Product Market Profile

• Who is the buyer?• Who is not the buyer?• What need or function does our product serve?• What problem does our product solve?• What are customers currently buying to satisfy the need

and/or solve the problem which are product is targeted?• What price are they paying for the products they are

currently using?• When / Where / Why are product purchased?

Waseem Alam

What is a product?

“A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objects, services, persons, places, organisation and ideas.”

(Kotler 1984)

So what is a service?

“ A service is an intangible product involving a deed, performance or effort that cannot be stored or physically possessed.”

(Dibb/Simpkin 2001)

But importantly...

• A product (or service) is the total experience of the customer when dealing with an organisation

• People do not buy products or services • They buy expectations of benefits

Features v benefits

Features: Discernible characteristics which help describe the product’s purpose

Technical spec Range variants:

Size Colour

Availability Packaging Warranties Service arrangements

Benefits: Charles Revson of Revlon: “In the factory we make cosmetics. In the store, we sell hope”.

Good value for money Prestige (Brand) Good design Ease of use Economy of use Safety (physical) Security (psychological)

Product/service continuumFruit

CarpetsPCs

Theatre

Financialservices

Psychiatry

PUREPRODUCTTangibledominant

PURE SERVICEIntangibledominant

Fast food outlet

Fast food outlet

The Product Life Cycle

IntroductionGrowth

Maturity Decline

Time

Saturation

sales

Profit

Revenue(sales/profit)

The Product Life Cycle

Introduction

Time

sales

Profit

Revenue(sales/profit)

Product unknownSlowly rising salesHigh costs – communication/distribution channelsPrice highLittle profitChoice - move forward or discontinue

The Product Life Cycle

Growth

Time

sales

Profit

Revenue(sales/profit)

Product gains acceptanceMore rapid sales – word of mouth/effect of communicationsIncreased profitsCompetition might enterPrice might reduceChoice - grow share faster than competition

The Product Life Cycle

Maturity

Time

sales

Profit

Revenue(sales/profit)

Sales growth slowsMargins reduceIncreased expenditure on brands against competitionBuild/develop brand loyaltyStrategic choice - cost/differentiate/focus

The Product Life Cycle

Saturation

Time

sales

Profit

Revenue(sales/profit)

High proportion of buyers have purchased productReplacement purchase of satisfied customersMargins further declinePrice competition to gain market shareChoice – fight for share/consider exit

The Product Life Cycle

Decline

Time

sales

Profit

Revenue(sales/profit)

Ceases to be profitableMore technologically advanced/contemporary products become availableChanges in buyer behaviourChoice - identify niches, lower costs or withdraw

Characteristics of physical products

CoreBenefit

AugmentedProduct

Tangible Product

Additional services and benefitsWays of enhancing the product

What is made Core need

Turning a core product/need into something we really want

Physical products - example car sale

CoreBenefittransport

Brand name

Features

Quality/durability

Design/styling

Colour

Capabilities

Warranty

Delivery speed

Personnel

Aftersales

AugmentedProduct Tangible Product

Credit

Characteristics of services

INTANGIBLE

Branding

Processes

Accessibility

Quality

Packaging

Tangibles

SECONDARYSERVICE CORE SERVICE

Services - example insurance

Peace of mind

BrandingImportance of company’s reputation

ProcessesMethods usedto process policiesand claims

AccessibilityDirect or throughbrokerQuality

Level of soughtcustomer satisfaction

PackagingOther benefitsIncl. advice centres

TangiblesBrochuresPolicy documents

SECONDARYSERVICE

CORE SERVICE