Product Management and Marketing Strategies
Product Classification
Tangibility
Durable Goods
These are tangible products that typically survive multiple uses, such as refrigerators, televisions, and clothing.
Non-Durable Goods
These are tangible products that are generally consumed in one or a few uses, like soap, beer, and salt.
Consumption
Consumer Goods
These are products purchased by end consumers for their personal use, categorized based on consumer buying habits.
Services
These are activities, benefits, or satisfactions offered for sale, such as haircuts and repairs.
Product Life Cycle
Introduction
When a product is first launched, growth can be slow as it gains market acceptance.
Growth
Market acceptance increases, leading to rapid sales growth. Product quality is often improved, and new features and models may be introduced.
Maturity
Competition intensifies, leading to declining sales and profit growth. Sales may continue to increase but at a slower pace, eventually stabilizing.
Decline
Sales decline, potentially rapidly (e.g., video games) or slowly (e.g., oatmeal). Sales may drop to zero or reach a low level maintained for years. This can be due to technological advancements, changing consumer preferences, or increased competition.
Product Mix
The complete set of product lines and items offered by a seller, characterized by its size, length, depth, and consistency.
Product Roles
- Product Leader: Generates the highest profits for the company.
- Product of Attraction: Used to attract customers.
- Product of Stability: Helps mitigate sales fluctuations.
- Tactical Product: Strengthens the company’s position against competitors.
Branding
A brand encompasses a name, term, symbol, design, or combination thereof, used to identify and differentiate a seller’s products and services from competitors. It facilitates advertising and builds brand recognition.
Pricing Strategies
Market Skimming
Setting a high initial price to capture the top segment of the market.
Market Penetration
Setting a low initial price to gain a large market share quickly.
Discount Pricing
Rewarding customers for specific actions, such as prepaying or buying off-season.
Cash Discounts
Offering price reductions for payments made within a specified timeframe.
Segmented Pricing
Adjusting prices based on time, location, product form, or customer segment.
Distribution Channels
Channel Selection Considerations
- Channel Compatibility: Ensuring the chosen channel aligns with the product and target market.
- Channel Conflict: Avoiding potential conflicts with existing channels or competitors.
- Entry Barriers: Considering the resources and costs associated with different channels.
- Number of Distribution Stages: Determining the length of the distribution chain (direct marketing, retailers, wholesalers, etc.).
Distribution Strategies
- Intensive Distribution: Making the product available at as many points of sale as possible.
- Selective Distribution: Choosing specific retailers based on their suitability for the product.
- Exclusive Distribution: Granting exclusive distribution rights to a limited number of retailers in a specific area.
Role of Intermediaries
- Transportation: Physically moving goods from producers to consumers.
- Storage: Warehousing and preserving products until they are needed.
- Product Variety: Providing consumers with access to a wide range of products from different suppliers.
- Balancing Supply and Demand: Matching production cycles with consumer demand.
- Financing: Providing financial assistance to facilitate transactions.
Elasticity of Demand
Measures the sensitivity of demand to price changes. Elastic demand indicates significant changes in demand with price fluctuations, while inelastic demand shows minimal changes in demand despite price variations.