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Product strategy
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Product strategy
International product life cycle
Standartization and Adaptation
What will we learn?
Product concepts and classification
Quality, Packaging and labelling
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Levels of a product
Core benefit (basic benefit) — this is the basic, fundamental value or need satisfaction that the consumer actually obtains when buying the product.�Example: a phone → the ability to communicate.
Actual product — this is the set of the product’s physical and functional characteristics that the consumer can see, use, and evaluate. It includes design, quality, features, and packaging.�Example: a phone → camera quality, screen size, memory capacity.
Augmented product (extended product) — these are additional services and features that go beyond the core benefit and the actual product, providing extra value to the consumer: warranty, delivery, service, and additional services.�Example: a phone → 1-year warranty, service centers, iCloud service, technical support.
Product Line
Example (Samsung): separate lines within the Mobile Communications line:�Galaxy S serie�Galaxy A series�Galaxy M series
A product line is a group of products that satisfy the same need, have similar functional features, are targeted at a similar consumer segment, and are sold within a similar price range.
Product Mix
(Nestlé product mix):�Chocolate�Coffee�Dairy products�Baby food
A product mix is the set of all product lines and their variants that a company produces or sells.
Four dimensions of the product mix
Width
Length
Depth
Consistency
Product strategies
Line extension
Line extension is a strategy in which a company introduces a new variant within an existing product line (a new size, color, design, taste, model, price level, or functional feature).
Through this strategy, the company:
Product Mix Expansion
Product mix expansion is a strategy in which a company adds a new product line to its existing product portfolio.
It produced automobiles, then added new product lines such as energy batteries (Powerwall) and solar panels.
Why do companies pursue mix expansion?
Modification strategy
The following can be changed:
Product quality
Design
Function
Technical specifications
Packaging style is changed, but the main product itself is preserved.
Product pruning (product line reduction)
This is a strategy in which a company removes from its product portfolio those products that do not generate profit, have low demand, or are not strategically suitable.
Innovation product strategy
This is a strategy of entering the market and gaining a competitive advantage by creating a new product that is not available in the market, or that differs fundamentally from existing products.
It creates a completely new category:
The first iPhone (the touchscreen smartphone revolution)
Tesla electric car
Dyson bladeless fan
Disadvantages:
Requires very large investment
The market may not accept it
High level of risk