PRODUCT MANAGEMENT
PRODUCT
MANAGEMENT
UNIT -
4
C
O
N
C
E
P
T
O
F
A
P
R
O
D
U
C
T
:
Acc. to
PHILIP
KOTLER
“A product
is
anything
that
can be
offered
to a market for
attention, acquisition,
use
or consumption.
It
includes physical
objects, services,
personalities, places, organizations and
ideas.
Product
occupies
a
dominant position
in
marketing mix
{one of the 4
p’s}
Key element of the marketing
programme.
Before making
decisions
about
pricing,
promotion,
distribution
firm has to decide
about the
product.
Product
have
two
aims:
1.
Profit
maximization
2.
Wealth
maximization [customer
satisfaction]
Product policies
decision
from an
important
basis for the firms competitive
advantages
in
the market
place.
Consumers
perceives
the
product from
different
angels.
This
perception are
to
be
combined in the
form
of
product
image.
C
o
n
s
u
m
e
r
p
o
i
n
t
o
f
v
i
e
w
C
o
m
p
a
n
y
p
o
i
n
t
o
f
v
i
e
w
P
r
o
d
u
c
t
i
m
a
g
e
Product
Price
Promoti
o
n
Place
Need
Want
Per
s
o
n
a
l
ity
Prestige
Income
Edu
c
at
i
on
VARIOUS
USE OF A
PRODUCT:
I
general
view,
product is defined as everything
the
purchaser
gets
in
exchange
of
money is a
product.
T
E
C
H
N
I
C
A
L
/
M
A
N
U
F
A
C
T
U
R
I
N
G
P
O
I
N
T
O
F
V
I
E
W
:
A
product consists
of
various
of
raw materials
put
together so,
that the
end result serves a useful
purpose
of
consumption.
E
C
O
N
O
M
I
C
P
O
I
N
T
O
F
V
I
E
W
:
A
product consists
of
a bundle
of
utilities
[value]
involve
in
various product
features
and
accompanying
services.
F
R
O
M
T
H
E
C
O
N
S
U
M
E
R
S
P
O
I
N
T
O
F
V
I
E
W
:
What
a
desire
are
not
the
product
but
satisfying
the
experiences.
D
E
F
I
N
I
T
I
O
N
:
“ A
product is
a complex
of tangible, intangible
and
external attributes including functional, social and
psychological
utilities
or
benefits”.
A
product has as bundle
of
physical services and a
symbolic
attributes
expected
to
yield
satisfaction
or
benefits
to
the buyers. This concept has actually led
to
defining
the
product
as the total
product.
P
R
O
D
U
C
T
P
L
A
N
N
I
N
G
:
Product planning has been defined by American Marketin
Association as
“ The
act of marketing out
&
supervising
the
search,
screening, development and communication
of
ne
Products, the
modification
of
existing lines and
the
Discontinuous of marginal or unprofitable
items.”
S
T
E
P
S
/
P
R
O
C
E
S
S
:
1)
Evaluation
of the
idea,
market & the
product
2)
Evaluation
of
company
resources
3)
Finding
out
customer
specifications
4)
Developing
the
product
5)
Testing
the
product
6)
Marketing
the
product
7)
Evaluating
the
result
{feedback}S
I
G
N
I
F
I
C
A
N
C
E
O
F
P
R
O
D
U
C
T
P
L
A
N
N
I
N
G
{I
M
P
O
R
T
A
N
C
E
}
“
I
F
Y
O
U
F
A
I
L
T
O
P
L
A
N
,
Y
O
U
’
R
E
P
L
A
N
N
I
N
G
T
O
F
A
I
L
”
1)
Basis
of
marketing
programme
2)
For
survival
3)
To
face
competition
4)
To
minimize
risk
5)
Instrument of
growth
6)
To
discharge social
responsibilities
P
R
O
D
U
C
T
O
B
J
E
C
T
I
V
E
S
&
S
T
R
A
T
E
G
I
E
S
:
1
)
P
r
o
d
u
c
t
p
o
l
i
c
y
Product mix
Product item
Product
line
2
)
E
l
e
m
e
n
t
s
o
f
p
r
o
d
u
c
t
p
o
l
i
c
y
Product planning
&
development
Product
line
Product standardization
Product identification
{branding}
Product
style
Product
packaging
P
R
O
D
U
C
T
M
I
X
Product
mix
F
A
C
T
O
R
S
I
N
F
L
U
E
N
C
I
N
G
P
R
O
D
U
C
T
M
I
X
:
1)
Population
increase
2)
Changes in level
of the
income
of the
buyers
3)
Changes in consumer
behaviour
4)
Other
reasons
Marketing influences {competition, place,media}
Product influences
Financial
influences
N
E
W
P
R
O
D
U
C
T
–
D
E
V
E
L
O
P
M
E
N
T
:
{V
.
