1. Nature of Product/Service Management
Rapping Up Products
Nature of Product/Service Management
Product/Service Management LAP 17

2. Objectives Describe the product/service management function.
Discuss the phases of product/service management.

3. Describe the product/service management function.
Objective
Describe the product/service management function.

4. What was the last product you purchased?
Have you ever thought about who’s responsible for it?
Managing products and services well—important for any business
Products don’t appear overnight:
Chick-fil-A sandwich—over six years in development
Polio vaccine—over 10 years in development
Google search—over three years in development
Products must be managed through all stages of their life cycles.

5. Products and Services Product/Service management: Marketing function
Involves obtaining, developing, maintaining, and improving a product or service mix in response to market opportunities

6. Products and Services Product—either a good or a service
Good—a tangible object that can be manufactured and produced for resale, along with its associated benefits
Examples:
Desk chair
Truck
Rose bush

7. Products and Services
Service—an intangible activity performed by other people in exchange for payment, along with its associated benefits
Pure service—not attached to any sort of tangible good
Product-related service—attached to some sort of tangible good
Examples:
Manicure
Internet connection
Employee search
Examples:
Banks
Insurance companies
Examples:
Instruction
Maintenance
Delivery
Credit
Repair

8. Product/Service Management Activities
Every business participates in product/service management!
Activities include:
Sustaining successful products as long as possible
Discovering new-product opportunities
Developing marketing plans and strategies for products
Coordinating the product mix
Reassessing products that are not meeting expectations
Eliminating products that have become liabilities

9. Factors Affecting Product/Service Management
Customer needs and wants
Remember that customers buy benefits, not products.
Manage from their point of view.
Market research can be helpful.

10. Factors Affecting Product/Service Management
Company goals and strategies
Internal factors
Each business has unique objectives—product/service management must align with them.

11. Factors Affecting Product/Service Management
Costs and available resources
Especially important during new-product development phase
Product may be great on paper but not cost-effective.

12. Factors Affecting Product/Service Management
Competition
Product/Service managers must be watchful.
May need to introduce a new product or modify an existing one to keep up with the competition
The product itself

13. Factors Affecting Product/Service Management
Government regulations
Control issues such as:
Production
Information companies must provide
Warranties
Construction and safety standards
Packaging and labeling

14. Factors Affecting Product/Service Management
Stage in the product life cycle
Stages:
Introduction
Growth
Maturity
Decline
Stages are the basis for product/service management.

15. Factors Affecting Product/Service Management
Business and economic trends
Must operate within framework of current economy
Must be flexible

16. Benefits of Successful Product/Service Management
Improved sales and profits
Improved market share
Improved ability to beat the competition
New customers gained
Less exposure to financial risk

17. Role of Product/Service Management in Marketing
Affects positioning—strategy in which a business creates a certain image or impression of a product in the minds of consumers
Improves product success
Gives product an image (branding)

18. Who Handles Product/Service Management?
May be an entire department in bigger companies
Associated job titles:
Product manager
Brand manager
Project manager
Product coordinator
Marketing manager
Product line manager
May be the owner or manager in small businesses

19. Discuss the phases of product/service management.
Objective
Discuss the phases of product/service management.

20. Phases of Product/Service Management: New-Product Development
Types of new products:
Have never been offered before
Have been modified in some way
Will be presented or distributed in a new manner

21. Phases of Product/Service Management: New-Product Development
Ways businesses obtain new products:
Purchase from another person or company
License from another person or company
Acquire by purchasing another company
Develop internally

22. Generate ideas—could come from anywhere! Screen ideas
Phases of Product/Service Management: New-Product Development: Steps to Internal Development
Generate ideas—could come from anywhere!
Screen ideas
Find any that are unworkable
Too expensive?
Tried unsuccessfully in the past?
Not in line with company goals?
May include managers from many different departments

23. Test the product concept
Phases of Product/Service Management: New-Product Development: Steps to Internal Development
Test the product concept
May involve a simple questionnaire or an actual prototype
Get feedback from potential customers
Answer the questions:
Is our target market interested in this product?
Is it the right time to introduce this product?
What benefits does our target market expect from this product?
Any further steps require much more financial investment from the company

24. Conduct a business or feasibility analysis
Phases of Product/Service Management: New-Product Development: Steps to Internal Development
Conduct a business or feasibility analysis
In-depth analysis that considers:
Demand
Costs
Competition
Required investment
Potential profit
May involve managers from many different departments
May take months to complete

25. Develop the product Plans made for:
Phases of Product/Service Management: New-Product Development: Steps to Internal Development
Develop the product
Chick-fil-A took six years and over $500,000 to develop their chicken sandwich.
Lengthy step that could take months or years
Can be very expensive
Working model of product is developed, tested, modified, and retested as many times as it takes.
Cost of production estimated
Plans made for:
Packaging
Labeling
Brand name
Promotion
Distribution
Safety tests conducted

26. Test market the product
Phases of Product/Service Management: New-Product Development: Steps to Internal Development
Test market the product
White Castle test markets a BBQ pulled pork sandwich.
Introduce to a limited market to gauge acceptance
Guides marketing strategies

27. Commercialize the product
Phases of Product/Service Management: New-Product Development: Steps to Internal Development
Commercialize the product
Put it into full-scale production
Put marketing plan in place
Conduct sales and service training
Begin product life cycle!

28. Phases of Product/Service Management: Monitoring of Existing Products
Existing products—goods and services already on the market
Monitored in terms of:
Sales
Profit
Market share
How well they’re meeting goals and expectations

29. Phases of Product/Service Management: Monitoring of Existing Products
Decisions product/service managers may make:
Leave product as is
Modify product
Reposition product
Eliminate product

30. Phases of Product/Service Management: Elimination of Weak Products
Also called product discontinuation
Weak products—goods and services with declining sales and profitability
Elimination must be planned carefully to maintain customer goodwill.
DISCONTINUED

31. Courses offered by educational institutions are products.
At your educational institution:
Who is responsible for product/service management?
What factors are currently affecting product/service management?
How does product/service management influence overall marketing success?
What are the current activities as far as new-product development, monitoring of existing products, and elimination of weak products?

32. Janna and Leah exchange new-product ideas.
Leah takes Janna’s idea to her own manager.
Is this ethical?

33. MBAResearch Acknowledgments Original Developers
Christopher C. Burke, Sarah Bartlett Borich, MBAResearch
Version 1.0
Copyright © 2009
MarkED Resource Center

34. Digital-based photography sources:
CORBIS CORP.
Small Business
Obj. B: #059
Photos copyright 1998 Corbis Corp.
750 Second Street, Encinitas, CA 92024
DIGITAL VISION LTD.;
Teenagers Today
Obj. B: #130271
Photos copyright Digital Vision Ltd., all rights reserved.
833 Fourth Ave. SW, Suite 800 Calgary, AB, Canada T2P 3T5
T/Maker Company; ClickArt
Obj. B: #dinpar6, #dinpar22
Photos copyright T/Maker Company; 1390 Villa Street: Mountain View, CA 94041; tel. (415) Copyright 1994, all rights reserved. ClickArt is a registered trademark of T/Maker Company. ClickArt Images copyright by T/Maker Company. All rights reserved.

35. Copyright:
All photographic digital images on this CD are owned by the aforementioned photographic resources or their licensors and are protected by the United States copyright laws, international treaty provisions, and applicable laws. No title to or intellectual property rights to the images on this CD are transferred to you. These sources retain all rights and are not to be used, digitally copied, transferred, or manipulated in any way. To do so is a violation of federal copyright laws.