PRINCIPLES OF

MARKETING
Product Planning and
Development

Presented By: Viqar A. Usmani 1

Product Planning and Development

Introduction to a product
Tangibility continuum of a product
Product Classification
Branding
Packaging
Product life Cycle
Introduction to new product planning

Presented By: Viqar A. Usmani 2

What is Product?
A product is anything that can be offered to a market that might satisfy a want or need.
It is more than physical products; includes services, places, persons, and ideas.
To create successful new products, the company must: understand its customers, markets
and competitors develop products that deliver superior value to customers.
Products go through life cycles.
Product planning-involves making decisions about the production and sale of a
businesss products.
Product could be defined as
Anything that can be offered to a market for
attention, acquisition, use or consumption that
might satisfy a want or a need- Phillip Kotler.

Presented By: Viqar A. Usmani 3

 Product could be of any of the following
A physical product Table, Car, Pen
Person- Shahid Afridi, Mr.
Place- Karachi, London, Jerusalem
Organisation- IBM, CISA, UN, UNESCO,
Idea- Freedom, democracy, Anti Corruption, Social
Justice, Anti Drugs, My Karachi
Services education, lawyers service, bank
service

Presented By: Viqar A. Usmani 4

Product Scope-
Three Aspects
Physical Aspect- is the physical aspect of the product.
What it is ?
E.g. It is a herbal tooth paste
Functional Aspect is what it does?
E.g. It cleans tooth/ prevents tooth decay
Symbolic Aspect- is what it means to the users emotion?
E.g. The satisfaction of a person free from tooth decay

Presented By: Viqar A. Usmani 5

 The Product

Tangible Attributes Intangible Attributes

Design, Features, Image, Value,
performances, Branding Perception
Packaging

Presented By: Viqar A. Usmani 6

 Product Sub category-
Further categorization of a product category
e.g. Toilet Soap category may be sub categorized as beauty
soap and herbal soap
Product Brand-
There could be one or many brands in sub categories of the
product line such as Lux and Dove
Product Mix Consistency-
how closely related the various product lines are in terms of
channel distribution, promotion or in other ways

Presented By: Viqar A. Usmani 7

 Unilever Product Mix
Product width
P Personal Product
soaps Food
r Care Lines
o
Laundry
d Toilet Soap Product
Soap
u category
c Herbal
t Soap Product
sub
Beauty
category
D Soap
e
p Lux brand
Product
t Brands
h Dove brand
Presented By: Viqar A. Usmani 8
Presented By: Viqar A. Usmani 9
Tangibility Continuum of products

Tangibility continuum discuss about to what degree a

product is tangible or intangible.
It is practically difficult to find a totally tangible product or a
totally intangible product in the modern world of marketing
In many products there are physical goods as well as service
components.

Presented By: Viqar A. Usmani 10

 Tangibility Continuum

Tangible Major
Pure goods with Hybrid service Pure
tangible service - Equal with goods intangible

Pencil Car Air

restaurant Lecture
line

Presented By: Viqar A. Usmani 11

Presented By: Viqar A. Usmani 12
 Products

Consumer Industrial

Convenience Materials and parts

Staple Raw Materials

Impulse Manufactured Materials

Emergency Capital Items

shopping Installations

Specialty accessories

Unsought Supplies & services

Supplies

Presented By: Viqar A. Usmani Business services 13

Product Life Cycle Theory ( PLC)
It is assumed that a product will have a life cycle from
development to decline.
It is measured in relation to time and sales.
However every product may not go through the same life
cycle or some products will stay for along without getting on
to the declining stage.

Presented By: Viqar A. Usmani 14

 Stage of Life cycle
1. Development stage
2. Introductory stage
3. Growth stage
4. Maturity stage
5. Declining stage

Presented By: Viqar A. Usmani 15

Introductory Growth Maturity Declining
Relatively Relatively Longer period Longer or
short short short

Sales are usually Sales increase and Sales growth Drop in the sales
slow and profits profits will be high become slow but
are low volume big

Competitors will New competitors More competition Competitors do not

watch enter and over capacity enter due to low
margins

Distribution has More distributors Many distributors Distributors

just begun take up the and undercutting reduce or give up
product

Presented By: Viqar A. Usmani 16

Introductory Growth Maturity decline

Positioning and Brand image is Many brands fight Brand image is low
brand awareness established each other

Promotion budget Promo budget may Promo budget may Not much
very high be increased be standard or low promotions done

Only one or two Few manufacturers Many manufactuers Abundoning

manufacturers manufacturing

High Product Improve product Many changes in May have to take a

failure rate quality and the Marketing mix decision to stay on
features to be done or not

Presented By: Viqar A. Usmani 17

 Importance of P L C to Marketers

Important tool for forecasting and strategic planning

It shows that product have a limited life span
It graphically shows the trend in sales and profitability
It shows the need to adopt different strategies in various
stages

Presented By: Viqar A. Usmani 18

PRODUCTS THAT COME AND GO ( FAD)

Presented By: Viqar A. Usmani 19

 Limitation of the PLC
Many products may not have a life cycle as depicted
by PLC
Stages of PLC are difficult to distinguish
Identifying where one stage ends and the other
begins is very difficult
Traditional shape may not occur. E.g.. Fad items
Ignores the application of marketing mix activities
Strategic decisions can change the PLC e.g.
repositioning

