Product Management

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Product Management

• Product Marketing

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References

• Marketing - Australia New ZealandP Kotler, P
  Chandler, L Brown, S Adam3rd Ed. 1994 Chapter 1

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Why is this important?

• Marketing places the Product in the hands of the
  User, initiating the return flow of cash
• Marketing gathers from the Market the
  inform-ation needed to design a saleable product
• Marketing is one of the Dimensions of Business
• Management
• Money
• Marketing
• Methodology

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What is Marketing?

• The activity of satisfying Customers Needs
• Not selling
• Aim is to make selling superfluous
• Social and Managerial Process
• Views Enterprise from point of view of Customer

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Concepts
Needs

• Concepts core to Marketing
• Concepts are linked
• Each builds on other

Wants
Markets
Core marketing concepts
Demands
Transactions
Products
Exchange
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Needs

• Human Need
• A State of felt deprivation
• Physical needs
• Food, shelter, safety
• Social needs
• Belonging and affection
• Individual needs
• Self realisation and expression

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Needs

• Inherent to people, not marketing invention
• Unsatisfied need
• Action to try to satisfy
• Possibly through an object or service

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Wants

• Focusing of Need onto object
• Culturally shaped
• The Want to satisfy the Need
• The objects Wanted

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Demands

• People have unlimited Wants
• They Demand what they can afford
• To satisfy the Want
• Or a balanced set of Wants
• Demand a saleable product

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Products

• Anything offered in the Market to satisfy Want
• Can be object, service, etc
• Want Product choice set
• Choice made to suit individual Wants
• Product must be seen as having value

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Exchange

• Obtaining something by offering something in
  return.
• Only one way to obtain goods
• Desirable way for society
• Encourages specialisation
• Avoids need for all to have wide skills

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Exchange

• Requires two parties
• Each must have something of value to other
• Agreement to exchange must be voluntary
• After exchange, each is better off
• Exchange is the core concept of marketing

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Transactions

• The Measure of exchange
• A gives B to X and gets Y in return
• Transaction involves at least-
• Two things of value
• Agreed conditions
• A time of agreement
• A place of agreement

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Markets

• The set of actual and potential buyers of a
  product.
• Can bring buyer and provider together directly
• Can provide opportunity for traders
• Not a physical location
• Can be identified with place
• Can be virtual

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Marketing Management

• Returns us to Marketing Management
• Working with Markets
• to bring about Exchanges
• for the purpose of satisfying Needs and Wants
• Core Marketing activities include-
• Product Development
• Research
• Communication
• Distribution
• Pricing and Service

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Mktg Management Philosophies

• Production Concept
• Product Concept
• Selling Concept
• Marketing Concept
• Societal Marketing Concept

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Production Concept

• Philosophy
• Consumers favour highly affordable and available
  products.
• Focus
• Improve Production and Distribution efficiency
• Good when
• Demand exceeds supply
• Trap
• When customers want more than low price

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Product Concept

• Philosophy
• Consumers favour products with most quality,
  performance and features.
• Focus
• Continuous product improvements
• Good when
• Product not threatened by alternatives (ever?)
• Trap
• Focus on Product rather than satisfying Needs

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Selling Concept

• Philosophy
• Shifting product needs large selling and
  promotion effort.
• Focus
• Selling the product rather than satisfying a Need
• Good when
• Goods are unsought - people dont look for them
• Trap
• Customer dissatisfaction can follow sale

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Marketing Concept

• Philosophy
• Determine Needs and Wants and deliver desired
  satisfactions effectively.
• Focus
• Achieving satisfied customers, long term
• Good when
• Long term market strength and reputation is goal
• Trap
• Requires major corporate commitment

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Marketing vs Selling
StartingPoint
Focus
Means
Ends
ExistingProducts
Selling andPromotion
Profits throughSales volumes
Factory
The Selling Concept
CustomerNeeds
IntegratedMarketing
Profits throughCustomer Satisfaction
Market
The Marketing Concept
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Societal Marketing Concept

• Philosophy
• Satisfy Customer and Societys well-being.
• Focus
• Achieving satisfied customers in long term,
  societal context
• Good when
• Long term market strength and reputation is goal
• Trap
• Requires major corporate commitment

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Goals of Marketing System

• Maximise consumption?
• Maximise consumer satisfaction?
• Maximise choice?
• Maximise life quality?

