powerpointpresentation on PRODUCT DESIGN
- 1. PRODUCT DECISION CONCEPT AND CLASSIFICATION LEVEL OF PRODUCT MADHAV B.COM(H)2021-2024
- 2. PRODUCT DECISION Product decision in marketing refers to the company’s mindful decisions, major or minor regarding their product. It ranks first among the 4Ps of marketing– Product, Price, Place, Promotion. Organizations take these decisions to attain their objectives and become profitable in the long run. Product decisions are vital marketing decisions to be made at various levels.
- 3. PRODUCT Anything of value that fulfils the requirement of the end-users is known as product. It can be goods or services, tangible or intangible, physical or physchological. The customers and competitiors largely depend upon the products offered by the company.
- 5. LEVELS OF PRODUCT 1.Core or Generic Product It is the raw product that satisfies the customer’s primary need. The core product is at its raw form, not bearing any brand name and remains undifferentiated. For example: – Wheat is a grain that one can consume. 2.Basic Product The core products differentiated from the rest become the basic product. It adds some necessary features to the products like Brand Name, Packaging and Label, etc. For example: – Fortune Chakki Fresh Atta (wheat flour). 3.Expected Product These products include the key features that customers look forward to. It also contains standard features that a product should have. For example: – Chapati is prepared from wheat flour. 4.Augmented Product To differentiate products from competitors, companies add distinctive features to them. These additions depend on the market survey conducted for the product. They try to create a Unique Selling Proposition (USP) for their
- 6. Potential Product It refers to all the possible features that a product can have in the future. These features depend on the market conditions and economic changes.
- 7. PRODUCT STRATERGIES Tanishq gupta Bcom (h) 2021-2024
- 8. • Introduction ■ A product strategy is a high-level plan describing what a business hopes to accomplish with its product and how it plans to do so. The strategy should answer key questions such as who the product will serve (personas), how it will benefit those personas, and the company’s goals for the product throughout its life cycle.
- 9. Why is Product Strategy Important? ■Building out a product strategy before you begin development is necessary because it serves three valuable business purposes. is Product Strategy Important.
- 10. ■ 1. A product strategy provides clarity for your company. ■ 2. It helps you prioritize your product roadmap. ■ 3. A product strategy improves your team’s tactical decisions.
- 11. Types of product strategies 1. Cost strategy ■ The cost strategy focuses on developing cost-effective products by using minimal resources. It is applicable for low-effort buying, such as household cleaning goods. Usually, consumers don’t think much while buying household cleaning items because they all serve the same purpose. That’s why we look for low-priced products. Hence, companies should align their cost strategies to produce low-cost products and beat competitors’ prices in the market.
- 12. 2. Differentiation Strategy ■ This strategy centralizes toward one fact: how your company’s product stands out in the market. There are various factors that decide the USP of a product. It may be the use of quality material for luxury or the innovative features that separate the product from others in the market. With the differentiation strategy, you can define your product and make it preferable for customers. ■ 3. Focus Strategy ■ Focus strategy helps companies build products that cater to particular customers or buyer persona. For example, if your company has a large customer base, focus strategies enable you to target a specific group of customers and create personalized products for them. It develops brand loyalty while adding new customers to the pipeline.
- 13. 4. Quality Strategy ■ With 68% of consumers willing to pay more for products and services from a company that offers quality, it’s evident that quality matters more than price. Quality strategies allow you to focus on producing quality products and target audiences, who are looking for the highest quality product in the market. Apple products are a great example for this type of product strategy. Apple products are highly priced yet they hold a significant market share purely because of quality. ■ 5. Service Strategy ■ According to the Salesforce report, 89% of consumers like to make another purchase after receiving a positive customer service experience. Service strategy plays a pivotal role in this scenario. It helps companies to take a customer-centric approach that resolves customers’ problems and provides after-sales service and satisfaction.
- 15. WHAT IS NEW PRODUCT DEVELOPMENT? New product development refers to the complete process of bringing a new product to market. This can apply to developing an entirely new product, improving an existing one to keep it attractive and competitive, on introducing an old product to a new market. The emergence of new product development can be attributed to the needs of companies to maintain a competitive advantage in market by introducing new products or innovating existing one. while regular product development refers to building a product that already has a proof of concept, new product development focuses on developing an entirely new idea- from idea generation to development to launch.
