S 11 Product Management

8/11/2019 S 11 Product Management

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Session 11

Product Management


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Session Objectives

What are the characteristics of products and how domarketers classify products?

How can companies differentiate products?

How can a company build and manage its product mix

and product lines?

How can companies use packaging, labeling,

warranties, and guarantees as marketing tools?

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What is a Product?

A Productis anything that can be offered in a market

for attention, acquisition, use, or consumption that

might satisfy a need or want

Productincludes physical goods, services,

experiences, events, persons, places, properties,

organizations, information, and ideas.

At the heart of a great brand is a great product.

The company offers something (product)

The customer offers something in exchange (price)

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Components of the Market Offering

Attractiveness

of the market

offering

Value-based prices

Product

features

and quality

Services

mix and

quality

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Five Product Levels

Core Customer Value What thecustomer is really buying. There is no

differentiation at this level

Actual Product - offered by the company

by adding certain features, style, design

and packaging to the customer.The customer always looks for certain

attributes in the Expected Product

The product can be augmented through

additional services. This is done through

delivery, credit, warranty, after salesservice to provide the cutting edge.

Potential product is to attract and hold

the customer


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Product Classification

Nondurable goods

bought frequently and hence requireintense distribution and heavy

promotion.

Durables

bought less frequently and require

strong warranties, after sales serviceand personal selling.

Services require more quality control, supplier

credibility and adaptability.

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Product Classification

Convenience Products

Shopping Products

Specialty Products

Unsought Products

ConsumerProducts

Materials and Parts

Capital Items Consumables

IndustrialProducts

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Consumer Products

Bought frequently with minimum comparison and buying effort Low price and widespread distribution

Mass promotionConvenience

Products

Customer compares carefully on suitability, quality, price and style

Higher prices and selective distribution

Advertising and personal selling

Shopping

Products

Unique characteristics for which customers make special purchase efforts

High price and selective distribution

Require service orientation

Specialty

Products Consumer does not know about or normally does not think of buying

Prices and distribution varies

Aggressive selling and advertising

UnsoughtProducts

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Product and Service Decisions


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Product Attributes

Level

ConsistencyQuality Competitive tool for differentiating a product from

competitors products Assessed on value to customer versus cost to companyFeatures The appearance of the productStyle

Product usefulness and looksDesign

10What was the inspiration of Nano?


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Product Differentiation

Product formsize, shape or physical structureFeaturesLook at which ones do different customers wantin different settingsCustomizationCan you meet each customers needs?PerformanceDecide on low, average, high or superior

ConformanceConsistency in qualityDurabilityExpected operating lifeReliabilityA product will not malfunction in a given timeperiodReparabilityEase of fixing a product

StyleLook and feel to the buyer

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Service Differentiation

Ordering

Ease

Delivery Installation

Customer

Education

Maintenance

and RepairReturns

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The Product Hierarchy

Need family

Product family

Product class

Product line

Product type

Item

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Core need that the

product family

meets

Products within a

product family having

functional coherence

All product classes

that satisfy a coreneed

Products which perform similar

functions, are sold to similarcustomers through similar

channels in a price range

A group of products

within a product line

that share form

Also called SKU. A distinct unit

distinguishable by appearance,

size, price or other attribute


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Product Systems and Mixes

Group of diverse but related items that work in a compatiblemannerProduct system

A set of all products a particular seller offers for saleProduct mix(Assortment)

Width Length

Depth

Consistency

Productassortments

have:

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Product ssortment

WIDTHDifferent product lines that the

company carries

LINESDifferent products that are closely

related to each other

DEPTHVariants offered of each product in the

line

CONSISTENCYDegree of similarity between variouslines in the mix in end use, distribution

lines or some other way

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Product Mix and Line Length of HUL

Product Mix Width

Home and Personal Care Home Care Foods

Personal

Wash

Skin Care

and

Cosmetics

Hair

Care

Oral

CareDeodorants

Fabric

Care

Kitchen and

Floor CareTea Coffee Foods

Ice

Cream

Lux Fair & Lovely SunsilkPepsode

ntAxe Surf Domex

Brooke

Bond

Brooke

Bond

Bru

KissanKwality

Walls

Lifebuoy Ponds Clinic PlusClose

UpRexona RIN Cif Lipton Knorr

Liril Vaseline Clear Wheel Vim Annapurna

Hamam Aviance Sunlight Modern

Breeze Lakme Comfort

Dove Ayush

Pears

Rexona


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Benefits of Product Lines

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Equivalent Quality

Efficient Sales and

Distribution

StandardizedComponents

Package Uniformity

Advertising Economies


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Product Mix Decisions

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ProductModification

ProductRepositioning

Product LineExtension orContraction

Adjustm ents to Produc t

Items,

Lin es, and Mixes


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Repositioning

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ChangingDemographics

Declining SalesChanges in Social

Environment

Why repos i t ion establ ished

brands?


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Product Line Extension/Contraction

The need for product modification is because ofchange in customer demographics and lifestyles

Extension

o Upward stretch

Examples

o Downward stretch

Examples

o Two way stretch

Examples

Line Filling

o Adding more items within present range

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Case in Point: Goodbye Vanilla Coke

Challenge

Answer

Results

To keep up with customer demandsin a rapidly changing beverage

landscape.

Explore new flavors that appealmore to customers than current

flavors.

Vanilla Coke and Diet Vanilla Coke,

though selling well over 250 million

cases, were removed from stores in

the U.S. (2005) and the UK (2006).Consumers are now demanding

Cherry flavored drinks so Black

Cherry Vanilla Coke and Black

Cherry Vanilla Diet Coke are now on

the market.

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Change Number of SKUs

Addition or

deletion of

SKUs in

existing

categories

Designed to

stimulate sales

or react to

consumerdemand

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Emerging Issues in India and Asia

Adapting products to local conditionsThreats from duplication

Quality improvement

Total Quality Management

Product performance

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Strategies to fight Duplication

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Th

reatfromDuplicates

LOW

HIGH

Firms Strength

HIGH LOW

1. Leap frog

2. Customer

education

3. Use stock

pressure onchannels

1. Customer

education

2. Lobbying with

theGovernment

1. Build brand

loyalty

2. Create entry

barriers

Maintain and

Grow


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Packaging The Fifth P

Packaging, sometimes called the fifth P, is all theactivities of designing and producing the container for

a product.

Factors contributing to the emphasis on packaging:

o Self Service

o Consumer Affluence

o Company Brand or Image

o Innovation Opportunity

Primary and Secondary packagingSpecial care for rural India

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Packaging Objectives

Identify the brandConvey descriptive and persuasive information

Facilitate product transportation and protection

Assist at-home storage

Aid product consumption

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Design Innovations in Packaging

Zip pouchesAluminium beverage cans

Ring pull cans

Aseptic drink bottles

Child resistant packages

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Product Labelling

Identifies

Grades

Describes

Promotes

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Warranties and Guarantees

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Formal statements of expected product performanceby the manufacturer

Products can be returned to the designated centre for

repair, replacement or refund

Reduce perceived risk

Whether expressed or implied, warranties are legally

enforcable


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Next Session

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Brand Equity

Deliverables

Chapter 10 with case lets

Each group to review different brand equity

models.

S 11 Product Management

Documents

Transcript of S 11 Product Management