1. Product Planning and Development

2. Product Planning and Development
Introduction to a product
Tangibility continuum of a product
Product Classification
Branding
Packaging
Product life Cycle
Introduction to new product planning

3. Definition of a product
Product could be defined as
Anyhting that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or a need- Phillip Kotler.

4. Product could be of any of the following
A physical product – Table, Car, Pen
Person- Sachin tendulkar, Amitabh Bachhan, Anjalina Jollie,
Place- Agra, Goa, Mataysia, London, Jerusalem
Organisation- UNO, UNI LEVER, CRY
Idea- Freedom, democracy, Anti Corruption, Social Justice, Anti Drugs, MADD, Family Planning
Services – education, lawyers service, bank service

5. Product Scope- Three Aspects
1. Physical Aspect- is the physical aspect of the product. What it is ? E.g. It is a herbal tooth paste
2. Functional Aspect – is what is does?
E.g. It cleans tooth/ prevents tooth decay
Symbolic Aspect- is what it means to the users emotion?
E.g. The satisfaction of a person “free from tooth decay”

6. The Product Attributes

7. Product Sub category- Further categorization of a product category eg
Product Sub category- Further categorization of a product category eg. Toilet Soap category may be sub categorized as beauty soap and herbal soap
Product Brand- There could be one or many brands in sub categories of the product line such as Lux and Dove
Product Mix Consistency- how closely related the various product lines are in terms of channel distribution, promotion or in other ways

8. UnilevernProductlever Mix
soaps
Laundry Soap
Toilet Soap
Herbal Soap
Beauty Soap
Lux brand
Dove brand
Food
Personal Care
Product width
Product
Lines
Product DEpth
Product category
Product sub category
Product
Brands

9. Tangibility Continuum of a products
Tangibility continuum discuss about to a what degree a product is tangible or intangible.
It is practically difficult to find a totally tangible product or a totally intangible product in the modern world of marketing
In many products there are physical goods as well as service components.

10. Tangibility Continuum
Major service with goods
Pure intangible
Pure tangible
Tangible goods with service
Hybrid- Equal
Pencil
Car
restaurant
Air line
Lecture

11. Product Classification

12. Product Life Cycle Theory ( PLC)
It is assumed that a product will have a life cycle from development to decline.
It is measured in relation to time and sales.
However every product may not go through the same life cycle or some products will stay for along without getting on to the declining stage.

13. Stage of Life cycle 1. Development stage 2. Introductory stage
3. Growth stage
4. Maturity stage
5. Declining stage

14. PLC
Dev Intro Growth Maturity Decline
Sales
Sales
Profit
losses
Time

15. Growth Maturity Declining Relatively short Longer period
Introductory
Growth
Maturity
Declining
Relatively short
Longer period
Longer or short
Sales are usually slow and profits ar low
Sales increase and profits will be high
Sales growth become slow but volume big
Drop in the sales
Competitors will watch
New competitors enter
More competition and over capacity
Competitors do not enter due to low margings
Distribution has just begun
More distributors take up the product
Many distributors and undercutting
Distributors reduce or give up

16. Introductory Growth Maturity decline Positioning and brand awareness
Brand image is established
Many brands fight each other
Brand image is low
Promotion budget very high
Promo budget may be increased
Promo budget may be standard or low
Not much promotions done
Only one or two manufacturers
Few manufacturers
Many manufactuers
Abundoning manufacturing
High Product failure rate
Improve product quality and features
Many changes in the Marketing mix to be done
May have to take a decision to stay on or not

17. Importance of P L C to Marketers
Important tool for forecasting and strategic planning
It shows that product have a limited life span
It graphically shows the trend in sales and profitability
It shows the need to adopt different strategies in various stages

18. Limitation of the PLC
Many products may not have a life cycle as depicted by PLC
Stages of PLC are difficult to distinguish
Identifying where one stage ends and the other begins is very difficult
Traditional shape may not occur. Eg. Fad items
Ignores the application of marketing mix activities
Strategic decisions can change the PLC eg. repositioning

19. Services
Service is is any act or performance that one party can offer another that is essentially intangible. It does not result in ownership of anything- Kotler.
Services have unique features that differentaite from physical goods
Intangibility
Variability
Inseparability
Perishability
Ownership
V I²PO

20. Planning for New Products
Long term survival of many firms in the competitive world depends on launching new products successfully.
Planning for new products is an essential and demanding strategic activity.
There could be many types of new products

22. Innovative Products
These products are new to the world and new to the company.
They are truly new to the customers and they provide completely different alternatives to existing products
Eg.
. Vaccine for AIDS
Products based on Nano Technology
Heat seeking missile
Computers

23. Replacement products
Although these products are new to customers or even to the company, they are essentially improvements or redesigns of existing products
Digital phones replaced the analogues
Disposable racers replaced the old blade base racers
Shaving foam and gels have replaced the shaving soaps

