PRODUCT & ITS DEVELOPMENT

WHAT IS A PRODUCT?
A product is anything that can be offered to a market for attention, acquisition &
consumption that might satisfy a want or need. It includes physical
objects,services, persons, places, organizations & ideas.
-Philip Kotler
FEATURES OF PRODUCT
Tangible attributes
Intangible attributes
Associated attributes
Exchange attributes
Customer satisfaction
Satisfaction of business needs
IMPORTANCE
Product is center of all marketing activities
Starting point of marketing planning
Product is end
Product is key to market success
Satisfaction of corporate need
Competitive weapon
Product Mix
The set of all product lines and items that a particular seller offers for sale
or it refers to all the products offered by a firm.

Product line: A group of products that are closely related because they
function in a similar manner, are sold to the same customer groups , are
marketed through the same types of outlet or fall with in given price
range
Product width : Number of different product lines offered by a firm
DIMENSIONS OF PRODUCT CONCEPT
MANAGERIAL DIMENSIONS
CONSUMER DIMENSIONS
SOCIAL DIMENSIONS
LEVELS OF PRODUCT
CORE PRODUCT
ACTUAL PRODUCT
AUGMENTED PRODUCT
PRODUCT CLASSIFICATION
Classification on basis of durability
Durable products
Semi-durable product
Non-durable products
PRODUCT PLANNING
It determines the characteristics of product, best meeting the consumer's
numerous desires, characteristics that add saleability to products &
incorporates these characteristics into the finished products.
CHARACTERISTICS OF PRODUCT PLANNING
Product investigation
Product modification
Product elimination
Discovering production possibility
OBJECTIVES
To meet consumer needs
To guarantee firm's survival
To increase firm's sales
To ensure better resource utilization
ELEMENTS OF PRODUCT PLANNING
Marketing research
Technical research
Improvement in product
Modification in existing product lines
Elimination of product
Price determination
Determining production capacity
Coordination
Commercialization of product
PRODUCT DEVELOPMENT
Product development Involves adding, dropping, & modification of item
specifications in product line for a given period of time, usually one year.
PRINCIPLES OF PRODUCT DEVELOPMENT
Principle of standardization
Principle of simplification
Principle of specialization
ADVANTAGES
Product development help in producing goods of best quality
It increases life cycle period for product
It increases profit earning capacity of firm
It increases potentiality & goodwill of firm
It helps in expanding market area of firm
ELEMENT OF PRODUCT DEVELOPMENT
Product innovation
Product improvement
Packaging improvement
IMPORTANCE
Existence of firm
Increase in profits
Increase in customer satisfaction
SCOPE OF PLANNING & DEVELOPMENT
Product decision
Product size
Product color
Product brand
 Product guarantee
NEW DEVELOPMENT PROCESS
GENERATION OF NEW PRODUCT IDEAS
SCREENING OF IDEAS

CONCEPT DEVELOPMENT & TESTING

To measure need level of customers
To measure consumer targets
To measure perceived value
MARKETING STRATEGY DEVELOPMENT
Describes target market; the planned product positioning & the sales
It outlines the product's planned price, distribution marketing budget
It describes planned long run sales, profit goals & marketing mix strategy
BUSSINESS ANALYSIS
Identifying product characteristics
Production capability
Production facilities
Estimating cost of production
Estimating profits & sales
Program me for a new product development
PRODUCT DEVELOPMENT
Engineering research
Developing models
Consumer preference testing
Developing marketing mix
TEST MARKETING
Test marketing is a way in which the entire product & marketing program me is
tried out for the first time in a smaller number of well chosen & authentic sales
environment.
PROCEDURE
Determining no. of cities
Selection of cities
Duration of test marketing
Cost of test marketing
Collecting necessary information
Launching new product
ADVANTAGES
Development of marketing mix
Estimation of sales
Removal of defects in product
Measurement of consumer reactions
LIMITATIONS OF TESTING
Information to competitive firms
Away from reach of small firms
Test results are not fully reliable
Not possible for all products
STAGES OF PLC
INTRODUCTION STAGE:
Low & slow sales
High product price
Heavy promotional expenses
Lack of knowledge
Low profit
Narrow product line
GROWTH STAGE
Rapid increase in sales
Product improvements
Increase in competition
Increase in profits
Reduction in price
Strengthening of distributional channel
MATURITY STAGE
Sales increases at decreasing rate
Normal promotional expenses
Uniform & lower prices
Product modifications
Dealer's support
Profit margin decreases
DECLINE STAGE
Rapid decrease in sales
Further decrease in prices
No promotional expenses
Suspension of production work
PLC Strategies
STAGE 2 – Growth Stage
STAGE 3 – Maturity Stage
STAGE 4 – Decline Stage
FACTORS AFFECTING PLC
Rate of technological change
Rate of market acceptance
Competitor's entry
Economic & managerial forces
Protection by patent
Risk bearing capacity
IMPORTANCE
Helpful in sales forecasting
Helpful as a predictive tool
Helpful as a planning tool
Helpful in framing marketing pro gramme
Helpful in price determination
Development of new product
 Comparison of different products
LIMITATIONS
Absence of absolute conformity
Stage span fluctuations
Difficulty in determining stage of PLC
Changes in product sale
Long & prosperous maturity stage
PRODUCT BRANDING
WHAT IS A BRAND?
A brand is a name, term, symbol or design or a combination of them which is
intended to identify the goods or services of one seller or group of sellers & to
differentiate them from those of competitors

