Introduction to Product
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Transcript of Introduction to Product
PRESENTED BY
SOMDEEP KUMAR SEN
A product is anything that has the capacityto satisfy customer’s need/want/demand
A product is anything offered for attention,use or consumption that might satisfy theneed/want/demand
The term product covers both goods andservices
The core product – the core benefit that satisfies the consumer’s need
The actual product – the specific product offering designed to satisfy the need
The augmented product – additional bundle of benefits
Core product benefit: Transportation
Actual product: The car itself – design, styling,quality, performance, reliability, etc.
Augmented product: Warranty, Extendedwarranty, credit, zero % finance, etc.
The product mix is the set of all productsoffered for sale by a company
A product mix has two dimensions: Breadth - the number of product lines
carried. Depth - the variety of sizes, colors, and
models offered within each product line
A product line is a broad group ofproducts, intended for similar uses andhaving similar characteristics.
Product Line- I Product Line- II Product Line - III
Bath Soap Detergent Beverage
•Dove•Lirl•Lux•Pears•Rexona•Lifebuoy•Hamam•Jai•Breeze•Moti
•Surf•Rin•Wheel•Sunlight•501
•Bru•Brook-Bond•Taaza•Tajmahal
Pro
du
ct De
pth
Product Breadth
LINE STRECHING
Whenever the marketer feels that they can increase the profit by either addingor dropping items from the product line, it is called Line stretching
Line Stretching can be both- upward or downward
Downward Stretching – P & G’s “Ariel” detergent begun at a premium end& then down stretched to lower market segment by introducing “Ariel Bar”
Upward Stretching- HUL’s Lifebuoy started as a hygienic bath soap, but latermoved to premium segment as HUL introduced Liquid Hand-Wash
Line Modernization-
Even when the product is adequate, the line might need to be modernized
In modern business line modernization is carried out to gain competitiveadvantage as the competitors are also upgrading their products
TATA Sumo (1994) >> Sumo DX (1996) >> Sumo DI Spectra (2000)……………..So on
Line Pruning-
Company may find out that one end of its line selling well & other end is not &hence they may try to boost the demand for slower sales
Line Extension-
Adding a new product line in the product mix is called Line Extension
In economics and marketing, productdifferentiation is the process of distinguishing aproduct or offering from others, to make it moreattractive to a particular target market
This involves differentiating it from competitors'products as well as a firm's own product offerings
Product differentiation can be achieved on thebasis of price, style, packaging, size, flavor etc.
The stages through which a new product idea goes through from beginning toend
It is a generic description of the way a product behaves in the market place
Every product passes through certain identifiable stages
Basically, it is a model that describes the stages a product goes through
This is stage where the product is first introduced to the market
This stage is most risky and expensive as the brand awareness & the volume of sales is very low (almost zero)
This is also known as the stage of negative return
The product has developed gained certain degree of brand awareness
The sales volume starts to grow quickly & the profits peak
However during the later phase of the stage sales volume starts to dip as newcompetitors enter the market
The most profitable Stage as the product has achieved acceptance by most potential customers
Sales continue to increase but at a slower pace
Advertisement expenditures will be reduced as the brand awareness is strong
Company not only looks to extend its market share but also it looks to defend its existing one
Sales begins to decline as the demand for the product decreases
The product becomes technologically obsolete
During the decline phase the firm generally have following options
1. Maintain the product & hope that the competitors will exit the market
2. Decrease the price of the product or use other pricing techniques toincrease the sales
3. Reposition the product
4. Discontinue the product
MARKETING OBJETIVES
To create the product awareness and to attract the customers towards the product
Product
They offer only on product in the market. They did not come up with the differentiated product
Price
In the initial stages of the product, they offer the relatively higher price than their competitor(LIFEBUOY). Because, they want to recover their initial cost of making the product
Promotion
In the initial stages, they allocated more advertising budget So that more and more customers couldbe attracted towards the product
In ads they targeted the early adopters, who were readiest to buy the product
The first ambassador, Leela Chitnis.
