Unit - III

PRODUCT
DECISION
Product

• Anything that can be offered to a market.

• To satisfy a want or need.
• Including
- Physical Goods
- Services
- Experiences
- Events
- Persons
- Places etc…

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PRODUCT
According to Phillip Kotler, “A product is
made up of three parts – TANGIBLE
PRODUCT – materials and construction,
EXTENDED PRODUCT PART services and
GENERIC PRODUCT PART -the benefits”.

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Product Levels :The Customer – Value Hierarchy

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PRODUCT CLASSIFICATION

DURABILITY TANGIBILITY USE

PRODUCT
CLASSIFICATION

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DURABILITY & TANGIBILITY
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• Non- Durable
• Durable
• Services

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 USE

CONSUMER INDUSTRIAL
GOODS GOODS

Supplies &
Convenience Shopping Specialty Unsought Materials &
Capital Items Business
Goods Goods Goods Goods Parts
Services

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NEW PRODUCT DEVELOPMENT

Acquisition or

Development

Birth of New Product

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TYPES OF NEW
PRODUCTS

Completely new to the

world item

Minor improvement or
revisions of existing
products.

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 Yes
1.Idea 2.Idea Screening 3.Concept 4. Marketing 5. Business
Generation Is the product idea Development & Strategy & Analysis
Is the idea compatible with Testing Development Will the
worth company Can we find a Can we find a product meet
considering? objectives, good concept cost effective, our profit
strategies and consumers say affordable goal?
resources? they would try? marketing
strategy?

DROP
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 Make future
YES plans

YES YES
6.Product 7.Market 8.
Development Testing Commercialization
Have we got a Have product Are product sales
technically and sales met meeting
commercially expectations? expectations? YES
sound product?

YES NO NO

Send the idea Modify the

back for product or
product marketing
development? program?

NO NO NO

DROP 11
PRODUCT LIFE CYCLE

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ANSOFF Matrix

• Developed by Mathematician and Business Manager H. IGOR ANSOFF in 1957.

• This matrix helps the marketers and executives to better understand the risks inherent in growing their business.
• 4 strategies of Ansoff Matrix are:
1. Market Penetration
2. Product Development
3. Market Development
4. Diversification

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BCG MATRIX

• Developed by Boston Consulting Group.

• Also known as product portfolio matrix.
• Used to evaluate the strategic position of a firm’s BRAND PORTFOLIO

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BCG MATRIX

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SERVICES

According to Kotler;
“A Service is an activity or benefit that
one party can offer to another
that is essentially intangible and does not result in the ownership
of anything.
Its production may or may not be tied to a physical product”.

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GOODS Vs. SERVICE
• Tangible
• Can be transported
• Goods are existent.
• The goods once purchased can be resold.
Transfer of ownership happens.
• Goods can be preserved until they are sold.
• Providing a sample for products is possible.
• Intangible
• Cannot be transported
• Services are non – existent.
• The services cannot be resold. The
ownership cannot be transferred in the
service.
• Services are perishable it cannot be stored.
• Services are of perishable nature. If the
services doesn’t have the demand then it
cannot be sold out, it becomes a wastage.
• Sale through sample is not possible in
services.
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Categories of Service Mix

• Pure Tangible Goods

• Tangible goods with accompanying services.
• Hybrid
• Major service with accompanying minor goods and services.
• Pure Services

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Further distinctions of service could be

• Equipment based or people based.

• Process of delivering the service could vary.
• Clients presence required or not required.
• Meets personal needs or a business model.
• Service providers differ in their objectives and ownership.

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Characteristics of Services

• INTANGIBILITY
• INSEPERABILITY
• VARIABILITY
• PERISHABILITY

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Classification of Services

Classification of
Services

Business,
Insurance, Profession
Banking, al & Leisure & Transport & Utilities Law Miscellaneous
Finance Scientific Recreation Communic Enforceme
Activities ation nt

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SERVICE DELIVERY PROCESS

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