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8/14/2019 Product Strategy Presentation.pptx
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Management of Marketing
MIX : Product Strategy
Presented ByKetan Chaudhari (12)Saurabh Singh (57)Ashish Thakor (60)
11-Nov-13 SPP-SPTM, SVKM's NMIMS, Mumbai 1
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Contents
What is product..?
Classification of products
Product and service strategies Product and brand relationships
Dimensions of product strategies
PLC Management
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What is product..?
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Product Characteristics
Experiences Events
Properties
Organizations
Information
Ideas
Places
Persons
Services Goods
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Core
Benefit
Transportationfrom one place
to another.
Core benefit of the product:This is the fundamental need or want the consumers satisfy by
purchasing product and services
Basic
ProductBrand of thecar, looks
and designof the car etc
Basic ProductThis is a vision of the product that only contain the
characteristics necessary for it to function
ExpectedProduct :
Decent
mileage,properengine,
inflated tyresetc.
Expected ProductThese are the set of attribute or characteristics that buyers
normally expect and agree to when they purchase a product
AugmentedProduct :After-saleservices,insurancepolicy etc.
AugmentedProduct :Product with additional features, benefits, attribute or related
services that differentiate it service from it competitor
PotentialProduct :May run more
smoothly as itwears off a
little
Potential Product :These are all the transformations and changes a product
undergoes in future
Five Product Levels
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Product Classifications
Nondurable goods
Services
Durable goods
Durability and Tangibility
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Product Classifications
Consumer-Goods
Convenience goods
Shopping goods
Specialty goods
Unsought goods
Staples Impulse goods Emergency goods
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Product Classifications
Industrial-Goods
Raw materials
Materials and Parts
Manufactured
materialsCapital Items
Installations
EquipmentSupplies andbusiness Services
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Product and service strategies
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Product and Brand Relationships
Product Hierarchy
Product Systems/Mixes
Product Line Analysis
Product Line Length
Product Mix Pricing
Co-Branding
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Product and Brand Relationships
Product Hierarchy
Product Systems/Mixes
Product Line Analysis
Product Line Length
Product Mix Pricing
Co-Branding
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Product and Brand Relationships
Product Hierarchy
Product Systems/Mixes
Product Line Analysis
Product Line Length
Product Mix Pricing
Co-Branding
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Product and Brand Relationships
Product Hierarchy
Product Systems/Mixes
Product Line Analysis
Product Line Length
Product Mix Pricing
Co-Branding
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Advantages of branding
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OverallAdvantages
Product Identification
Comparison ShoppingProduct Acceptance
Enhanced Self-Image
Enhanced Product Loyalty
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Dimensions of Product Strategies
ProductPositioning.
ProductRepositioning.
ProductOverlap.
Product Scope.ProductDesign.
ProductElimination.
New Product. Diversification.Value
Marketing.
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Product Positioning Strategy
Definition: Placing a brand in that part of themarket where it will have a favorable receptioncompared with competing brands.
Objective To position the product in the market so that it standsapart from competing brands.
To position the product so that it tells customers whatyou stand for, what you are, and how you would likecustomers to evaluate you.
In the case of positioning multiple brands:1. To seek growth by offering varied products in differing
segments of the market.
2. To avoid competitive threats to a single brand
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Product Positioning Strategy
Expected Results:
Short term success
Meet as much as possible the needs of specific
segments of the market Limit sudden changes in sales.
Make customers faithful to the brands.
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Product Re-positioning Strategy
Definition: Reviewing the current positioning ofthe product and its marketing mix and seeking anew position for it that seems more appropriate.
Objectives:
(a) To increase the life of the product. (b) To correct an original positioning mistake.
Expected Results: Among existing customers: increase in sales growth and
profitability.
Among new users: enlargement of the overall market, thusputting the product on a growth route, and increasedprofitability.
New product uses: increased sales, market share, andprofitability.
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Products repositioned successfully
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Product Overlap Strategy
Definition: Competing against ones own brandthrough introduction of competing products, use ofprivate labeling, and selling to original-equipmentmanufacturers.