Place
Distribution was selective and only covers the major cities of India to get recognition in those cities.
Marketing Objectives
The marketing objectives of the Lux were to expand their market to the other cities of India
MARKETING STRATEGIES
Product
In the growth stage, the company had offered the same product in the market.
Price
In this stage, the company had changed their price to some extent because of maximizing themarket share. ( Slightly cut down the prices )
Place
In this stage, company had expanded their market to the other cities of INDIA. Their distribution channel was the same as in the initial stages of the product.
Promotion
In the growth stage, they had increased their advertising budget as in the initial stages because of attracting the new customers or to retain the existing customers.
Sharmila Tagore, Hema Malini, Zeenat Amaan, Juhi Chawla, Madhuri Dixit, Sridevi
MARKETING OBJECTIVES
The marketing objective of Lux is to maximize more profit while defending the market share. And to expandthe market to all the cities of INDIA.
MARKETING STRATEGIES
Product
The Lux has made the modification in the product by introducing
Lux Almond, Lux Orchid , Lux Fruit, Lux Saffron, Lux Chocolate, Lux Oil and Honey.etc
Price
The Lux products are now available at higher prices in the market, the reason behind is that the company’smarketing objectives is to maximize more profit
Place
Now Lux products are available in almost all the cities of India
Promotion
In this stage Lux advertising has been reduced to some extent because of the more brand awareness in the minds of customers.
Recently, they have shown Aishwarya Rai , kareena kapoor & ShahRukh khan
A product that opens up entirely a newmarket
A product that replaces an existingproduct
An old product introduced in a newmarket
An old product packaged in a differentway
An old product marketed in a differentway
A new product launched in a new market
A new product launched in an old market
Throx
Socks with a spare - Throx is a company thatsells socks, claiming to have solved theproblem of the missing sock: by selling threesocks instead of two
The Fizz
The screw on ice-cream top - The Fizz is aplastic cup that screws on to a plastic PETbottle allowing you to create a mobile icecream float
Neglect of market research
Inaccurate market research
Poor marketing after launch
Poor distribution
Performance below expectation
Product too complex
Market not ready for the product
To add to product mix
To replace declining products
To take advantage of new technology
To maintain/increase market share
To defeat or to keep up with rivals
To maintain competitive advantage
To bring in new customers
Idea Generation
Idea Screening
Concept Testing
Business Analysis
Product Development
Test Marketing
Commercialization
Am
ou
nt o
f Inve
stme
nt
New Products by their very nature are the results of innovations
These innovations result from creative & free thinking
The sources of Idea generation are:
R & D Department
Production Department
Sales Team
Employees
Customers
Competitors
Market Sources
The main objective of idea screening is to spot good ideas and rejectpoor ones
Ideas are checked for technical feasibility, financial viability &marketability
Ideas are rated according to marketing, production & strategic factors
During this stage the consumers are presented with a proposed product tomeasure their attitude & intentions
Sample of potential buyers are presented with the product idea through awritten or oral description to determine the attitudes & initial buyingintentions
In this stage potential profitability of the new product are evaluated
During this phase potential sales, profit, BEP , ROI, etc. are reviewed
During this phase the company analyzes the feedback of the sample of thepotential buyers.
Analysts look to study the technical & the financial feasibility of the product
Several statistical analysis such regressing, hypothesis testing etc. are usedduring this phase
R&D turns the idea into a product
Engg. & production issues are involved
Concern with design, materials, production, processes, quality & safety
Developing the product concept into a physical product
Launching a product in small geographical area
A field experiment in realistic market setting
Releasing the product into a small but representative market where consumer reactions can be assessed & the marketing mix checked and adjusted
Objectives Forecast likely results of a national launch Test the operational effectiveness of the marketing plan To identify possible problems & customer reaction
Introducing a new product in the market
Heavy promotional expenditure at the launch as the product is in theintroduction stage
Product has to be well targeted and positioned
Choice of skimming or penetration pricing