Product Strategy : Food - Product Management And New Product Development Flashcards
What is a Product?
Product is a good or service offered to the market for exchange.
–Tangible that you can touch, taste and smell & Intangible that is something you experience
Consumer products are intended for personal consumption by households or individuals. Business products are intended for resale, for use in producing other products or for providing services in a customer organisation
What is a Food Product?
• Food is a material eventually consumed by humans to satisfy physiological and psychological needs, designed for sale to public.
• Consumer food products are a complex mix of tangible and intangible attributes (brand, packaging, colour, aroma, price, manufacturer & retailers’ services),
buyer may accept as satisfying wants or needs.
What is a Consumer Food Product?
• Consumer Food Product - benefits recognised by consumer & characteristics to identify the product.
• Product profile - identify product characteristics Compared to:
- competing products and
- consumers’ ideal product profile
• Identification of product characteristics, building of product profiles and product concept is a fundamental part of product
improvement and development of new products.
What is a Product Description?
• Core benefit – motivation for purchase and
consumption (Maslow’s Hierarchy)
• Physical product – tangible attributes provided of value to consumer or customer
• Intangible product – intangible services and assurances provided of value to consumer, customer or society
• Augmented product – special attributes or services provided to special or strategically important consumers or customers
What services a Product?
- Intangible – cannot see what you will get
- Inseparable – service tied to service provider
- Heterogeneous (variable) – depends on provider, user & environment
- Perishable – cannot be stored
What is Product Mix?
• Product mix is a list of all product lines offered for sale
by a company e.g. Heinz Australia , Goodman Fielder or Coca-Cola Amatil
What is a Product Line or Category?
• Product line or category is a group of products that are
closely related e.g. Heinz Sauces &
Dressings, Goodman Fielder’s bread or Coca-Cola Amatil Non-alcoholic sparkling Beverages
Perishability – fresh, chilled, frozen, dry goods
Product Differentiation?
• “Differentiation” is a major source of competitive advantage.
• Creation of product attributes that distinguish one product from another
(also exists within an organisation’s product mix).
• Any change in the product, however minor, or a new innovation creates in effect a ‘new’ product.
• If consumer recognizes a difference, then it is a new or differentiated product to them.
Why Differentiation?
- Create a unique value offering to customer / consumer - influence how product is positioned.
- Positioning - developing image product projects in relation to competitive products and to firms own products.
Why Branding?
• Brand - collection of symbols e.g. name, logo,
slogan and design
- create an image for consumer to differentiates one
product, line, manufacturer or retailer from another e.g. manufacturer vs. retailer brands
•Speed up purchase decision by identifying specific preferred products, key ingredients, manufacturer or retailer
•Form of self expression, status and denotes product quality
• Brand image - set of consumer beliefs about a brand (leads to brand loyalty)
•Ideally name translates well and is understood quickly
What does Packaging & Labelling mean?
• Packaging is another important marketing tool to differentiate the product.
• It serves as a silent sales person & helps persuade the consumer to buy the product
• Provides convenience of use and protects that product before & after use.
• Labelling forms part of the package and provides information
about the product and the seller. Info carried on labelling: • brand name & logo
• product name
• size of packaging
• statement of quantity
• origin of goods
• name & address of packer or manufacturer • nutritional information
• ingredients list
• use-by date or date of packaging
• bar code
What is a Product Life Cycle?
- The concept of product life cycle refers to the relationship between the time a product has been present in the market and its sales growth/revenue generated.
- As a product moves through the different stages of the product life cycle, the marketing mix will need to be adjusted to take into account the changing marketing conditions.
What is the length of a Product Life Cycle?
• Product life cycle varies in length from three months for a special summer ice cream to over 100 years for Kellogg’s Corn Flakes or Coca-Cola but the average product life has shortened over the years.
• The length of maturity and decline depends on continuing need for the product and lack of competition from improved products.
• Product life cycle varies with
the type of the product,
the effectiveness of the marketing activity,
the effect of the competitors in the market, economic conditions and technological developments & company policy
What are the Product Lifecycle phases?
- Introduction phase
- Growth phase
- Mature phase
- Decline phase
What is the Introduction phase?
- Introduction phase: Product launched into the market
o Market development strategy with most likely high price, scattered distribution and extensive promotions for awareness
o Newcustomersandlittlecompetitionifany
o Lowsalesandnoprofits(highrisk&highfailurerate)
