1.1. What is Product

8/4/2019 1.1. What is Product

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Product Concepts


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Objectives To Understand the Concept of a Product

To Understand How to Classify Products

To Become Familiar With the Concepts ofProduct Item, Product Line, and ProductMix and Understand How They AreConnected

To Become Familiar With the ProductAdoption Process

To Understand Why Some Products Fail andSome Products Succeed


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Good

Service

Idea

Whats a Product?


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Product

A product is anything that can be offered to

the market to satisfy a want or need

Levels Core benefit that the customer is really buying

In a hotel, customer is buying rest and sleep

Basic product through which the core benefit is

delivered to the consumer

A room, bed, bathroom, desk, closet


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Product

Expected product the set of attributes that the consumers

expect as obvious along with the product (otherwise

dissatisfaction)

Clean bed, pillow, fresh towel, soap, lamp, fan etc.

Augmented product attributes / features that exceed

consumer expectation which leads to happiness of the

consumer

TV with cable, good interior design & dcor, good food etc.

Cost benefit trade off

Todays augment tomorrows expected

Easy to copy


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Product

Potential product all possible augmentation and

transformation that the product may go through

in future which leads to customer delight

Bar inside the room, fruit bowl, computer facilities etc.


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Classifying Products

Consumer

vs.

Business


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Consumer Products

ConvenienceStaples,

impulse,emergency


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Consumer Products

Shopping

Homogenous

Heterogeneous


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Consumer Products

Specialty


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Consumer Products

Unsought


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Installations

Accessory Equipment

Business Products


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Business Products

Raw Materials

Component Parts


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Business Products

Process Materials

Supplies


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Business Services

Business Products


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Product Line

& Product Mix

Product Item


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LAMPSLAMPS

TableTableCeilingCeiling

TrackTrack

DeskDesk

Product Line

Product Line

& Product Mix

SelectedSelected

Acme Furniture Co.Acme Furniture Co.

ProductsProducts


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ProductProduct

Line 1Line 1

ProductProduct

Line 2Line 2

ProductProduct

Line 3Line 3

SelectedSelected


ProductsProducts

TABLESTABLESKitchenKitchen

Dining RoomDining Room

EndEnd

CoffeeCoffee

OutdoorOutdoor

ConferenceConference

ComputerComputer

CHAIRSCHAIRSDining RoomDining Room

Living RoomLiving Room

BedroomBedroom

OutdoorOutdoor

DeskDesk

LAMPSLAMPSTableTable

CeilingCeiling

TrackTrack

DeskDesk

Product Line & Product Mix

Product Mix


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ProductProduct

Line 1Line 1

ProductProduct

Line 2Line 2

ProductProduct

Line 3Line 3

SelectedSelected


ProductsProducts

TABLESTABLES

KitchenKitchenDining RoomDining Room

EndEnd

CoffeeCoffee

OutdoorOutdoor

ConferenceConference

ComputerComputer

CHAIRSCHAIRS

Dining RoomDining RoomLiving RoomLiving Room

BedroomBedroom

OutdoorOutdoor

DeskDesk

LAMPSLAMPS

TableTableCeilingCeiling

TrackTrack

DeskDesk


Length of Product line


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ProductProduct

Line 1Line 1

ProductProduct

Line 2Line 2

ProductProduct

Line 3Line 3

SelectedSelected


ProductsProducts

TABLESTABLESKitchenKitchen

Dining RoomDining Room

EndEnd

CoffeeCoffee

OutdoorOutdoor

ConferenceConferenceComputerComputer

CHAIRSCHAIRSDining RoomDining Room

Living RoomLiving Room

BedroomBedroom

OutdoorOutdoor

DeskDesk

LAMPSLAMPSTableTable

CeilingCeiling

TrackTrack

DeskDesk


Width of Product Mix


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Product line Analysis

Understand each product lines market profile andperformance

Sales and profit

Market profile Identification of significant product attributes of each product in

the different product lines

Identification of competition in the market (different levels) foreach product

Comparison of the positioning theme against the variouscompetitors against the backdrop of the characteristics of thetarget markets


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Product related decisions

The profiling and analysis of performance

leads to some decision making by the product

/ brand managers

Optimal product line length

Line modernization

Line featuring

Line pruning etc.


