Module_-_3_Product_Mgt_&_Pricing[1].pptx

MODULE -3
PRODUCT MANAGEMENT & PRICING

MEANING OF THE PRODUCT
•A product can be defined as anything that we can offer
to a market for attention, acquisition, use or
consumption that could satisfy a need or want.

DEFINITION
•Philip Kotler: “Product is anything that can be offered
to someone to satisfy a need or a want.”
•W. Alderson: “Product is a bundle of utilities,
consisting of various product features and
accompanying services.”
•Jobber (2004): “A product is anything that has the
ability to satisfy a consumer need.”

PRODUCT MANAGEMENT:
• Product management is an organizational function that guides every step of a
product's lifecycle — from development to positioning and pricing — by
focusing on the product and its customers first and foremost.
• Product managers are responsible for ensuring that a product meets the needs of
its target market and contributes to the business strategy, while managing a
product or products at all stages of the product lifecycle.
• Product management examples also include the branding and customer
communication required to launch a new product. Each product, in its nascent
form, requires proper branding.

PRODUCT MANGEMENT IS IMPORTANT:
•Identifying customer needs
•Maximizing ROI
•Driving innovation
•Collaboration
•Risk mitigation

OBJECTIVES OF PRODUCT MANAGEMENT

KOTLER’S 5 LEVELS OR DIMENSIONS OF PRODUCT

TYPES OF PRODUCT
• Consumer products
• Industrial products
• Digital products
• Physical products
• Seasonal products
• Perishable products
• Luxury products
• Necessity products
• Specialty products
• Private label products

PRODUCT MIX STRATEGIES
•Expansion of Product Mix
•Contraction of Product Mix
•Deepening Product Mix Depth
•Alteration or Changes in Existing Products
•Developing New Uses of Existing Products
•Trading Up
•Trading Down
•Product Differentiation

APPRAISAL OF PRODUCT LINES
1. Identify the products in the product line: Companies should create a list of all the
products in the product line.
2. Gather data on each product: Companies should gather data on each product,
including sales figures, profit margins, production costs, and customer feedback.
3. Analyze the data: Companies should use the data collected to analyze the
performance of each product. This analysis should include an evaluation of the
product's contribution to overall revenue, profitability, market share, and customer
satisfaction.

4. Determine the strengths and weaknesses of each product:
Companies should identify the strengths and weaknesses of each
product in the product line. This can help them determine which
products to continue producing, which to improve, and which to
discontinue.
5. Make recommendations: Based on the analysis, companies should
make recommendations on which products to continue producing,
which to improve, and which to discontinue. These recommendations
should take into account factors such as profitability, market demand,
and customer satisfaction.

LINE STRETCHING
• Line stretching is a marketing strategy where a company extends its product line
beyond its current range to include products that are either more expensive or less
expensive than the existing products.
• Upward line stretching: This is when a company adds high-end products to its
existing product line to target customers who are willing to pay more for premium
products. For example, a clothing company that specializes in affordable clothing
may introduce a high-end luxury line to appeal to customers who are willing to pay
more for premium quality and design.
• Downward line stretching: This is when a company adds lower-priced products to its
existing product line to target customers who are price-sensitive and looking for
affordable options. For example, a high-end restaurant may introduce a lower-priced
menu to attract customers who are looking for a more affordable dining option.

•LINE TRIMMING is a marketing strategy where a
company reduces its product line by eliminating
products that are not performing well or are no longer
profitable. The goal of line trimming is to focus on the
most profitable products and streamline the product
line to reduce costs and improve efficiency.

• Stage 1: Introduction
• This is where the new product is introduced to the market, the customers are
unaware about the product. To create demand, producers promote the new
product to stimulate sales. At this stage, profits are low and there are only a few
competitors. As more units of the product sell, it enters the next stage
automatically.
• For example, a new product invented in the United States for local consumers is
first produced in the United States because that is where the demand is, and
producers want to stay close to the market to detect consumer response.
Characteristics of the product and the production process are in a state of
change during this stage as firms familiarize themselves with the product and
the market. No international trade takes place.

