PRODUCT MANAGEMENTProduct policy decisions

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AgendaProduct policy decisionsLines & mix decisionsSub-optimalityProduct-company fitAdjustments to mix

Product policy decisionsNeed for changes in product line?Dynamic nature of marketplace?Changes in nature & resources of firm itself?

ObjectivesEliminate / modify productsSatisfy needs?Contribute significantly to well-being?Add NPs / featuresBetter meet needsEnhance current lineImprove resource utilisation

Degree of similarity between linesEnd useTechnologyProduction technicsDistribution channels

Product mix

BathingSoapsDetergentsCookingMediumHairCareOralHygieneLuxLirilLifebuoyRexonaPearsDoveAnd othersSurfRinWheelSunlight And othersDaldaAnd othersNiharClinicAnd othersCloseupAnd othersWidthDEPTHMix and lines

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Lines and mixMixComposite of offeringsWide variety of linesLinesGroup of different products but relatedSatisfy particular class of needUsed togetherCommon physical / technical characteristicsSold to same customer groupsThrough same channelsFall within specific price ranges Item / line may not be profitableRetain?

Mix decisions in perspectiveReflectNature of marketFirms resourcesManagement philosophy

InfluencesLong-run objectivesProfit levelsSales stabilityGrowthPersonal valuesRisk attitudeMarket opportunities for mixUpper limits for potential profitability?Marketing program qualityPotential achieved?

Sub-optimal mixVary firm to firmHard to defineSituations that suggest sub-optimalityChronic / seasonally recurring excess capacityProductionStorageTransportation20-80Inefficient use of salesforce contacts & skillsSteadily declining profits / sales

Narrower than optimumLoss in EOSBroader than optimumExcessive costsProduction changeoversOrder processingInventory management

Product company fitGood opportunities exist in marketplace for NPShould we proceed?If no fit,Net result of GO harmful or at best sub-optimal10 conditions for evaluating fitTechnological skillsLabour & managementFinancial resourcesProduction resources & capacityLogistics facilitiesFeasibility of using current salesforce & channelsNeeds & behaviour of current customersImpact on market position of other productsConsistency with current imageDemand seasonality

NP not consistent with 1 of 10Drop the idea?Maturing markets, under pressure to diversifyGood fit that lack growth potential or vice versaSacrifice fit for need to diversify?Poorer the fitLarger financial resources needed to purchase or develop internally Requisite skills, production facilities, market relationshipsWill NP exaggerate or counter balance current fluctuations?

Adjustments to product mixWhy changes in policy?Correct any sub-optimalityEnhance ability to meet objectivesEfficiencyQualityInnovationResponsiveness to customers3 formsAbandonmentModificationIntroduction

Adjustments to mix: AbandonmentIndividual items / entire lineLikely candidatesLow demandUneconomicallyShort production runsFrequent price & inventory adjustmentsExcessive management time & resourcesRelative to profit contributionOut of dateDetract from image

Adjustments to mix: Modification & IntroductionModificationProduct attributesTangibleIntangibleOptionsReformulationRedesignChange in unit sizeAdd / remove features

IntroductionNew product line(s)DevelopTest marketCommercialiseCurrent lineAdd / extendMe-too imitationBrand name?Trade-offAdvertising EOSHigher costs of cannibalisation

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