductionIntroduction GrowthGrowth MaturityMaturity DeclineDecline

Sales Low Rapid Growth rate rednPeak sales Declining

Profit Loss

Investment inprodn & mktg

Reaches peak Increased competition

reduces profits andcuts into total profits

Pushes cost up

Competitors

Nil Growing Many fight for samepie

Few . Shakeout ofweak

CustomersInnovative

2.5%Visionaries

Early adopter13.5%

Pragmatists

Mass Mkt 68 %Conservatives

Laggards 16%

Overall strategy Product Price Distribution Promotion


18/20

Overall strategy Product Price Distribution Promotion

I Mkt acceptance.Foster productawareness and trial

Basic Designlow learningproducts

Skim

Pen

Cost+

Cmp

Selective Informative.Perhapspublicity

G Mkt Penetration.Persuade mass Mktto prefer your brand

Product /designImprovement.Expand line

High Intensive Persuasive.Loyalties

M Defend brand. Stopcompetitors fromentry

Differentiate.Full line

Find new userskeep currentsatisfied

Marketprices. Avoidwar

Intensive More user/usage.Loyalties

D Redn of expenses.Prepare for removalof prod. Squeeze allbenefits of theproduct

Minimalchanges toproduct. Linereduces to bestservers

Low enoughto permitliquidationof inventory

selective Minimal tonone. Perhapsnegative


19/20

Strategies for existing products

Do nothing

If you have a huge customer base, but is in

the process of being replaced, lower OH

and cost of production

Change the product?

If things wont work, drop the product. Why

not?


20/20

Product elimination decisions

Customers have no alternatives despitechanges in environment- CRDI- do not

eliminate Will relationship gets jeopardized

Will it hurt the profitability of other

products Corporate image-raise doubts on thereliability of the firm

Develop Product Strategy

Documents