The attributes of a product includes the features, quality, characteristics, and design of a product as well as branding concern with giving a right kind of identity to that product by which consumers can recognize it and packaging and labeling is related to putting the product into a suitable container and providing necessary information about the product and the product support services includes the how, when, where to purchase & use of product. The final aspects of product decisions related to product line and mix discussed latter.
Product as above mentioned, is a bundle of benefits, essentially it may be tangible or intangible. Means product is anything which can satisfy the need and want of the customers.
A bundle of attributes (features, functions, benefits, and uses) capable of exchange or use; usually a mix of tangible and intangible forms. Thus a product may an idea, a physically entity (a good), or a service, or any combination of the three. It exists for the purpose of exchange in the satisfaction of individual and organizational objectives: -American Marketing Association.
By analyzing above definition broadly product may be classified into two categories;
Goods: Are tangible aspects of product , like technological devices, physical devices all are the goods can be seen, touched or demonstrated by the individuals.
Services: Are the intangible aspects of product, like restaurant, food services, transportation services etc. are all the services which can’t be touched or seen only the individual could get the benefits of these services in-terms of psychological term they can avail the benefits.
Level of Product
The level of product deals with exactly what a product constitutes, like the cluster of benefits. Following are the main levels of product with generally come in notice.
Core Product: The core level of product includes the fundamental benefits of a product which customers buy to manufactures/producers. This level of product is totally intangible because i.e. a benefit. For e.g. a passenger is buying transportation benefits to a car rental services to go from one place to another.
Figure: Levels of Product
Basic Product: The second level of product includes the basic requirements of a product which are necessary to deliver the functions of benefits for the customer. For e.g. at the basic level the transporter turn into basic level, thus the transporter should have at least a car with basic requirements.
Expected Product: Is a set of attributes that buyers normally expect to a product at the time of purchasing. Passengers expect a good car with good seat quality, music system, driver with co-operative nature, and inflated tyres etc.
Augmented Product: It includes the unexpected benefits which exceeds the customer expectations towards the expectation of product. Here is a stage where marketer could differentiates it’s offering to competitors by providing them additional pleasure. The car rental could offer a branded car with good suspension system on reasonable rates, in place of audio device there be video device, after sales services, insurance policy etc.
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Potential Product: The final level of product knows as potential product is includes the maximum possible modification in an augmented product which may attract the group of prospects for long run. Like our earlier example in this level he/she could offer a complete tour package with all necessary bundles of benefits as per the changing requirement of the consumers or prospects.
Classification of Product
On the basis of different parameters product may be divided into different sub categories;
On the basis of tangibility: on the basis of tangibility product may be defined into two types follows;
Tangibility – are tangible aspects of product , like technological devices, physical devices all are the goods can be seen, touched or demonstrated by the individuals.
Intangibility – are the intangible aspects of product, like restaurant, food services, transportation services etc. are all the services which can’t be touched or seen only the individual could get the benefits of these services in-terms of psychological term they can avail the benefits.
On the basis of durability: On the basis of durability the product may be categories into again two categories.
Non-durable goods – are tangible goods generally purchased frequently & consumed by the consumers within a short span of time e.g. soap, shampoo, toothpaste, etc.
Durable goods – are also tangible alike non-durable but generally purchased infrequently and consumed by the consumers for long span of time e.g. cloths, machine tools, washing machine, etc.
Services – are the intangible aspects of product, like restaurant, food services, transportation services etc.
On the basis of market: On the basis of market product may be classified into following categories.
Consumer goods (Consumer Market) – the product purchase by the consumers for satisfying his personal or family needs called consumer goods or consumer product. Following are the main categories of consumer goods;
Convenience goods – relatively inexpensive and consumers purchased frequently, immediately, and with minimum effort. Soaps and newspapers are considered convenience goods.
Shopping goods – A second type of product is the shopping good, which usually requires more considerable efforts in purchasing decisions. These products might include automobile tires or a stereo or television system.
Specialty goods – Specialty goods have specific and unique characteristics and brand identifications for which a buyers is willing to make a special purchasing effort. Examples include specific brands of fancy products, luxury cars, professional photographic equipment, and high-fashion clothing.
Unsought goods – Finally, an unsought good which purchased to solve a sudden problem. Unsought product is one that a consumer does not know about-or knows about but does not normally think of buying.