V
.
I
M
P
}
Product planning deals with changes
in:
1)
The kinds of
goods
or
services
offered
2)
The
number/kinds of products
or different
lines
that
the company
offers
3)
The width
of
assortment within each
product line
offered
4)
The quality
levels/
levels
acceptable to
various
classes
of
customers
5)
The degree of
distinctiveness
[different]
T
h
e
f
o
l
l
o
w
i
n
g
a
r
e
t
h
e
b
a
s
i
c
c
h
a
n
g
e
s
t
h
a
t
m
a
y
b
e
r
e
q
u
i
r
e
d
i
n
p
r
o
d
u
c
t
p
l
a
n
n
i
n
g
:
1)
I
m
p
r
o
v
i
n
g
t
h
e
e
x
i
s
t
i
n
g
p
r
o
d
u
c
t
s
2)
W
e
e
d
i
n
g
[
u
n
p
r
o
f
i
t
a
b
l
e
i
t
e
m
s
]
o
u
t
p
r
o
f
i
t
a
b
l
e
o
f
t
h
e
p
r
o
d
u
c
t
l
i
n
e
3)
E
x
p
a
n
s
i
o
n
o
f
t
h
e
c
u
r
r
e
n
t
p
r
o
d
u
c
t
l
i
n
e
[
d
i
v
e
r
s
i
f
i
c
a
t
i
o
n
]
s
4)
N
e
w
p
r
o
d
u
c
t
d
e
v
e
l
o
p
m
e
n
t
f
o
r
t
h
e
p
r
e
s
e
n
t
c
u
s
t
o
m
e
r
s
5)
N
e
w
p
r
o
d
u
c
t
f
o
r
n
e
w
c
u
s
t
o
m
e
r
s
N
E
W
P
R
O
D
U
C
T
D
E
V
E
L
O
P
M
E
N
T
S
T
A
G
E
S
:
1
)
E
X
P
L
O
R
A
T
I
O
N
O
F
I
D
E
A
S
/
I
D
E
A
G
E
N
E
R
A
T
I
O
N
:
R&D
Distributors
Competitors
Customers
Employees
Professional investment/ marketing
agencies
2
)
S
C
R
E
E
N
I
N
G
O
F
I
D
E
A
S
:
Expanding each idea into full product
concept
Collecting
facts &
opinion
to
decide whether
the
product
idea could
be
converted
into a
business
proposition
Technology
Assessing each idea
for its
potential value
for its
company
3
)
B
U
S
I
N
E
S
S
A
N
A
L
Y
S
I
S
:
Future study
on each
idea
in
detail
Determining
the
desirable
market features for the
product
& its
feasibility
Developing specification
&
establishing a definate
programme for the
product
4)
D
E
V
E
L
O
P
I
N
G
T
H
E
P
R
O
D
U
C
T
:
Idea on
the
paper is turned into product on a
hand.
5)
T
E
S
T
I
N
G
:
Concept
testing
Product
testing
Test
marketing
a
)
C
O
N
C
E
P
T
T
E
S
T
I
N
G
:
To
evaluate
the
relative
merits of
several new product
proposals
To
determine whether
the
product idea is
to
be abounded or
modified
To
determine
the
size
of
potential
market
To
guide
the
management
to
adopt suitable
policies
b
)
P
R
O
D
U
C
T
T
E
S
T
I
N
G
:
To
assess
proper product
performance
To
minimise
the risk
attached
to
full scale launching
of
a
new product
To
identify the most productive
market
segments
To
collect necessary data of responsiveness
from the
customers
c
)
T
E
S
T
M
A
R
K
E
T
I
N
G
:
To
evaluate a complete marketing plan including
advertisement,
distribution,
sales, pricing
etc…
To
determine media mix, channels
e.t.c
To
forecast
sales
volume
6
)
C
O
M
M
E
R
C
I
A
L
I
S
A
T
I
O
N
:
Completing final plans
for
production
&
marketing
Initiating, co-ordinated production
&
selling
programmes
Checking results at regular
intervals
WHY NEW
PRODUCTS
FAIL
IN THE
MARKET
???
