1. UNIVERSITY OF GUYANA MARKETING 1101…..PRODUCT MODULE 6
ERIC M. PHILLIPS (MBA,
CTP, BSc. Eng.)
SEPT-DECEMBER 2013

2. MODULE OUTLINE What is a product? Product versus Brand
Product Life cycle
Product Management

3. WHAT IS A PRODUCT ?
A product is anything that can offered to market for attention, acquisition , use , consumption that might satisfy a want or need.

4. WHAT IS A PRODUCT? Goods (physical and tangible things)
Ideas (Say no to drugs)
Services (intangible, airlines, hotels)
Information (universities)
Organizations (favorable image)
Experiences (Theme Parks)
Properties (real estate)
Places (Tourism, Guyana)
Events (Shows, Olympics)
Persons (Celebrities)

5. PRODUCTS
Tangible products
Intangible products
GOODS
SEVICES

6. FEATURES OF PRODUCT Tangibility Associated attributes
Intangible attributes
Features of product
Customer satisfaction
Exchange value

7. LEVELS OF A PRODUCT Potential product Augmented product
Expected product
Generic product
Core benefit
Unexpected features
Luxury features
Expected features
Basic features
Basic product

8. CONSUMER ADOPTION PROCESS
Trail
Evaluation
Interest
Awareness

9. CONSUMER ADOPTION PROCESS
Potential product
Augmented product
Expected Product
Generic product
Core Benefit

10. CLASSIFYING PRODUCTS Durable products Consumer products
Business products

11. DURABLE PRODUCTS
Durable
Non-durable
Services

12. CONSUMER PRODUCTS Specialty Shopping Products Products Convenience
Unsought
Products
. . To satisfy information needs & buying motives 8

13. CONVENIENCE GOODS Staples Emergency goods Impulse purchases
CONVENIENCE GOODS – CONSUMERS USE MINIMAL EFFORT FOR FREQUENTLY PURCHASED LOW COST ITEMS
Staples
Emergency goods
Impulse purchases

14. SHOPPING GOODS - CONSUMERS MAKE A CONSIDERABLE EFFORT TO EVALUATE
SHOPPING PRODUCTS
SHOPPING GOODS - CONSUMERS MAKE A CONSIDERABLE EFFORT TO EVALUATE
Consumers make product comparison(s),
They seek information before purchase,
they are not impulsive
Moderate substitutions are made
Product’s last a considerable time
Monetary & social costs may be highigh

15. BUSINESS PRODUCTS Materials and parts Capitals items
Raw materials and parts
Manufactured materials and parts
Capitals items
Equipment
Suppliers and business services
Maintenance and repair items
Operating supplies

16. RAW MATERIALS
Farm products
Natural products

17. MANUFACTURED MATERIALS AND PARTS

18. PRODUCT MIX
Width
Length
Depth
Consistency

19. THE ASSORTMENT OF PRODUCTS THAT A COMPANY OFFERS TO A MARKET
PRODUCT MIX
THE ASSORTMENT OF PRODUCTS THAT A COMPANY OFFERS TO A MARKET
Width – how many different product lines?
Length – the number of items in the product mix
Depth – The number of variants offered in a product line
Consistency – how closely the product lines are related in usage

20. PRODUCT LINE & PRODUCT MIX
LAMPS
Table
Ceiling
Track
Desk

21. PRODUCT MIX Line 1 Line 3 LAMPS Table Ceiling Track Desk Kitchen
TABLES
Kitchen
Dining Room
End
Coffee
Outdoor
Conference
Computer
CHAIRS
Dining Room
Living Room
Bedroom
Outdoor
Desk

22. Product vs. Brand A product is something that
is made in a factory
A brand is something that is bought by a customer.
A product can be copied by a
competitor.
A brand is unique.
A product can be quickly
outdated.
A successful brand is timeless.

