SETTING THE

PRODUCT STRATEGY

10th October 2019

 What is a Product
A particular

bundle of benefits

which satisfies

particular needs and wants.

Anything that can be offered to a

market to satisfy a want or need.
 What are the
characteristics of products
and
How can they be classified?
 Classification of Products
BASIS :
Consumer
Use
Business

Durable
Goods
Tangibility Non-durable
Services
 How do products fit into the
market place
OFFERINGS

Consumer Business to Business

Goods Services Raw Process Accessory Services

Material Material Equipment

Convenience Specialty Manufactured Operating

Components Supplies
Shopping

Convenience Specialty Distribution Consulting

Shopping
Financial Operational Marketing Personnel
 The term Product in the
Marketing Mix includes :
Product assortment Quality
Design Features
Brand name Packaging
Sizes Services
Warranties Returns
 Product Levels
• Core benefit – the
primary benefit
• Basic product – a generic
tangible product
• Expected product – set
of attributes normally
expected
• Augmented product –
the additions the seller
adds to the product to
make it attractive
• Potential Product – all
possible augmentations
a product might undergo
in the future Five Product Levels
 Product Levels - Bicycle
LEVELS BICYCLE

Core ?

Basic ?

Expected ?

Augmented ?

Potential ?
 Product Levels - Bicycle
LEVELS BICYCLE
Cheap self powered
Core
transportation
Strong frame, two wheels,
Basic
pedal, brakes seat
Bell, carrier, chain guard,
Expected
tool kit
Light frame, gears, collapsible,
Augmented
service
Open to creativity, endless
Potential
possibilities………….
Product Levels – Pressing Iron
LEVELS PRESSING IRON
Core ?
Basic ?
Expected ?
Augmented ?
Potential ?
Product Levels – Pressing Iron
LEVELS PRESSING IRON
Removal of creases
Core
from clothes
Heavy base, heating coil,
Basic
handle, power plug, power cord
Temperature control, low power
Expected
consumption
Cordless, steam ironing,
Augmented
light weight
Open to creativity, endless
Potential
possibilities………….
How does a company
build and manage its
products???
 Product Mix
(also called Product Assortment)

The Product Mix : all products a seller offers for sale

A Product Line : a group of products clubbed

together by virtue of
performing a similar function
 Product Lines
1. Breadth – how many different product lines
the company carries
2. Depth – the number of product items and
variants of each product line
3. Consistency – how closely related the various
products lines are in end use, production
requirements, distribution channels or some
other way
 Breadth of Product Line

Laundry Oral Care Personal Skin Care

Depth of Product Line

Wash
Surf Excel Pepsodent Lux Fair & Lovely
Rin Close-up Lifebouy Pond’s
Wheel Liril
Dove
Pears
Breeze
 Product Mix Decisions

1. Addition to the product line

Upwards
Stretching
Downwards
2. Product modification
3. Product abandonment
 Product Strategy
The Product is one of the elements in your
marketing mix, the ingredient marketers call the
“Four Ps”

What is Product Strategy?

…. is what you put into your products

 New Product
Development Process
1. Idea generation
2. Idea screening
3. Concept development and testing
4. Marketing strategy development
5. Business analysis
6. Product development
7. Market testing
8. Commercialization
Managing the Development
Process: Ideas
• Idea Generation
– Interacting with Others
• Sales representatives
• Intermediaries
• Customers
• Foreign markets and media
• R & D Scientists
• Competitors ………………..and a host of
others
Managing the Development
Process: Ideas
Idea Screening
 Idea manager
 Idea committee
 Two types of errors in screening ideas
DROP - error
GO - error
 Concept Development and
Testing
Product concepts describe
what features the product should have
and the benefits those features
will provide for consumers
Marketing Strategy Development
• Identifying the target market
• Determining the positioning to effectively
address the needs of the target market.
• Planning for pricing, distribution and
promotion expenditures
 Business Analysis
Assessing the product’s commercial
viability :
• Profitable contribution
• Risk of cannibalization
• Synergy with existing product line,
• Etc.
 Product Development

Refining and perfecting the new

product by company engineers and
the like

Prototypes are made up for testing.

 Market Testing

Testing the complete marketing plan

in a small geographic area

that is similar to the larger market

the firm hopes to enter.

 Commercialization

Launching of the product after

full scale production,

distribution,

advertising,

sales promotion – the works

 Product Life Cycle
Introduction Growth Maturity Decline
Stage Stage Stage Stage
Sales
and
Profits
Total
industry
sales

Total
industry
profits

Time
How can a company differentiate
its product???
Form – the physical structure
Features – benefits in addition to basic function
Performance quality - level of operational effectiveness
Conformance quality – consistency in performance
Durability – product’s expected operating life
Reliability – probability of mal-function
Repairability – easy of recovery from a malfunction
Style – aesthetics ……….2
How can a company differentiate
its product???
Ordering ease – how easy it is to place an order
Delivery – speed, accuracy, and care attending the delivery
process
Installation – work done to make a product operational
Customer Training – training the customer’s employees
to use the vendor’s equipment.
Customer Consulting – data, info, advice offered by the
seller to the buyers
Maintenance & Repairs – service program to help
customers keep purchased products in working conditions
 Continuum of Evaluation

Most Goods Most Services

High in High in High in

Search Qualities Experience Qualities Credence Qualities
 The BCG Model suggests which
products to keep and which to kill
High
Stars Question Marks
Market Growth Rate

Maintain/hold Build/Withdraw
Revenues ++++ Revenues +
Expenses --- Expenses ----
Net + Net ---
10%
Cash Cows Dogs
Harvest Kill/Divest
Revenues ++++++ Revenues ++
Expenses -- Expenses ----
Net ++++ Net --
Low
High 1.0X Low
Relative Market Share
That’s all for today!!!