- 16. THE STAGES OF NEW PRODUCT DEVELOPMENT IDEA GENERATION IDEA SCREENING CONCEPT DEVELOPMENT AND TESTING MARKETING STRATAGIES AND BUSINESS ANALYSIS PRODUCT DEVELOPMENT TEST MARKETING PRODUCT LAUNCH
- 17. 1. IDEA GENERATION It involves brainstorming of new products ideas or ways to improve an existing product. Companies examine market trends, conduct research, and dig deep into users wants and needs to identify a problem and purpose innovative solution. There are two primary sources for generating ideas- • internal ideas comes from different areas within the company such as sales or technical team, marketing, customer support. • External ideas comes from outside sources such as competitors, feedback from target audience. 2. IDEA SCREENING This second step revolves around screening all your generated ideas and picking only the ones with highest chance of success. Deciding which ideas to pursue and discard depends on many factors, including the expected benefits to your consumer products improvements most needed, technical feasibility or marketing potential. 3. CONCEPT DEVLOPMENT AND TESTING A product concept is a detailed description or blueprint of your idea. It should indicate the target market, features and benefits and the proposed price for the product. It should also contain the estimated cost of designing, developing, and launching the product. Concepts are often used for market validation. Before committing to developing a new product, share your concept with your prospective buyers to collect insights and guage how viable the product ideas would be in target market.
- 18. 4. MARKETING STATAGY DEVELOPMENT AND BUSINESS ANALYSIS Now that you’ve selected the concept its time to put together an initial marketing strategy to introduce product to the market and analyze the value of yor solution. • Serves to guide the positioning, pricing, and promotion of your new product. Once strategy is planned, product management can evaluate business attractiveness of the product idea. • comprises a review of sale forecasts, expected costs and profit projections. If they satisfy the company’s objective than can move to next stage. 5. PRODUCT DEVELOPMENT This stage consists of developing the product concept into a finished, marketable product. This stage usually involves creating the prototype and testing it with users to see how they interact with it and collect feedback. Prototype testi ng allows product team to validate design decisions and uncover any flaws or usability issues before handing the designs to the development team. 6. TEST MARKETING Test marketing involves releasing the finished products to a sample market to evaluate its performance under predetermined marketing strategy. There are two testing method alpha and beta testing. The goal of the test marketing stage is to validate the entire concept behind the new product and get ready to launch the product. 7. PRODUCT LAUCH/ COMMERCIALIZATION At this point you are ready to introduce your new product to the market. There are some essential elements to consider such as customers, value proposition, messaging channels.
- 19. Product Life Cycle Lipsa swain 03213088821 Bcom(honours)
- 20. DEFINITION The stages through which the individual products develop over a period of time is known as Product Life Cycle. It is the length of time from a product first being introduced to consumers until it is removed from the market. Product life cycles are used by management and marketing professionals to help determine advertising schedules, price points, expansion to new product markets, packaging redesigns, and more. These strategic methods of supporting a product are known as product life cycle management. A product’s life cycle is usually broken down into four stages; introduction, growth, maturity, and decline. If we plot a graph of sales volume versus time for a product, generally, the PLC represents a bell- shaped or s-shaped curve.
- 22. Introduction stage of the Product Life cycle This product life cycle stage involves developing a market strategy, usually through an investment in advertising and marketing to make consumers aware of the product and its benefits.
- 23. Marketing Strategies used in Introduction stage Rapid Skimming- Launching the new product at high price and high Promotional level. Slow skimming- Launching the new product a thigh price and low promotional level. RapidPenetration-Launching of product at low price with heavy promotion. Slow penetration- Launching the new product at a low price and low level of promotion.
- 24. Growth Stage of Product Life Cycle
- 25. Marketing Strategies Used in Growth Stage Improved product quality and add new product features and styling. Add new models and products of different sizes,color, shapes etc. Enter new market segments. Increase distribution coverage distribution channels. Shifts from product awareness to product preference advertising. Examples- Hyundai-I10.
- 26. Maturity Stage of Product Life Cycle
- 27. Marketing Strategies Used in Maturity Stage 1. Market Modification- Converting non users. Entering new market segments. Win competitors customers. Redefine target market. 2. Product Modification- Quality Improvement. Adopting advance technology. Product Differentiation.
- 28. Decline Stage of Product Life Cycle
- 29. MARKETING STRATEGY USED IN DECLINE STAGE Increase the given firms investment to dominate the market or strengthen its competitive Position. Maintaining the given firms investment level until the uncertainties about the industry are resolved. Decrease the firms investment selectively, by dropping the unprofitable customers group, while simultaneously strengthening the firm so Harvesting the firms investment to recover cash quickly. Divesting the business quickly by dropping off itsassets as advantageously as possible.
- 30. PRICING DECISION OBJECTIVE OF PRICING FACTORS AFFECTING PRICING DECISION KANIKA B.COM(H)2021-2024 02113088821
- 31. PRICING DECISION • Pricing is simply the “money charged for a product or service”. • It is everything that a “customer has to give up” in order to acquire a product or service. • The “price is not the same thing as cost”. • Pricing is “one of the most important business decisions” management take. • Unlike other elements of marketing mix, “pricing decisions directly affect revenues rather than costs”. • It contributes to the “perception” of a product or service by customers. • There are so many factors to consider and much uncertainty about whether a price change will have the desired effect.