REASONS:
Inadequate market
analysis
Product
defect
Higher
cost
Poor timing
[proper]
Competition
Insufficient
marketing
effort
Inadequate sales
force
Weakness
in
distribution
*
*
*
v
.
i
m
p
P
R
O
D
U
C
T
L
I
F
E
C
Y
C
L
E
[
P
L
C
]
:
There
are
4 stages of
product
life
cycle.
I.
Introduction
II.
Growth
III.
Maturity
IV.
Decline
Introduction
G
ro
w
th
Maturity
D
e
cl
i
ne
bep
T
IME
Sales
/
Profit
volume
Products have a limited
life
Products sales pass through
different
stages
each posing
different
challenges, opportunities
&
problems
to the
seller
Profits
rise
&
fall
at
different
stages of
PLC
Products require
different
marketing,
financial, manufacturing, purchasing,
human
resources strategies in each
stage of the
PLC
D
E
F
I
N
I
T
I
O
N
:
A
c
c
.
T
o
P
H
I
L
I
P
K
O
T
L
E
R
“
T
h
e
p
r
o
d
u
c
t
l
i
f
e
c
y
c
l
e
i
s
a
n
a
t
t
e
m
p
t
t
o
r
e
c
o
g
n
i
s
e
d
i
s
t
i
n
c
t
s
t
a
g
e
s
i
n
s
a
l
e
s
h
i
s
t
o
r
y
o
f
t
h
e
p
r
o
d
u
c
t
.
”
PLC concerns with
the study of
degree
of
product
acceptance by
the market
overtime.
It
includes
major
raises
&
falls
of
sales
during
its
life.
P
L
C
S
T
A
G
E
S
:
I
.
I
N
T
R
O
D
U
C
T
I
O
N
S
T
A
G
E
:
•
H
u
g
e
s
e
l
l
i
n
g
&
p
r
o
m
o
t
i
o
n
c
o
s
t
a
r
e
r
e
q
u
i
r
e
d
t
o
i
n
c
r
e
a
s
e
a
w
a
r
e
n
e
s
s
o
f
t
h
e
c
u
s
t
o
m
e
r
s
.
•
P
r
i
c
e
i
s
k
e
p
t
h
i
g
h
t
o
r
e
c
o
v
e
r
h
i
g
h
d
e
v
e
l
o
p
m
e
n
t
,
p
r
o
d
u
c
t
i
o
n
&
m
a
r
k
e
t
i
n
g
c
o
s
t
•
M
a
r
k
e
t
e
r
h
a
s
t
o
t
a
c
k
l
e
t
e
c
h
n
i
c
a
l
a
n
d
p
r
o
d
u
c
t
i
o
n
p
r
o
b
l
e
m
s
•
S
a
l
e
s
a
r
e
l
o
w
a
n
d
i
n
c
r
e
a
s
i
n
g
a
t
a
l
o
w
e
r
r
a
t
e
.
•
T
h
e
r
e
i
s
l
o
s
s
o
r
n
e
g
l
i
g
i
b
l
e
p
r
o
f
i
t
•
T
h
e
r
e
i
s
n
o
c
o
m
p
e
t
i
t
i
o
n
.
I
I
.
G
R
O
W
T
H
S
T
A
G
E
:
•
Sales increase rapidly as a result
of
consumer
acceptance
of the
products.
•
Company can earn maximum
profits.
•
Competitors
enter
the market
due
to attractive
profits
•
Price is reduced
to
attract more
customers
•
Distribution network is widened and
improved
•
Necessary
primary
changes are
made
in products
to
remove
defects
•
Company enters
the
new segments and channels are
selected.
I
I
I
.
M
A
T
U
R
I
T
Y
S
T
A
G
E
:
a)
Growth
maturity
b)
Stable
maturity
c)
Decline
maturity
•
Sales increase
at
decreasing
rate
•
Profits starts
declining
•
Marginal
competitors
leave
the
market
•
Customer retention
is
given
more
emphasis
•
Product,
market &
marketing mix modifications are
undertaken.
