Individual product decisions

Individual product decisionsProduct attribute decisionsBrand decisionsPackaging decisionsProduct-Support decisions

Product Line DecisionsA product line is a group of products that are related in function, customer-purchase needs, or distribution channels.Product mix decisionsthe set of all product lines and items that a particular seller offers for sale

4 dimensionswidthlengthdepthconsistencyProduct hierarchyEach product is related to certain other products. The product hierarchy stretches from basic needs to particular items that satisfy those needs. We can identify seven levels of product hierarchy.Eg. (life Insurance)1) Need family: The core need underlies the existence of a product .Eg.security2) Product family: All the product classes that can satisfy a core need with reasonable effectivenessEg. Saving and incomecontinued3) Product class : A group of products within the product family recognised having certain functional coherence .Eg.financial instruments

4) Product line: A group of products within a product class that are closely related because they performa similar function,are sold to the same customer groups,are marketed through same channels,or fall within same price ranges.Eg . Life insurance, vehicle insurancecontinued5) Product type: A group of items within product line that share one of several possible forms of the product.Eg Term life(all policies have this attribute)6) Brand: The name associated with one or more items in the productline,that is used to identify the source or characterof the item(s).Eg. Tata Aig,Max Newyork,Kotak Mahindra,Liccontinued7) Item:A distinct unit within a brand or product line distinguishable by size,price, apperence or some other attribute.( Eg. Gyan kosh by Tata Aig, for pension, or some kid education plan )Differences Between Goods and ServicesIntangibilityPerishabilitySimultaneousProductionandConsumptionHeterogeneityImplications of IntangibilityServices cannot be inventoriedServices cannot be patentedServices cannot be readily displayed or communicatedPricing is difficultImplications of HeterogeneityService delivery and customer satisfaction depend on employee actionsService quality depends on many uncontrollable factorsThere is no sure knowledge that the service delivered matches what was planned and promotedImplications of Simultaneous Production and ConsumptionCustomers participate in and affect the transactionCustomers affect each otherEmployees affect the service outcomeDecentralization may be essentialMass production is difficultImplications of PerishabilityIt is difficult to synchronize supply and demand with servicesServices cannot be returned or resoldTable 1-2 Services are Different

Why does a company need new products?Obtain greater profits/ROICapture larger market shareMeet customers changing needs & tastesShorter product life cycleBuild competitive advantagesPlanned obsolescence

New product developmentSteps:Product idea generationProduct idea screening and product concept developmentBusiness analysisProduct testingMarket testingCommercialization

Product life cycle (PLC)the course of a products sales and profit over its lifetime

4 stages:introductiongrowthmaturitydeclineIntroductionGrowthMaturityDeclineSalesProfitTimeSales and profitIntroduction Stageslow sales growthprofit are nonexistenthigh promotion spendinga few competitorsusually focus on high-income groups

Growth Stagerapid market acceptancenew competitors will enterintroduce new product featuresmarket will expandprofit increases

Maturity Stageslowdown in sales

competitors begin marking down prices,. to find better versions of the product

drop in profit

only well-established competitors

Decline Stagesales fall off and profits drop

some firms withdraw from the market

Introduction

Growth

Marketing ObjectivesIntroduction and Growth

Marketing ObjectivesMaturity and Decline

Strategies Introduction Growth

Strategies Maturity Decline

Strategies Introduction Growth

Strategies Maturity Decline

GoodsServicesResulting Implications

TangibleIntangibleServices cannot be inventoried.

Services cannot be patented.

Services cannot be readily displayed or communicated.

Pricing is difficult.

StandardizedHeterogeneousService delivery and customer satisfaction depend on employee actions.

Service quality depends on many uncontrollable factors.

There is no sure knowledge that the service delivered matches what was planned and promoted.

Production separate from consumptionSimultaneous production and consumptionCustomers participate in and affect the transaction.

Customers affect each other.

Employees affect the service outcome.

Decentralization may be essential.

Mass production is difficult.

NonperishablePerishableIt is difficult to synchronize supply and demand with services.

Services cannot be returned or resold.