23. WHAT IS A BRAND? A set of product perceptions by the consumer.
It is a personality developed over time.
A brand signifies a relationship with the customer.
It is the company’s most valuable asset. It’s also the main
differentiator, the best defense against price competition, and the
key to customer loyalty.
Competitors can copy your features and benefits, but they can’t
steal your brand.
It’s a promise. But it must be backed up by performance.

24. WHAT IS A BRAND ?
It’s the company’s definition of what they have to offer.
A brand is a product that has a personality.
A promise to the customer.
What the customer knows about your specific product. It’s your image.
How the company or product is perceived?

25. BRAND
A name becomes a brand when consumers associate it with a set of tangible and intangible benefits that they obtain from the product or service
It is the seller’s promise to deliver the same bundle of benefits/services consistently to buyers

26. BRAND EQUITY
When a commodity becomes a brand, it is said to have equity.
The premium a brand can command in the market
The difference between the perceived value and the intrinsic value

27. BRAND EQUITY – COMPETITIVE ADVANTAGES
Reduced marketing costs
Trade leverage
Can charge a higher price
Can easily launch brand extensions
Can take some price competition

28. BRAND POWER Customer will change brands for price reasons
Customer is satisfied. No reason to change.
Customer is satisfied and would take pains to get the brand
Customer values the brand and sees it as a friend
Customer is devoted to the brand

29. UMBRELLA BRAND Products from different categories under one brand
Dangerous to the brand if the principal brand fails
Sometimes the company name is prefixed to the brand. In such cases the company name gives it legitimacy. The product name individualizes it.

30. BRAND IDENTIFICATION
    Batteries: DieHard contains a promise of long use.
Sears has Craftsman, DieHard, Homart and Kenmore.
2.    Mercedes promises well-built, prestigious, safety, performance.
3.    Co branding/Dual branding: "Intel inside."

31. WHAT IS A BRAND? & BRAND IDENTIFICATION
More Examples:
4.    Need to keep it fresh. Look at Coca-Cola.
Its image is as fresh today as when it started. It’s not luck. It’s careful nurturing and development of the brand.
Can exploit brand equity with brand extensions, if there is value.
5.    Look at licensing. Need control over who uses your brand. Sunkist.
Why? Lowers marketing costs, greater trade leverage, can charge higher price, defense against price competition, more easily launch line extensions.

32. WHAT IS A BRAND? & BRAND IDENTIFICATION
Salt is in bright-colored packages.
Oranges are marked. Labeled. A guarantee of quality.
BMW paid $60 million for the Rolls Royce name. Nothing else.
A brand can convey:
Attributes + Benefits + Values + Culture + Personality
Seller’s promise to deliver a specific set of features.
Brand equity is the value a brand adds to the product.

33. BRAND REPOSITIONING This may be required after a few years to face
new competition and changing customer
preferences

34. PORSHE VERSUS LEXUS
Porsche is positioned on the basis of performance and freedom.

35. Levels Of Marketing Segmentation
MARKET SEGMENTATION
Levels Of Marketing Segmentation
Mass Marketing
Segment
marketing
Niche Marketing
Micro-marketing
Complete
segmentation
No Segmentation

36. PACKAGING

37. PACKAGING
Includes the activities of designing and producing the container for a product
Packaging is done at three levels
- primary
- secondary
- shipping

38. PACKAGING AS A MARKETING TOOL
Self service
Consumer affluence
Company and brand image
innovation

39. DESIGNING PACKAGING Packaging concepts Technical specifications
Engineering tests
Visual tests
Dealer tests
Consumer tests
Packaging innovations
Environmental considerations

40. LABELS Identification Grade classification Description of product
Manufacturer identity
Date of mfg., batch no.
Instructions for use
Promotion

41. LABELS AS A MARKETING TOOL
Labels need to change with time
or packaging changes
to give it a contemporary
and
fresh look

