Download - Product & PLC Basic Concepts
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Product Concepts
&
Management
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Introduction
To marketers, products are bundles of benefits
delivered to the customer.
The form in which these benefits are delivered can be
both tangible and intangible.At the intangible end of the product spectrum are services.
Product strategy is derived from the company's
marketing objectives
influenced by how products are organised by line and
range, and also by the product life cycle.
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The Product - A Definition
A product is a physical good, service,idea, person or place that is capable of
offering tangible and intangible attributesthat individuals or organisations regard sonecessary, worthwhile or satisfying thatthey are prepared to exchange money,
patronage or some other unit of value inorder to acquire it.
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What is product management?
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Examples of levels of competition
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Key Product Management functions
Product Mix
Product Line
Product Mix decision
Product Line Addition / Deletion
Product Abandonment
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Levels of Product Hierarchy
Product needto satisfy a need e.g. feet protection
Product classa family of products having similar
function e.g. all shoes
Product linea group of products with closely related
functions e.g. sports shoes
Product typeproducts within a line having similar form
e.g. basket-ball shoes
Branda name representing a product or line e.g. Nike
Item (Stock Keeping Unit)a unit item e.g. one pair of
Nike basket-ball shoe
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What Are Key Strategy Planning Decisions Related
to Product?
Physical good,
service or most
often some of both
Branding
Packaging
Warranty
Life Cycle
Management andProduct
Development
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Components of the Market Offering
Value-based prices
Services mixand quality
Product featuresand quality
Attractiveness ofthe market offering
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CUSTOMERS DO NOT BUYPRODUCTS. THEY BUY
BENEFITS
AND SATISFACTION.
---Peter Drucker
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Product classifications
Products can be classified according to theirdurability and tangibility.
Non-durable products are goods consumed
quickly and used on one or a few occasions, e.g.beer, soap.
Durable products are used over an extended timeand may last for years, e.g. fridge.
Marketers also divide products and services intotwo other classifications:consumer andindustrial products.
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Consumer products
Bought to satisfy personal and family needs.
Classified according to consumer shopping habits:
Convenience products
Purchased frequently, minimum comparison and buyingeffort.
Shopping products
Process of selection, compared on bases of quality,suitability, price and style.
Unsought products
Consumer does not know about the product or perceives noneed for it.
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Marketing considerations for consumer products
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Industrial products
Products bought for further processing or the purposes of
resale.
Distinction based upon the purpose for which the product is
purchased.
Materials and parts
Raw materials.
Manufactured materials and parts.
Capital items
Installations.
Accessory equipment.
Supplies and services
Electricity to power the machines making shirts.
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Core
Product
QualityPackaging
Brand Name
ColourStyling
Attributes
InstructionManual
Consumer
Complaint
Management
Consumer
Education &Training
Installation
Delivery
Points &
System
After Sales
Service
Guarantees
&Warranties
Payment
Options
Formal
Product
Augmented
ProductFuture
Product
TOTAL PRODUCT CONCEPT
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Levels of a product
Core product
problem solving service or core benefits that consumers arereally buying when they obtain a product.
Formal product ( basic & expected)
incorporates the quality, features and design, brand name,packaging and other attributes that combine to deliver coreproduct benefits.
Augmented product
incorporates the consumer services and benefits builtaround the core and actual products which in itselfenhances functioning and use of the product..
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Definition of Lipstick
A crayon-like oil-based cosmetic used in
coloring the lips, usually in a tabular container.
Make-up that is used to color the lips.
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Benefits of Lipstick
Core ( different)
Look good
Look different
Look photogenic Enhance looks
Retain moisture
Freshness
Hide irregularities
Face lift
Perfection
Basic (1st stage of Formal)
Long lasting
Grace,style,poise
Heighten personality
Look attractive
Smokers to change lip color
Look presentable & complete
Different shades
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Benefits- Lipstick (Contd.)Expected (2nd stage of Formal)
Fragrance
Formal look
Social acceptance
Impress guys
Shining lipsticks
associated with diamonds Juicy effect
Reflect Mood.
To have a smoothtalk
To feel the taste
throughout the day Demonstration effect
Safety
To give Shape to
your lips
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Benefits- Lipstick (Contd.)