Stage 2: Growth
• In this stage, demand for the product increases sales. As a result, production costs decrease and profits are high.
The product becomes widely known and competitors enter the market with their own version of the product. To
attract as many consumers as possible, the company that developed the original product increases promotional
spending. When many potential new customers have bought the product, it enters the next stage.
Stage 3: Maturity
• In the maturity stage of the Product life cycle, the product is widely known and many consumers own it. In the
maturity phase of the product life cycle, demand levels off and sales volume increases at a slower rate. There are
several competitors by this stage and the original supplier may reduce prices to maintain market share and
support sales. Profit margins decrease, but the business remains attractive because volume is high and costs,
such as for development and promotion, are also lower.
Stage 4: Decline
• By this time in the product’s life cycle, the characteristics of the product itself and of the production process are
well known; the product is familiar to consumers and the production process to producers. This occurs when the
product peaks in the maturity stage and then begins a downward slide in sales

MANAGING PRODUCT LIFE CYCLE AND ITS STRATEGIES
•Rapid Skimming Strategy
•Slow Skimming Strategy
•Rapid Penetration
•Slow Penetration

PACKAGING
Packaging refers to the
process of designing a
package for the
consumer product.

PACKAGING AS A MARKETING TOOL
•Capturing Attention
•Brand and Product Names should be very Clear
•Point out to Benefits
•Designed with the Target Audience in Mind

LABELLING
•Labelling is the display
of label in a product. A
label contains
information about a
product on its
container, packaging,
or the product itself. It
also has warnings in it.

ROLE OF LABELLING IN PACKAGING:
• Labelling is another significant means of product identification like branding and packaging.
• Labelling is the act of attaching or tagging labels.
• Labeling gives necessary information to the customers about the products. The customers
can get knowledge about the quality and features of the product without tasting the product.
• Label becomes helpful to sellers to sell out the product. It protects the customers from
malpractices of the middlemen.
• Labeling is very important element affecting sales and distribution process of a product,
which provides clear information about the grade, quantity, price, brand name, features etc.
to the customers

•Brand and Product Identity
•Grade and type
•Requirement by law
•Description
•Promotion
•Additional information

BRANDING
•Branding refers to process involved in creating a
unique name and image for a product in the
consumers mind mainly through advertising
campaigns with a consistent theme.
•

TYPES OF BRANDING OR VARIOUS BRANDING STRATEGIES
• .Product Branding- Unique design. Colour, logo.
• Personal Branding - This type of branding is very common among politicians, athletes and
celebrities.
• Corporate Branding: This type of branding is used by businesses interested in creating and
maintaining a good reputation.
• Geographical Branding- This type of branding is used for specific services and products that
are peculiar to a particular region. Geographical branding is commonly used in the tourism
industry.
• Retail Branding: A lot of money is spent to develop unique brand images that convince
consumers to select their brand instead of others.
• Co-Branding: Co-branding is a type of branding that associates the brands of two or more
companies with a specific product or service.

BRAND EQUITY
Brand equity is a marketing term
that describes a brand’s value. That
value is determined by consumer
perception of and experiences with
the brand. If people think highly of
a brand, it has positive brand
equity.

Brand Equity comprises the following elements:
•Awareness
•Brand
• Association
• Quality
• Loyalty

BRANDING STRATEGIES
A branding strategy is a long-term plan for the development of a successful
brand in order to achieve specific goals.
Here are some common branding strategies:
Define your brand
Create a visual identity
Use brand messaging
Focus on customer experience
Engage with customers
Differentiate your brand
Stay consistent

WAYS TO BUILD A BRAND
• Identify your brand values and mission
• Develop a strong brand message
• Create a visual identity
• Build a website
• Establish a social media presence
• Develop content marketing
• Engage with your audience
• Collaborate with influencers
• Monitor your brand reputation

BRAND EXTENSION
Brand extension is a marketing strategy where a company uses an existing brand
name to introduce a new product or service that is related to the original brand.
Examples:
• Amazon: Amazon is an e-commerce brand that has extended its brand to
various product categories such as books, electronics, home goods, fashion,
and even food and groceries.
• Harley-Davidson: Harley-Davidson is a motorcycle brand that has extended its
brand to clothing, accessories, and even home decor products.
• Nike: Nike is a sportswear brand that has extended its brand to different
product categories such as footwear, apparel, accessories, and fitness
technology.

