Product Management and Pricing Strategies
Product
Product Types
Three types of products exist: core, actual, and augmented.
- Core Product: Intangible, its value lies in the benefit it provides to the consumer.
- Actual Product: Physical and tangible.
- Augmented Product: Intangible, adds value to the core product.
Key Elements
Tangibility, intangibility, utility, exchange, creation and design, branding, and lifecycle.
Product Classification
Products can be classified based on various factors:
- Nature of the product (durable goods, non-durable goods, consumer goods, industrial goods)
- Product life cycle stage
- Degree of tangibility
- Use (consumer products, industrial products)
- Basis of production (homogeneous products, heterogeneous products)
- Target market
- Pricing level
- Durability and reparability
- Consumer perception
- Degree of urgency
- Legal classification
- Technological complexity
The Brand
Criteria for Choosing a Brand Name
- Memorability
- Meaningfulness
- Amiability
- Transferability
- Adaptability
- Protection
Brand Strategies
- Individual or multiple brand strategy
- Single brand strategy
- Second brands strategy
- White label or distributor’s brand strategy
Methods for Creating Brand Names
- Descriptive naming
- Summary naming
- Acronyms and initials
- Founder’s name
- Mix and match
- Geographical name
- Emotional
- Competition and industry analysis
- Cultural and linguistic considerations
Packaging, Label, and Guarantees
Packaging
Packaging should prioritize durability, protection, and ease of handling.
Label
Labels should comply with regulations, reflect brand identity, provide clear product information, and be aesthetically appealing.
Guarantees
Guarantees include product warranties, satisfaction guarantees, money-back guarantees, and lifetime guarantees.
Product Life Cycle
Strategies should be tailored to different stages of the product life cycle:
- Introduction stage
- Growth stage
- Maturity stage
- Decline stage
SWOT Analysis
Strengths, Weaknesses, Opportunities, and Threats should be analyzed to inform product strategy.
Product Positioning
Positioning the product effectively in the market is crucial for success.
Ansoff Matrix
Growth Strategies
The Ansoff Matrix outlines four growth strategies:
- Market penetration
- Market development
- Product development
- Diversification
Product Adaptation
Products may need to be adapted to various factors:
- Government regulations
- Consumer needs
- Economic possibilities
- Requirements
Pricing
Price and Its Importance
Price represents the value exchanged for a product or service. Analyzing price in different markets is crucial due to varying economies. Pricing is a challenging yet critical element of the marketing mix.
Pricing Objectives
Five primary pricing objectives guide companies:
- Survival
- Profit maximization
- Market share maximization
- Maximum skim
- Leadership in product quality
Pricing Methods
Various pricing methods are available:
- Cost-Plus Pricing: Setting prices based on product cost plus a markup.
- Psychological Pricing: Leveraging consumer psychology to influence perception, such as using odd prices.
- Product Line Pricing: Offering different products within the same range at various prices based on specific features.
- Optional Product Pricing: Encouraging additional spending by offering optional extras.
- Captive Product Pricing: Setting low prices for core products while profiting from associated add-ons.
- Bundle Pricing: Combining products at reduced prices to boost overall sales.
- Promotional Pricing: Offering discounts or special deals to promote sales.
- Geographical Pricing: Adjusting prices based on location or country-specific factors.
- Value-Based Pricing: Setting prices based on the perceived value to the customer.
Export Pricing
Factors to Consider
When setting export prices, companies must consider factors like:
- Manufacturing costs
- Demand
- Competition
- Exchange rates
- Perceived value
Understanding Costs
Understanding costs involved in manufacturing, distribution, and marketing is crucial, including supply, manufacturing, distribution, administrative, and financing costs.
Global Supply Processes and Risks
Global supply processes involve risks like quality issues and legal regulations.
Exchange Rates and Demand
Exchange rates impact export prices, while demand and competition also play significant roles.
Final Price Determination
Companies must determine the final price considering its impact on marketing activities, general pricing policies, and other stakeholders.
Antidumping Regulations
Purpose and Process
Antidumping regulations prevent unfair trade practices. The process involves filing complaints, investigations, interim measures, definitive measures, and reconsideration of measures based on evolving economic conditions.
Relationship to Pricing Strategies
Antidumping practices are closely related to pricing strategies, as they address issues like dumping, price negotiation, and corrective measures to ensure fair market competition.