Product Product strategy strategy

Product analysis and Product analysis and descriptiondescription

Lecture 7Lecture 7

Content- Content- Products DecisionsProducts Decisions

• Product and Service Classification System

• The Product Life Cycle• Introduction to product matrices• Boston Matrix (Growth/Share)• Ansoff’s Matrix (Product Market)

Products DecisionsProducts Decisions

• Product and Service Classification System?

• The Product Life Cycle stages?• Growth/Share?• Product Market?

Product and Service Product and Service Classification SystemClassification System

• Convenience goods - little effort, relatively inexpensive

• Shopping goods - e.g ‘white goods’, DIY equipment, more expensive, infrequent

• Speciality goods - extensive search e.g Jewellery, gourmet food

• Unsought goods - e.g. double glazing,

• Industrial goods• Installations - ‘speciality’ goods of

industrial markets - plant and machinery

• Accessories - maintenance and office equipment

• Raw materials• components • Business to business e.g.

consultants, accountants

Individual Product Individual Product DecisionsDecisions

Product attributesProduct attributes

BrandingBranding

Packaging & Packaging & labelinglabeling

Product support Product support servicesservices

Product quality Product quality

Product featuresProduct features

Product style & design

Product style & design

Ability of product to perform its functions; includes level (performance quality) & consistency (conformance

quality)

Ability of product to perform its functions; includes level (performance quality) & consistency (conformance

quality)

Help to differentiate the product from the competition

Help to differentiate the product from the competition

Style = appearance Design = performance / function

(as well as appearance)

Style = appearance Design = performance / function

(as well as appearance)

Marketing’s role – represent the “voice of the consumer”

Developing a product or service involves defining the benefits that it will offer such as:

Product AttributesProduct Attributes

ATTRIBUTESATTRIBUTES

• AN ATTRIBUTE IS A PROPERTY OF A FOOD THAT THE CUSTOMER DESIRES

• MOST CUSTOMERS ARE LOOKING FOR MULTIPLE ATTRIBUTES IN A FOOD PRODUCT

• ATTRIBUTES ARE EXPECTED TO REMAIN CONSTANT THROUGHOUT THE SHELF-LIFE OF THE PRODUCT

Attributes and benefitsAttributes and benefits• Features-attributes are product

characteristics such size, color, horsepower, functionality, design, hours of business, fabric content, etc.

• Benefits answer the customer’s question: “What’s in it for me?” Benefit is a product attribute expressed in terms of what the user gets from the product rather than its physical characteristics or features. Benefits are often paired with specific features, but they need not be. They are perceived, not necessarily real.

SpecificationSpecification• A detailed description of the features and

performance characteristics of a product. • For example, a laptop computer's

specification may read as a 90 megahertz Pentium, with 16 megabytes of ram and 720 megabytes of hard disk space, 3.5 hours of battery life, weighing 4.5 pounds, with an active matrix 256 color screen.

• To specify a product we need: – attributes and characteristics – measurement and measurements units

Basic classification of Basic classification of attributesattributes

• chemical,• physical,• biological,• sociological,• physiological etc. characteristics

Classification of attributes based on their Classification of attributes based on their relation to product corerelation to product core

• product core attributes – product functionality – Product reliability – product usability including ergonomic

attributes – product maintability

• product environment attributes – product compatibility and portability– environmental attributes– economical attributes– psychological and sociological attributes

Characteristics and Characteristics and attributesattributes

• according ISO Standard ISO 9216 Information technology -- Software product evaluation -- Quality characteristics and guidelines for their use

• ISO 9126 sets out six quality characteristics, which are intended to be exhaustive. From this it follows that each quality characteristic is very broad– Functionality – Reliability – Usability– Maintainability– Portability– Efficiency

Functionality Functionality A set of attributes that bear on A set of attributes that bear on the existence of a set of functions and their the existence of a set of functions and their specified properties. The functions are those specified properties. The functions are those

that satisfy stated or implied needsthat satisfy stated or implied needs..