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What is a Product?

• Any thing which can be offered to a Market for
  attention , acquisition, use or consumption that
  might satisfy a Want or Need.
• Includes physical objects, services, persons,
  places, organisations and ideas.

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Products

• Core Product
• The Problem-solving services or core benefits
  that consumers are really buying
• Actual Product
• The parts, styling features, brand name,
  packaging and other attributes that combine to
  deliver benefits
• Augmented Product
• Additional consumer services and benefits built
  around the core and actual products

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The Product
AugmentedProduct
Installation
ActualProduct
Packaging
CoreBenefitorService
BrandName
Styling
AfterSalesService
DeliveryandCredit
CoreProduct
Quality
Features
Warranty
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Product Development Stages
Idea Generation
Screening
Concept Development and Testing
MarketingStrategy
BusinessAnalysis
ProductDevelopment
TestMarketing
Commecialisation
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Idea Generation

• Use Creativity to look for new ideas, but
• Use structured and disciplined approach to early
  weeding.
• Undisciplined waste of time
• Disciplined implies targeted

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Idea Generation

• Sources of ideas
• Internal sources
• Customers
• Competitors
• Distributors and suppliers
• Other sources
• Trade shows and magazines
• Market research firms
• Government agencies (including Unis)

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Screening

• Aim
• To spot good ideas quickly
• To drop poor ones as soon as possible
• Use Disciplined methods
• Review against Company policies
• Use formal rating methods
• Quality Function Deployment
• Rating against objectives

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Screening

• Rating method example

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Concept Development

• Product Idea
• An idea for a possible product which the Co can
  offer to the Market
• Product Concept
• A detailed version of the new product idea stated
  in meaningful customer terms
• Product Image
• The way consumers perceive an actual or potential
  product

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Concept Development Testing

• Concept Development
• A specification of the proposed product
• Defines market (customer) targeted
• In terms of potential product offerings
• Concept Testing
• Test Concept spec with groups of target customers
• Questionnaires
• Expose to models or prototypes
• Get their reactions

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Marketing Strategy

• Marketing Strategy Development
• Initial Mktg strategy based on product concept
• Marketing Strategy Statement
• Target market, positioning, sales and market
  share goals and profit goals
• Price, distribution and marketing budget for year
  1
• Long run goals for sales, profitability, market
  mix

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Business Analysis

• Review of sales, costs and profit projections for
  a new product to find whether these satisfy the
  Companys objectives

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Product Development

• Developing product concept into physical product
• Resolve issues of engineering

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Test Marketing

• Small scale production supplied to limited market
  with detailed review of outcome
• Standard Test Markets
• Full scale marketing, but in limited region
  (Adelaide)
• Effective, but costly and time-consuming
• Controlled Test Markets
• Groups of distributors who agree, for a fee
• Less expensive but smaller samples

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Test Marketing

• Simulated Test Markets
• Various research methods on small groups of
  people
• Cheapest and quickest, but least reliable
• Industrial goods
• Supply to users on trial basis and observe
• Place on show at trade show and observe
• Supply demos

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Commercialisation

• Entry into full scale production and marketing
• Four decisions
• When?
• Where?
• To Whom?
• How?

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Promoting Products

• Communication with Customers
• Generating favourable reaction
• Mix of activities

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The Promotion Mix

• Advertising
• Personal Selling
• Sales Promotion
• Public Relations

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Identifying Target Audience

• Potential buyers or users
• Buying decision-makers
• Influencers (specialist journalists etc)

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Determining Response Sought

• Awareness
• Knowledge
• Liking
• Preference
• Conviction
• Purchase

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Choosing a Message

• Message Content
• Rational Appeal
• Emotional Appeals
• Moral Appeals
• Message Structure
• Message Format

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Conclusions

• Marketing is a key area of the Business
• Marketing is a people-oriented activity
• Marketing view the operation of the Company from
  the customers perspective
• The techniques of marketing assume that ethical
  issues have been met
• The product does what it says it will do
• It is built upon good engineering