Product Management: Key Concepts and Differentiation

Posted on Jan 7, 2025 in Business Administration and Management (BAM)

Product Management – Lecture 2

What is a Product?

  • A product is something that can be offered to a market to satisfy a need or desire.
  • It can be a concrete object or an abstract concept that meets the needs and desires of consumers. Consumers are looking for objects, services, or ideas that enable them to live a satisfying experience or solve a problem.
  • Consumers do not buy the products themselves, but the benefits they provide.
  • Products can be tangible goods or services.
  • Variables that make up a product:
    • Brand
    • Design
    • Packaging
    • Odor, color, flavor
    • Shape, size
    • Quality
    • Services

Classification of Consumer Goods

  • Durability x Tangibility
    • Non-durable goods: Food, beverages
    • Durable goods: Appliances, furniture, clothes
    • Services
  • Consumer Goods
    • Convenience goods: Cigarettes, newspapers, snacks
    • Compared to purchase goods: Used cars, clothing
    • Specialty goods: Luxury goods, cars, suits
    • Unsought goods: Life insurance, encyclopedias, cemetery lots
  • Industrial Goods
    • Materials and components: Raw materials (agricultural, natural) and manufactured materials and component parts. These enter the process of implementing production.
    • Capital goods: Installations (buildings and heavy equipment) and equipment (machines and portable equipment factory). These are long-lasting goods that facilitate the development and management of the finished product.
    • Supplies and services: Fuel, operating supplies (paper, pen), maintenance and repair (cleaning, wall paint), business consulting (legal). These are goods that facilitate short-term development and management of the finished product.

Product Mix

  • Product Mix (product portfolio) is the set of all products and items that a seller puts up for sale to buyers.
  • Scope: Product line, number of different lines.
  • Extension: How many brands on each line.
  • Depth: How many items in each row.
  • Consistency: Assessment of the family’s need and product family.

Product Differentiation

  • Differentiation is the act of developing a set of meaningful differences to distinguish the company’s offer from the competition’s.
  • Form: Size, shape, or physical structure.
  • Feature
  • Performance: Quality – low, medium, high, and higher.
  • Conformity: Ferrari
  • Durability: Measuring the operational life.
  • Reliability: Probability of not breaking or malfunctioning.
  • Ease of repair
  • Style
  • Design
  • Differentiation as brand identity.
  • Tangible products have easier differentiation.
    • Low differentiation: Chicken, rice
    • High differentiation: Car
  • When a product is not easily differentiated, there is a need to differentiate the services involved in delivering them.
    • Request
    • Delivery
    • Installation
    • Customer training
    • Customer orientation
    • Maintenance and repair
    • Various services
  • Differentiation through people
  • Well-trained people exhibit six features:
    • Competence
    • Courtesy
    • Credibility
    • Reliability
    • Responsibility
    • Communication
  • Differentiation through channel: By the way it develops its distribution channels, primarily in terms of coverage, experience, and performance.
  • Differentiation through image: Image is the way the public perceives the company or its products.
  • Image provides:
    • Message establishing a unique position, characteristics, and value.
    • Distinctive message reaches hearts and minds of consumers.
  • Symbol: Logos, objects, characters, colors, music.
  • Written and audiovisual media: The symbols must be worked on ads that advertise the brand personality.
  • Atmosphere: Internal design, layout, colors, materials, furniture.
  • Event: Building an image through the type of event that it decides to sponsor.