Objectives: (a) To attract more customers to the product and thereby
increase the overall market. (b) To work at full capacity and spread overhead. (c) To sell to competitors; to realize economies of scale and
cost reduction.
Expected Results: Increased market share. Increased growth.
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Product overlap
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Product Scope Strategy
Definition: The product-scope strategy deals with the perspectivesof the product mix of a company. The product-scope strategy isdetermined by taking into account the overall mission of thebusiness unit. The company may adopt a single-product strategy,a multiple-product strategy, or a system-of-products strategy.
Objectives:
Single product: to increase economies of scale by developing specialization.
Multiple products: to cover the risk of potential obsolescence of the singleproduct by adding additional products.
System of products: to increase the dependence of the customer on the
companysproducts as well as to prevent competitors from moving into themarket.
Expected Results: Increased growth, market share, and profits.
System-of-products strategy : monopolistic control over the market
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Product scope strategy
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Product Design Strategy
Definition: The product-design strategy deals with the degree ofstandardization of a product. The company has a choice amongthe following strategic options: standard product, customizedproduct, and standard product with modifications.
Objectives:
Standard product: to increase economies of scale of the company.
Customized product: to compete against mass producers ofstandardized products through product-design flexibility.
Standard product with modifications: to combine the benefits of thetwo previous strategies.
Expected Results:
Increase in growth, market share, and profits. In addition, the
third strategy allows the company to keep close contacts with themarket and
gain experience in developing new standard products.
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Product Elimination Strategy
Definition: Cuts in the composition of a companysbusinessunit product portfolio by pruning the number of productswithin a line or by totally divesting a division or business.
Objectives: To eliminate undesirable products because their contribution to
fixed cost and profit is too low, Eliminate Products that its future performance looks grim, or
because they do not fit in the businesssoverall strategy. The product elimination strategy aims at shaping the best possible
mix of products and balancing the total business.
Expected Results: In the short run, cost savings from production runs, reduced inventories, and in some cases an improved return on investment
can be expected. In the long run, the sales of the remaining products
may increase because more efforts are now concentrated onthem.
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New Product Strategy
Definition: A set of operations that introduces (a) within the business, a product new to its previous line of
products; (b) on the market, a product that provides a new type of
satisfaction.Three alternatives emerge from the above: product
improvement/modification, product imitation, and productinnovation..
Objectives: To meet new needs and to sustain competitivepressures on existing products. In the first case, the new-product strategy is an offensive one; in the second case, itis a defensive one.
Expected Results: Increased market share and profitability.
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Diversification Strategy
Definition: Developing unfamiliar products and marketsthrough: Concentric diversification (products introduced are related to
existing ones in terms of marketing or technology), Horizontal diversification (new products are unrelated to existing
ones but are sold to the same customers) Conglomerate diversification (products are entirely new).
Objectives: Growth when current products/markets have reached maturity, Stability by spreading the risks of fluctuations in earnings, Security when the company may fear backward integration from
one of its major customers, Credibility to have more weight in capital markets.
Expected Results: Increase in sales. Greater profitability and flexibility
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Value Marketing Strategy
Definition: The value-marketing strategy concernsdelivering on promises made for the product orservice. These promises involve product quality,customer service, and meeting time commitments.
Objectives: Value-marketing strategies are directedtoward seeking total customer satisfaction. It meansstriving for excellence to meet customer expectations.
Expected Results: This strategy enhances customersatisfaction, which leads to customer loyalty and,hence, to higher market share. This strategy makesthe firm less vulnerable to price wars, permitting thefirm to charge higher prices and, thus, earn higherprofits.
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Product Life Cycle Management
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Introduction
Revenues- Small
Sales Growth - Slow
Costs- High Fixed
Profits- Negative
Competitors- 0-2
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Growth
Revenues- Moderate
Sales Growth - Rapid
CostsModerate Fixed Costs
Profits- Increasing
Competitors - Many
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Maturity
Revenues Large
Sales Growth None
Costs Low fix
Profits High
Competitors 3-4
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Decline
Revenues Moderate
Sales growth Negative
CostsRising fixed costs
ProfitsDecreasing
Competitors Fewer than Before
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