Module-3

Product, Brand equity , Service

Marketing
 Meaning
• Product development refers to the creation of a new
product which has some utility; or up-gradation of the
existing product; or enhancement of the production
process, method or system.
• In simple words, it is all about bringing a change in
the present goods or services or the mode of
production.
• Creation and Innovation pave the way for new
inventions and generation of a new product
which provides utility to the consumers.
• Improvement of the existing products is
essential to upgrade the old products and to
attain perfection.
• Enhancement of the existing production
process, methods, techniques and system
helps in the betterment of customer
experience. It is more cost-efficient for the
organization too.
• For Example; One of the most popular
electronic brands Sony came up with the idea
of coloured television in the year 196o. Sony,
with its new product development, has given a
modern edge to the technological
advancement in the entertainment world.
• Product Development
1. Identifying the Need
2. Process
3. Conclusion
 Product Development Process
• Product development is a strategic approach.
It should be well planned and systematically
executed to achieve desired results and avoid
loss.
• Given below is the step by step process for
introducing a new product in the market:
• Idea Generation: The first step is knowing customer’s
requirement through market research by taking feedback,
conducting surveys and going through the competitor’s
product. From this research, a product idea is developed.
• Idea Screening: The product idea is to be well studied and
investigated to find out the need for introducing the new
product, the requirement of additional machinery,
selection of marketing channel and its break-even point.
• Concept Testing: The next stage is enquiring about the
product feasibility by conducting concept testing. The
new product idea is revealed to a group of consumers,
and they are asked to share their response over it. If the
majority is in favour of the product, then further steps are
to be taken.
• Business Analysis: In this step, the organization decides
whether the product is financially viable for it or not.
Product’s demand, cost, competitiveness, profitability,
expected sales, overheads, etc. are analyzed.
• Product Development: At this stage, the manufacturing
of a new product, it’s financing, marketing and
distribution as well as advertisement and promotion
takes place. However, initially, a small quantity is
produced as a test batch.
• Test Marketing: The product is then launched in the
market on a small scale. If it attains success and can
generate customers, the large-scale production is
planned.
• Commercialization: At this point, the company
executes large-scale production and distribution
of the successful new product. It advertises and
markets the product on a massive scale to
acquire a considerable customer base.
• Review Market Performance: Lastly, the
company keeps track of the product’s
performance in the market to know customer
satisfaction level, demand, profitability, sales
volume, competitor’s strategy, the satisfaction
of the middlemen involved, etc.
 Product Life Cycle (PLC)

• Definition: Product life cycle can be defined as

the analysis of the complete life span of a
product. It is divided into five stages, i.e.,
development, introduction, growth, maturity
and decline. It is an essential tool for analyzing
the prospective success or potential of a new
product through research and development.
 Consumer Products
The goods or services purchased by individuals to meet their personal
needs are considered as consumer products. These are primarily of
the following three types:
1. Convenience Products: The products which are available with ease
and fewer efforts and bought in small quantities are known as
convenience products. It includes sugar, milk, stationery,
newspapers, medicines, etc.
2. Shopping Products: Purchase of these products are dependant upon
consumer’s choice and preference and requires time and efforts for
shopping. Most durable products, such as electronic appliances,
furniture, jewellery, etc. are categorized under shopping products.
3. Specialty Products: The products which require a lot of efforts to be
selected and the demand for these are quite limited and expensive.
The examples of speciality products are sculptures, artwork,
paintings, etc.
• Industrial Products
• The goods are services utilized for the production of consumer
goods are known as industrial products. These products are
divided into the following three types:
1. Material and Parts: The raw material and the tools or
supporting equipment used for the production of the consumer
products are termed under this head. The various items
belonging to content and parts are cement, steel, plastic, motor,
pump, trolley, etc.
2. Capital Items: The fixed assets used for manufacturing, supply and
management of consumer goods are defined as capital items. It
includes machines, land, plant, building, etc. together with its
installation.
3. Business Services and Supplies: These products are the secondary
goods or services which support the manufacturing activities. The
services include advertisement, transportation, legal services, etc.
and supplies consist of office supplies such as pen, files, papers;
whereas maintenance supplies like paint, lubricants, brooms, etc.
 Product Life Cycle Stages
• The product life cycle includes five stages
defining the journey of a product in the
market. Let us now discuss each step of the
product’s life in details below:
• Development Stage
• The first stage of the product life cycle is the
development stage at which the new product
generates. Here, the company needs to pay off various
cost involved in product research, manufacturing or
acquisition without generating any revenue from it.
The features of this stage are as follows:
• Generation of a workable product idea
• Making investment
• No sales revenue
 Introduction Stage
• At this stage, the new product is launched in the
market, and the prospective customers are
acquainted with it. The demand for the product is
created at this stage. The characteristics of the
introduction stage are as follows:
1. Creation of the product’s demand
2. No or low-profit stage
3. May encounter brand issues
4. Low sales volume
5. Promotion and free samples
 Growth Stage
The third stage of the product life cycle is the
growth stage where the product sales, demand
and profits accelerate. It consists of the
following characteristics:
1. Sales increases rapidly
2. Constant price
3. Market segment penetration
4. High marketing and promotional expenses
5. Manufacturing cost decreases
6. High-profit margin
 Maturity Stage
The sales of the product are at its peak and price is
competitive at the maturity stage. The features of this
stage are as follows:
1. Low cost due to high production volume
2. Industrial profits decline
3. High competition
4. Optimum sales volume
5. Market saturation
6. The entry of new competitors
7. Requires brand differentiation or feature diversification
to sustain in the market
 Decline Stage

• This is the last stage of the product where the

demand shrinks and its sales start declining. The
features of the decline stage are mentioned
below:
1. Sales volume decreases gradually
2. Product price falls
3. Low margin
4. Implementation of new strategies
5. Introduction of a new product
• Product management is the practice of strategically driving
the development, market launch, and continual support and
improvement of a company’s products.

• Product management is an organizational function that

guides every step of a product’s lifecycle:
i. From development,
ii. to positioning and
iii. pricing, by focusing on the product and its customers first
and foremost.
iv. To build the best possible product, product managers
advocate for customers within the organization and make
sure the voice of the market is heard and heeded.
• But most product professionals spend the majority of their time
focused on the following:

1. Conducting Research: Researching to gain expertise about the

company’s market, user personas, and competitors.

2. Developing Strategy: Shaping the industry knowledge they’ve

learned into a high-level strategic plan for their product—including
goals and objectives, a broad-strokes overview of the product itself,
and maybe a rough timeline.

3. Communicating Plans: Developing a working strategic plan using a

product roadmap and presenting it to key stakeholders across their
organization: executives, investors, their development team, etc.
Ongoing communication across their cross-functional teams
throughout the development process and beyond.
4. Coordinating Development: Assuming they have
received a green light to move forward with their
product’s strategic plan, coordinating with the
relevant teams—product marketing,
development, etc.—to begin executing the plan.
5. Acting on Feedback and Data Analysis: Finally,
after building, testing, and introducing the
product to the marketplace, learning via data
analysis and soliciting direct feedback from users,
what works, what doesn’t, and what to add.
Working with the relevant teams to incorporate
this feedback into future iterations of the product