 Welcome, learners. I am Dr. Smita Sikha Soutri from Krishna Kanto Handic State Open University. Today, I will discuss Unit 4 of Marketing Management for BBS Second Semester Learners. The name of the unit is the Concept of Product. And this is the first video lecture. Outline of this presentation. In this video lecture, we shall explain the concept of product, its classification, then product planning and development, and then product diversification, simplification, standardization, all those aspects. And like we know that customers' behavior also changes with different types of products. So, consumers are reasonably rational in case of industrial products, but it is not so in case of consumer goods. So, there is difference between the industrial products and consumer products. So, in this video lecture, we will study the reason behind all those things. Generally, we consider product as a set of tangible physical attributes, which are assembled in an identifiable form. So, each product carries a name such as like car, iron, etc. Then in case of marketing, what we say as a product, it is anything which can satisfy need, wants or desire of consumers and can be offered in an exchange process. So, there are different definitions of product has been given. One of these definitions are like a product is a set of tangible and intangible attributes, including packaging, color, price, quality and brand plus the services and reputation of the seller. A product may be a tangible goods or it may be intangible services or it may be any idea. So, WJ Watson's tension has given that definition. Then according to Philip Kotler, a product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or a need. It includes physical objectives, services, person, place, organization and ideas. So, there are different characteristics or we can say attributes of a product. Here we will discuss the essential attributes of the product. First thing is tangibility. To be a product, it should have a tangibility character such as it can be touched, seen, etc. So, when we go to market and when we purchase something, what we do? We touch the product, we check the product, so that thing is considered as tangibility of the product. Then we will come to the intangible characteristics of the product. The product may also be intangible in the form of services. For example, insurance, banking, then hotel service, hospitality service, all these things we cannot touch but we can feel the service. So, that is the intangible characteristics of the product. Then comes the associated attributes. A product may have number of features which differentiate it from the competitors product. Associated attributes usually cover the color, packaging, branding, etc. When we go to market and purchase some product, what we see? We compare the product, particular product with the competitors product. So, if there is any difference and whichever we like, suppose for some product we like the packaging of the product. So, all these characteristics are known as associated attributes. Then comes the exchange value. A product may be tangible or intangible but it must have exchange value. It must be capable of being exchanged between seller and buyer at a mutual agreed price. So, there should be specific price for the specific product. Then comes the consumer satisfaction. A product should have the capacity to satisfy the consumers need and wants. Because if customers are satisfied then only they will go to purchase the product again and again. Now, we will discuss the classification of the products. Products can be classified in different ways. First we will discuss the classification of product based on the users. So, first is your consumer products. Like based on users we can classify the products on consumer products as well as the industrial products. So, again under consumer products we have some subsections. So, what is consumer products? Like when the product is used for the consumption of a person that is known as your consumer products. So, consumer products can be classified as convenience goods. These products or services are purchased with minimum efforts and time consuming as the buyers have sufficient information and knowledge about these types of products. Suppose when we go to purchase bread, butter or newspaper all these things come under convenience goods. That means we already know what we need to buy and we just go and purchase the product. So, consumer products can be classified under convenience product and again convenience product can be classified as one is your staple goods, then emergency goods and then shopping goods. So, next what is your staple convenience goods? These items are purchased routinely with little effort. So, as I have already said bread, butter, fish, vegetable all these things are your staple goods. Then are emergency goods. Emergency goods like goods required meeting the urgent need and so the purchasers do not get time for selection. Suppose you need some repairing of something then suppose it's raining you require the umbrella. So, these kind of products when we purchase this comes under emergency goods. Then impulse goods. Impulse goods are like the consumers is not usually pre-planned or predetermined to purchase such goods. But during the shopping of something then all of a sudden decides to purchase these goods. Suppose you are purchasing something then someone your baby or someone asking for chocolate balloon all these things comes under impulse goods. Then comes the shopping goods. So, shopping goods these goods are consumers durable items and so like the purchaser they are looking for these goods. And then they compare these goods in terms of its suitability, price, style and durability etc. So, when we purchase any expensive goods it comes under the shopping goods. Then are your specialty goods. