Product Strategy & Lifecycle Flashcards
3 LEVELS OF A PRODUCT
- Core Product
- Actual Product
- Augmented Product
CORE PRODUCT
Core need that the product intends to satisfy and that defines the category.
ACTUAL PRODUCT
Overall product design and product features (shape, taste, size, ingredients, name, brand, color, etc.)
AUGMENTED PRODUCT
Set of benefits, with no actual product modifications, increase the offering to consumers (donating % to charity, free replacements, free trial period, etc.)
4 ISSUES TO ADDRESS WHEN DEVELOPING PRODUCT POLICY
- Product Mix Breadth
- Product Line Depth
- Product Item Design
- Product Lifecycle
PRODUCT MIX BREADTH
The variety and number of product or service lines offered.
PRODUCT LINE DEPTH
Refers to the number of products offered under a product line.
PRODUCT ITEM DESIGN
Process of imagining, creating, and iterating products that solve users’ problems or address specific needs in a given market. (Product’s specifications)
PRODUCT LINE CONSIDERATIONS?
- Customer heterogeneity
- Competitive Impact
- Legitimization
- Brand Equity
- Cost of variety vs scale opp.
- Collaborator reaction
PRODUCT/MARKET
EXPANSION GRID
Identifies company growth opportunities.
- Products: Existing/New
- Markets: Existing/New
MARKET PENETRATION STRATEGY
When a company works towards a higher market share by tapping into existing products in existing markets.
MARKET DEVELOPMENT STRATEGY
Business growth strategy that focuses on introducing existing products into new markets.
PRODUCT DEVELOPMENT STRATEGY
Enables product organizations to create a stream of innovative offerings that disrupt the competition and delight customers of existing markets.
DIVERSIFICATION STRATEGY
Business development strategy in which a company develops new products and services, and/or enters new market, beyond its existing ones.
TYPES OF NEW PRODUCTS
- New product based on existing product.
- Company entry into a product category that already exists.
- Addition to existing product line.
NEW PRODUCT SPECTRUM
- Incremental Improvements of existing product.
- Expansion of existing product line.
- New product to firm but not to the world.
- New to the world/radical innovation.
RADICAL INNOVATION
Strong impact on two dimensions:
- Market (destroys existing organizational competencies)
- Company (enhances existing organizational competencies)
THE BCG MATRIX
Analysis of market growth rate (cash usage) vs relative market share (cash generation). Designed to help a business consider growth opportunities in investing, discontinuing, or developing products.
MARKET GROWTH RATE
Provides a measure of market attractiveness; high/low cash usage.
RELATIVE MARKET SHARE
Measure (ratio) of company strength in the market with respect to its main competitor(s); high/low cash generation.
(High when ratio > 1)
STARS
BCG MATRIX
High-growth businesses, high-share products. Heavy investments needed to finance rapid growth, eventually turning into cash cows when growth slows.
CASH COWS
BCG MATRIX
Low-growth businesses, high-share products. Need less investment to hold their market share. Produce cash.
QUESTION MARKS
BCG MATRIX
High-growth businesses, low-share products. Require a lot of cash to hold their share.
DOGS
BCG MATRIX
Low-growth businesses, low-share products. May generate enough cash to support themselves but not large sources of cash.