• Suitability: Attribute of software that bears on the presence and appropriateness of a set of functions for specified tasks. (ISO 9126: 1991, A.2.1.1)

• Accuracy: Attributes of software that bear on the provision of right or agreed results or effects. (ISO 9126: 1991, A.2.1.2)

• Interoperability: Attributes of software that bear on its ability to interact with specified systems. (ISO 9126: 1991, A.2.1.3) (NOTE -- Interoperability is used in place of compatibility in order to avoid possible ambiguity with replaceability. (ISO 9126: 1991, A.2.1.3)

• Compliance: Attributes of software that make the software adhere to application related standards or conventions or regulations in laws and similar prescriptions. (ISO 9126: 1991, A.2.1.4)

• Security: Attributes of software that bear on its ability to prevent unauthorized access, whether accidental or deliberate, to programs and data. (ISO 9126: 1991, A.2.1.5)

Reliability Reliability A set of attributes that bear on the A set of attributes that bear on the capability of software to maintain its level of capability of software to maintain its level of

performance under stated conditions for a performance under stated conditions for a stated period of time.stated period of time.

• Maturity: Attributes of software that bear on the frequency of failure by faults in the software. (ISO 9126: 1991, A.2.2.1)

• Fault tolerance: Attributes of software that bear on its ability to maintain a specified level of performance in cases of software faults or of infringement of its specified interface. (ISO 9126: 1991, A.2.2.2)

• Recoverability: Attributes of software that bear on the capability to re-establish its level of performance and recover the data directly affected in case of a failure and on the time and effort needed for it. (ISO 9126: 1991, A.2.2.3)

Maintainability Maintainability A set of attributes that bear A set of attributes that bear on the effort needed to make specified on the effort needed to make specified

modifications.modifications.

• Analysability: Attributes of software that bear on the effort needed for diagnosis of deficiencies or causes of failures, or for identification of parts to be modified. (ISO 9126: 1991, A.2.5.1)

• Changeability: Attributes of software that bear on the effort needed for modification, fault removal or for environmental change. (ISO 9126: 1991, A.2.5.2)

• Stability: Attributes of software that bear on the risk of unexpected effect of modifications. (ISO 9126: 1991, A.2.5.3)

• Testability: Attributes of software that bear on the effort needed for validating the modified software. (ISO 9126: 1991, A.2.5.4)

Portability Portability A set of attributes, that bears on A set of attributes, that bears on the ability of software to be transferred from the ability of software to be transferred from

one environment to anotherone environment to another

• Adaptability: Attributes of software that bear on the opportunity for its adaptation to different specified environments without applying other actions or means than those provided for this purpose for the software considered. (ISO 9126: 1991, A.2.6.1)

• Installability: Attributes of software that bear on the effort needed to install the software in a specified environment. (ISO 9126: 1991, A.2.6.2)

• Conformance: Attributes of software that make the software adhere to standards or conventions relating to portability. (ISO 9126: 1991, A.2.6.3)

• Replaceability: Attributes of software that bear on the opportunity and effort of using it in the place of specified other software in the environment of that software. (ISO 9126: 1991, A.2.6.4) NOTES: Replaceability is used in place of compatibility in order to avoid possible ambiguity with interoperability. Replaceability with a specific software does not imply that this software is replaceable with the software under consideration. Replaceability may include attributes of both installability and adaptability. The concept has been introduced as a subcharacteristic of its own because of its importance.

Efficiency Efficiency A set of attributes, that bears on the A set of attributes, that bears on the relationship between the level of performance relationship between the level of performance of the software and the amount of resources of the software and the amount of resources

used, under stated conditionsused, under stated conditions

• Time behaviour: Attributes of software that bear on response and processing times and on throughput rates in performing its function. (ISO 9126: 1991, A.2.4.1)

• Resource behaviour: Attributes of software that bear on the amount of resources used and the duration of such use in performing its function. (ISO 9126: 1991, A.2.4.2)

Usability (product attribute)Usability (product attribute)

• What is usability?– Extend to which a product is designed to fit users’

needs or, in other words, the extend to which a product is easy to use.

How is product usability achieved?How is product usability achieved?

• Collecting data from user:– Objective Data – Subjective Data– Measurements – such as task time, errors, learning

rate, satisfaction, level of frustation...

Why use usability engerneering?Why use usability engerneering?

• Define the needs of the users before building the product. Understand how human interact with technology.

• Designers CANNOT effectively speak for users.

• Preference does not equal perfomance.

General usability benefitsGeneral usability benefits• Reduces engineering/development costs and

facilitates speed to market.• Reduces testing and quality assurance costs.• Reduces sales costs and shortens sales cycles.• Can decrease production costs while improving

margins• Improvers customer Return on Investiment.

