Individual product decisions

Product attribute decisions

Brand decisions Packaging decisions

Product-Support decisions

Product Line Decisions

A product line is a group of products that
are related in function, customerpurchase needs, or distribution channels.

Product mix decisions

the set of all product lines and items that a particular seller offers for sale 4 dimensions
width length depth consistency

Product hierarchy
Each product is related to certain other products. The product hierarchy stretches from basic needs to particular items that satisfy those needs. We can identify seven levels of product hierarchy.

Eg. (life Insurance)

1) Need family: The core need underlies the existence of a product . Eg.security 2) Product family: All the product classes that can satisfy a core need with reasonable effectiveness Eg. Saving and income

continued
3) Product class : A group of products within the product family recognised having certain functional coherence . Eg.financial instruments 4) Product line: A group of products within a product class that are closely related because they performa similar function,are sold to the same customer groups,are marketed through same channels,or fall within same price ranges. Eg . Life insurance, vehicle insurance

continued
5) Product type: A group of items within product line that share one of several possible forms of the product. Eg Term life(all policies have this attribute) 6) Brand: The name associated with one or more items in the productline,that is used to identify the source or characterof the item(s). Eg. Tata Aig,Max Newyork,Kotak Mahindra,Lic

continued
7) Item:A distinct unit within a brand or product line distinguishable by size,price, apperence or some other attribute. ( Eg. Gyan kosh by Tata Aig, for pension, or some kid education plan )

Differences Between Goods and Services

Intangibility

Heterogeneity

Simultaneous Production and Consumption

Perishability

Implications of Intangibility
Services cannot be inventoried Services cannot be patented Services cannot be readily displayed or communicated Pricing is difficult

Implications of Heterogeneity
Service delivery and customer satisfaction depend on employee actions Service quality depends on many uncontrollable factors There is no sure knowledge that the service delivered matches what was planned and promoted

Implications of Simultaneous Production and Consumption Customers participate in and affect the transaction Customers affect each other Employees affect the service outcome Decentralization may be essential Mass production is difficult

Implications of Perishability
It is difficult to synchronize supply and demand with services Services cannot be returned or resold

Table 1-2

Services are Different

Goods
Tangible

Services
Intangible

Resulting Implications
Services cannot be inventoried. Services cannot be patented. Services cannot be readily displayed or communicated. Pricing is difficult. Service delivery and customer satisfaction depend on employee actions. Service quality depends on many uncontrollable factors. There is no sure knowledge that the service delivered matches what was planned and promoted. Customers participate in and affect the transaction. Customers affect each other. Employees affect the service outcome. Decentralization may be essential. Mass production is difficult. It is difficult to synchronize supply and demand with services. Services cannot be returned or resold.

Standardized

Heterogeneous

Production separate from consumption

Simultaneous production and consumption

Nonperishable Perishable

Why does a company need new products? Obtain greater profits/ROI Capture larger market share Meet customers changing needs & tastes Shorter product life cycle Build competitive advantages Planned obsolescence

New product development

Steps: Product idea generation Product idea screening and product concept development Business analysis Product testing Market testing Commercialization

Product life cycle (PLC)

the course of a products sales and profit over its lifetime 4 stages:
introduction growth maturity decline

Sales and profit

Sales

Profit Introduction Growth Maturity Decline

Time

Introduction Stage
slow sales growth
profit are nonexistent

high promotion spending

a few competitors usually focus on high-income groups

Growth Stage
rapid market acceptance
new competitors will enter

introduce new product features

market will expand profit increases

Maturity Stage
slowdown in sales

competitors begin marking down prices,. to find better versions of the product drop in profit only well-established competitors

Decline Stage
sales fall off and profits drop

some firms withdraw from the market

Introduction

Growth

Marketing Objectives
Introduction and Growth

Marketing Objectives
Maturity and Decline

Strategies
Introduction Growth

Strategies
Maturity Decline

Strategies
Introduction Growth

Strategies
Maturity Decline