The learning objectives
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The learning objectives. Product Product classification Product life-cycle strategies New-product Development Product-line decision Brands decisions. 1. What is product?.

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The learning objectives

The learning objectives

  • Product

  • Product classification

  • Product life-cycle strategies

  • New-product Development

  • Product-line decision

  • Brands decisions


1 what is product

1. What is product?

  • Anything that can be offered to a market for attention,acquisition,use,or consumption that might satisfy a want or need.


Components of the market offering

Value-based prices

Product features

and quality

Services mix

and quality

Components of theMarket Offering

Attractiveness of

the market offering


2 product classifications

2. Product classifications

  • Consumer products

  • Industrial products


Consumer product

Consumer product

  • Convenience products

  • Shopping products

  • Specialty products

  • Unsought products


Consumer goods classification

  • Convenience Products

Shopping Products

Unsought Products

Specialty Products

Consumer-Goods Classification

  • Buy frequently & immediately

  • Low priced

  • Many purchase locations

  • Includes:

    • Staple goods

    • Impulse goods

    • Emergency goods

  • Buy less frequently

  • Gather product information

  • Fewer purchase locations

  • Compare for:

    • Suitability & Quality

    • Price & Style

  • Special purchase efforts

  • Unique characteristics

  • Brand identification

  • Few purchase locations

  • Products consumers don’t demand normally.

  • Require much advertising &

    personal selling


Industrial product

Industrial Product

  • Material and parts

  • Capital items

  • Supplies and services


6 product line decision

6.Product-line decision

  • Product mix

  • Product-line analysis

  • Product –line length


Product mix assortment

Product mix(assortment)

  • The set of all products and items that a particular seller offers for sale.

  • A company’s product mix has a certain width,length,depth, and consistency.


Product mix concepts

Product Mix Concepts:

  • Width:how many different product lines.

  • Length:the total number of items.

  • Depth:how many variants are offered of each product in the line.

  • Consistency:how closely related the various product lines are in end use,production requirement,distribution channels, or some other way.


The learning objectives 1366245

Product Mix & Product Line- HUL

Personal wash

Personal wash : Lux , lifebuoy , Liril , Hamam , Breeze , Dove , Pears ,

Laundry

Laundry : Surf Excel , Rin , Wheel

Skin Care

Skin Care : Fair and Lovely , Ponds

Hair Care

Hair Care: Sunsilk , Clinic Plus

Oral care

Oral care : Pepsodent , Close Up

Color Cosmetic

Color Cosmetic : Lakme

Beverage

Tea : Broke Bond , Lipton

Coffee: Bru

Foods

Foods: Kissan , Knorr Annapurna

Ice-Cream

Quality Walls


Product mix

Product Mix -

all the product

lines offered

Consistency

Product Mix

Width - number of different product lines

Length - total number of items

within the lines

Depth - number of versions of each product


Product line analysis

Product-line analysis

  • Sales and profit

  • Market profile


Product line length

Product-Line Length

  • Line Stretching

    • Downmarket (TATA Nano)

    • Upmarket (Maruti 800 to Maruti SX4)

    • Two-way

  • Line Filling

  • Line Modernization

  • Line Featuring & Line Pruning


Trading up and trading down

Trading Up and Trading Down

  • Trading up:Adding a higher-priced product to a line to attract a higher-income market and improve the sales of existing lower-priced products.

  • Trading down:Adding a lower-priced item to a line of prestige products to encourage purchases from people who cannot afford the higher-priced product, but want the status.


3 product life cycles plc

3.Product Life Cycles (PLC)

  • The course of a product’s sale and profit over it lifetime.It involves five distinct stages:product development,introduction,growth,maturity,and decline.


Sales profit life cycles

Sales&profits

Introduction

Growth

Maturity

Decline

Time

Sales & Profit Life Cycles


Product life cycle stages

Product Life Cycle Stages

  • Introduction—most risky and expensive.

  • Growth—both sales and profits rise, often rapidly.

  • Maturity—sales increase at a decreasing rate and profits decline.

  • Decline—demand drops, often because of another product development.


Strategic implications of the stages

Strategic Implications of the Stages

  • introductory stage: developing the market, creating awareness, reaching the innovators

  • growth stage: competition begins, sales grow quickly, profits peak, market penetration

  • maturity stage: competition is intense, sales slow down, differentiated product offerings, customers are brand loyal, few new entrants

  • decline stage: customers move to other options, competitors leave, profits are low, consider exit


Characteristics of introduction stage

Characteristics of Introduction Stage

  • Low sales

  • High cost per customer

  • Zero or Negative profits

  • Create product awareness and trial

  • Offer a basic product

  • Use cost-plus

  • Build selective distribution

  • Awareness building advertising


Four introductory price promotion strategies

Promotion

High

Low

High

Price

Low

Four IntroductoryPrice-Promotion Strategies

Rapid-

skimming

strategy

Slow-

skimming

strategy

Rapid-

penetration

strategy

Slow-

penetration

strategy


Characteristics of the growth stage

Characteristics of the Growth Stage

  • Rapidly rising sales

  • Average cost per customer

  • Rising profits

  • Offer product extensions

  • Target new market segments


Characteristics of maturity stage

Characteristics of Maturity stage

  • Peak sales and profits

  • Increased advertising and trade and consumer promotion.

