M.

Jakkaraiah
Asst.professor
PBR VITS
KAVALI
A product is anything that can offered to
market for attention, acquisition ,use,
consumption that might satisfy a want or
need.
 PRODUCTS

Tangible Intangible
products products

GOODS SEVICES
 tangibility
Associated
attributes
Intangible
Features of attributes
product

Customer
Exchange
value satisfaction
Unexpected features Potential product

Luxury features Augmented product

Expected features Expected product

Basic features
Generic product

Basic product Core benefit

Durable products

Consumer products,

Business products
 Durable

 Non-durable

 Services
 Shopping Specialty
Products Products

Convenience
Products

Unsought
Products

. . To satisfy information needs & buying motives

Convenience goods – consumers use minimal effort for
frequently purchased low cost items

 Staples -

 Emergency goods –

 Impulse purchases –
Shopping goods - consumers make a
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

Attribute-based Price-based
Plasma –LCD screen
LOW PRICE

WARRANTY
REMOTE CONTROL

PICTURE SIZE
Homogeneous products select on price Heterogeneous products
select on benefits
 Materials and parts
 Raw materials and parts

 Manufactured materials and parts

 Capitals items
 1.installation
 2.equiptment

 Suppliers and business services

 1.maitainance and repair items
 2.operating suppliers
 Farm products

 Natural products
 1.installation  2.equiptment
 1.mainteinance  2.operating
and repair items suppliers
• Product Item
 The assortment of products that a company
offers to a market
 Width – how many different product lines?
 Length – the number of items in the product mix
 Depth – The no. of variants offered in a product
line
 Consistency – how closely the product lines are
related in usage
 • Product Line
LAMPS
•Table
•Ceiling
•Track
•Desk
 • Product Mix
Product Product Product
Line 1 Line 2 Line 3

LAMPS TABLES CHAIRS

•Table •Kitchen •Dining Room
•Ceiling •Dining Room •Living Room
•Track •End •Bedroom
•Desk •Coffee •Outdoor
•Outdoor •Desk
•Conference
•Computer
 Home WIDTH
Depot,
Lowe’s

Tata Motors Tata Steel Tata Tea Tata DTH

D
GEMINI
BUS BARS
TEA
E
# of lines = 4 P
LORRY PLATES
# of items = 12 T
CARS H

A wide product mix facilitates one stop shopping

 Width (# of product lines)

HAIR SALTY DENTAL SOFT

CARE SNACKS CARE DRINKS
Shampoo Chips Tooth Brush Cola

Conditione Nuts Tooth Paste Ginger Ale

r
Dental Floss
Crackers Root Beer
Hair Spray
 Changes in market demand
 Cost of production
 Quantity of production
 Changes in company desire
 Competitors actions and reactions
 Expansion of product mix
 Contracting or dropping the product mix
 Alteration of existing product s
 Trading up/trading down stratagies
 Planning
 Forecasting
 Marketing
of products of a company is
product management
 To design product stratagies
 To spot market opportunities
 To develop strategies for each stage of product life cycle
 To generate new product ideas
New product : New to the company even it is
in the world
Types of new products
1.New to the world
2.New to the firm
3.Addition to existing product line
4.Improved and revised
5.Reduction in cost
 To meet consumer needs and wants
 To meet competition
 To increase profits
 To avoid threats from substitutes
 New Product Development Process

Step 1. Idea Generation

Systematic Search for New Product
Ideas
Internal sources
Customers
Competitors
Distributors
Suppliers
 Step 2. Idea Screening

 Process to spot good ideas and drop poor

ones
 Technically feasibility
 Financially viable
Step 3. Concept Development & Testing

1. Develop Product Ideas into

Alternative
Product Concepts

2. Concept Testing - Test the

Product Concepts with Groups
of Target Customers

3. Choose the Best One

Step 4. Marketing Strategy Development

Part One - Overall:

Target Market
Planned Product Positioning
Sales & Profit Goals
Market Share

Part Two - Short-Term:

Product’s Planned Price
Distribution
Marketing Budget

Part Three - Long-Term:

Sales & Profit Goals
Marketing Mix Strategy
Step 5. Business Analysis
Step 6. Product Development

Business Analysis

Review of Product Sales, Costs,

and Profits Projections to See if
They Meet Company Objectives

If No, Eliminate
Product Concept

If Yes, Move to
Product Development
Step 7. Test Marketing

Standard
Test Market
Full marketing campaign
in a small number of
representative cities.
Controlled
Test Market
A few stores that have
agreed to carry new
products for a fee.

Simulated
Test Market
Test in a simulated
shopping environment
to a sample of
consumers.
Introducing the product into the market
Sales and
Profits ($)

Sales

Profits

Time
Product Introduction Growth Maturity Decline
Develop-
ment

Losses/
Investments ($)
 Sales Low sales

Costs High cost per customer

Profits Negative
Create product awareness
Marketing Objectives and trial

Product Offer a basic product

Price Use cost-plus

Distribution Build selective distribution

Advertising Build product awareness among early

adopters and dealers
Growth Stage of the PLC

Sales Rapidly rising sales

Costs Average cost per customer

Profits Rising profits

Marketing Objectives Maximize market share

Offer product extensions, service,
Product warranty
Price Price to penetrate market

Distribution Build intensive distribution

Advertising Build awareness and interest in the

mass market
Maturity Stage of the PLC

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

 Decline Stage of the PLC

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

Go selective: phase out unprofitable
Distribution outlets
Advertising Reduce to level needed to retain
hard-core loyal customers
 PRODUCT Offer a basic product

PRICE Cost +profit

SALES PROMOTION Heavy expenditure to create trails

Distribution Build selective distribution

Build product awareness among early

Advertising adopters and dealers
Growth Stage of the PLC

Offer product extensions, service,

Product warranty

Price penetrate Price

Distribution Build intensive distribution

Build awareness and interest in the

Advertising mass market

Sales promotion Consumer demo

Maturity Stage of the PLC

Product Diversify brand and models

Price Price to match or beat competitors

Distribution Build more intensive distribution

Advertising Stress brand differences and benefits

Sales promotion Encourage to brand switching

 Decline Stage of the PLC

Product Phase out weak items

Price Cut price

Go selective: phase out unprofitable
Distribution outlets
Advertising Reduce to level needed to retain
hard-core loyal customers
Sales promotion Reduce to minimal level
 Overestimation of Market Size
 Product Design Problems
 Product Incorrectly Positioned, Priced or
Advertised
 Costs of Product Development
 Competitive Actions
 Technical problems
 Poor planning
 Inadequate promotion
 Poor packing
 Fault pricing
 Adopt

Trail

Evaluation

Interest

Awareness
 Potential product

Augmented product

Expected Product

Generic product

Core Benefit