Product Management

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Marketing mix and product management.

At the end of this module the learning actuates are. 1. What is a product? 2. Various levels of product. 3. How products are classified? 4. What is the concept of product life cycle?

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Marketing mix and product management.

Suggested readings. 1. Marketing management, Millennium edition by Kotler chapter10 and 13 .

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Marketing mix and product management.

What is product? Product is anything that can be offered to a market to satisfy a want or need.

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Marketing mix and product management.

PRODUCT LEVELS 1. Core product 2. Basic product 3. Expected product 4. Augmented product 5. Potential product

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Marketing mix and product management.

1. Core product Most fundamental benefit customer is buying. Heart of the system. Refrigerator Basic purpose.
Preservation.
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To preserve you need a compressor and cooling system. This is core.

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2. Basic product Do you buy compressor? You buy a basic product? Formal Refrigerator Compressor is mounted on a body /cabinet. There is a door, shelves, trays. This is basic product.
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Marketing mix and product management.

EXPECTED PRODUCT A set of attributes and conditions customers expect. This depends on the chosen target audience. This is expected from a marketer. Refrigerator Freezer. Bulb. Thermostat. Quiet not noisy. Different types of shelves. Antirust system. This is expected product.
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Marketing mix and product management.

AUGMENTED PRODUCT Prepare a product that exceeds customer expectation. Is the reason to buy. Add further attributes Each attribute adds cost Will customer pay enough to cover the extra cost? Refrigerators Easy financing scheme Four year warranty on compressor Free rice cooker with every refrigerator purchased.
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Marketing mix and product management.

POTENTIAL PRODUCT Companies search for new ways to satisfy customers and distinguish their offer.

Refrigerator Water dispenser on the door Prevent frequent opening of doors. Faster cooling.

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Marketing mix and product management.

WHAT DO WE OBSERVE? Most competition at augmentation level. Constant innovation. Understand how customers use their product. New features add to the cost. Marketers have to find out that whether customers are willing to pay extra cost.

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Marketing mix and product management.

REFRIGERATORS. 1. Whirlpool Quick lce making 2. Samsung Super x flow Uniform cooling. 3. LG Nutritional value maintained. 4. ALLWYN Efficient compressor. 5. KELVINATOR Coolest.
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Marketing mix and product management.

PRODUCT CLASSIFICATION A. Durability and tangibility Nondurable goods. Durable goods Services. B. Consumer goods classification Convenience good. Shopping goods Speciality goods Unsought goods.
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Marketing mix and product management.

A. 1. Durability & Tangibility Non-durable goods Consumed in one or few uses Consumed quickly Frequent purchase Need to make them available in many locations Heavy promotion Induce trial Example Coke, Modern bread, Lux Soap, Mother Diary Milk
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2. Durable goods Used many times More personal selling/service Sellers assurance about product longevity Example Refrigerators Mixer Car Higher priced than non-durable Consumer involvement is high as they are high priced
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Marketing mix and product management.

3. Services Intangible Inseparable Variable Perishable Example Beauty parlour Education Services A Surgery Listening to concert Airlines
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Marketing mix and product management.

Therefore Products which are predominantly tangible are called goods Products, which are predominantly intangible, are called services.

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Marketing mix and product management.

B. Consumer Goods classification Based on shopping habits 1. Convenience goods Goods purchased Frequently Immediately Minimum effort Example Newspapers Bread Milk Distributed at shops very near to households
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Marketing mix and product management.

2. Shopping goods Goods that the customer in the process of selection and purchase Characteristically compares on such basis as suitability, quality, price and style Examples Furniture Clothing Appliances
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Marketing mix and product management.

3. Speciality goods Unique characteristics Unique brand values Buyers willing to make extra efforts Example Arrow shirts Very few outlets, exclusive Honda showrooms One in Badarpur, Udyog Nagar Customers willing to travel that far to buy their choice of goods
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Marketing mix and product management.

4. Unsought goods Goods the consumer does not know about or does not normally think of buying Consumers made aware through promotional efforts of the firm. Examples Life insurance Security equipments Fitness equipment
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Marketing mix and product management.

PRODUCT MIX Set of all products and items that a particular seller offers for sale Example: BPL Consumer products TVs, Washing Machine Cellular Services Mobile operations in Mumbai Telecom Instruments
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Marketing mix and product management.

Product Mix-concepts 1. Width How many different product lines are carried by the organization P&G Five lines Detergents, Toothpaste, Bar soap, diapers, paper tissue
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Marketing mix and product management.

2. Length Total number of items in the mix Total items 25 Average length of a line is 25/5 = 5 3. Depth How many variants are offered of each product in the line Proctor and Gamble Crest Toothpaste Comes in five sizes Two formulations Mint Regular Total Depth = 5 * 2 = 10
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Marketing mix and product management.

4. Consistency How closely related the various product lines are in end use, production requirements, distribution channels or some other way. Proctor and Gamble Very consistent Why Products are available through the same distribution channels GE Products Refrigerators Aircraft Engines Electricity equipments
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GE

Very inconsistent Are Refrigerators, Aircraft engines and Electricity equipment available from same places No ? Refrigerators Shops Aircraft Engines Direct
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Marketing mix and product management.

PRODUCT LIFE CYCLE Four stages 1. Introduction 2. Growth 3. Maturity 4. Decline

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Marketing mix and product management.

PRODUCT LIFE CYCLE Products have limited life Products pass through distinct stages Each stage Different challenges Different opportunities Problems to the seller Profits and sales vary in different stages Different strategies Marketing Human resources Purchasing
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Marketing mix and product management.

1. Introduction Slow sales growth Product introduced Profits less or non-existent Heavy expenses Promotion Distribution

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Marketing mix and product management.

2. Growth Rapid market acceptance Substantial profit improvement 3. Maturity Slowdown in sales growth Achieved acceptance by most potential buyers Increasing competition Profits stabilize or decline 4. Decline Sales show decline Profits also decline
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Product life cycle Product categories Longest - Newspaper - Sugar - Ice-cream Branded categories Shorter - Pioneer Newspaper - Dollops Ice-cream Newspaper, ice-cream sales are rising Pioneer & dollops sales have declined
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Why four stages in Product lifecycle Marketers deploy different marketing strategies in different stages of product life-cycle .

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