Benefits of Usability - examplesBenefits of Usability - examples

• Automotive industry – reseachers methodically test and mesure drivers in a real or simulated driving environment.

• Aerospace industry – understand how human interact to technology (pilot cognitive load to air traffic controller)

• IBM – state that for every $1 invested in usability, the payback is between $10 and $100

Quick Check List TCNVVQuick Check List TCNVV• T- Taste/Texture• C – Convenience• N – Nutrition/Health• V – Variety• V – Value (perceived Quality/cost)

ATTRIBUATE EXAMPLESATTRIBUATE EXAMPLES

• FLAVOR• TEXTURE• COLOR• MOUTHFEEL• APPEARANCE• HEALTHY • NUTRITIOUS

• LOW COST• LONG LASTING• NATURAL• ORGANIC• LOW FAT• LOW CALORIES• LOW SUGAR

FACTORS AFFECTING ATTRIBUTESFACTORS AFFECTING ATTRIBUTES

• FOOD TYPE• INGREDIENTS

– TYPE– AMOUNT– INTERACTION

• ENVIRONMENT– PH– OXYGEN

• PROCESSING HISTORY– TEMPERATURE– SHEAR

• PACKAGING• STORAGE

CONDITIONS

INFLUENCED BYINFLUENCED BY

• MARKET POSITION OF THE PRODUCT• DESIRED SHELF-LIFE• PROCESSING CAPABILITIES• PACKAGING CAPABILITIES

ATTRIBUTES MAY BE IN CONFLICT ATTRIBUTES MAY BE IN CONFLICT WITH ONE ANOTHERWITH ONE ANOTHER

• FREQUENTLY OPTIMIZING FOR ONE ATTRIBUTE WILL ADVERSELY AFFECT ANOTHER

• RECOGNIZE TRADE-OFFS EARLY IN DEVELOPMENT PROCESS -- A TWO YEAR SHELF-LIFE GENERALLY COMPROMISES “FRESH FLAVOR”

LEARN TO RECOGNIZE ATTRIBUTE LEARN TO RECOGNIZE ATTRIBUTE EXPECTATIONS FROM - EXPECTATIONS FROM -

• PRODUCT TYPE• INGREDIENT LABELS• PACKAGING• PACKAGE INSTRUCTIONS• LOCATION AT POINT OF SALE• SELL BY DATE• ADVERTISING PROMISES

Product Life Cycle

ProductProduct Single company produces productSingle company produces product

Introduction Stage of the PLC

GoalsGoals

SalesSales

ProfitsProfits

PricingPricing

MarketingMarketing

Get first-time buyers to try the productGet first-time buyers to try the product

Increase at a steady but slow paceIncrease at a steady but slow pace

NegativeNegative

High: recover R&D costs; or Low: attract large number of customers

High: recover R&D costs; or Low: attract large number of customers

Informing customersInforming customers

Length of StageLength of Stage Depends on 1) marketplace acceptance, 2) producer willingness to support

product

Depends on 1) marketplace acceptance, 2) producer willingness to support

product

SalesSales

ProfitsProfits

GoalsGoals

Marketing StrategiesMarketing Strategies

PricePrice

AdvertisingAdvertising

Rapid increase in sales Rapid increase in sales

Increase and peakIncrease and peak

Encourage brand loyaltyEncourage brand loyalty

Introduction of product variationsIntroduction of product variations

Price competition may appearPrice competition may appear

Heavy advertising is used when competitors appear

Heavy advertising is used when competitors appear

Growth Stage of the PLC

SalesSales

ProfitsProfits

CompetitionCompetition

ProductProduct

DistributionDistribution

Marketing StrategiesMarketing Strategies

Peak , then level off, even declinePeak , then level off, even decline

Margins narrowMargins narrow

Grows intenseGrows intense

Mostly replacement productsMostly replacement products

Sell through all suitable retailersSell through all suitable retailers

Firms alter the marketing mix, try to attract new users

Firms alter the marketing mix, try to attract new users

Maturity Stage of the PLC

SalesSales

ProfitsProfits

CompetitorsCompetitors

ProductProduct

Marketing StrategiesMarketing Strategies

Declining salesDeclining sales

Declining profitsDeclining profits

Large number with no one having the advantage

Large number with no one having the advantage

Should the product be kept?Should the product be kept?

Keep product, phase out gradually, drop product immediately

Keep product, phase out gradually, drop product immediately

Decline Stage of the PLC