42. PRODUCT LIFE CYCLE

43. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX
The Stages of the Product Life Cycle:
Development
Introduction/Launch
Growth
Maturity
Saturation
Decline
Withdrawal

44. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX
Sales
Development
Introduction
Growth
Maturity
Saturation
Decline
Time

45. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX
Introduction/Launch
Advertising and promotion campaigns
Target campaign at specific audience?
Monitor initial sales
Maximise publicity
High cost/low sales
Length of time – type of product

46. Product Life Cycles and the Boston Matrix
Growth:
Increased consumer awareness
Sales rise
Revenues increase
Costs - fixed costs/variable costs, profits may be made
Monitor market – competitors reaction?

47. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX
Maturity:
Sales reach peak
Cost of supporting the product declines
Ratio of revenue to cost high
Sales growth likely to be low
Market share may be high
Competition likely to be greater
Price elasticity of demand?
Monitor market – changes/amendments/new strategies?

48. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX
Saturation:
New entrants likely to mean market is ‘flooded’
Necessity to develop new strategies becomes more pressing:
Searching out new markets:
Linking to changing fashions
Seeking new or exploiting market segments
Linking to joint ventures – media/music, etc.
Developing new uses
Focus on adapting the product
Re-packaging or format
Improving the standard or quality
Developing the product range

49. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX
Decline and Withdrawal:
Product outlives/outgrows its usefulness/value
Fashions change
Technology changes
Sales decline
Cost of supporting starts to rise too far
Decision to withdraw may be dependent on availability of new products and whether fashions/trends will come around again?

50. THE BOSTON MATRIX Problem Children Stars Dogs Cash Cows Market Growth
High
Problem Children
Stars
Dogs
Cash Cows
Market Share
Low
High

51. THE BOSTON MATRIX Problem Child: Problem children – worth spending
Products having a low market share in a high growth market
Need money spent to develop them
May produce negative cash flow
Potential for the future?
Problem children – worth spending
good money on?

52. THE BOSTON MATRIX
STARS – products in markets experiencing high growth rates with a high or increasing
share of the market
Potential for high revenue growth

53. THE BOSTON MATRIX Dogs: Is your product starting to
Products in a low growth market
Have low or declining market share (decline stage of PLC)
Associated with negative cash flow
May require large sums of money to support
Is your product starting to
embarrass your company?

54. THE BOSTON MATRIX Cash Cows: High market share
Low growth markets – maturity stage of PLC
Low cost support
High cash revenue – positive cash flows

55. Product Life Cycles and the Boston Matrix
Sales
Effects of Extension
Strategies
Time

56. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX
PLC and Profits
Sales/Profits
PLC
Profits
Time
Losses
Break Even

57. THE PRODUCT LIFE CYCLE AND THE BOSTON MATRIX
Importance of maintaining a balance of products in the portfolio at different stages of the PLC – Boston Matrix helps with the analysis
(3) Cash from ‘C’ used to support growth of ‘D’ and possibly to finance extension strategy for ‘B’?
Sales
(2) Cash from ‘B’ used to support ‘C’ through growth stage and to launch ‘D’. ‘A’ now possibly a dog?
(1) ‘A’ is at maturity stage – cash cow. Generates funds for the development of ‘D’
The product portfolio – four products in the portfolio
(1)
(2)
(3) D B C A
Time

58. WHAT IS PRODUCT MANAGEMENT ?

59. WHAT IS PRODUCT MANAGEMENT?
The following questions need to be answered
What is product management?
What do product managers do?
Who does product management?
How does one become a product manager?

60. THE ROLE OF PRODUCT MANAGEMENT
The role of Product Management is to define, develop, deploy and maintain products and services that:
Provide more value than the competition.
Help build a sustainable competitive advantage.
Deliver financial benefit to the business.

