product management

By : Kritika Handoo

A product is anything that can offered to market for attention, acquisition ,use, consumption that might satisfy a want or need.

Convenience Products – These are products that appeal to a very large market segment. They are generally consumed regularly and purchased frequently. Examples include most household items such as food, cleaning products, and personal care products.

Shopping Products – - consumers make a - consumers make a considerable effort to evaluate considerable effort to evaluate

Consumers make product comparison(s), They seek information before purchase, they are not impulsive Moderate substitutions are made Product’s last a considerable time Monetary & social costs may be high

Specialty Products – These are products that tend to carry a high price tag relative to convenience and shopping products.

SpecialtyProducts

Emergency Products – These are products a customer seeks due to sudden events and for which pre-purchase planning is not considered.

Unsought Products – These are products whose purchase is unplanned by the consumer but occur as a result of marketer’s actions. Such purchase decisions are made when the customer is exposed to promotional activity

Core Benefits Actual Product Augmented Product

it’s not the product itself, it’s what the product can bring about

In some cases these core benefits are offered by the product itself (e.g., floor cleaner) while in other cases the benefit is offered by other aspects of the product (e.g., the can containing the floor cleaner that makes it easier to spread the product).

Consequently, at the very heart of all product decisions is determining the key or core benefits a product will provide. From this decision, the rest of the product offering can be developed.

The core benefits are offered through the components that make up the actual product the customer purchases.

Within the actual product is the consumable product, while toothpaste may come in a package that makes dispensing it easy, the Consumable Product is the paste that is placed on a toothbrush. But marketers must understand that while the consumable product is, in most cases, the most critical of all product decisions, the actual product includes many separate product decisions including product features, branding, packaging, labelling, and more.

Marketers often surround their actual products with goods and services that provide additional value to the customer’s purchase.

While these factors may not be key reasons leading customers to purchase (i.e., not core benefits), for some the inclusion of these items strengthens the purchase decision while for others failure to include these may cause the customer not to buy.

Guarantee Warranty Customer Service

The actual product is designed to provide the core benefits sought by the target market. The marketer offers these benefits through a combination of factors that make up the actual product.

These factors include:

1. Consumable Product Features 2. Branding 3. Packaging 4. Labelling 

1. Functional Benefits- Customers derive functional benefits from features that are part the consumable product. For instance, a plasma television includes such features and benefits as: screen size, screen resolution.

2. Psychological Benefits - For customers psychological benefits represent certain benefits they perceive to receive when using the product though these may be difficult to measure and may vary by customer. These benefits address needs such as status within a group, risk reduction, sense of independence, and happiness. Such benefits are developed through promotional efforts that target customer’s internal makeup

Quantity & Quality vs. Cost - For the marketers an important decision focuses on the quantity and quality of features to include in a product.

Is More Better? – Even if added cost is not a major concern, the marketer must determine if more features help or hurt the target market’s perception of the product. A product with too many features could be viewed as too difficult to use.

Who Should Choose the Features? – Historically marketers determined what features to include in a product. However the technology, and especially the Internet, offer customers the opportunity to choose their own features to custom build a product.

Branding involves decisions that establish an identity for a product with the goal of distinguishing it from competitors’ offerings. In markets where competition is fierce and where customers may select from among many competitive products, creating an identity through branding is essential. It is particularly important in helping position the product

The most well-known company to brand components is Intel with its now famous "Intel Inside" slogan. Intel’s success has led many other b-to-b companies and even non-profits to incorporate branding within their overall marketing strategy.

To brand or not to brand Brand sponsor decision

Manufacturer brand (HLL, Bajaj etc.) Distributor brand (private brand) (Shopper

Stop) Licensed brand (Parker, Levi etc.)

A brand communicates the following six levels of meanings Attributes Benefits Values Culture Personality User

Brand name decisions Individual name (Lux, Liril etc.) Blanket family name (Amul products, Godrej

product lines etc.) Separate family names (TISCO, TELCO, TCS

etc.) Company – Individual name (Bajaj Chetak,

Bajaj Super etc.)

A strong brand offers many advantages for marketers including:

Brands provide multiple sensory stimuli to enhance customer recognition.

Customers who are frequent and enthusiastic purchasers of a particular brand are likely to become Brand Loyal.

Well-developed and promoted brands make product positioning efforts more effective.