Industrial goods (Industrial Market) – the product bought by one organization to run its operations and then further resell or to make other finished or semi-finished goods called industrial or business products. Following are the main categories of consumer goods;
Installations – installation industrial goods include facilities, such as industry location, facility design and office building and warehouses, which used basically for the purpose of smooth running of a particular industry.
Raw Materials – the raw material is the basic material which used by an organization for further production of finished or semi-finished goods. It includes the different kind of natural products depending on industry to industry operations.
Equipment – it comprises the factory equipment and tools and office equipment’s.
MRO supplies – MRO supplies are maintenance, repair and operating items that facilitate production and operations in a smooth way. These items purchased according to industry standards or the purchaser’s specifications.
Product Mix & Product Line
Product mix and product line are two words used in connection with the range and variety of the products of a company. Product Mix also known as “Product Assortment”, it refers to the total number of product a marketer offer for sale to customers’, and product line is a group of closely related products known as product line. The product mix of a company is composed of all the product lines, it carries.
A range of associated products that yields larger sales revenue when – marketed together than if they were marketed individually or in isolation from others. – Business Dictionary
The full set of products offered for sale by an organization & includes all product lines a company offered for sale. -American Marketing Association (www.marketingpower.com)
A product mix of a company includes four dimensions namely;
Product Width: Product width represents how many different product lines a company offered for sale.
Product Length: The length of a product mix refers to the total number of items in a particular product line.
Product Depth: The depth of a product mix refers to how many variants are offered of each product in the line.
Product Consistency: The consistency of the product mix refers to how closely relate the various product lines are in end use, production requirements, distribution channels, or some other way.
Let us considered the example of HUL1. The product lines and product mix of HUL. Product line 1, Bath Soaps, Product line 2, Fabric wash, Product line 3, Beverages and yet another lines carried by Hindustan Uniliver, in each product line HUL has several brands/products that is the product line length of HUL product mix. And the following another diagram also illustrates the product depth of Lux a brand of HUL in product line first.
PRODUCT MIX WIDTH
PRODUCT LINE LENGTH
25 gm.Figure: – Selected Product Mix Elements in Just Three Product Lines of HUL
Fig. Product line Depth – Lux
Product Life Cycle
Definition of ‘Product Life Cycle;
The period of time over which an item is developed, brought to market and eventually removed from the market. First, the idea for a product undergoes research and development. If the idea is determined to be feasible and potentially profitable, the product will be produced, marketed and rolled out. Assuming the product becomes successful; its production will grow until the product becomes widely available. Eventually, demand for the product will decline and it will become obsolete.
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Source – Investopedia http://www.investopedia.com/terms/p/product-life-cycle.asp#axzz2KfHzcRAH All products and services have certain life cycles just as biological life cycle from birth to death. The life cycle represents the period from the product’s life from first launch into the market until its final withdrawal and it is split up in phases. During the overall life cycle of a product there are significant changes made by the organizations in the strategies related to marketing it for the consumers. Some companies use strategic planning process and others follow the basic rules of the different life cycle phase. The understanding of a product’s life cycle, can help a company to understand and realize when it is time to introduce and withdraw a product from a market, its position in the market compared to competitors, and the product’s success or failure. For a company to fully understand the above and successfully manage a product’s life cycle, needs to develop strategies and methodologies as per the dynamic market situations.
Stages of Product Life Cycle
Now we discuss about the different stages of a product life cycle, in which the life of a product or services surrounded from its inception to decline in the market place. The product life cycle is an important concept in marketing. It describes the stages a product goes through from when it was first thought of until it finally is removed from the market. Not all products reach this final stage. Some continue to grow and others rise and fall. Following are the main stages which come under the stages of product life cycle.
Figure: – Diagrammatic representation of different stages product life cycle.
Introduction – researching, developing and then launching the product
Growth – when sales are increasing at their fastest rate
Maturity – sales are near their highest, but the rate of growth is slowing down, e.g. new competitors in market or saturation
Decline – final stage of the cycle, when sales begin to fall
Source: – http://www.tutor2u.net/business/gcse/marketing_product_life_cycle.htm
This is the stage of low growth rate of sales as the product is newly launched in the market. Monopoly can be created, depending upon the efficiency and need of the product to the customers. A firm usually incurs losses rather than profit. If the product is in the new product class, the users may not be aware of its true potential. In order to achieve that place in the market, extra promotional about the product should be transferred to consumers through various media. The stage has the following characteristics: 1. Low competition 2. Firm mostly incurs losses and not profit.
