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Anna Dudel

on 16 November 2014

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What is a product strategy?
Lisa, Katja, Miglė & Anna
Product Strategy
What is a product?
Anything that can be offered to market for attention, acquisition, use or consumption that might satisfy a want or need.

Activities, benefits or satisfaction offered for sale that are essentially intangible and not result in the ownership of anything

What is a service?

A plan for marketing a good that is founded upon an analysis of the nature of the intended market,
how much market share is to be achieved,
how the good is to be marketed and
how much profit is anticipated.

4 questions you should answer before you introduce a product to the market:
What is the target group of the product?
'Customers are really buying much more than just products and services.
They are buying what those offers will do for them!'
...short conclusion:
4 questions you should answer before you introduce a product to the market:
What is the benefit to the customer ?
4 questions you should answer before you introduce a product to the market:
4 questions you should answer before you introduce a product to the market:
Compared to competing products:
whats the differential advantage of your product?
How does the firm plan to position
the product within the market?
More detailed information for you (I):
Products can be: Physical objects, services, persons, places, organisations, ideas, mix of them.
Product Decisions
Product Life Cycle
Time for a short quiz...
Now that you know more about product strategy -
what do you think about this?
members of the 'Apple tribe'
Lenght of the PLC depends on:
- type of product
- levels of competition
- marketing support
- consumer tastes
What to do if sales start to fall?
- withdraw product
- wait for competitors to withdraw product
- use extension strategies
lower prices
sales promotions
make customer buy your prodcut more often
target new market segment

"Product strategy" deals with how the product is
produced, designed, distributed, promoted and innovated over time.
Examples for services: banking, hotel, hairdressing, airline, retail, tax-preparation, home repair service.
4 phases of the product life cycle:
Introduction: new product, only freaks buy it then
Growth: getting more famous
Maturity: everyone has one
Decline: the following model might be on the market already
Philip Kotler, Gary Armstrong, Veronica Wong, John Saunders. “Principles of Marketing” (15th edition)
Claudio Giachetti & Gianluca Marchi. (2010). Evolution of firms' product strategy over the life cycle of technology-based industries: A case study of the global mobile phone industry, 1980–2009. Business History, pp. 1123-1150.
Why do products fail?

overestimated market size
poor design
technological drawbacks
'me too' product
product incorrectly positioned in the market
product launched at the wrong time
overpriced product
advertised and promoted badly
Product Design
Product Quality
Sony's Quality Hotline:
product quality-related information
opinions from employees
hotline proposes measures to prevent previous problems
'Sony is wholeheartedly committed to improving product and service quality from the customer's perspective with the aim of maintaining and enhancing customers' satisfaction, reliability and trust.'
Product Features
'Why features tell, but benefits sell'
Product Branding
Product Decisions:
When a company places a new product into a market, there are several decisions to consider. These following decisions are closely connected to each other. If a company considers all these aspects and creates a respective concept, it will achieve success.
1. Product Design
Does the company focus on the design? (selling point)
Extraordinary design grabs costumers attention
What imagination will the design create for the costumer? What comes to their mind, when they see the product the first time?
2. Product Quality
Quality is closely linked with the design and also with pricing strategy
The balance between a high quality product and an affordable price would be preferable but quality always has it’s price
There are different ways to improve and maintain quality: EXAMPLE “Sony’s Quality Hotline”

More detailed information for you (II):
4 questions
levels of product
product decisions
product life cycle
reasons for product failures
summarizing basics about product strategies
last but not least: quiz & video
3. Product Features
Characteristic that your product or service has or does (color, weight, special functions…)
They show the advantages, but don’t tell the costumer why it is important or helpful for them
The benefit sells the product (benefit= value or usefulness of a product)
Benefits show how the features will solve the costumer’s problem: EXAMPLE “digital camera” (features: focus on technical facts, 10 megapixel, professional pictures // benefit: good pictures capture the memories in a better way, so memories last longer)
4. Product Branding
Brands have the power to convey a message of confidence, quality and reliability to their target market, also effect instant sales
Costumers prefer brands which are unique and have a consolidated quality -> building and maintaining costumer’s trust

When an organisation introduces a product into a market they must ask themselves a number of questions:
What is the target group of the product
What is the benefit to the customer
How does the firm plan to position the product within the market?
Compared to competing products: what is the differential advantage of your product?

Product Strategy

analyze market first

be aware of the three levels of a product
(core, actual, augmented)

make product decisions
(design, quality, features, branding)

adapt to the different stages of the PLC
(introduction, growth, maturity, decline)
Question 1
Which of the following is NOT a stage in the product life cycle?

Question 4
What is one of the questions you should ask yourself before you introduce your product to the market?
What is the benefit to the customer?
What is the benefit to the company?
Question 2
Connect the right pairs:
Question 3
core product
augmented product
actual product
benefit of the product
physical product
non-physical part of the product
Making product decisions is only about design and quality!
Making product decisions also includes thinking about branding and product features!
Levels of Product
Level 1: Core Product
benefit of the product
Level 2: Actual Product
physical product
5 main characteristics
Level 3: Augmented Product
non-physical part of the product
consists of added value
Levels of Product:
Level 1: Core Product
It is the benefit of the product that makes it valuable to you and addresses the question: What is the buyer really buying?

Level 2: Actual Product
It is the tangible, physical product.
The strategy at this level is to create differential advantage over your competitors.
5 main characteristics: a quality level, product/service features, styling, a brand name and packaging.

Level 3: Augmented Product
It is the non-physical part of the product.
It usually consists of lots of added value, for which you may or may not pay a premium (after sales service, warranties, delivery and so on)
More detailed information for you (III):
To differentiate your product from others,
you need to add experience!
new level of technology,
new level of design,
social status...
THE new Apple device
compared to other Iphones:
bigger, thinner, more energy efficient...
World of Experience
in Munich
MILKA World in Munich
M&M's World
Full transcript