Product strategy Product analysis and description Lecture 7.
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Transcript of Product strategy Product analysis and description Lecture 7.
Product Product strategy strategy
Product analysis and Product analysis and descriptiondescription
Lecture 7Lecture 7
Content- Content- Products DecisionsProducts Decisions
• Product and Service Classification System
• The Product Life Cycle• Introduction to product matrices• Boston Matrix (Growth/Share)• Ansoff’s Matrix (Product Market)
Products DecisionsProducts Decisions
• Product and Service Classification System?
• The Product Life Cycle stages?• Growth/Share?• Product Market?
Product and Service Product and Service Classification SystemClassification System
• Convenience goods - little effort, relatively inexpensive
• Shopping goods - e.g ‘white goods’, DIY equipment, more expensive, infrequent
• Speciality goods - extensive search e.g Jewellery, gourmet food
• Unsought goods - e.g. double glazing,
• Industrial goods• Installations - ‘speciality’ goods of
industrial markets - plant and machinery
• Accessories - maintenance and office equipment
• Raw materials• components • Business to business e.g.
consultants, accountants
Individual Product Individual Product DecisionsDecisions
Product attributesProduct attributes
BrandingBranding
Packaging & Packaging & labelinglabeling
Product support Product support servicesservices
Product quality Product quality
Product featuresProduct features
Product style & design
Product style & design
Ability of product to perform its functions; includes level (performance quality) & consistency (conformance
quality)
Ability of product to perform its functions; includes level (performance quality) & consistency (conformance
quality)
Help to differentiate the product from the competition
Help to differentiate the product from the competition
Style = appearance Design = performance / function
(as well as appearance)
Style = appearance Design = performance / function
(as well as appearance)
Marketing’s role – represent the “voice of the consumer”
Developing a product or service involves defining the benefits that it will offer such as:
Product AttributesProduct Attributes
ATTRIBUTESATTRIBUTES
• AN ATTRIBUTE IS A PROPERTY OF A FOOD THAT THE CUSTOMER DESIRES
• MOST CUSTOMERS ARE LOOKING FOR MULTIPLE ATTRIBUTES IN A FOOD PRODUCT
• ATTRIBUTES ARE EXPECTED TO REMAIN CONSTANT THROUGHOUT THE SHELF-LIFE OF THE PRODUCT
Attributes and benefitsAttributes and benefits• Features-attributes are product
characteristics such size, color, horsepower, functionality, design, hours of business, fabric content, etc.
• Benefits answer the customer’s question: “What’s in it for me?” Benefit is a product attribute expressed in terms of what the user gets from the product rather than its physical characteristics or features. Benefits are often paired with specific features, but they need not be. They are perceived, not necessarily real.
SpecificationSpecification• A detailed description of the features and
performance characteristics of a product. • For example, a laptop computer's
specification may read as a 90 megahertz Pentium, with 16 megabytes of ram and 720 megabytes of hard disk space, 3.5 hours of battery life, weighing 4.5 pounds, with an active matrix 256 color screen.
• To specify a product we need: – attributes and characteristics – measurement and measurements units
Basic classification of Basic classification of attributesattributes
• chemical,• physical,• biological,• sociological,• physiological etc. characteristics
Classification of attributes based on their Classification of attributes based on their relation to product corerelation to product core
• product core attributes – product functionality – Product reliability – product usability including ergonomic
attributes – product maintability
• product environment attributes – product compatibility and portability– environmental attributes– economical attributes– psychological and sociological attributes
Characteristics and Characteristics and attributesattributes
• according ISO Standard ISO 9216 Information technology -- Software product evaluation -- Quality characteristics and guidelines for their use
• ISO 9126 sets out six quality characteristics, which are intended to be exhaustive. From this it follows that each quality characteristic is very broad– Functionality – Reliability – Usability– Maintainability– Portability– Efficiency
Functionality Functionality A set of attributes that bear on A set of attributes that bear on the existence of a set of functions and their the existence of a set of functions and their specified properties. The functions are those specified properties. The functions are those
that satisfy stated or implied needsthat satisfy stated or implied needs..