Growth comes with the acceptance of the product or innovation in the market and profit starts to flow. As the monopoly still exists companies can experiment with new ideas and innovation in order to maintain the sales growth. This stage is the best time to introduce new effective products in the market thus creating an image in the product class in the presence of its competitors who try to copy or improve the product and present it as a substitute.
In this, the end stage of the growth rate, sales slowdown as the product has already achieved acceptance in the market. New firms start experimenting in order to compete by innovating new models of the product. With many companies in the market, competition for customers becomes fierce, despite the increase in growth rate of sales at the initial part of this stage. Aggressive competition in the market results in profits decreasing at the end of the growth stage thus beginning the maturity stage. In addition to this, the maturity stage of the development process is the most vital.
This is the stage where most of the product class usually dies due to low growth rate in sales. A number of companies share the same market, making it difficult for all entrants to maintain sustainable sales levels. Not only is the efficiency of the company an important factor in the decline, but also the product category itself becomes a factor, as the market may perceive the product as “old” and may not be in demand. It is not always necessary that a product should go through these stages. It depends on the type of product, its competitors, scope of the product etc. Source: – http://en.wikipedia.org/wiki/Product_lifecycle
New Product Development
New product development is a process is a process which is design to develop, test and considered the feasibility of products which are new to the market in order to ensure the growth or survival of the organization.
A new product is any product which is perceived by the customer as being new. The process of new product development varies from one to another, but generally, following are the main steps involved in the process of developing new product.
New Product Development:
Product development is a creation, innovation, utility enhancement or continuous improvement of earlier features (design, service, etc.) f an existing product or developing (manufacturing) an entirely new kind of product to satisfy the requirements of its end users
Source – http://kalyan-city.blogspot.com/2012/02/what-is-product-development-meaning.html
Stage1. Idea Generation:
The process of new product development always starts with the generation of new product ideas with relation to changing customer needs and preferences, competition, company mission and vision, R&D activities of the organization and the need of all stake holders. Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses, and Opportunities & Threats). Market and consumer trends, company’s R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or product features.
Fig: – New Product Development Process (sources- Marketing Management 4 ed. Rajan Saxena)
Stage2. Identifying prospective customers/defining target market:
The second stage in the process of developing new product is identifying group of customer and defining target market. In this stage the organization tries to identify the target group of customer for its offerings in a particular market place.
Stage3. Concept development and testing:
After identifying target prospects for new product, companies go for the third stage i.e. concept development and testing here the decisions takes about what kind of possible product they might be develop, means a right kind of concept which should be feasible in relation to customer needs and company objectives. Once the firm developed suitable concepts for the development of new product then it’s mandatory to test that idea in the market place. The product management team of the firm tests it by conducting independent research in the market place.
Stage4. Feasibility analysis:
In this stage of NPD the product management team of the firm go for feasibility analysis of the concepts in terms of demand, sales, market accessibility.
Stage5. Product development:
This is the actual stage of physical presence of the product, here the R&D and production department of the organization now develop the actual physical product as per need of customers standard.
Stage6. Test marketing:
The new product is now tested in the market place on four parameters; namely trial, first purchase, adoption and frequency of purchase.
Once the test marketing process completed and firm believed that the new product will survive in the market place then they go for the commercial production and launch the new product in the market place by using proper strategies.
Product Classification http://www.britannica.com/EBchecked/topic/365730/marketing/27284/Consumer-goods-marketing#toc27285
Marketing Management 4ed/V.S.Ramaswamy and A.Namakumari/Macmillan Publisher India ltd.
Marketing Managemnt 3ed/Rajan Saxena/ Tata McGraw Hill Companies
Marketing Management 12ed/ Kotler Keller/ Printice Hall India
Marketing Concepts & Strategies 12ed. (Indian adoptation)/william M pride/O.C. Ferrell/Biztantra
American Marketing Association.
Dictionary – American Marketing Association www.marketingpower.com/_layouts/dictionary.aspx
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