I
V
.
D
E
C
L
I
N
E
S
T
A
G
E
:
•
Sales
fall
rapidly
•
Profits
fall
more
rapidly than
sales
•
Product modification is
adopted
•
Gradually,
company prefers
to
shift resources
to
new
products.
•
Most of the
sellers withdraw
from the
market
•
Promotional expenses
are
reduced
to
realise
a
little
profit.
B
R
A
N
D
I
N
G
,
P
A
C
K
A
G
I
N
G
,
L
A
B
E
L
L
I
N
G
[
B
P
L
]
S
T
R
A
T
E
G
I
E
S
:
I
.
B
R
A
N
D
I
N
G
:
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 a group
of
sellers and
to
differentiate
them
from
those
of
competitors
•
B
r
a
n
d
n
a
m
e
•
B
r
a
n
d
m
a
r
k
•
T
r
a
d
e
m
a
r
k
•
B
r
a
n
d
i
n
g
•
T
r
a
d
e
n
a
m
e
•
P
a
t
e
n
t
s
•
C
o
p
y
r
i
g
h
t
s
F
U
N
C
T
I
O
N
S
O
F
B
R
A
N
D
I
N
G
:
•
B
r
a
n
d
i
n
g
h
e
l
p
s
i
n
p
r
o
d
u
c
t
i
d
e
n
t
i
f
i
c
a
t
i
o
n
&
d
i
s
t
i
n
c
t
i
v
e
n
e
s
s
t
o
a
p
r
o
d
u
c
t
•
I
n
d
i
r
e
c
t
l
y
i
t
d
e
n
o
t
e
s
t
h
e
q
u
a
l
i
t
y
o
r
a
s
t
a
n
d
a
r
d
o
f
a
p
r
o
d
u
c
t
.
•
I
t
e
l
i
m
i
n
a
t
e
s
i
m
i
t
a
t
i
o
n
p
r
o
d
u
c
t
s
.
•
I
t
e
n
s
u
r
e
s
l
e
g
a
l
r
i
g
h
t
s
o
n
t
h
e
p
r
o
d
u
c
t
.
•
I
t
h
e
l
p
s
i
n
a
d
v
e
r
t
i
s
i
n
g
a
n
d
p
a
c
k
a
g
i
n
g
a
c
t
i
v
i
t
i
e
s
.
•
I
t
h
e
l
p
s
t
o
c
r
e
a
t
e
a
n
d
s
u
s
t
a
i
n
b
r
a
n
d
l
o
y
a
l
t
y
t
o
p
a
r
t
i
c
u
l
a
r
p
r
o
d
u
c
t
s
.
•
I
t
h
e
l
p
s
i
n
p
r
i
c
e
d
i
f
f
e
r
e
n
t
i
a
t
i
o
n
o
f
p
r
o
d
u
c
t
s
.
C
L
A
S
S
I
F
I
C
A
T
I
O
N
O
F
B
R
A
N
D
S
:
I
.
M
a
n
u
f
a
c
t
u
r
e
r
’
s
b
r
a
n
d
s
:
•
National
•
Regional
•
Advertising
brands
•
Single
brands
•
Multiple
brands
•
Individual
brands
I
I
.
D
I
S
T
R
I
B
U
T
E
R
’
S
B
R
A
N
D
S
:
•
Private
brand
•
Store
brand
•
Dealer
brand
•
House
brand
K
I
N
D
S
O
F
B
R
A
N
D
S
:
1.
Coined name
– e.g:
parker
pen
2.
Arbitrary name
{ not related
to
product
}
3.
Suggestive name
– e.g :
boost
4.
Descriptive name
– e.g :
glucose
–
D
C
H
A
R
E
C
T
E
R
I
S
T
I
C
S
O
F
A
B
R
A
N
D
N
A
M
E
:
•
Easy
•
Read and
understand
•
Remember
•
Appropriate
•
It
should
be
descriptive
name
I
I
.
