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MARKETING MANAGEMENT - Introduction to Marketing Mix

Product Management Decisions - Introduction to Marketing Mix

   Posted On :  18.06.2018 01:44 am

Product decisions start with an understanding of what a product is, viz., the product offering is not the thing itself, but rather the total package of benefits obtained by the customer.

Product Management Decisions

Product decisions start with an understanding of what a product is, viz., the product offering is not the thing itself, but rather the total package of benefits obtained by the customer. This is called as the total product concept.
 
For example, a watch from Rediff.com is not just a watch but one shipped within 24 hours of order and unconditionally guaranteed. This broad conception of a ‘product’ is key to seeing possible points of differentiation from competitors. The following chart illustrates the total product concept.



The ‘generic’ product is no longer sought (leave alone bought!) by the customers. For transport, a scooter without cushion seats, handle covers, side mirrors, etc is adequate. It merely represents customer need fulfillment. But one would expect some sort of comfort in starting, sitting and driving the scooter. The expected product represents the customers’ minimal purchase conditions. When such customer expectations are met, it leads to customer satisfaction.
 
The augmented product represents the customers’ wish-list. It is the basic product with all extra features that makes the scooter convenient and safe. It leads to customer delight. Beyond the augmented product, lies the potential product which represents all that this product can become in the future. It represents the customers’ dream. In case of a scooter, it may be one with foldable sunshad with sensors that change the direction of scooter to avoid accidents. More enthusiastic expectation is, a flying one that avoids road traffic jams.
 
Activity 1.7.1

Illustrate the product hierarchy or ‘total product concept’ with an example.

Core benefit                    -
 
Basic product                  -
 
Expected product             -

Augmented product         -
 
Potential product            -
 
A taxonomy of product line planning decisions can be developed by considering some product planning decisions firms face. Product line breadth: How many different lines will the company offer? A guiding principle in answering breadth questions is the company’s position on desired consistency or similarity between the lines it offers.
 
Product line length: How many items will be there in a line providing coverage of different price points?
 
Product line depth: How many types of a given product?
 
Individual item decisions: decisions on individual items need to be considered within the context of the firm’s full product line due to item interrelationships. At the individual item level, decisions to be made are whether to undertake efforts to delete an item from the line (pruning), reposition an existing product within the line (balancing), improve the performance of an existing product to strengthen its positioning (modernization), introduce a new product within an existing line (filling) and introduce a product to establish a new line (extension). The assortment of product lines and individual product offerings is called as the product mix.
 
A proactive approach to new product development follows some form of a sequential process, for example,
 
1. Opportunity identification
 
2. Design
 
3. Testing
 
4. Product introduction and
 
5. Life cycle management.
 
In the opportunity identification stage, the firm identifies a customer problem that it can solve. In addition it identifies the concept for a product through idea generation and screening initiatives. The next two stages, design and testing are linked in an iterative process. The firm must first embody the product idea in a concept statement which is tested via presentation to potential customers. After the firm has settled on the product and a supporting plan, it reaches product introduction.
 
Decisions at this stage involve the geographic markets to which the product will be introduced and whether markets will be approached at the same time or sequentially over time. After introduction, a process of Product Life Cycle Management begins. The Life Cycle stages are introduction, growth, maturity and decline. The marketing objectives vary across these stages – so do the sales, profits and costs. The marketing mix also changes from stage to stage.
 
The first P of marketing, namely, the product also looks at how firms build and maintain identity and competitive advantage for their products through branding. Functions like packaging and labeling also perform specific functions within the ambit of product management. 

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