Types of Product and Managing Products

Managing Products

·         The product lifecycle.

·         Analysis of product portfolios.

·         Branding.

·         New product development.

Types of Product

	Convenience	Shopping	Speciality
Example	Chewing Gum	TV	Sports Car
Distribution (Place)	Very Wide	Wide	Limited
Price	The price isn’t really that important as it is normally relatively low	The price is important as customers shop around and compare different products	The price isn’t very significant, as it is a special purchase.
Product	There is some brand loyalty.	There is some brand loyalty, but there is also comparison between brands	There is strong brand awareness
Promotion	They aim the product at large numbers of customers, they aim to draw them into the store and use in store promotions to attract impulse buys	Will raise brand awareness	The products are very targeted (e.g. people of different wealth)
Process	They are often impulse buys	They may have payment and credit terms	May want payment terms
Physical Environment	It is not very significant	It is relatively significant	It is very significant
People	There is limited importance	Important as customers want staff to know about strengths of brands and the particular model product that they are buying	Very important as staff in store reflect on the brand a lot

Analysis of the Marketing Mix

Analysis of new product development decisions

May be required because…

• ·         An existing product is coming to the end of its product lifestyle.
• ·         There are new opportunities opening up due to changes happening in the market.
• ·         The business has a desire to build on the strengths of the brand.
• ·         It is a way of achieving growth.
• ·         To allow them to match what their competitors are doing.

Pricing decisions

• ·         Costs.
• ·         Positioning of the product.
• ·         The stage of the products lifecycle.
• ·         Price elasticity of demand.
• ·         The competitiveness of the market.
• ·         Other elements of the marketing mix.

Promotion decisions

• ·         The target market.
• ·         The message the business is trying to bring across.
• ·         The promotion budget.
• ·         The positioning of the business or the product.
• ·         The competitive environment.

Branding decisions

• ·         The brand represents a promise made by the business.
• ·         As customers, we recogniser brands and associate the brands with particular values.
• ·         The brand’s logo, slogan and anything else that makes it different from competitors recognised.

Distribution decisions

• ·         The degree of coverage (locally, globally and nationally).
• ·         Costs of different distribution strategies.
• ·         The target market.
• ·         Positioning
• ·         Competitors.

The Boston Matrix

The Boston Matrix is used to analyse product portfolios. Each product can be put in an area based on Market Share and Market Growth.

Operations Management

Four common functional areas

•      Marketing

•      Operations

•      Finance

•      HR (Human Resources)

Operations Management

•      This describes the activities, decisions and responsibilities of managing production and delivery of products and services.

What do operations managers/management do?

•      Manage the conversion of inputs into outputs (raw materials, capital, labour into the final product or service).

•      Good vs Service

•      Good = physical

•      Services = Not physical

What decisions might operations management make or take?

•      The level of output (capacity/scale).

•      Range of products/Levels of customer service/How many different versions/The degree of choice for the customer.

•      How best to provide the good or service (online, high street, both).

•      How much of the process should be managed through other providers (outsourcing) (supply chain) (upstream vs downstream).

The Marketing Mix

A combination of marketing decisions that influence the customer’s decision to buy a product.

Price

•      What is charged for different versions of the product, as well as payment terms.

Product

•      Physical features. What does it look like? What does it do? What guarantee or after sales service is provided.

Promotion

•      The way in which the business communicates about the product.

•      Includes the following:

•      Advertising

•      Sponsorship deals

•      Offers

•      Promotions

Place

•      Distribution channels. Where can the product be purchased?

People

•      All of the people (staff) involved in the transaction.

•      Examples include...

•      The person who answers the phone

•      The cashier

•      Their skills and attitude will affect the customer’s perception of the product and the business.

Process

•      What the customer actually has to do to purchase the product.

•      Examples include...

•      Using a credit or debit card

•      Using a mobile phone to book something

•      Going into a shop and handing money over to buy a product

•      Buying online

Physical Environment

•      The premises or area surrounding the product.

•      Includes things such as….

•      Cleanliness

•      Layout

•      Quality of furnishings

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