P
A
C
K
A
G
I
N
G
:
F
U
N
C
T
I
O
N
S
O
F
P
A
C
K
A
G
I
N
G
:
•
Two
assemble and arrange
the
products
in
the
desired
form
•
To
identify
the
contents
the brand
and
the maker [
product
differentiation is perfected
to the function]
•
To
protect the
contents
from
product line through final
use/
consumption
•
To
provide
a
suitable product
mix
[
size, weight, grade,
package]
•
To
facilitate
retailer’s
functions
•
To
facilitate transportation, storing, warehouse,
handling
•
To
enable
the
display
of
contents
•
To
encourage
repurchase
•
To
help in complying with legal
requirements
•
To
provide opportunity and space
for
advertising.
K
I
N
D
S
O
F
P
A
C
K
A
G
I
N
G
:
1.
Family packaging
–
same
for
all
products
2.
Reuse packaging
– e.g:
soap
case,
hand
wash
3.
Multi packaging:
More than 1 product is packed
e.g: tooth
paste
&
brush, natraj pencil with sharpener and
eraser.
P
R
O
B
L
E
M
S
I
N
P
A
C
K
A
G
I
N
G
:
1.
High
cost
of production/packaging
2.
Appearance
3.
Kinds
of
designs
4.
Convenience
5.
Reuse purpose
6.
AIDA [ Attention, Interest,
Desire,
Action]
I
I
I
.
L
A
B
E
L
L
I
N
G
:
Label is a small slip placed on or near anything
[product]
to
denote its nature,
contents,
ownership,
destination
etc….
F
U
N
C
T
I
O
N
S
:
1.
It
gives definiteness
to
a product
&
therefore
the
identification
of
a product is
easy.
2.
It stresses the
standard
&
other special
features of
the
product
3.
It
enables
the manufacturer to
give clear instructions
to the
consumer about use
of the
product
4.
By
mentioning prices undue
price
variations caused
by
the
intermediaries are
avoided
5.
It
encourages
to
produce only standardized
&
quality
products
6.
It
provides
a method for manufactures by
which
a
contact
K
I
N
D
S
O
F
L
A
B
E
L
S
:
1.
Brand labels
–
e. g:
cosmetics,
sweets, chocolates
etc…
2.
Grade
labels
– e.
g: clothes
[silk]
3.
Descriptive labels
[
uses
of product] – e.
g: milk
food
4.
Informative
labels
– e.
g:
medicines
A
D
V
A
N
T
A
G
E
S
O
F
L
A
B
E
L
L
I
N
G
:
1.
Social
service
2.
Avoids
price
variations
3.
Helps
advertising
4.
It
helps
to
assess
the
superiority
of a
product
5.
It
is a guarantee
for the
standard
of
a
product
D
I
S
A
D
V
A
N
T
A
G
E
S
:
1.
No use
for
illiterate
people
2.
Increase cost of a
product
3.
It
is
effective
only where standardization is
compulsory
4.
Comparison ultimately ends
in
discarding one product
in
favour
of
other.
The concept of product management is crucial in marketing, as a product can be anything offered to a market for attention, acquisition, use, or consumption. Products can include physical objects, services, personalities, places, organizations, and ideas. Product management involves decision-making on profit and wealth maximization, shaping product images, and considering consumer and company perspectives. Various perspectives on products, such as economic, technical, and consumer points of view, highlight the importance of understanding and meeting customer needs and desires. Product planning involves evaluating ideas, resources, and customer specifications, developing and testing products, and marketing them effectively to create a successful outcome.
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Presentation Transcript
PRODUCT MANAGEMENT UNIT - 4
CONCEPT OF APRODUCT: Acc. to PHILIP KOTLER A product is anything that can be offered to a market for attention, acquisition, use or consumption. It includes physical objects, services, personalities, places, organizations and ideas. Product occupies a dominant position in marketing mix {one of the 4 p s} Key element of the marketing programme. Before making decisions about pricing, promotion, distribution firm has to decide about the product.
Product have two aims: 1. Profit maximization 2.Wealth maximization [customer satisfaction] Product policies decision from an important basis for the firms competitive advantages in the market place. Consumers perceives the product from different angels. This perception are to be combined in the form of product image.
Consumer point of view Company point of view Need Product Want Product image Price Promotion Personality Prestige Income Place Education
VARIOUS USE OF APRODUCT: I general view, product is defined as everything the purchaser gets in exchange of money is a product. TECHNICAL / MANUFACTURING POINT OF VIEW: A product consists of various of raw materials put together so, that the end result serves a useful purpose of consumption. ECONOMIC POINT OF VIEW: A product consists of a bundle of utilities [value] involve in various product features and accompanying services.