24. Imitative Products
These products are new to the company and not new to the market
Many products come in this form to the market
One or few companies may come out with an innovative or replacemnet products but many will copy the technology and come out with simillar products. They are called mee- too products
Eg. After celltel> mobitel> dialog> Hutch
After Signal > clogard> supirivicki> sudnatha
After Bata slipper > DSI> Ceypa> ranpa
After Mercedes Benze> Ford> GM> Toyota> Nissan

25. Reasons for introducing new products
To suit the changes in customers needs
To adopt new technological advances and avoid obsolence
To match competition
Product Life Cycle Concept
To bring down the cost

26. Customer need analysis
. Information is required as to the expectation of the customer and to what extent the existing products meet that expectation. Then the gap between the two could be observed
Expectation
GAP
Level met by the product

27. If the gap is understood well, one could find opportunities to
Introduce new products
Make improvements in existing products
Make improvements in production process
Make improvements in supporting services.

28. Stages of new product development
1. Idea Generation
2. Idea Screening
3. Concept Development & testing
4. Marketing Strategy
5. Business Analysis
6. Product Development
7. Test Marketing
8. Commercialisation ( Launch)

29. Idea Generation
Finding promising new ideas is the starting point in the new-product development process.
Idea generation ranges from incremental improvements to existing products to new to the world products.
( produce a drug to reduce cholesterol with less side effects = improvement
produce a drug that cures AIDS = new to the world product)

30. Sources of new ideas Internal Customers Competitors Outside inventors
Channel members
Consultants

31. Methods of generating new ideas
Search
Searching new product idea publications, research publications, the internet, exhibitions, conventions
Marketing Research
Meet product end users and find out what kind of products that can be used to satisfy their needs. Meet focus groups of consumers- retailers to discuss new products.
Technical research
Firm’s internal research laboratories and other external laboratories could generate new idea for you.

32. Screening Evaluating and business analysis.
There should be a very clear cut screening policy that would reject the unpromising product ideas and further the promising ideas.
Two basic questions need to be answered at the screening stage.
Is the idea could be practically developed into a product with development, production,marketing and financial capabilities of the company?
Is the venture commercially feasible? ( market attractiveness,profitability, social and environmental concerns)

33. Evaluation
After the initial screening more comprehensive evaluation is required. It is better to have a buyers reaction also into the evaluation process.
A response from a sample of buyers potential buyers could be a very good criteria to find out the ultimate demand for the product.( This is also called proposed product concept testing) However, the actual product is not in existence and it could not be able to get results as in a test marketing process.

34. Concept development & testing
Idea has to be developed into a concept
A concept is a detailed version of the idea stated in a meaningful consumer terms.
The developed concept will be tested among a sample of consumers.
This will be presented to the target market in words or pictures.
Few questions will be asked to check whether the target market will buy the product.

35. Marketing Strategy Development
Product
Brand name selection and registration
Government regulations as to pricing, packaging and labeling etc
Determine packaging, sizes, shapes, colours, other properties
Guarantee period

36. Pricing
Finalise pricing strategy- Premium/ skimming, penetrative, mark up etc
Dealer/distributor margings
Bulk selling discounts
Credit periods

37. Distribution Select channels of distribution Transportation
Point of Sales Materials ( POSM)
Display racks, stand etc.

38. Promotion Selection and briefing an advertising agency
Finalise segmentation and target markets
Finalise the positioning strategy
Have a theme
Communication budgets
Finalise advertising plan/promotion plan

39. Business Analysis
Business analysis estimates the commercial performance of the proposed product.
Revenue forecast
Cost Estimation
Profit Projections-
Acceptable level of profit for a given product development-
Assess the amount of risk involve

40. Product Development and testing
Prototype
User Tests
Manufacturing development
Component developments and collaborative product developments
various specialised manufacturers get involved.

41. Test Market the product
During the test marketing, the marketers offer the product for sale in a limited area where they can measure the response.
Ideally the test market should reflect the target market for the product. The marketers evaluate not only the customers reaction but all the elements of the marketing mix.
Based on the results of test marketing, marketers determines how the marketing mix should be adjusted before a full scale launch.

42. STAGES IN ADOPTION PROCESS
AWARENESS – the consumer become aware of the innovation but lack information about the product
INTEREST – the consumer is induced to seek information about the innovation
EVALUATION – the consumer consider whether to try the innovation
TRIAL– the consumer tries the innovation to improve his or her estimate of its value
ADOPTION – the consumer decide to make full and regular use of the innovation

43. Diffusion of innovation
Innovators 2.5% -- willing to try new idea at a risk
Early adopters 13.5%-- opinion leaders , adopt new ideas early but carefully
Early majority 34% -- deliberate they adopt new ideas before the average person
Late majority 34% they adopt only after a majority of people have tried it.
Laggards 16% -- suspicious of changes and only adopt when all options are exhausted

45. Categories of Adopters
-2σ -σ +σ
The Chasm!
34%
34%
16%
2.5%
13.5%
The
Chasm
Mohr, Sengupta, Slater
© 2005