61. THE ACCIDENTAL PROFESSION
It’s a pretty safe bet to say that few –if any –product managers have a Bachelor degree in Product Management
“Everyone comes from somewhere else”.. Steven Haines –The Product Managers Desk Reference

62. MOST PRODUCT MANAGERS HAVE ROOTS IN OTHER PROFESSIONS

63. WHAT DO PRODUCT MANAGERS DO?
Product managers spend time understanding what customers need and want
Then develop solutions that solve these problems and satisfy needs & wants
Product managers have a duty to deliver and maintain financial benefit to the business

64. PRODUCT MANAGERS SEE THINGS DIFFERENTLY
The carpenter doesn’t want a drill. He wants a hole
HOW DOES A PRODUCT MANAGER SEE THIS PROBLEM
The speed at which the hole is made.
The accuracy of the cut
The safety of the device that makes the
hole
The ease of using the device
The reliability of the device
Where the device can be purchased
or accessed
The price of the device
After sales support of the device
The carpenter has a problem.
He needs a hole in the wall. A drill can solve this problem, but there’s much more to it than just creating a hole.
The carpenter is concerned with multiple factors:

65. PRODUCT MANAGERS HAVE TO SEE THE HOLISTIC SOLUTION
Product managers define the problem using
criteria such as these before working on
possible solutions

66. THE PRODUCT MANAGEMENT DOMAIN
STRATEGIC PRODUCT MANAGEMENT
PRODUCT PLANNING
PRODUCT MARKETING
BUYER FOCUS
USER FOCUS

67. THERE ARE MANY ROLES IN PRODUCT MANAGEMENT
strategic
Product marketing
Product Planning
Marketing/Sales
Product Architect/
Design
Engineering
Tactical/operational
Market
communications
Project
Manager
Sales
manager
Project
Manager
Product
Operations

68. A PRODUCT MANAGER IS AN ALL-ROUNDER

69. PRODUCT DELIVERY CYCLE

70. STAGE 1: IDEA STAGE Key stage actions
• Ideation and innovation workshops
• Interviews and discussions with customers
• Market analysis including foreign markets
Key stage deliverables
• Market Problem
• Market Opportunity Discussion Report

71. STAGE 2 – PRODUCT STRATEGY
Key stage actions
• Investigate idea concept
• Contrast market problems, needs and wants with
organizational capabilities and competitive threats
• Conduct due diligence to determine if idea presents
a feasible opportunity
Key stage deliverables
• Business case
• Competitive analysis
• Product comparison documents (of existing
products)

72. STAGE 3 –PRODUCT PLANNING
Key stage actions
• Articulate the market problem
• Develop and define market requirement
• Identity and understand customers including
buyers, users and influencers
Key stage deliverables
• Market segmentation and targeting
• Personas
• Use cases
• Market requirements document

73. STAGE 4 –PRODUCT DEFINITION
Key stage actions
• Articulate the solution that will solve the market
problem and satisfy needs/wants
• Provide inputs for development and other teams
that will build and deliver the solution
Key stage deliverables
• Product requirements document
• Product comparison document
• Deliver prototype

74. STAGE 5–LAUNCH PLANNING
Key stage actions
• Prepare customer facing messaging
• Prepare customer facing teams including sales,
support and marketing communications
Key stage deliverables
• Value proposition
• Product-Solution-Feature-Benefit table
• Sales collateral
• Marketing plan
• Launch plan

75. STAGE 6 -LAUNCH Key stage actions
• Manage product launch and maintain velocity
• Coordinate internal and external parties involved –
ad agencies, support teams, sales teams
• Act on feedback immediately
Key stage deliverables
• Marketing communications materials
• Sales materials
• Be available to colleagues as required

76. STAGE 7 –DAY-TO-DAY PRODUCT MANAGEMENT
Key stage actions
• Continue to refine and improve product
• Assist marketing, support and sales teams in
selling and maintaining the product
Key stage deliverables
• Product in-life reports
• Product roadmap
• Product profile and collateral
• Product marketing plans