Product planning and Development

Product Classification
costumers goods and business good
Importance of Product
What is product

 A product is anything that can be offered to a market that might satisfy a want or
need
 It is more than Physical product; Include services, places, persons and ideas
 Products go through life cycles
 Product planning-involves making decisions about production and sale of
business’s products
 To create new successful new product, the company must:
- understand it’s customers, markets and competitors
- development product that deliver superior value to customers
Why do Products fail?

 Doesn't match current company objectives

 Make room for other products
 Over estimating market size
 Poor Marketing research
 Obsolete
 Lost it’s appeal
 No longer profitable
 Conflicts with other products in the same product line
 Design problems
 Excessive development costs
 Incorrectly positioned, priced or advertised
 Competitive reation
Product planning and development
Process
 Once ideas emerge and are analyzed through the opportunity analysis plan, they
will need further development and refinement. This refining process—the product
planning and development process—is divided into five major stages: idea stage,
concept stage, product development stage, test marketing stage, and
commercialization. These stages result in the start of the product life cycle
 Improving and updating product lines is crucial for the successFor any
organisation
 Failure for an organisation to change could result in a decline in sales and with
competitors racing a head
 The process of NPD is crucial within an organisation
 Products go through the stages of their lifecycle and will eventually have to be
replaced
 NPD Strategy

 Original products
 Acquisition
 Product improvements
 Product modification
 New brands through the firm's own R&D efforts.
 New product development
Growth Productivity Quality Brand
Improvement Maintenance

New productivity Reduce cost Quality of design •Conformance

New package •Formulas •Special
Situations
•Packages
•Regulatory
•manufacturing
•Environmental
•Specifications
Product classification

 Can be done in a variety of perspectives

 Consumer-Goods Classification
- Classified on the basis of shopping habits
 Durability and Tangibility

 Industrial-Goods Classification
- Classified in terms of their relative cost and how they enter the production
process
Consumer product classification

 Convenience Goods
-Inexpensive, frequently purchased
-Little effort needed to purchased them
- Staples, Impulse and emergency goods
Shopping Goods
 Not as frequently as convenience
products
 Costly
 Consumer does research before
purchase
 Specialty Goods
 Unique features
 Consumer is prepared to pay a premium
price
 Unsought Goods
 Those good that consumer didn’t know
or
 Doesn’t think of buying
Durability and Tangibility
Nondurable Goods
 Tangible goods consumed in one or few
uses
 Purchase frequently
 Strategy : availability, low priced,
heavily advertised
Durable Goods
 Tangible goods that survive many uses
 Require more personal selling and
service
 Higher margins and require seller
guarantee
 Services
 Intangible product
 Requires more quality control and
credibility
 Industrial-Goods Classifications

 Materials and Parts

 Raw Materials  Farm Products
 Manufactured raw materials and parts  Natural products
 Materials and Parts

 Raw Materials  Farm Products

 Manufactured raw materials and parts  Natural products
 Materials and Parts

 Raw Materials  Farm Products

 Manufactured raw materials and parts  Natural products
 Materials and Parts

 Raw Materials  Farm Products

 Manufactured raw materials and parts  Natural products
 Capital Items
 Installation
 Equipment
 Supplies
 Maintenance and repair items
 Operating supplies
Business Services
 Maintenance and repair services
 Business advisory services
 Consumer goods

Those goods, which aredirectly

consumed or used by the buyers
without any commercial processing,
are known as consumer goods.
 Types of Consumer goods
Consumer goods may be basically of
two types:
1. Single-use goods and
2. Durable-use goods.

Single-use goods are those which get exhausted in one use, e.g., chocolate, biscuit, ice-
cream etc. On the other hand, durable-use goods are long lasting, e.g., television, fridge,
motorcycle, car, etc.
What does a consumer goods market consist of?
The market for consumer goods consists of people who have the necessary purchasing
power. Such people must have a need for a particular product. In a competitive market,
various brands of the same product are available. Of these various brands, one particular
brand alone is capable of satisfying the buyer’s wants, which he buys.

Luxury model cars are being marketed in India. Such cars do have a potential market here.
There are consumers with the capacity to buy these. Ford Ikon, Honda City, Mitsubishi
Lancer, Toyota Qualis, Hyundai Accent are examples. One may show preference for Ford
Ikon and another may prefer Toyota Qualis. But all these cars are in demand.
Classification of Consumer Goods
Consumer goods are classified into three
categories:
A. Convenience goods.

B. Shopping goods, and

C. Specialty goods.
1. Convenience Goods
Goods that are purchased by the consumers as a matter of daily routine are called
convenience goods. Buying such goods requires minimum or no shopping efforts.
Example: Soap, detergent powder, toothpaste, toothbrush, shaving cream, hair-oil,
etc.
All these products are, in fact, made available at the place of living of the buyers. The
buyers of such goods have perfect knowledge of the goods and also the various
substitutes available in the market.
Convenience goods are non-durable in nature and therefore, the buyers need to buy
them frequently. The unit price of the convenience goods is less. These goods are not
bulky in nature. There are a number of brands of soaps, face powder, toothpaste, etc.,
available in the market. Often, buyers show preference for a particular brand.
Characteristics of Convenience
Goods
The characteristics of convenience goods may be stated as follows :

1. Convenience goods are purchased frequently.

2. No special skill is required to buy such goods.

3. The unit value of the product is less.

4. There are a number of brands of such goods available in the market.

5. The buyers often have preference for a particular brand.

2. Shopping Goods
Goods that are not purchased frequently by the buyers are called
shipping goods. The unit value of shopping goods is high. The
buyer, often, does not have complete knowledge of the product.

There are a number of models of shopping goods available in the

market. The buyer makes a comparison between the various
models before taking the purchase decision.
Characteristics of Shopping Goods
The characteristics of shopping goods may be
mentioned as follows:
1. Shopping goods are not purchased frequently like convenience goods.

2. The buyer does not have perfect knowledge of the goods.

3. He shops around to find out the best.

4. Brand name may not be an important criterion in buying shopping goods.

5. Shopping goods are semi-durable in nature.

3. Specialty Goods
Goods that have a high commercial as well as utility
value are called specialty goods. Such goods possess
certain special characteristics that attract the buyers. The
purchase of specialty goods calls for special buying
efforts.
Characteristics of specialty Goods
The characteristics of specialty goods may
be stated as follows:
1. Specialty goods are very high value goods.

2. Such goods possess certain special features.

3. Special buying efforts are necessary.

4. Specialty goods are long lasting.

5. Trade name and brand name are important considerations.