PRODUCT MANAGEMENT
© 2004 Mark H. Hansen
Product Management
Dimensions of a Product:
• Core Product
• Tangible Product
• Augmented Product
• Promised Product
© 2004 Mark H. Hansen
2
Product Management
Core Product:
• what the consumer really wants
from the product
• buys bran cereal for family…
…wants healthy family
• it’s not the product itself, it’s what the
product can bring about
© 2004 Mark H. Hansen
3
Product Management
Tangible Product:
• the product itself
• appearance
• quality
• functionality
© 2004 Mark H. Hansen
4
Product Management
Augmented Product:
• the product plus accompanying services
• service/maintenance
• buying environment
• warranties & return policies
© 2004 Mark H. Hansen
5
Product Management
Promised Product:
• status the product will bestow
• dependability
• trade-in value
• any aspect of the product that helps
bring about the core product
© 2004 Mark H. Hansen
6
Product Management
Product dimensions vary from consumer
to consumer
• core and promised dimensions may be
very individual in nature
• different people buy the same
product for different reasons
• marketers need to understand
consumer behavior
© 2004 Mark H. Hansen
7
Product Management
Product Classifications
• convenience goods
• shopping goods
• specialty goods
© 2004 Mark H. Hansen
8
Product Management
Goods Products and Services Products
• goods are tangible, traditional products
• services are intangible
• simultaneous production & consumption
• difficult to evaluate
• relationships matter more
© 2004 Mark H. Hansen
9
Product Management
Product Strategy Formulation
Product Objectives
• Why have this product?
• growth
• using excess capacity
• market share
• target new segments
© 2004 Mark H. Hansen
10
Product Management
Product Strategy Formulation
Product Plan
Product Lifecycle - Five Stages
1 – Product Development
2 - Introduction
3 - Growth
4 - Maturity
5 – Decline
© 2004 Mark H. Hansen
11
Product Management
Product Strategy Formulation
Product Strategies
Approaches to the Market
• product differentiation
- customers see a difference
• market extension
- new uses for the product – Scotch tape
• market segmentation
- develop new products for new segments
© 2004 Mark H. Hansen
12
Product Management
Product Strategy Formulation
Key
•
•
•
•
•
•
•
Management Decisions
product features
packaging
branding
related services
product mix
product line decisions
product deletion
© 2004 Mark H. Hansen
13
Product Management
“New” Products
How new is new?
• FTC – functionally significant or
substantial respect
© 2004 Mark H. Hansen
14
Product Management
“New” Products
Where do they come from?
Internal Sources:
• basic research
• applied research
• development
© 2004 Mark H. Hansen
15
Product Management
“New” Products
External Sources
• mergers & acquisitions
• licenses & patents
• joint ventures
© 2004 Mark H. Hansen
16
Product Management
New Product Development Process
• many, if not most, new products fail – Why?
8 Step Process
1 – generating new ideas
2 – screening new ideas
3 – business analysis
© 2004 Mark H. Hansen
17
Product Management
New Product Development Process
4 – technical and marketing development
5 – manufacturing planning
6 – marketing planning
7 – test marketing
product testing v. test marketing
8 - commercialization
© 2004 Mark H. Hansen
18
Product Management
Summary…
• successful product management depends
on understanding consumer behavior
• the “product” is multifaceted, much more
than the physical product itself
• managing the ‘stable’ of products is no
simple task
© 2004 Mark H. Hansen
19