Augmented Beauty saloons
Non-transferable
Personality Classes
Usage pattern fordifferent occasions
Potential
Veggie classification
PRODUCT MATRIX FOR WRITING PENS
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Clarity &Speed
Body,Refill.Casing
InstructionsCustomer care
ProductLevels
Applications
Notes Writing Signing Office Use Gift
CoreLong Lasting.-Indelible
Clarity & nosmudging
Memento /Remembrance.
Basic
Light in weight &Grip, Type of penInk colour, freeflow of ink.
Smoothness.Type of pen.Ink colour
Hassle Free.Type of pen &ink, color, Grip
Long Lasting.CasingDesign & pattern
Expected CreateImpression,Pen standInstructions
BodyRefillCasing etc...
Ink Color,Pen Stand
Augmented CustomerCare,
CustomerCare,
Customer careTestimonials
PRODUCT MATRIX FOR WRITING PENS
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Washing machine types
WASHING MACHINE
WASHERS FULLY AUTOMATIC SEMI AUTOMATIC
TOP LOADING FRONT LOADING
Pulsator wash Agitator wash Tumble wash
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PARTICULARS INDIVIDUAL FAMILY FAMILY FAMILY
BULK SPECILISED COMPLETE
CORE Time
Management &
Convenience
Zero effort wash, one
time quick wash.
Fabric sensitive
Wash
Speedo wash
BASIC Storage of used
clothes,
Non dependence
on servants.
Intensive wash, Any
time easy usage,
Bulk load, Capacity,
Non dependence on
servants.
One time wash,
Stain free,
Optimum wash
quality
Gentle wash, Quick
wash
EXPECTED Wrinkle free
wash,
Clothes should
not get entangled
Instruction
manual
Additional/Superior
fabric, Talking
machine, Multiple
rinse care, purifying of
water, Silent wash. etc
Durability,
Preventing of
clothes from
becoming dull
Talking washing,
Preventing of
clothes from
becoming dull
AUGMENTED Warranty,
After sale service,
Finance,
Finance, After sales
service
Instruction
manual,
Finance
Warranty,
Instruction manual
??? ???
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Brands Individual Family
Bulk Specialized Complete
Whirlpool -E-50
-S-70
-White magic
Agisoak,
-White magic
Super
Hot wash H-55 F-65
FP-65
T-50
T-62
National NA-W-652,NA-W-607,
NA-W-605A.
NA-F-551 NA-F-521 NA-F-621
LG Electrolux WP-9031,
WP-9032,
WP-954S,
WP-1021S,
WP-1022M
WF-T-8519TE,
Direct Drive
WRT-1071
WF-T7517TE,
WD-8007-CI,
WD-1205CI
WD-10160F,
WD-10165F,
WF-S-610TD,
WF-F-6627TD
IFB ------- Digital,
Senator.
-Executive Elite,
Executive Plus
Senorita plus,
Elena
SAMSUNG WT 7100,
WT 7700,
WT 8700,
KARISMA WS
7500
WA-11K5, SWF-
P10.
WA-75N6,
WA-80K4,
WA-80K5
WA-85B9.
GODREJ GDS 400
GDS 550
GDS 650 GDF1101
GDF1201
GDF1301
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PAINTS
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DEFINITION OF PAINT
A substance usedas a coating toprotect or decoratea surface
(especially amixture of pigmentsuspended in aliquid); dries to
form a hard coating
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AUGMENTED = Soft touch feel, Washable, Waterproof ,
Additional benefit
EXPECTED = Durability , Odor free, Should notstick, Dry easily, instructions for use.
BASIC = Co lour, Looks, Combinations
CORE = Decoration, Safety Ofwall, Beautification, Sun light.
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Product / Brand Mix
Width - number ofdifferent product
lines
Length - totalnumber of itemswithin the lines
Depth - number ofversions of each
product
Product Mix -all the product
lines offered
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4 Dimensions of the product mix
Breadth or width
Wide product mix containing many different product lines.
Length
Total number of products in the product lines
DepthDifferent versions, such as size of packaging and different
formulations.
ConsistencyHow closely related the various product lines are in end use,
production requirements, distribution channels etc.
