MAR3023 Lecture 2 13 Part 1 Product Decisions Example Nintendo struggled because Sony PlayStation graphics were better Nintendo introduced the Wii fun for families to interact Graphics were still not ideal but interactive concept is easy to use Concept appeals to a broader market simple technology Introduces Wii U didn t sell very well Product anything offered to a market that might satisfy a need combination of goods and services tangible and intangible benefits Durable lasts 3 years Non durable one or set of uses short life span 3 years or less food is a non Distinctions durable good Consumer Products Consumer for own consumption personal use Convenience bought often minimal effort immediate process laundry Shopping bought less often usually spend time comparing with other products Specialty unique brand requires special effort might travel to buy Ferrari Unsought consumer does not think about buying insurance promote ideas detergent dryers clothing etc donating blood Industrial Business Products Components rubber for tires cloth for clothes Support Product keeps a business running Copier Legal Services Search Good can verify quality before you buy it can read about the good on a review or inspection calculator Experience Good verify quality of the good after you buy it price not as relevant mouth wash vacation insurance Credence Good Cannot verify quality even after you buy it requires taking on faith that it works take word for it vitamins Product Item specific product identified by ordering code the stock keeping unit SKU Product Line group of closely related items types of Campbell soup Product Mix the set of product lines sold by a company Sony TV Sony Computer Sony Software 3 Levels of a Product Features vs Benefits 1 Core benefit or service the product has a car will get you from point A to B 2 Actual what you expect the product to have upon buying car safety features 3 Augmented Beyond your expectations free installation Seller s view of a product A bundle of tangible and intangible attributes designed to provide benefits to a customer Customer s view of a product a bundle of tangible and intangible benefits Attributes vs Benefits Attributes seller Benefits customer Product and Service Decisions Product attributes What benefits will the producer offer Quality level of consistency creating value above and beyond freedom from defective products Features How can features create customer value Style appearance and Design usefullness Add value through style or design Branding Identify the products or services of one seller and differentiates them from those competitors build and manage the brand Packaging designing and producing the container or wrapping of the product Labeling provides identification description and promotion Product Support Services customer service including assessment Lecture Part 2 Product Life Cycle PLC the life of a product over four stages Introduction just a few brands slow growth minimal effort 1 2 Growth lots of brands in the market fastest growth in sales peaks profit 3 Maturity slow growth competitive shakeout weaker firms leave 4 Decline profit sales drop Important Characteristics of PLC PLC Length want it to be as long as possible depending on the product PLC Shape All types of shapes possible fads fashions slow starters Marketing Mix Varies over stages of PLC PLC is relevant for Product Class soft drink Product Form shape 2 liter canned Brand most likely to be under your control but still at mercy of PLC Managing the Product Life Cycle PLC Product Manager Extending the PLC market penetration is key try to extend life cycle by selling more of the product to the same people One way to assess market penetration 1 Brand Development Index Coke 2 Category Development Index Soda Brand Development Index BDI BDI Brand Sales per capita in territory Brand Sales in USA x 100 CDI Category sales per capita in territory J Category Sales in USA x 100 Category Development Index CDI Other Ways to Extend the PLC Market Penetration BDI CDI Market Development Product Modification changing the product to keep it fresh to consumers Product Repositioning make fresher and younger Harvesting retain product but no advertising still produce the product for people who want it