FROM THE CONSUMERS POINT OF VIEW: What a desire are not the product but satisfying the experiences. DEFINITION: A product is a complex of tangible, intangibleand external attributes including functional, social and psychological utilities or benefits . A product has as bundle of physical services and a symbolic attributes expected to yield satisfaction or benefits to the buyers. This concept has actually led to defining the product as the total product.
PRODUCT PLANNING: Product planning has been defined by American Marketin Association as The act of marketing out & supervising the search, screening, development and communication of ne Products, the modification of existing lines and the Discontinuous of marginal or unprofitable items. STEPS/ PROCESS: 1) Evaluation of the idea, market & the product 2) Evaluation of company resources 3) Finding out customer specifications 4) Developing the product 5) Testing the product 6) Marketing the product 7) Evaluating the result {feedback}
SIGNIFICANCE OF PRODUCT PLANNING {IMPORTANCE} IF YOU FAILTO PLAN, YOU RE PLANNING TO FAIL 1) Basis of marketing programme 2) For survival 3) To face competition 4) To minimize risk 5) Instrument of growth 6) To discharge social responsibilities
PRODUCT OBJECTIVES & STRATEGIES: 1) Product policy Product mix Product item Product line 2) Elements of product policy Product planning & development Product line Product standardization Product identification {branding} Product style Product packaging
PRODUCT MIX Product mix Product Breadth Product depth Product consistency
FACTORS INFLUENCING PRODUCT MIX: 1) Population increase 2) Changes in level of the income of the buyers 3) Changes in consumer behaviour 4) Other reasons Marketing influences {competition, place, media} Product influences Financial influences
NEW PRODUCT DEVELOPMENT: {V.V.IMP} Product planning deals with changes in: 1) The kinds of goods or services offered 2) The number/kinds of products or different lines that the company offers 3) The width of assortment within each product line offered 4) The quality levels/ levels acceptable to various classes of customers 5) The degree of distinctiveness [different]
The following are the basic changes that may be required in product planning: 1) Improving the existing products 2) Weeding [unprofitable items] out profitable of the product line 3) Expansion of the current product line [diversification]s 4) New product development for the present customers 5) New product for new customers
NEW PRODUCT DEVELOPMENT STAGES: 1) EXPLORATION OF IDEAS / IDEAGENERATION: R&D Distributors Competitors Customers Employees Professional investment/ marketing agencies 2) SCREENING OF IDEAS: Expanding each idea into full product concept Collecting facts & opinion to decide whether the product idea could be converted into a business proposition Technology Assessing each idea for its potential value for its company
3) BUSINESSANALYSIS: Future study on each idea in detail Determining the desirable market features for the product & its feasibility Developing specification & establishing a definate programme for the product 4) DEVELOPING THE PRODUCT: Idea on the paper is turned into product on a hand. 5) TESTING: Concept testing Product testing Test marketing
a) CONCEPT TESTING: To evaluate the relative merits of several new product proposals To determine whether the product idea is to be abounded or modified To determine the size of potential market To guide the management to adopt suitable policies b) PRODUCT TESTING: To assess proper product performance To minimise the risk attached to full scale launching of a new product To identify the most productive market segments To collect necessary data of responsiveness from the customers
c) TEST MARKETING: To evaluate a complete marketing plan including advertisement, distribution, sales, pricing etc To determine media mix, channels e.t.c To forecast sales volume 6) COMMERCIALISATION: Completing final plans for production & marketing Initiating, co-ordinated production & selling programmes Checking results at regular intervals
WHY NEW PRODUCTS FAIL IN THE MARKET ??? REASONS: Inadequate market analysis Product defect Higher cost Poor timing [proper] Competition Insufficient marketing effort Inadequate sales force Weakness in distribution
*** v.imp PRODUCT LIFE CYCLE [PLC]: There are 4 stages of product life cycle. I. Introduction II. Growth III. Maturity IV. Decline Introduction Growth Maturity Decline Sales / Profit volume bep TIME
Products have a limited life Products sales pass through different stages each posing different challenges, opportunities & problems to the seller Profits rise & fall at different stages of PLC Products require different marketing, financial, manufacturing, purchasing, human resources strategies in each stage of the PLC DEFINITION: Acc. To PHILIP KOTLER The product life cycle is an attempt to recognise distinct stages in sales history of the product. PLC concerns with the study of degree of product acceptance by the market overtime. It includes major raises & falls of sales during its life.