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Optimal Product line length

Line stretching (up market ~ down market)

Downward

Upward

Two way

Line Filling

Self cannibalization

JND (just noticeable difference)


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Markets for a hotel chain

Economy Standard Good Superior

High TopExecutives

Above

Average

Middle

Managers

Average Salespeople

Low Vacationers

Quality

Price


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Other Product line decisions

Line modernization

Style

Design etc.

Line featuring

Which product items to be used as show piece toattract consumers for the whole product range

Line pruning (removal of deadwoods)


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Brand Decisions

A name, term, sign, symbol, design or

combination of them, intended to identify the

goods and services of one seller or group of

sellers and differentiate them from

competitors

Sellers promise to deliver a specific set of

features, benefits and services constantly tothe buyers


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Brand Decisions

A brand communicates the following six levelsof meanings

Attributes

Benefits

Values

Culture

Personality User


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Brand Decisions

To brand or not to brand

Brand sponsor decision

Manufacturer brand (HLL, Bajaj etc.) Distributor brand (private brand) (Shopper Stop)

Licensed brand (Parker, Levi etc.)


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Brand Decisions

Brand name decisions

Individual name (Lux, Liril etc.)

Blanket family name (Amul products, Godrej

product lines etc.)

Separate family names (TISCO, TELCO, TCS etc.)

Company Individual name (Bajaj Chetak, Bajaj

Super etc.)


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Brand Decisions

Brand strategy decisions

Line extension

Brand extension

Multi-branding

New brands

Co-brands


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Brand Decisions

Brand repositioning decision

Brand should be repositioned

Brand should not be repositioned


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Packaging

Packaging includes the activities of designing and

producing the containers for the products

Levels

Primary

Bottle containing the shampoo

Secondary

The cardboard box containing the bottles

Tertiary Shipping package


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Packaging

Factors influencing the growing use of

packaging in marketing

Self- service

Consumer affluence

Company and brand image

Innovation opportunity


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Labeling

May be a simple tag or complex graphics

May carry only the brand name or a lot of otherinformation

May be voluntary or enforced by law Functions

Identification

Gradation

Description Promotion


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Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption


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Adoption Process

Product Adopter Categories

100% of

eventual

adopters


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2.5% Innovators

Adoption Process



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2.5% Innovators

13.5% Early Adopters

Adoption Process



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2.5% Innovators


34% Early Majority

Adoption Process



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2.5% Innovators


34% Early Majority34% Late Majority

Adoption Process



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2.5% Innovators


34% Early Majority34% Late Majority

16% Laggards

Adoption Process



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Why Some Products Fail and Others

Succeed

Failure to Meet Customer Needs

Poor Timing Market Conditions

Ineffective or Inconsistent Branding

Technical or Design Problems

Overestimation of Market Size

Poor Promotion Insufficient Distribution

80 to 90% Fail. Why?


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The Emerging Marketing Environment

Increased competition

Proliferation ofbrands and Product

categories

Increased choice to the consumer

Transformation from a Sellers Market toa Buyers Market


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Total Product Concept

Servicization of Products andProductization of Services

Differentiation-Both Tangible and

Intangible Vectors of Differentiation


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The more commoditised the market the more

branding matters.

Anything can be branded.


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HP,Motorola ,Intel

What is an opportunity can only be decided

if there is a strategy. Otherwise, there is no

way to tell what genuinely advances the

organisation towards its desired results,

and what is diversion and splintering of

resources.-- P.F.Drucker


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New Product Development

Product-Line Strategy

Product Platform Strategy

Product

Strategy

Vision

Product Strategy Process Structure


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Strategic window concept

Strategic inflection point


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OK, YOU SHOULD NOW . . .

Understand the Concept of a Product

Understand How to Classify Products

Be Familiar With the Concepts of Product Item,Product Line, and Product Mix and Understand HowThey Are Connected

Understand the Concept of Product Life Cycle andIts Impact on Marketing Strategies

Be Familiar With the Product Adoption Process

Understand Why Some Products Fail and SomeProducts Succeed


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Thank You

1.1. What is Product

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