• Suitability: Attribute of software that bears on the presence and appropriateness of a set of functions for specified tasks. (ISO 9126: 1991, A.2.1.1)
• Accuracy: Attributes of software that bear on the provision of right or agreed results or effects. (ISO 9126: 1991, A.2.1.2)
• Interoperability: Attributes of software that bear on its ability to interact with specified systems. (ISO 9126: 1991, A.2.1.3) (NOTE -- Interoperability is used in place of compatibility in order to avoid possible ambiguity with replaceability. (ISO 9126: 1991, A.2.1.3)
• Compliance: Attributes of software that make the software adhere to application related standards or conventions or regulations in laws and similar prescriptions. (ISO 9126: 1991, A.2.1.4)
• Security: Attributes of software that bear on its ability to prevent unauthorized access, whether accidental or deliberate, to programs and data. (ISO 9126: 1991, A.2.1.5)
Reliability Reliability A set of attributes that bear on the A set of attributes that bear on the capability of software to maintain its level of capability of software to maintain its level of
performance under stated conditions for a performance under stated conditions for a stated period of time.stated period of time.
• Maturity: Attributes of software that bear on the frequency of failure by faults in the software. (ISO 9126: 1991, A.2.2.1)
• Fault tolerance: Attributes of software that bear on its ability to maintain a specified level of performance in cases of software faults or of infringement of its specified interface. (ISO 9126: 1991, A.2.2.2)
• Recoverability: Attributes of software that bear on the capability to re-establish its level of performance and recover the data directly affected in case of a failure and on the time and effort needed for it. (ISO 9126: 1991, A.2.2.3)
Maintainability Maintainability A set of attributes that bear A set of attributes that bear on the effort needed to make specified on the effort needed to make specified
modifications.modifications.
• Analysability: Attributes of software that bear on the effort needed for diagnosis of deficiencies or causes of failures, or for identification of parts to be modified. (ISO 9126: 1991, A.2.5.1)
• Changeability: Attributes of software that bear on the effort needed for modification, fault removal or for environmental change. (ISO 9126: 1991, A.2.5.2)
• Stability: Attributes of software that bear on the risk of unexpected effect of modifications. (ISO 9126: 1991, A.2.5.3)
• Testability: Attributes of software that bear on the effort needed for validating the modified software. (ISO 9126: 1991, A.2.5.4)
Portability Portability A set of attributes, that bears on A set of attributes, that bears on the ability of software to be transferred from the ability of software to be transferred from
one environment to anotherone environment to another
• Adaptability: Attributes of software that bear on the opportunity for its adaptation to different specified environments without applying other actions or means than those provided for this purpose for the software considered. (ISO 9126: 1991, A.2.6.1)
• Installability: Attributes of software that bear on the effort needed to install the software in a specified environment. (ISO 9126: 1991, A.2.6.2)
• Conformance: Attributes of software that make the software adhere to standards or conventions relating to portability. (ISO 9126: 1991, A.2.6.3)
• Replaceability: Attributes of software that bear on the opportunity and effort of using it in the place of specified other software in the environment of that software. (ISO 9126: 1991, A.2.6.4) NOTES: Replaceability is used in place of compatibility in order to avoid possible ambiguity with interoperability. Replaceability with a specific software does not imply that this software is replaceable with the software under consideration. Replaceability may include attributes of both installability and adaptability. The concept has been introduced as a subcharacteristic of its own because of its importance.
Efficiency Efficiency A set of attributes, that bears on the A set of attributes, that bears on the relationship between the level of performance relationship between the level of performance of the software and the amount of resources of the software and the amount of resources
used, under stated conditionsused, under stated conditions
• Time behaviour: Attributes of software that bear on response and processing times and on throughput rates in performing its function. (ISO 9126: 1991, A.2.4.1)
• Resource behaviour: Attributes of software that bear on the amount of resources used and the duration of such use in performing its function. (ISO 9126: 1991, A.2.4.2)
Usability (product attribute)Usability (product attribute)
• What is usability?– Extend to which a product is designed to fit users’
needs or, in other words, the extend to which a product is easy to use.
How is product usability achieved?How is product usability achieved?
• Collecting data from user:– Objective Data – Subjective Data– Measurements – such as task time, errors, learning
rate, satisfaction, level of frustation...
Why use usability engerneering?Why use usability engerneering?
• Define the needs of the users before building the product. Understand how human interact with technology.
• Designers CANNOT effectively speak for users.
• Preference does not equal perfomance.
General usability benefitsGeneral usability benefits• Reduces engineering/development costs and
facilitates speed to market.• Reduces testing and quality assurance costs.• Reduces sales costs and shortens sales cycles.• Can decrease production costs while improving
margins• Improvers customer Return on Investiment.