Firms that establish a successful brand can extend the brand more easily by adding new products under the same “family” brand.

Strong brands can lead to financial advantages through the concept of Brand Equity in which the brand itself becomes valuable.

Packaging includes the activities of designing and producing the containers for the products that, serves many purposes including protecting the product during shipment.

Levels Primary▪ Bottle containing the shampoo

Secondary▪ The cardboard box containing the bottles

Tertiary▪ Shipping package

Protection – Packaging is used to protect the product from damage during shipping and handling

Added Value – Packaging design and structure can add value to a product. For instance, benefits can be obtained from package structures that make the product easier to use while stylistic designs can make the product more attractive to display in the customer’s home.

Distributor Acceptance – Packaging decisions must not only be accepted by the final customer, they may also have to be accepted by distributors who sell the product for the supplier. For instance, a retailer may not accept packages unless they conform to requirements they have for storing products on their shelves.

Cost – Packaging can represent a significant portion of a product’s selling price. For example, it is estimated that in the cosmetics industry the packaging cost of some products may be as high as 40% of a product’s selling price. Smart packaging decisions can help reduce costs and possibly lead to higher profits.

Long Term Decision – Changing a product’s packaging too frequently can have negative effects since customers become conditioned to locate the product based on its package and may be confused if the design is altered.

Environmental or Legal Issues – Packaging decisions must also include an assessment of its environmental impact especially for products with packages that are frequently discarded.

Also, caution must be exercised in order to create packages that do not infringe on intellectual property, such as copyrights, trademarks or patents, held by others.

May be a simple tag or complex graphics May carry only the brand name or a lot of

other information May be voluntary or enforced by law Functions

Identification Gradation Description Promotion

Time

ProductDevelop-

ment

Introduction

Profits

Sales

Growth Maturity Decline

Losses/Investments ($)

Sales andProfits ($)

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Low sales Low sales

High cost per customerHigh cost per customer

NegativeNegative

Create product awareness and trial

Create product awareness and trial

Offer a basic productOffer a basic product

Use cost-plus Use cost-plus

DistributionDistribution Build selective distributionBuild selective distribution

AdvertisingAdvertising Build product awareness among early adopters and dealers

Build product awareness among early adopters and dealers

Growth Stage of the PLCGrowth Stage of the PLC

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Rapidly rising sales Rapidly rising sales

Average cost per customerAverage cost per customer

Rising profitsRising profits

Maximize market shareMaximize market share

Offer product extensions, service, warranty

Offer product extensions, service, warranty

Price to penetrate marketPrice to penetrate market

DistributionDistribution Build intensive distributionBuild intensive distribution

AdvertisingAdvertising Build awareness and interest in the mass market

Build awareness and interest in the mass market

Maturity Stage of the PLCMaturity Stage of the PLC

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Peak salesPeak sales

Low cost per customerLow cost per customer

High profitsHigh profits

Maximize profit while defending market share

Maximize profit while defending market share

Diversify brand and modelsDiversify brand and models

Price to match or best competitors

Price to match or best competitors

DistributionDistribution Build more intensive distributionBuild more intensive distribution

AdvertisingAdvertising Stress brand differences and benefits

Stress brand differences and benefits

Decline Stage of the PLCDecline Stage of the PLC

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Declining salesDeclining sales

Low cost per customerLow cost per customer

Declining profitsDeclining profits

Reduce expenditure and milk the brand

Reduce expenditure and milk the brand

Phase out weak itemsPhase out weak items

Cut priceCut price

DistributionDistribution Go selective: phase out unprofitable outlets

Go selective: phase out unprofitable outlets

AdvertisingAdvertising Reduce to level needed to retain hard-core loyal customers

Reduce to level needed to retain hard-core loyal customers

Failure to Meet Customer Needs Poor Timing Market Conditions Ineffective or Inconsistent Branding Technical or Design Problems Overestimation of Market Size Poor Promotion Insufficient Distribution

80 to 90% Fail. Why?

The Sustainable Competitive AdvantageThe Way You Compete

•Product Strategy•Positioning Strategy

•Manufacturing Strategy•Distribution Strategy

Basis of Competition•Assets and Competencies

Where You Compete•Product-Market Selection

Whom You Compete Against•Competitor Selection

SCA

successful product management dependson understanding consumer behavior

the “product” is multifaceted, much more than the physical product itself

managing the ‘stable’ of products is no simple task