  • Frequent markdowns

  • Market nicher develops.

  • Market Modification Strategy

  • Marketing Mix Modification Strategy


Characteristics of declining stage

Characteristics of Declining Stage

  • Declining sales& Profits

  • Phase out unprofitable outlets

  • Cut on promotional expenditure

  • Liquidating, Divesting and Harvesting the business


Special categories of plc style fashion fad

Special categories of PLC (Style, Fashion, Fad)

  • Style is a basic/distinctive mode of expression appearing in a field of human endeavors.-Once a style is invented, it can last for generations.

  • Fashion is a currently accepted/popular style in a given field.

  • Fads are fashion that comes quickly into the public eye, are adopted with great zeal, peak easily and decline fast


5 new product development

5.new-product development

  • What is new product?

  • Major stages in new product development


What is new product

What is new product?

  • Original products

  • Product improvements

  • Product modifications

  • New brands that the firm develops through its own research and development efforts


Major stages in new product development

Major stages in new product development

  • Idea generation

  • Idea screening

  • Concept development and testing

  • Marketing strategies

  • Business analysis

  • Product development

  • Test marketing

  • Commercialization


New product development process

Marketing

Strategy

Development

Business

Analysis

Concept

Development

and Testing

Product

Development

Idea

Screening

Market

Testing

Commercialization

New Product Development Process

Idea

Generation


Probability of success

Probability of

economic

success given

commercialization

Probability of

commercialization

given technical

completion

X

X

=

Overall

probability

of success

Probability of Success

Probability

of technical

completion


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

Concept Development & Testing


Product brand positioning

Expensive

High price/oz.

Brand C

Cold

cereal

Bacon

and

eggs

Quick

High in calories

Slow

Low incalories

Pancakes

Instant

breakfast

Brand B

Hot

cereal

Brand A

Inexpensive

Lowprice/oz.

Product & Brand Positioning

(a)Product-positioning

map

(breakfast market)

b)Brand-positioning

map

(instant breakfast market)


Conjoint analysis

Brand name

Retail Price

--

--

--

--

--

--

--

--

--

--

1.0

1.0

Utility

Utility

| | |

K2R Glory Bissell

| | |

$1.19 $1.39 $1.59

0

0

Money-Back

Guarantee?

Good Housekeeping Seal?

--

--

--

--

--

--

--

--

--

--

1.0

1.0

Utility

Utility

0

| |

No Yes

| |

No Yes

0

Conjoint Analysis


Consumer goods market testing

Consumer-Goods Market Testing

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.

Sales-

Wave

Research

Test offering trail to

a sample of

consumers in

successive

periods.

Standard

Test Market

Full marketing campaign

in a small number of

representative cities.


Adopter categorization of the basis of relative time of adoption of innovations

34%

Late

majority

34%

Early

majority

13 1/2%

Early

adopters

16%

Laggards

2 1/2%

Innovators

Adopter Categorization of the Basis of Relative Time of Adoption of Innovations

Time of adoption innovations


6 brand decision

6.Brand Decision

  • What is brand?

  • Band decision


What is brand

What is brand?

  • Brand is a name,term,sign,symbol,or design,or a combination of them,intended to identify the goods or services of one seller or group of sellers and differentiate them from those of competitors.


What is a brand

What is a Brand?

User

Culture

Personality

Attributes

Benefits

Values


An overview of branding decisions

Brand-

Repositioning

Decision

Brand-

Sponsor

Decision

Brand-

Name

Decision

Brand-

Strategy

Decision

Branding

Decision

  • Brand

  • No brand

  • Manu-

  • facturer

  • brand

  • Distribu-

    • tor

  • (private)

  • brand

  • Licensed

  • brand

  • Individual

  • brand

  • names

  • Blanket

  • family

  • name

  • Separate

  • family

  • names

  • Line

  • extension

  • Brand

  • extension

  • Multi-

  • brands

  • New

  • brands

  • Cobrands

  • Reposi-

  • tioning

  • No

  • reposi-

  • tioning

An Overview ofBranding Decisions


Good brand names

Good Brand Names:

Lack Poor

Foreign

Language

Meanings

Distinctive

Suggest

Product

Qualities

Suggest

Product

Benefits

Easy to:

Pronounce

Recognize

Remember


Brand strategies

Product Category

Line

Extension

Brand

Extension

Existing

New

Existing

Multibrands

BrandName

New

Brand Strategies

New

Brands


Why package crucial as a marketing tool

Why Package Crucial as a Marketing Tool

  • Self-service

  • Consumer affluence

  • Company & brand image

  • Opportunity for innovation


Labels

Labels

Promote

Describe

Identify


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