Presented By: Viqar A. Usmani 20

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Services
Service is any act or performance that one
party can offer another that is essentially
intangible. It does not result in ownership of
anything- Kotler.
Services have unique features that
differentiate from physical goods
Intangibility
Variability
Inseparability
Perishability
Ownership
V IPO
Presented By: Viqar A. Usmani 22
 Why do Products fail?
Doesnt match current company objectives
Make room for other products
Overestimating market size
Poor marketing research
Obsolete
Lost its appeal
No longer profitable
Conflicts with other products in the same product line
Design problems
Excessive development costs
Incorrectly positioned, priced, or advertised
Competitive reaction Presented By: Viqar A. Usmani 23
 Product
quality Physical
Sellers characteristics
services of goods

Price
Sellers
reputation

Colour Brand

Product Packaging
warranty
Design

Presented By: Viqar A. Usmani 24

 Planning for New Products
Long term survival of many firms in the competitive world
depends on launching new products successfully.
Planning for new products is an essential and demanding
strategic activity.
There could be many
types of new products

25 Presented By: Viqar A. Usmani


Why crawl when you can run?
Staying still resembles a rock
Presented By: Viqar A. Usmani
Improving and updating product lines is
crucial for the success for any organisation.
Failure for an organisation to change could
result in a decline in sales and with
competitors racing ahead.
The process of NPD is crucial within an
organisation
Products go through the stages of their
lifecycle and will eventually have to be
replaced
26
 NPD Strategy
Original products
Acquisition
Product improvements
Product modifications
New brands through the firms own R&D efforts.
Product
Development

Quality Brand
Growth Productivity Improvement Maintenance

New Products Reduce Cost Quality of Conformance

New Packages Formulas Design Special Situations
Packages Regulatory
Manufacturing Environmental
Presented By: Viqar A. Usmani Specifications 27
New Product Development Process
Idea Generation and Screening

Concept Development and Testing

Marketing Strategy

Business Analysis

Product Development

Test Marketing

Commercialization
Presented By: Viqar A. Usmani 28
 Idea Screening
Internal sources This process involves shifting through
Company employees at all levels the ideas generated above and
External sources selecting ones which are feasible
Customers Competitors and workable to develop.
Distributors Suppliers
Outsourcing Pursing non feasible ideas can
clearly be costly for the company.

Concept Development and Testing Market Research Options (Strategy)

Done by Marketing and/or Advertising Agency Depth Interviews
Qualitative
Conducting Focus Groups Focus Groups Expert
Objectives Judgment
Judge whether the concept fits the Quantitative
opportunity area, and constraints Pre-Prototype Post-Prototype
Refine and / or describe the product concept
What it is : Surveys Conceptual Product Use Test Lab
What benefit(s) will it deliver to the user Tests Perceptual Test Market Test
Key information size, varieties, Maps Conjoint Market
package, price Presented By: Viqar A. Usmani Analysis 29
Presented By: Viqar A. Usmani 30
 Innovative Products
These products are new to the world and new to the company.
They are truly new to the customers and they provide completely
different alternatives to existing products
E.g.
Vaccine for AIDS
Products based on Nano Technology
Heat seeking missile
Computers

Presented By: Viqar A. Usmani 31

 Replacement products
Although these products are new to customers or even to the
company, they are essentially improvements or redesigns of
existing products
Digital phones replaced the analogues
Disposable razers replaced the old blade base razers
Shaving foam and gels have replaced the shaving soaps

Presented By: Viqar A. Usmani 32

 Imitative Products
These products are new to the company and not new
to the market
Many products come in this form to the market
One or few companies may come out with an
innovative or replacement products but many will
copy the technology and come out with similar
products. They are called mee- too products
E.g.. After celltel> mobitel> dialog> Hutch
After Signal > clogard> supirivicki>
After Bata slipper > DSI> Ceypa>
After Mercedes Benze> Ford> GM> Toyota> Nissan

Presented By: Viqar A. Usmani 33

Reasons for introducing new products
To suit the changes in customers needs
To adopt new technological advances and avoid obsolesce
To match competition
Product Life Cycle Concept
To bring down the cost

Presented By: Viqar A. Usmani 34

 Customer need analysis
Information is required as to the expectation of the
customer and to what extent the existing products
meet that expectation. Then the gap between the
two could be observed
Expectation

GAP

Level met by the product

Presented By: Viqar A. Usmani 35

If the gap is understood well, one could find
opportunities to
Introduce new products
Make improvements in existing products
Make improvements in production process
Make improvements in supporting services.

Presented By: Viqar A. Usmani 36

 MAJOR PRODUCTS

Presented By: Viqar A. Usmani 37

Presented By: Viqar A. Usmani 38
 STAGES IN ADOPTION PROCESS
AWARENESS the consumer become aware of the
innovation but lack information about the product
INTEREST the consumer is induced to seek
information about the innovation
EVALUATION the consumer consider whether to
try the innovation
TRIAL the consumer tries the innovation to
improve his or her estimate of its value
ADOPTION the consumer decide to make full and
regular use of the innovation

Presented By: Viqar A. Usmani 39

 Diffusion of innovation
Innovators 2.5% -- willing to try new idea at a risk

Early adopters 13.5%-- opinion leaders , adopt new

ideas early but carefully

Early majority 34% -- deliberate they adopt new

ideas before the average person

Late majority 34% they adopt only after a majority

of people have tried it.

Laggards 16% -- suspicious of changes and only

adopt when all options are exhausted
Presented By: Viqar A. Usmani 40
Presented By: Viqar A. Usmani 41
ANY QUESTIONS????

Thank You
Presented By: Viqar A. Usmani 42