Product Strategy Presentation.pptx

8/14/2019 Product Strategy Presentation.pptx

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Management of Marketing

MIX : Product Strategy

Presented ByKetan Chaudhari (12)Saurabh Singh (57)Ashish Thakor (60)

11-Nov-13 SPP-SPTM, SVKM's NMIMS, Mumbai 1


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Contents

What is product..?

Classification of products

Product and service strategies Product and brand relationships

Dimensions of product strategies

PLC Management



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What is product..?

11/11/2013 SPP-SPTM, SVKM's NMIMS, Mumbai 3


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Product Characteristics

Experiences Events

Properties

Organizations

Information

Ideas

Places

Persons

Services Goods


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Core

Benefit

Transportationfrom one place

to another.

Core benefit of the product:This is the fundamental need or want the consumers satisfy by

purchasing product and services

Basic

ProductBrand of thecar, looks

and designof the car etc

Basic ProductThis is a vision of the product that only contain the

characteristics necessary for it to function

ExpectedProduct :

Decent

mileage,properengine,

inflated tyresetc.

Expected ProductThese are the set of attribute or characteristics that buyers

normally expect and agree to when they purchase a product

AugmentedProduct :After-saleservices,insurancepolicy etc.

AugmentedProduct :Product with additional features, benefits, attribute or related

services that differentiate it service from it competitor

PotentialProduct :May run more

smoothly as itwears off a

little

Potential Product :These are all the transformations and changes a product

undergoes in future

Five Product Levels


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Product Classifications

Nondurable goods

Services

Durable goods

Durability and Tangibility


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Consumer-Goods

Convenience goods

Shopping goods

Specialty goods

Unsought goods

Staples Impulse goods Emergency goods


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Industrial-Goods

Raw materials

Materials and Parts

Manufactured

materialsCapital Items

Installations

EquipmentSupplies andbusiness Services


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Product and service strategies



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Product and Brand Relationships

Product Hierarchy

Product Systems/Mixes

Product Line Analysis

Product Line Length

Product Mix Pricing

Co-Branding



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Product Hierarchy



Product Line Length

Product Mix Pricing

Co-Branding



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Product Hierarchy



Product Line Length

Product Mix Pricing

Co-Branding



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Product Hierarchy



Product Line Length

Product Mix Pricing

Co-Branding



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Advantages of branding


OverallAdvantages

Product Identification

Comparison ShoppingProduct Acceptance

Enhanced Self-Image

Enhanced Product Loyalty


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Dimensions of Product Strategies

ProductPositioning.

ProductRepositioning.

ProductOverlap.

Product Scope.ProductDesign.

ProductElimination.

New Product. Diversification.Value

Marketing.



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Product Positioning Strategy

Definition: Placing a brand in that part of themarket where it will have a favorable receptioncompared with competing brands.

Objective To position the product in the market so that it standsapart from competing brands.

To position the product so that it tells customers whatyou stand for, what you are, and how you would likecustomers to evaluate you.

In the case of positioning multiple brands:1. To seek growth by offering varied products in differing

segments of the market.

2. To avoid competitive threats to a single brand



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Product Positioning Strategy

Expected Results:

Short term success

Meet as much as possible the needs of specific

segments of the market Limit sudden changes in sales.

Make customers faithful to the brands.



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Product Re-positioning Strategy

Definition: Reviewing the current positioning ofthe product and its marketing mix and seeking anew position for it that seems more appropriate.

Objectives:

(a) To increase the life of the product. (b) To correct an original positioning mistake.

Expected Results: Among existing customers: increase in sales growth and

profitability.

Among new users: enlargement of the overall market, thusputting the product on a growth route, and increasedprofitability.

New product uses: increased sales, market share, andprofitability.



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Products repositioned successfully



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Product Overlap Strategy

Definition: Competing against ones own brandthrough introduction of competing products, use ofprivate labeling, and selling to original-equipmentmanufacturers.

Objectives: (a) To attract more customers to the product and thereby

increase the overall market. (b) To work at full capacity and spread overhead. (c) To sell to competitors; to realize economies of scale and

cost reduction.

