Product Management

Week 4Week 4

Topic 1: Product Management

ProductAnything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need.

ServiceAny activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.

Pure tangiblePure intangibleTangible goods with accompanying serviceHybrid offerService accompanying with minor goods

Topic 1: Topic 1: Product ManagementProduct Management

To differentiate their offer from the competition, companies should develop and deliver a total customer experience.

Levels of product When developing products, marketers first

must identify the core customer needs the product will satisfy.

They must then design the actual productFind ways to augment it in order to create the

bundle of benefits that will best satisfy consumers.


Product classification1. Consumer product 2. Industrial product

Organisation, person, place and idea1. Organisation marketing

e.g. Corporate image advertising2. Person marketing3. Place marketing4. Idea marketing (social idea)

e.g. social marketing (Public health, environmental and other social campaign)


Individual product decisions may be based on:

1. PRODUCT ATTRIBUTES

a. Product quality– The ability of a product to perform its functions; it includes

the product’s overall durability, reliability, precision, ease of operation, repair and other valued attributes.

Two dimensions:– 1. Quality level (Performance level)– 2. Consistency (Conformance quality-freedom from defects

and consistency in delivering a targeted level of performance)

Total Quality Management (TQM) plays an important role in enhancing product quality.


b. Product features– A competitive differentiation tool.– Companies should survey to find out which features to add.– Companies should assess each feature’s value to customer versus

its cost to the company.

c. Product style and design– Style simply describes the appearance of a product.– Design contributes to the products usefulness as well as to its

looks.

2. BRANDINGBrand is a name, term, symbol, or design or combination of

these, that identifies the maker or seller of a product or service.It can help: – To identify the product.– To tell about product’s quality.– To provide legal protection.– To segment the market.


Brand equity– The value of the brand based on the extend to which it has

high brand loyalty, name awareness, perceived quality, strong brand association, and other assets such as patents, trademarks, and channel relationship.

– It is a valuable asset to the company.

Major Branding Decisions

Brand name selection1. Should suggest something about the product’s benefits and

qualities.2. Should be easy to pronounce, recognize and remember.3. Should be distinctive.4. Should easily translate into foreign language.5. Should be capable of registration and legal protection.

Generic names


Brand Sponsor1. Manufacture’s brand (or national brand)

2. Private brand (Store brand or distributor brand)

3. Licensed brand

4. Co-brand

Store brands are posing a strong challenge to manufacture’s brand.


Brand Strategy

3. PACKAGING– The activities of designing and producing the

container or wrapper for a product.– Primary, secondary and shipping package

Functions of packagingTo contain and protect.To attract attention (to describe, to make the sale)To create instant consumer recognitionTo gain competitive advantage


Developing a good package for a new product requires making many decisions:

1. Establish packaging concept

2. Size, shape, materials, color, text, brand mark.

3. Consistent with the product’s advertising, pricing and distribution.

4. Safety

5. Green packaging


4. LABELLING– Tags attached to the product or graphics on the

package– Functions (Identify, describe and promote)

5. PRODUCT SUPPORT SERVICE– Customer service– Use internet to provide support service– Companies should develop a package of services

that both delight and yield profits to the company.


PRODUCT LINE DECISION

Product line– A group of products that are closely related

because they function in a similar manner, and sold to the same customer groups, are marketed through the same type of outlets, fall within given price ranges.

The decisions involve

Product line length the number of item in the product line.

Companies should systematically increase its product line in two ways


1. Product line stretching: when a company lengthens its product line beyond its current range.

Stretching downwardTo plug a hole that otherwise would attract a new competitor.To respond to a competitor’s attack on the upper end.To get opportunity of faster growth at lower end.


Stretching upward– To add prestige to the current product.– To get opportunity of higher growth rate or

margins at the higher end.– To position the company as a full-line

manufacturer.

Stretching in both directions

2. Product line filling– Adding more items within the present range of

the line.


Reasons– Reaching for extra profit– Satisfying dealers– Using excess capacity– Being the leading full line company– Plugging holes to keep out competitors.

Product mix decisions– Product mix consists of all the product lines and items that a

particular seller offers for sale.

Four important dimensions1. Width2. Length3. Depth4. Consistency


New Product Development

The development of original products, product improvements, product modifications, and new brands through the firm’s own R&D effort.


Major Stages in New Product Development

•Idea generation

•Idea screening

•Concept development and testing

•Marketing strategy

•Business analysis

•Product development

•Test marketing

•Commercialization

The New-Product Development Process:

Product Life Cycle (PLC): The course of a product’s sales and profits over its life.The stages in a PLC are:

1. Product development

2. Introduction

3. Growth

4. Maturity

5. Decline

Product Life-Cycle Strategies

Thank You!

Product Management

Education

Transcript of Product Management