PLC STAGES: I. INTRODUCTION STAGE: Huge selling & promotion cost are required to increase awareness of the customers. Price is kept high to recover high development, production & marketing cost Marketer has to tackle technical and production problems Sales are low and increasing at a lower rate. There is loss or negligible profit There is no competition.
II. GROWTH STAGE: Sales increase rapidly as a result of consumer acceptance of the products. Company can earn maximum profits. Competitors enter the market due to attractive profits Price is reduced to attract more customers Distribution network is widened and improved Necessary primary changes are made in products to remove defects Company enters the new segments and channels are selected.
III. MATURITY STAGE: a) Growth maturity b) Stable maturity c) Decline maturity Sales increase at decreasing rate Profits starts declining Marginal competitors leave the market Customer retention is given more emphasis Product, market & marketing mix modifications are undertaken.
IV. DECLINE STAGE : Sales fall rapidly Profits fall more rapidly than sales Product modification is adopted Gradually, company prefers to shift resources to new products. Most of the sellers withdraw from the market Promotional expenses are reduced to realise a little profit.
BRANDING, PACKAGING, LABELLING [BPL] STRATEGIES: I. BRANDING: 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 a group of sellers and to differentiate them from those of competitors Brand name Brand mark Trade mark Branding Trade name Patents Copy rights
FUNCTIONS OF BRANDING: Branding helps in product identification & distinctiveness to a product Indirectly it denotes the quality or a standard of a product. It eliminates imitation products. It ensures legal rights on the product. It helps in advertising and packaging activities. It helps to create and sustain brand loyalty to particular products. It helps in price differentiation of products.
CLASSIFICATION OF BRANDS: I. National Regional Advertising brands Single brands Multiple brands Individual brands Manufacturer s brands : II. DISTRIBUTER S BRANDS: Private brand Store brand Dealer brand House brand
KINDS OF BRANDS: 1. Coined name e.g: parker pen 2. Arbitrary name { not related to product } 3. Suggestive name e.g : boost 4. Descriptive name e.g : glucose D CHARECTERISTICS OF A BRAND NAME: Easy Read and understand Remember Appropriate It should be descriptive name
II. PACKAGING: FUNCTIONS OF PACKAGING: Two assemble and arrange the products in the desired form To identify the contents the brand and the maker [ product differentiation is perfected to the function] To protect the contents from product line through final use/ consumption To provide a suitable product mix [ size, weight, grade, package] To facilitate retailer s functions To facilitate transportation, storing, warehouse, handling To enable the display of contents To encourage repurchase To help in complying with legal requirements To provide opportunity and space for advertising.
KINDS OF PACKAGING: 1. Family packaging same for all products 2. Reuse packaging e.g: soap case, hand wash 3. Multi packaging: More than 1 product is packed e.g: tooth paste & brush, natraj pencil with sharpener and eraser.
PROBLEMS IN PACKAGING: 1. High cost of production/packaging 2. Appearance 3. Kinds of designs 4. Convenience 5. Reuse purpose 6. AIDA [ Attention, Interest, Desire,Action]
III. LABELLING: Label is a small slip placed on or near anything [product] to denote its nature, contents, ownership, destination etc . FUNCTIONS: 1. It gives definiteness to a product & therefore the identification of a product is easy. 2. It stresses the standard & other special features of the product 3. It enables the manufacturer to give clear instructions to the consumer about use of the product 4. By mentioning prices undue price variations caused by the intermediaries are avoided 5. It encourages to produce only standardized & quality products 6. It provides a method for manufactures by which a contact
KINDS OF LABELS: 1. Brand labels e. g: cosmetics, sweets, chocolates etc 2. Grade labels e. g: clothes [silk] 3. Descriptive labels [ uses of product] e. g: milk food 4. Informative labels e. g: medicines
ADVANTAGES OF LABELLING : 1. Social service 2. Avoids price variations 3. Helps advertising 4. It helps to assess the superiority of a product 5. It is a guarantee for the standard of a product DISADVANTAGES : 1. No use for illiterate people 2. Increase cost of a product 3. It is effective only where standardization is compulsory 4. Comparison ultimately ends in discarding one product in favour of other.