Expected Results: Increased market share. Increased growth.



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Product overlap



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Product Scope Strategy

Definition: The product-scope strategy deals with the perspectivesof the product mix of a company. The product-scope strategy isdetermined by taking into account the overall mission of thebusiness unit. The company may adopt a single-product strategy,a multiple-product strategy, or a system-of-products strategy.

Objectives:

Single product: to increase economies of scale by developing specialization.

Multiple products: to cover the risk of potential obsolescence of the singleproduct by adding additional products.

System of products: to increase the dependence of the customer on the

companysproducts as well as to prevent competitors from moving into themarket.

Expected Results: Increased growth, market share, and profits.

System-of-products strategy : monopolistic control over the market



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Product scope strategy



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Product Design Strategy

Definition: The product-design strategy deals with the degree ofstandardization of a product. The company has a choice amongthe following strategic options: standard product, customizedproduct, and standard product with modifications.

Objectives:

Standard product: to increase economies of scale of the company.

Customized product: to compete against mass producers ofstandardized products through product-design flexibility.

Standard product with modifications: to combine the benefits of thetwo previous strategies.

Expected Results:

Increase in growth, market share, and profits. In addition, the

third strategy allows the company to keep close contacts with themarket and

gain experience in developing new standard products.



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Product Elimination Strategy

Definition: Cuts in the composition of a companysbusinessunit product portfolio by pruning the number of productswithin a line or by totally divesting a division or business.

Objectives: To eliminate undesirable products because their contribution to

fixed cost and profit is too low, Eliminate Products that its future performance looks grim, or

because they do not fit in the businesssoverall strategy. The product elimination strategy aims at shaping the best possible

mix of products and balancing the total business.

Expected Results: In the short run, cost savings from production runs, reduced inventories, and in some cases an improved return on investment

can be expected. In the long run, the sales of the remaining products

may increase because more efforts are now concentrated onthem.



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New Product Strategy

Definition: A set of operations that introduces (a) within the business, a product new to its previous line of

products; (b) on the market, a product that provides a new type of

satisfaction.Three alternatives emerge from the above: product

improvement/modification, product imitation, and productinnovation..

Objectives: To meet new needs and to sustain competitivepressures on existing products. In the first case, the new-product strategy is an offensive one; in the second case, itis a defensive one.

Expected Results: Increased market share and profitability.



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Diversification Strategy

Definition: Developing unfamiliar products and marketsthrough: Concentric diversification (products introduced are related to

existing ones in terms of marketing or technology), Horizontal diversification (new products are unrelated to existing

ones but are sold to the same customers) Conglomerate diversification (products are entirely new).

Objectives: Growth when current products/markets have reached maturity, Stability by spreading the risks of fluctuations in earnings, Security when the company may fear backward integration from

one of its major customers, Credibility to have more weight in capital markets.

Expected Results: Increase in sales. Greater profitability and flexibility



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Value Marketing Strategy

Definition: The value-marketing strategy concernsdelivering on promises made for the product orservice. These promises involve product quality,customer service, and meeting time commitments.

Objectives: Value-marketing strategies are directedtoward seeking total customer satisfaction. It meansstriving for excellence to meet customer expectations.

Expected Results: This strategy enhances customersatisfaction, which leads to customer loyalty and,hence, to higher market share. This strategy makesthe firm less vulnerable to price wars, permitting thefirm to charge higher prices and, thus, earn higherprofits.



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Product Life Cycle Management



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Introduction

Revenues- Small

Sales Growth - Slow

Costs- High Fixed

Profits- Negative

Competitors- 0-2



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Growth

Revenues- Moderate

Sales Growth - Rapid

CostsModerate Fixed Costs

Profits- Increasing

Competitors - Many



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Maturity

Revenues Large

Sales Growth None

Costs Low fix

Profits High

Competitors 3-4



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Decline

Revenues Moderate

Sales growth Negative

CostsRising fixed costs

ProfitsDecreasing

Competitors Fewer than Before

11/11/2013 SPP-SPTM SVKM's NMIMS Mumbai 33

Product Strategy Presentation.pptx

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