Product management

The product or program policy is to characterize, in conjunction with the other elements of the marketing mix, the goal of meeting the needs and desires of the customers with the products and services of the company, or at least to satisfy. It deals with both real assets (eg physical goods and intangible goods ) and nominal assets (eg money, property ).

Term

Under Product Policy refers to all activities associated with the selection and development of a product or a product bundle and in marketing. Product policy is a major undertaking, if intended to preserve or increase ( primarily by consumers, suppliers and competitors ) of the paragraph in a changing environment.

Instruments of product policy

The product policy is basically divided into the following areas of responsibility:

• Branding (license plate)
• Program and assortment policy ( supplementary services ) Product Innovation ( Innovation Management )
• Product variation and improvement
• Product modification
• Product differentiation ( range expansion )
• Product diversification (eg: if Coca -Cola would suddenly offer chocolate)
• Product elimination ( product is withdrawn from the market if no profit is made )

Besides the need for product innovation and variation is the responsibility of the product policy in the strategic assessment of the investment and the effects on the market as well as in the active change of customer preferences via market communication. Here the cooperation with all areas of marketing and the customer is important as prices, distribution and advertising hand must be planned in hand with the product policy.

After the propensity to innovate the provider can bring various opportunities and risks a pioneer behavior. The levy price strategy, with its risk of so-called sunk costs is due to greater uncertainty about future market developments in this case the behavior of the early imitators opposite, where a lower risk is bought due to error prevention to the detriment of overcoming market barriers.

The so-called modifier, however, has the opportunity to fill a market niche, its risks are low margins and high barriers to entry.

The so-called laggards have the least market risks as well as research and development expenses.

In contrast to the above figure are divided Homburg / Krohmer the areas of Produktpolitk only in the categories of Innovation Management, Management of established products and brand management.

Planning of new products

Any product that is perceived by customers as a novel, is a product innovation. This innovation can be assumed that the customer's requirements ( market pull ) or on a technological development ( technology push ) based. Due to the ever shorter product life cycles, new product development for a company is very important. This is based on the innovation and technology management. The systematic procedure is described in the innovation process.

Under market innovation is understood that an offer is available on the market for the first time. For this was the term coined " absolute innovation ". Business innovation called an offer that is new for the company in question, but not for the market itself. One speaks in this case of "relative innovation ". In product innovation is a marketable product / offer, which is absolutely or relatively new to the market, while a process innovation represents a new method for creating a marketable range, which itself is not marketable.

Relevant for the planning and introduction of new products is the observance of adoption and diffusion processes. They describe the terms and conditions for the successful adoption and diffusion of innovations in the market. Everett Rogers has noted defined target groups: innovators, Fruehauf takers, early majority, late majority and laggards.

Program policy

The totality of all products offered by a company is referred to as product, product portfolio or range. The product can be made with regard to two dimensions. The program width indicates the number of co-existing product lines. The program depth is the number of model variations within individual product lines. Change the customer's needs and / or the products of our competitors, so the product has to be adapted to these. There are four changes are possible:

A special visualization and planning assistance for this purpose is the product life cycle portfolio.

For product policy leeway include:

• Performance core ( eg problem adequacy and efficiency )
• Design
• Packaging (eg, requirements of manufacturers, retailers and consumers)
• Use other influencing factors (eg, warranties, customer service).

Brand policy

Adjacent to the power core and the package and the label is a product element, and has a tag value. The branding has the task ultimately to stylize largely interchangeable products to a single brand and establish a differentiation to its competitors. Brand products give the user safety when shopping because they are no longer anonymous. The essential characteristics and functions of a brand are:

• Communication means of the manufacturer
• Differentiation from competitors
• Preference formation in favor of their offerings
• Guidance in the increasing diversity
• Sense of security when buying
• Recognizability
• Brand loyalty and brand loyalty
• Pricing Power
• Requirement for securing and expanding the market base
• Ability of the target group marketing
• Legal Brand Protection.

Within the brand management, there are numerous areas of decision. A brand strategy can be defined in terms of range, the positioning and architecture. In particular, the architecture has far-reaching consequences and can not be so easily change. Here is to distinguish between a single brand, multi-brand, umbrella brand and family brand strategy. The appearance of the brand should be coordinated necessarily with the other instruments of the marketing mix, so the strategy is perceived by customers as consistent.

Another important decision field is whether a company has a brand extension (also: brand transfer ) to perform or not. Transferred to the search for new opportunities for growth companies often already established brand names to previously offered products. With the consequent transfer of trust fund, you can quickly and with low implementation costs to achieve high market shares ( Berend 2002).

Internal organization

The organizational integration of product policy is different depending on the industry and company size. You can, for example, as a staff, as a line in the matrix organization or in different functional areas such as purchasing, production or marketing.

The operational responsibility for the program and product policy, the marketing department is responsible, but often it is also connected to the distribution. In general, there is a program manager who is responsible for the overall product portfolio management, and several product manager for the care of the individual products or product groups.