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Product mix implications
Positive:
More closely reflects the segmentation of the market
Closes gaps for competitor entry/meets competition
Increases profile with customers and consumers
NegativeGreater costs
Greater complexity
Reduced concentration
Therefore objective is : optimisation of the mix
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Product mix strategies
Company can add new product lines, thus widening
the product mix.
Company can lengthen the existing product lines to
become a more full line company. It can add more product versions of each product and
deepen its product mix.
The company can pursue more product lineconsistency, or less, depending upon whether it wants
to have a strong reputation in a single field or in
several fields.
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Product-Mix Width and Product-Line Length for
Proctor& Gamble Products
Charmin
Puffs
Banner
Summit
Pampers
Luvs
Ivory
Kirks
Lava
Camay
Gleem
Crest
Ivory Snow
Dreft
Tide
Cheer
Ariel
Paper
TissueDiapers
Disposable
Bar SoapToothpasteDetergents
Product-Mix Width
PRODUCT-
LINE
LENGTH
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Various Product decisions
Building product lines
Line stretching- DOWN MARKET & UP MARKET
Line Filling
Line modernization
Line featuring.
Multibrand strategy
New product development.
Innovations in core product.
Extending markets by usage
Th P d t Lif C l
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The Product Life Cycle
+
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Market
Introduction
Sales growslowly, at acost
Time
Th P d t Lif C l
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The Product Life Cycle
Total
IndustrySales
Total IndustryProfit
+
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Market
Introduction
Market
Growth
Market
Maturity
Sales
Decline
Sales growslowly, at acost
Salesgrowth, butprofits level
off
Sales levels,but profitsdecline
Manage it orsay goodbye
Time
The Product Life Cycle
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The Product Life Cycle
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Market
Introduction
Market
Growth
Market
Maturity
Time
Sales growslowly, at acost
Salesgrowth, butprofits level
off
Sales levels,but profitsdecline
The Product Life Cycle
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The Product Life Cycle
Total
IndustrySales
Total IndustryProfit
+
-
$ 0
Market
Introduction
Market
Growth
Market
Maturity
Sales
Decline
Time
Sales growslowly, at acost
Salesgrowth, butprofits level
off
Sales levels,but profitsdecline
Manage it orsay goodbye
Avoid Confusion about PLC
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Avoid Confusion about PLC
Product-market, not brand
Markets may have different
cycles
Timing of stages may vary
Strategy must change over
time
Key PointsAbout the
PLC...
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The Product Life Cycle
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The Product Life Cycle
TotalIndustry
Profit
+
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$0
MarketIntroduction
MarketGrowth
MarketMaturity
SalesDecline
Time
TotalIndustry
Sales
PlaceBuild
Channels
Maybe
selective
distribution
More of the
same, but
more channeloutlets
available
Move toward
more
intensivedistribution
Find a way to
reach loyal
laggards
The Product Life Cycle
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The Product Life Cycle
TotalIndustry
Profit
+
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$ 0
MarketIntroduction
MarketGrowth
MarketMaturity
SalesDecline
Time
TotalIndustry
Sales
PromotionBuild
primary
demand
Build selective demand
Informing/Persuading Persuading/reminding
Frantically competitive!
The Product Life Cycle
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The Product Life Cycle
TotalIndustry
Profit
+
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MarketIntroduction
MarketGrowth
MarketMaturity
SalesDecline
Time
TotalIndustry
Sales
Price
Skim the
cream at a
high price
or
Low to
penetrate
faster
Meet competition (especially in oligopoly)
or
Price dealing and price cutting
or
Value pricing for long-term relationships
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Life Cycles and Marketing Strategy
Introduction
Growth
Maturity
Maximize distributionBuild awareness & obtain trial
Decline
Extend distributionAdvertise & promote heavily
Advertise product imagePersuade customers to switch
Milk the product for profitsDetermine if to terminate product
Postmortem Plan for postmortem expensesDevelop phase-out plan
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A NEW LOOK AT PLC
Exploit the PLC-Theoder Levitt : HBR:1965
Forget the PLC-Nariman Dhalla : HBR :1977
EVERY BUSINESS IS A GROWTH
BUSINESS!-Ram Charan : 2000