- 32. PRICE • Price is the value that is put to a product or service and is the result of a complex set of calculations, research and understanding and risk taking ability. • “Price is the amount of money charged for a product or service”. • Pricing is the process whereby a business sets the price at which it will sell its products and services , and may be part of the business’s marketing plan. In setting prices, the business will take into account the price at which it could acquire the goods, the manufacturing cost, the market place, competition , market condition , brand , and quality of product.
- 33. 33 OBJECTIVE OF PRICING • Pricing for a target return.(ROI) • Pricing for market penetration. • Pricing for skimming. • Discriminatory pricing. • Stabilizing pricing. • Expansion of current profits. • Ruling the market. • A market for an innovative idea. .
- 34. FACTORS AFFECTING PRICING DECISIONS INTERNAL FACTORS • Cost • Company objective • Organizational factors • Elements of Marketing mix • Product quality • Top level management • Degree of product differentiation • Brand image • Category or class of product • Market share
- 35. EXTERNAL FACTORS • Demand for the product • Competition • Price of raw materials and other inputs • Buyers behavior • Government rules and restrictions • Ethical considerations or code of conduct • Seasonal effect • economic conditions
- 36. Pricing refers to the process of determining the optimal price for a product or service that maximizes profitability while considering various factors such as costs, competition, customer demand, and perceived value. It is a crucial element of the marketing mix, along with product, promotion, and place (distribution). Pricing
- 37. Methods of Pricing Cost-Plus Pricing: This method involves calculating the total cost of production and adding a markup to determine the selling price. The markup can be a percentage of the cost or a fixed amount. Market-Based Pricing: Market-based pricing involves setting the price based on the prevailing market conditions and the prices charged by competitors. It takes into account factors such as supply and demand, customer preferences, and the perceived value of the product. Skimming Pricing: Skimming pricing is used when a business introduces a new product or service and sets a high initial price to maximize profits from the early adopters or customers willing to pay a premium. The price is gradually lowered over time to attract a broader customer base. Penetration Pricing: Penetration pricing is the opposite of skimming pricing. It involves setting a low initial price to quickly gain market share and attract customers. The goal is to encourage mass adoption of the product or service, and prices may be increased later once the market has been captured.
- 38. Contd… Value-Based Pricing: Value-based pricing focuses on setting prices based on the perceived value of the product or service to the customer. It considers factors such as the benefits provided, customer willingness to pay, and the competitive landscape. This approach aims to capture the value customers place on the offering rather than solely relying on production costs. Psychological Pricing: Psychological pricing takes advantage of the psychological perception of prices by customers. It involves setting prices slightly below a round number (e.g., $9.99 instead of $10) to create the perception of a lower price and increase customer appeal. Bundle Pricing: Bundle pricing involves offering multiple products or services together as a package at a lower price than if they were purchased individually. This strategy encourages customers to buy more and provides them with a sense of added value. Promotional Pricing: Promotional pricing involves offering temporary discounts, sales, or special offers to stimulate demand, attract new customers, or clear out excess inventory. These pricing tactics are often used for specific periods, such as holidays or product launches.
- 39. Pricing Strategies Price Skimming: Set an initially high price for a new or innovative product to target early adopters and capture maximum revenue. Gradually lower the price to appeal to a broader customer base. Penetration Pricing: Set a low initial price to quickly enter the market and gain market share. This strategy aims to attract price-sensitive customers and discourage potential competitors. • Premium Pricing: Set higher prices for products or services that are positioned as exclusive, high-quality, or luxury items. This strategy emphasizes the unique value and differentiation of the offering. • Psychological Pricing: Use pricing tactics based on consumer psychology, such as setting prices slightly below a round number (e.g., $9.99 instead of $10) to create the perception of a lower price. • Bundle Pricing: Offer two or more products or services together as a package at a discounted price compared to buying them individually. This strategy encourages customers to purchase more items and provides added value.
- 40. Contd… Dynamic Pricing: Adjust prices based on real-time market conditions, such as demand, supply, or customer behavior. This strategy is often used in industries where prices can fluctuate rapidly, such as airlines or ride-sharing services. Freemium Pricing: Offer a basic version of a product or service for free, while charging for premium features or additional functionality. This strategy aims to attract a large user base and monetize through upselling or premium subscriptions. Captive Pricing: Set a lower price for the main product or service and higher prices for related or complementary items. This strategy encourages customers to purchase additional items once they are committed to the main purchase. Pay-What-You-Want (PWYW) pricing: It is a unique strategy where customers are given the freedom to choose the price they want to pay for a product or service. While it may seem unconventional, PWYW can be an effective approach in certain contexts. Economy pricing: It is a pricing strategy that focuses on offering products or services at the lowest possible price in the market. It aims to attract price-sensitive customers who prioritize affordability over other factors.