Product Management Flashcards
What is at the core of bringing value to the customer?
The product experience
Example customer experience
-Apple
-it´s not only about the product but because of the lifestyle one wants to live
Definition product
A product is anything that delivers value to satisfy a need or want and includes physical merchandise, services, events, people, places, organizations, information, or ideas.
SKU
stock-keeping unit
3 Product characteristics
1) Essential benefit
2) Core product
3) Enhanced product
Name the essential benefit of a product
the fundamental need met by the product (getting from point A to point B on an
Southwest Airlines)
Name the core product characteristic
the physical, tangible elements (e.g.,one kind of aircraft, low fares, good website).
Name the enhanced product characteristic
includes additional features, designs, and innovation that exceed expectations (e.g., frequent flyer program, fun and entertaining flight attendants).
How can a product be classified?
-by the nature of the product
-by who uses the product
Aspects of product nature
1) Tangibility (physical aspects of the product experience, is the product tangible?)
2) Durability (product usage)
Types of durability
-durable products: can be used many times, e.g. refrigerators, cars etc.
-non-durable goods: will be consumed after one or few uses (e.g. coke, soap etc.)
Who uses the product?
1) Consumers
2) Businesses
Types of consumer goods (4)
-Convenience Goods Staples: Impulse, Emergency
-Shopping Goods Furniture: Clothes, Appliances
-Specialty Goods: Unique characteristics iPhone
-Unsought Goods: Insurance
Types of business goods
-materials
-parts
-MRO (maintenance, repair, operations) supplies
-capital goods
Product aspects to create differentiation with
-Form
-Features
-Performance QUality
-Durability
-Realiability
-Repairability
-Style
Definition Product Line
A group of products linked through usage, customer profile, price points, and distribution channels or needs satisfaction
Definition Product Mix
all the products offered by a company
Difference of product and product item
Product = coke
Product item = Coke in 0,5 bottles
The product item is what you sell and the product is what you market
Stages PLC
-Introduction
-Growth
-Maturity
-Decline
3 main aspects to know about PLC
1) Provides a framework for market analysis
2) It is looked at aggregated data from a whole industry not at a single company (Smartphone not Iphone)
3) It is a function of time and shows the development of a product category
Objective Intro-Phase
-Build awareness
-Trial purchase of customer
Profitability Intro-Phase
-Low sales, typically high failure rate
-High marketing and product costs
Objective Growth-Phase
-differentiate product from competitors
-promote rapid expansion
Profitability Growth phase
-Sales grow at increasing rate
-Profits are healthier as operations are streamlined
Objective maturity phase
-transition product high growth to sales stability
Profitability matrurity-phase
-Sales increase at a decreasing rate
-Cost minimization has reached full extent
Objective Decline-Phase
Determine future of the product
Profatibility Decline-Phase
-Long-run drop in sales
-Profit margins dramatically reduced
Market Segments along the PLC
Nonexistent
-> New segment now established
-> Market approaching saturation
-> Changing tastes and substitute products erode share
Targeted Consumers along the PLC
Innovators and Early Adopters -> Early Adopters to Majority ->Majority -> Laggards
Competetive environment along the PLC
Little competition -> Many competitors -> Marginal competitors drop out -> Falling demand forces many out of market
Competitor reaction along the PLC
Followers release similar products to pioneers ->Large companies acquire small ones -> Models emphasize style over function -> Remaining firms focus on specialty products
Strategy introduction phase regarding product and price
-Product: High-quality, innovative design providing new benefit to consumers. Features well-received and understood by target consumers.
-Price: Price skimming or penetration.
Strategy Introduction phase regarding communication and distribution
-Communications: Inform and educate target audience about the product’s features and benefits. Promotion focused on product awareness and to stimulate primary demand.
-Distribution: Wide distribution network with limited product availability
Strategy growth phase regarding product and price
-Product: More features and better design. Diversification of product and release of complementary products/services.
-Price Penetration: New and improved models sold at high price points.
-Price Skimming: Existing models or earlier generations move down in price.
Strategy Growth phase regarding promotion and distribution
-Promotion: Link the brand with key product features and highlight differentiation between competitors. Promotion emphasizes brand advertising and comparative ads.
-Distribution: Broaden distribution networks to keep up with expanding market demand
Strategy Maturity phase regarding product and price
-Product: Product lines are widened or extended
-Price Penetration: Target high-end market, higher price.
-Price skimming: Lower price due to competitive pressures if product is not well-differentiated
Strategy Maturity phase regarding promotion and distribution
-Promotion: Decide between short-term sales promotion or investing more in the brand.
-Distribution: Has reached maximum distribution
Strategy decline phase regarding product and price
-Product: Consider product expense in terms of ROI.
-Price Penetration: Low price to stimulate demand.
-Price skimming: Pressure from competitors and consumers
Strategy Decline phase regarding promotion and distribution
-Promotion: Cost not justified by conditions.
-Distribution: Reduce channels
Definition tangible product
- Physical products that one can feel, touch and see
- Designed and manufactured from physical materials
Define intangible product
- Not physical products, but people can perceive or easily understand
- Provide buyer with tangible benefits
Define durable product
- Not bought frequently, maybe once/twice a year
- Longer product life cycle
- Higher financial risk, more expensive
Define nondurable product
- Bought frequently
- Short product life cycle (immediate consumption)
- Low financial risk, cheap