EFFECTS OF BRAND EXTENSION
• POSITIVE EFFECTS: -
• Increase brand awareness: By leveraging the existing brand name, the
company can quickly and easily gain exposure for the new product or
service.
• Improve brand image: If the new product or service is well received, it
can enhance the original brand's reputation and image.
• Increase market share: By offering a new product or service that
appeals to the same target audience, the company can expand its
market share and increase revenue.

NEGATIVE EFFECTS
• Dilute the brand's identity: If the new product or service is not closely
related to the original brand, it can confuse customers and weaken the
brand's identity.
• Damage brand image: If the new product or service is of poor quality,
it can negatively impact the original brand's reputation.
• Cannibalize sales: If the new product or service competes with the
original product or service, it can cannibalize sales and reduce revenue.

LOGO
A logo is the graphic symbol used by your company which allows it to
be recognized by your audience.
It is a visual representation of your brand's identity that is used to in
still trust and convey your chosen message to the public in an
instant.

SELECTING A LOGO
1. Understand your brand
2. Keep it simple
3. Make it versatile
4. Ensure it's unique
5. Get feedback
6. Get help from an expert
7. Use a colour that makes your logo stand out

PRICING
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.
DEFINITION
“Price is the amount of money or goods for which a thing is bought or sold”.
The concept of value can therefore be expressed as:
(Perceived) VALUE = (perceived) BENEFITS – (perceived) COSTS

SIGNIFICANCE OF PRICING
•Revenue generation
• Profitability
• Competitive advantage
• Brand perception
• Customer retention
• Market positioning

FACTORS AFFECTING PRICING (Internal and External)
Internal factors affecting pricing
1. Organizational Factors
2. Marketing Mix
3. Product Differentiation
4. Cost of the Product
5. Objectives of the Firm
6. Promotional activity
7. The predetermined objectives
8. Product life cycle

External factors affecting pricing
1. Demand
2. Competition
3. Economic Conditions
4. Buyers
5. Government
6. Channel intermediaries

OBJECTIVES OF PRICING
• To maximize profit
• Achieving target return
• Achieving target return on sales
• Achieving target return on investment
• Sales volume increase
• Maintain market share
• Stabilization of price
• Meet competition

PRICINGMETHODS ((Value Based, Cost Based, Market Based,
Competitor Based)
• VALUE BASED PRICING - Value-based pricing (or value pricing) is the most highly
recommended pricing technique by consultants and academics. The basic idea is to set a
price that's based on what your customers are willing to pay.
• COST BASED PRICING – Cost based pricing is one of the pricing methods of
determining the selling price of a product by the company, wherein the price of a product is
determined by adding a profit element (percentage) in addition to the cost of making the
product.
• MARKET BASED PRICING - A market-based pricing strategy is also known as a
competition- based strategy. In this pricing strategy, the company will evaluate the prices of
similar products that are on the market.
• COMPETITION BASED PRICING - Competition-based pricing is a pricing method that
makes use of competitors' prices for the same or similar product as basis in setting a price.
The price of competing products is used a benchmark.

OTHER PRICING STRATEGIES
1. Penetration Pricing
2. Psychological Pricing
3. Product Line Pricing
4. Geographical Pricing
5. Optional Product Pricing
6. Premium Pricing
7. Economy Pricing
8. Price Skimming

Module_-_3_Product_Mgt_&_Pricing[1].pptx

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