PRODUCT

MANAGEMENT
Product Decisions
Product Development
Product Lifecycle
 Product Management

• Product
A product is something which is brought to
the market for attention, acquisition and
buying
• Product & Service
In marketing, a product can be tangible or
intangible. Tangible products are called as
goods and intangible products are called as
services
Levels of Product
Potential

Augmented

Expected

Generic

Core Product
Levels of Product
How much extra benefit can be offered

Extra Offers

Attractive Lips

COSMETICS

Hope
 Classification of products

PRODUCT

Consumer Products Business Products or

Industrial Products

Convenience
Materials and Parts

Shopping
Capital Items

Specialty

Supplies and Services

Unsought
 Classification of Products

• Consumer Products
o Purchased by consumers for personal
consumption
• Business Products / Industrial Products
o Purchased by business concerns for further
production
 Consumer Products
• Classification of consumer products
o Convenience goods
 FMCG goods purchased regularly by consumer
 Consumer involvement very low
 Price of product is very low
 Intensive distribution channel is used
 The stock turnover is quite high
 Aggressive promotion is used
Examples : soap, detergents, cigarettes etc
o Shopping goods
 High consumer involvement
 Process information of product suitability, quality and price
 Less frequent purchase as compared to convenient goods
 Price of the product is quite high
 Products available in selected outlets
 Consumer takes lot of time to search and evaluate information
 Consumer Products
• Specialty goods
o High brand loyalty and ready to wait or spend time
o Companies adopt premium pricing strategy
o Exclusive distribution and selective communication
strategy
E.g.: Costly and branded music system, cars etc
• Unsought goods
o Consumers are unaware or ignorant about the
product
o Marketers need heavy promotional activity and
aggressive selling strategy
E.g.; Insurance, funeral plots in US etc
 Business Products/ Industrial
Products
MATERIAL AND PARTS

Manufactured
Raw Materials
Materials & Parts

Natural Products Farm Products Components Component

Parts
 Product Hierarchy
1. Need Family The core need that underlies the product family

2.Product Family All the product classes that can satisfy a core need with reasonable
effectiveness

3.Product Class A group of products within the product family recognized as having a
certain functional coherence

4. Product Line A group of products within a produt class that are closely related because
they function in a similar manner or are sold to the same customer
groups or are marketed through the same types of outlets or fall within a
given price ranges

5.Product Type Those items within a product line that share one of several possible forms
of the products

6.Brand The name associated with one or more items in the product line that is
used to identify the source or character of the items

7. Item A distinct unit within a brand or product line that is distinguished by size,
price, appearance, or some other attribute
 Product Line Strategies
• PRODUCT LINE
o The group of related products which uses same
marketing effort to teach the customer. It cater to the
common need of a group or class of customers
• PRODUCT LINE DECISIONS
o The major product line decisions are
 Product line length
 Product line stretching
 Product line filling
 Product line pruning
 Product line decisions
1.PRODUCT LINE LENGTH
o The number of items in the product line is
called the product line length
o The product line chain can be short or long
o If short, it can add more new products and if
long, it can reduce the number of products
2.PRODUCT LINE STRETCHING
o Company lengthens its product line by
stretching upwards, stretching downwards or
both ways
 Product line decisions
• Line stretching decision depends on three
situations:
o Company that operates in high end market may
come up with mid class or low class targeted
products. Eg. Maruti Gypsy, Nano etc
o The company which operates in lower end of
market may come up with high end market
products. Eg. Scorpio by M & M
o If the company operates in mid segment and
comes out with low end products as well as
high end product, then it is called as stretching
both ways.
 Product line decisions
C. PRODUCT LINE FILLING
When more products are added in the line, it
is called product line filling. Eg. Maruti Alto
launched in between Maruti 800 and Maruti
Zen
D. PRODUCT LINE PRUNING
Removing the unprofitable products from the
product line. Eg. Qualis in India
 Product Mix Strategies
• Product Mix
o The number of product lines and items offered by
marketer to the consumer is called as Product Mix
• Dimensions of Product Mix
o Product Mix Width
The total number of product line that a company offers
to the consumers. For example, Ujala has fabric care,
household insecticides, utensil cleaners, fragrances,
personal care etc
o Product Mix Length
The total number of items that company carries within
its product line. Eg. Ujala Fabric Care has got Ujala
Supreme, Ujala Washing Powder and Stiff and Shine
 Packaging & Labeling
• Packaging
o The processing of designing and producing the
container or wrapper for a product is called as
packaging
o Packaging has got the following benefits:
1.Strong brand awareness
2.Proper protection to the product
3.Helps in bulk breaking
4.Attracts a customer to buy a product
 Packaging & Labeling
• Labeling
o Labeling is a piece of paper designed to carry the
information about a product and its producer
o Types of Labels
1.Brand Label
Only brand name is mentioned in this label. Eg.Masafi
1.Grade Label
Identify the quality of the product with a letter, figure etc
Eg. Fertilizers
1.Descriptive Label
Gives entire information about the product, its content,
use and care. Eg. Hair Dye
Labels
 Product Mix Strategies
• Product Line Depth
The number of versions offered of each product in
the line
Eg. Jyothi Laboratories Jeeva Natural is offered in
three versions. ie. Coconut Milk with Milk Protein,
Coconut Milk with Jasmine, Coconut Milk with
Kasturi Manjal
• Product Mix Consistency
If the company’s product line, production and
marketing are related, then it is called as product
mix consistency
NEW PRODUCT DEVELOPMENT
 New Product Development