Several types of identities

Brand name
Brand mark
Logo
Trade mark
ADVANTAGES
A) TO MANUFACTURERS:
Builds up reputation & image
Helpful in advertising
Easy to identify
Creation of separate market
Personal contact with customers
Builds product loyalty
Cont.......
B)TO MIDDLEMAN:
Helps in understanding consumer behavior
No need of extra advertising
Lesser risk
Increase in goodwill
Helpful in selling process
Cont.....
C) TO CONSUMERS
Easy identification
Quality products
Price stability
Provide status value
Guaranteed quality
High quality packing
Branding Decisions
Essentials of a Good Brand
Brand name should be easy to pronounce, spell and remember, it should
be short.
Brand mark/design should be attractive to eyes
It should be able to suggest benefits, uses and characterstics of the
product.
It should be distinctive
Brand name should be capable of being registered
It should be suitable to the product.
Packaging
The activities of designing and producing the container or wrapper for a
product.

Approximately 10% of product selling cost.

Development of a container and a graphic design for a product.
Can effect purchase decisions ,a tube of toothpaste.

Packaging Functions include:

Why Change Product Packaging
Product doesn’t stand out
Update product look
Change consumer perceptions
Increase ease of use
Spending on a small promotional budget, may be most effective way to
increase sales

Requisite of a Good Package

Suitability
Protective
Requirements of Consumers
Packaging Material
Cost
Attraction Value
Size & Shape
Durability
Product Labelling
Labelling means putting identification marks on the package.
Labelling the act of attaching of tagging labels.a lable is any thing carries
verbal information about the product,producers or such useful
information beneficial to the user.
Labeling
FaFacilitates product
Descriptive function
Indicate the grade of the product
How to use the product etc.
Facilitates Product
Descriptive Function
Indicate the grade of the product
Explains the usage of thr product
Describe the contents and the features
Label acts as a Promotional tool

A label should have

Picture of the product
Description of raw products used along with methods of processing
Directions for use, including cautions against misuse
Possible adverse effects, if any
Brand name
Dates of manufacturing and expiry
Statutory warning , if any

“Positioning is what you do to the mind of the prospect.”

Al Ries and Jack Trout

A product's position is how potential buyers see the product. Positioning is

expressed relative to the position of competitors.
In marketing, positioning has come to mean the process by which
marketers try to create an image or identity in the minds of their target
market for its product, brand, or organization.
Definition
Positioning is how your target market defines you in relation to your
competitors.
A good position is:
1. What makes you unique.
2. It is considered a benefit by your target market.
Positioning Differences
The differences that are promoted for a product must be:
Distinctive: Competitors do not offer the difference, or the company can
offer it in a more distinctive way
Important: The difference delivers a highly valued benefit to the target
buyers
Superior: The difference is superior to other ways that the customer might
obtain the same benefit
Communicable: The difference can be explained and communicated to the
target buyers
Affordable: Buyers can afford to pay the difference
Profitable: Company can introduce the difference profitably
 A product “position” is the complex set of perceptions, impressions and
feelings that the consumers have for the product compared with the competing
products.
Choosing a Positioning Strategy
Marketers decide upon a competitive position which helps them to
distinguish their own products from the offerings of their competition
known as the positioning strategy.

Identifying Possible Competitive Advantages

Key to winning and keeping customers is to understand their needs and buying
processes better than competitors do and deliver more value.

Competitive advantage – helps the company to position itself as providing

superior value in the selected target markets.
Identifying Possible Competitive Advantages
TAJ Groups
Switzerland

Best services

People
Differentiation

Channel
Differentiation
Selecting an Overall Positioning Strategy
More for More
Involves providing the most upscale product or service and charging a higher
price to cover the higher costs.
E.g. Ritz-Carlton Hotels, Mercedes-Benz automobiles happened
More for the Same
Companies can attack a competitors more-for-same positioning by introducing a
better quality at same price being offered by competitors.
E.g. Toyota introduced its Lexus line with a “more-for-the-same” value
proposition.
The Same for Less
It can be a powerful value proposition.
E.g. Dell Computer offers equivalent quality computers at a lower “price for
performance”
Other companies develop imitative but lower price in an effort to lure customers
away from the market leader.
Less for much Less
It involves meeting consumers lower performance or quality requirements at a
much lower price.
E.g. Air Deccan, nations most cost competitive air carrier.
More for Less
E.g. P&G claims that its laundry detergents provide the best cleaning at everyday
low prices.
Communicating and Delivering the Chosen Position

Company must take strong steps to deliver and communicate the desired
position to target consumers.

All the company’s marketing mix must support the positioning strategy.