Benefits of Usability - examplesBenefits of Usability - examples
• Automotive industry – reseachers methodically test and mesure drivers in a real or simulated driving environment.
• Aerospace industry – understand how human interact to technology (pilot cognitive load to air traffic controller)
• IBM – state that for every $1 invested in usability, the payback is between $10 and $100
Quick Check List TCNVVQuick Check List TCNVV• T- Taste/Texture• C – Convenience• N – Nutrition/Health• V – Variety• V – Value (perceived Quality/cost)
ATTRIBUATE EXAMPLESATTRIBUATE EXAMPLES
• FLAVOR• TEXTURE• COLOR• MOUTHFEEL• APPEARANCE• HEALTHY • NUTRITIOUS
• LOW COST• LONG LASTING• NATURAL• ORGANIC• LOW FAT• LOW CALORIES• LOW SUGAR
FACTORS AFFECTING ATTRIBUTESFACTORS AFFECTING ATTRIBUTES
• FOOD TYPE• INGREDIENTS
– TYPE– AMOUNT– INTERACTION
• ENVIRONMENT– PH– OXYGEN
• PROCESSING HISTORY– TEMPERATURE– SHEAR
• PACKAGING• STORAGE
CONDITIONS
INFLUENCED BYINFLUENCED BY
• MARKET POSITION OF THE PRODUCT• DESIRED SHELF-LIFE• PROCESSING CAPABILITIES• PACKAGING CAPABILITIES
ATTRIBUTES MAY BE IN CONFLICT ATTRIBUTES MAY BE IN CONFLICT WITH ONE ANOTHERWITH ONE ANOTHER
• FREQUENTLY OPTIMIZING FOR ONE ATTRIBUTE WILL ADVERSELY AFFECT ANOTHER
• RECOGNIZE TRADE-OFFS EARLY IN DEVELOPMENT PROCESS -- A TWO YEAR SHELF-LIFE GENERALLY COMPROMISES “FRESH FLAVOR”
LEARN TO RECOGNIZE ATTRIBUTE LEARN TO RECOGNIZE ATTRIBUTE EXPECTATIONS FROM - EXPECTATIONS FROM -
• PRODUCT TYPE• INGREDIENT LABELS• PACKAGING• PACKAGE INSTRUCTIONS• LOCATION AT POINT OF SALE• SELL BY DATE• ADVERTISING PROMISES
Product Life Cycle
ProductProduct Single company produces productSingle company produces product
Introduction Stage of the PLC
GoalsGoals
SalesSales
ProfitsProfits
PricingPricing
MarketingMarketing
Get first-time buyers to try the productGet first-time buyers to try the product
Increase at a steady but slow paceIncrease at a steady but slow pace
NegativeNegative
High: recover R&D costs; or Low: attract large number of customers
High: recover R&D costs; or Low: attract large number of customers
Informing customersInforming customers
Length of StageLength of Stage Depends on 1) marketplace acceptance, 2) producer willingness to support
product
Depends on 1) marketplace acceptance, 2) producer willingness to support
product
SalesSales
ProfitsProfits
GoalsGoals
Marketing StrategiesMarketing Strategies
PricePrice
AdvertisingAdvertising
Rapid increase in sales Rapid increase in sales
Increase and peakIncrease and peak
Encourage brand loyaltyEncourage brand loyalty
Introduction of product variationsIntroduction of product variations
Price competition may appearPrice competition may appear
Heavy advertising is used when competitors appear
Heavy advertising is used when competitors appear
Growth Stage of the PLC
SalesSales
ProfitsProfits
CompetitionCompetition
ProductProduct
DistributionDistribution
Marketing StrategiesMarketing Strategies
Peak , then level off, even declinePeak , then level off, even decline
Margins narrowMargins narrow
Grows intenseGrows intense
Mostly replacement productsMostly replacement products
Sell through all suitable retailersSell through all suitable retailers
Firms alter the marketing mix, try to attract new users
Firms alter the marketing mix, try to attract new users
Maturity Stage of the PLC
SalesSales
ProfitsProfits
CompetitorsCompetitors
ProductProduct
Marketing StrategiesMarketing Strategies
Declining salesDeclining sales
Declining profitsDeclining profits
Large number with no one having the advantage
Large number with no one having the advantage
Should the product be kept?Should the product be kept?
Keep product, phase out gradually, drop product immediately
Keep product, phase out gradually, drop product immediately
Decline Stage of the PLC