© 2004 Mark H. Hansen PRODUCT MANAGEMENT

Product Management © 2004 Mark H. Hansen 2 Dimensions of a Product: Core Product Tangible Product Augmented Product Promised Product

Product Management © 2004 Mark H. Hansen 3 Core Product: what the consumer really wants from the product buys bran cereal for family… …wants healthy family it’s not the product itself, it’s what the product can bring about

Product Management © 2004 Mark H. Hansen 4 Tangible Product: the product itself appearance quality functionality

Product Management © 2004 Mark H. Hansen 5 Augmented Product: the product plus accompanying services service/maintenance buying environment warranties & return policies

Product Management © 2004 Mark H. Hansen 6 Promised Product: status the product will bestow dependability trade-in value any aspect of the product that helps bring about the core product

Product Management © 2004 Mark H. Hansen 7 Product dimensions vary from consumer to consumer core and promised dimensions may be very individual in nature different people buy the same product for different reasons marketers need to understand consumer behavior

Product Management © 2004 Mark H. Hansen 8 Product Classifications convenience goods shopping goods specialty goods

Product Management © 2004 Mark H. Hansen 9 Goods Products and Services Products goods are tangible, traditional products services are intangible simultaneous production & consumption difficult to evaluate relationships matter more

Product Management © 2004 Mark H. Hansen 10 Product Strategy Formulation Product Objectives Why have this product? growth using excess capacity market share target new segments

Product Management © 2004 Mark H. Hansen 11 Product Strategy Formulation Product Plan Product Lifecycle - Five Stages 1 – Product Development 2 - Introduction 3 - Growth 4 - Maturity 5 – Decline

Product Management © 2004 Mark H. Hansen 12 Product Strategy Formulation Product Strategies Approaches to the Market product differentiation - customers see a difference market extension - new uses for the product – Scotch tape market segmentation - develop new products for new segments

Product Management © 2004 Mark H. Hansen 13 Product Strategy Formulation Key Management Decisions product features packaging branding related services product mix product line decisions product deletion

Product Management © 2004 Mark H. Hansen 14 “New” Products How new is new? FTC – functionally significant or substantial respect

Product Management © 2004 Mark H. Hansen 15 “New” Products Where do they come from? Internal Sources: basic research applied research development

Product Management © 2004 Mark H. Hansen 16 “New” Products External Sources mergers & acquisitions licenses & patents joint ventures

Product Management © 2004 Mark H. Hansen 17 New Product Development Process many, if not most, new products fail – Why? 8 Step Process 1 – generating new ideas 2 – screening new ideas 3 – business analysis

Product Management © 2004 Mark H. Hansen 18 New Product Development Process 4 – technical and marketing development 5 – manufacturing planning 6 – marketing planning 7 – test marketing product testing v. test marketing 8 - commercialization

Product Management © 2004 Mark H. Hansen 19 Summary… successful product management depends on understanding consumer behavior the “product” is multifaceted, much more than the physical product itself managing the ‘stable’ of products is no simple task