• New product development is a process

whereby a new product is created by the
company
• New product doesn't mean that absolutely
new to the world
• It may be modification, or offered in the
new market, or differentiate from the
existing products
 New Product Development

• New Products are

o New innovative product. Eg Orkut by Google
o A product totally different from others. Eg.
Dream liner jet by Boeing
o Imitative product that are not new to the
market but new to the company. Eg. Tata Salt
 New Product Development
• New Product Development Process
1.Idea Generation
o A new product is the result of a new idea.
o Ideas are generated either from internal sources or from
external sources
1.Idea Screening
o Idea screening is a process whereby feasible ideas will be
selected and non-feasible ideas will be rejected
1.Concept Development
o The ideas should be explained as a concept.
 New Product Development

4. Concept Testing
• The concept will be tested with a group of target
customers
5. Marketing Strategy Development
• This involves three parts. They are:
o Target market, sales, market share and profit goals
o Product price, distribution, marketing budget
o Marketing mix strategies and profit goals
 New Product Development
6. Business Analysis
• Analysis of sales, cost and profit of the new product and
its compatibility with the company’s mission, vision and
objectives
7. Product Development
• Real proto-type of the product will be manufactured to
test its real performance
8.Test Marketing
• The new product will be tested in a realistic marketing
situation in few test canters
• The 4 Ps of marketing also will be tested
9. Commercialization
• The product will be aggressively launched in the market
with aggressive communication strategy.
 NEW PRODUCT
DEVELOPMENT

CONCEPT DVPT &

IDEA GENERATION

IDEA SCREENING

MKTG STRATEGY

COMMERCIALIZA-
PDT DEVPT

TEST MKTG
TESTING

BUSINESS
ANALYSIS
DVPT

TION
NO YES
YES
NO NO NO SHOULD WE
WOULD IT
NO NO SEND THE
HELP TO
MODIFY THE
IDEA BACK PDT OR
FOR PDT MKTG
DVPT PROGRAM

NO NO
DROP
 Product Life Cycle (PLC)

• Many of the product has a life cycle like a

human being.
• It passes through five different stages
o Product development stage
o Product introduction stage
o Growth stage
o Maturity stage
o Decline stage
 Stages of Product Life Cycle (PLC)
Sales &
Profit Maturity Decline
Product Introduct- Growth
Dvpt ion Stage
Stage

PLC

Profit
o
 PLC
• Product Development Stage
o Sales is zero in this stage, but company requires
huge investment in R&D
o So company incurs loss at this stage
• Introduction Stage
o As product is new, the awareness about the product
is low during this stage
o Company has to spend heavy amount of money on
promotion and product awareness program
o Cost of product is very high and the sales is very low
o Company charges high price for the product
 PLC

• Growth Stage
o Sales will grow rapidly during this stage
o The cost of production goes down and
companies get better profit
o Company reduces the price of the product
o It focuses on developing better distribution
during this period
o Number of competitors will grow in the market
 PLC
• Maturity Stage
o Sales reaches peak level
o Low cost and high profit
o Pricing becomes competition based
o Communicate product differentiation to the customers
o Company improves the supply chain
o Defend the market share
o Industry get consolidated
 PLC

• Decline Stage
o Product sales declines
o Promotion also declines
o Company phase out weak product from their
product mix
o The advertisement budget of the company
also comes down
Other Product Life Cycles
Growth Slump Maturity Pattern
 Other Product Life Cycles
Sales Volume
Cycle – Recycle Pattern

Primary Cycle Recycle

Times
 Other Product Life Cycles
Sales Volume

Scalloped Pattern

Time
Other Product Life Cycles- Style
Other Product Life Cycles-
Fashion
Other Product Life Cycles - Fad
 Other Product Life Cycles – Style, Fashion, Fad

• Style: A style is a basic and distinctive mode of

expression appears in the field of human behavior
• E.g.. Style appears in home, art, clothing etc
• Fashion: Currently accepted or popular style in a
given field of life
• E.g.. Cargo jeans
• Fad: A fashion that enters quickly, adopted with
great zeal, peaks early and decline very fast
• E.g. Hair styling