Product Management Basic Concepts

PRODUCT MANAGEMENT BASIC CONCEPTS What is PRODUCT? A product is more than physical. A product is anything that can be offered to a market for attention, acquisition, or use, or something that can satisfy a need or want. Therefore, a product can be a physical good, a service, a person, an organizat...

PRODUCT MANAGEMENT BASIC CONCEPTS What is PRODUCT? A product is more than physical. A product is anything that can be offered to a market for attention, acquisition, or use, or something that can satisfy a need or want. Therefore, a product can be a physical good, a service, a person, an organization, a place or even an idea. Products are the means to an end wherein the end is the satisfaction of customer needs or wants. (Philip Kotler) - Physical good - Services - Person/individual - Place - Experiences 1. Consumer Orientation-offering products in response to the needs and wants of the consumer. 2. Tangible/Intangible Offering-might satisfy the needs or aspirations of a consumer. 3. Product-product means different things to different people LEVELS OF A PRODUCT - Core Benefits - Tangible Specifications - Augmented Features LEVELS OF PRODUCT - CORE BENEFITS-"Why should the buyer buy it?" - GENERIC/BASIC PRODUCT-It represents all the qualities of a product. - EXPECTED PRODUCT-All aspects the consumer expects to get when they purchase a product. - AUGMENTED FEATURES-All additional factors which sets the product apart from the competition. - POTENTIAL PRODUCT-Augmentations and transformations that the product may undergo in the future. EXAMPLE LEVELS OF PRODUCT (CAR) - CORE BENEFITS-The core product of a car is transportation. - GENERIC/BASIC PRODUCT-A car that is like all other cars on the market. It has four wheels, an engine, etc. - EXPECTED PRODUCT-A customer may expect a car to have a certain level of safety, reliability, and comfort. - AUGMENTED FEATURES-A customer may not expect a car to have GPS, heated seats, or a sunroof. - POTENTIAL PRODUCT-A customer may not even know that cars can have GPS, heated seats, or a sunroof. TYPES OF PRODUCTS 01 DURABLE GOODS A category of consumer products that do not need to be purchased frequently because they are made to last for a long time. - Require greater personal selling efforts and after sales services. 02 NON-DURABLE GOODS They may be defined either as goods that are immediately consumed in one use or ones that have a lifespan of less than 3 years. - Extensive distribution channel - Needs heavy advertising - Raw Materials - are the basic materials that actually become part of the product and that enter the manufacturer's product completely. - Natural Products - Farm Products - Manufactured materials and parts 1. CONVENIENCE PRODUCT-purchased frequently and with little planning or effort. This type of product is widely available, easy to obtain, and typically has a low price.​ 2. SHOPPING PRODUCT-buying decisions are detailed considerations of price, quality, suitability, and value for products 3. SPECIALTY PRODUCT-possess unique characteristics or brand identification that consumer are willing to seek out and alternatives are not considered to be satisfactory. 4. UNSOUGHT PRODUCT-products that have little or no proactive customer demand - Products purchased at convenient locations, with least efforts and time. - These are products that appeal to a very large market segment. They are generally consumed regularly and purchased frequently. - Regular and continuous demand, as the products are essential products. - Price per item tends to be relatively low because of the high purchase volume by consumers. - Durable in nature - Less frequent purchases - More shopping effort for comparisons - Higher price than convenience goods - Selective distribution in fewer outlets but have deeper sales support. - High price - Exclusive distribution - Unique characteristics - Carefully targeted promotions - Consumers have little product awareness or knowledge. - Aggressive advertising and personal selling by producers and resellers fall in this category if they are introducing a completely new concept to the market. - Most major new innovations are unsought until the consumer becomes aware of them. Features of Product - Tangibility - Associated Attributes - Intangible Attributes - Exchange Value - Customer Satisfaction **Customer Satisfaction** is evaluated in terms of benefits expected minus costs incurred (Murphy and Enis, 1986), these costs should be conceptualized on two independent dimensions wherein products can further be distinguished. **Attributes that signal quality have often been divided into intrinsic and extrinsic cues (Olson and Jacoby. 1972)** 1. **Intrinsic Cues-**Involves the physical composition of the product such as flavor, color and sweetness in an orange juice. 2. **Extrinsic Cues**-Are products related but not part of the physical product itself such as the brand name, price, warranty, product form, (fresh versus canned) and level of advertising. **Note:** Packaging could be an intrinsic cue if it is part of the physical composition of the product (e.g. squeezable ketchup container) and extrinsic cue if it is outside the product (such as protective corrugated box for a computer) PRODUCT MIX & PRODUCT LINE **PRODUCT MIX**-Set of all products and items that a particular seller offers for sale Also called product assortment. It is consists of various product lines. Ex. SAMSUNG TV, A.C, Washing Machine, Mobile Phones, Smart Watch It has a certain width, length, depth and consistency. **PRODUCT LINE**-Group or set of products that are closely related because they perform a similar function, targeted at the same customer and distributed through same channel. Ex. **SAMSUNG** has many models of mobile phones from low-price to premium range. It has the following attributes: Stretching, Filling, Modernization, Featuring **PRODUCT MIX** - Product Width-Refers to how many different product lines the company have. - Product Length-Shows the total number of product in the product mix of the company. - Product Depth-Shows how many variant are offered for each product in the line. - Product Consistency-Refers how closely related various product lines are in the end use, distribution channels, etc. - Line Stretching-Occurs when a company lengthens its product line beyond its current range. - Line Filling-Adding more items within the present price range to strengthen the product line. - Line Modernization-The company like to upgrade their products offerings with technology. - Line Featuring-Featuring a one or two products in the line to attract the customers in the showrooms and then try to expose all their models to them.  **Marketing** is about promoting products and services. First rule -- you don't try to serve everybody. You segment the available market, then target a segment, then position the product.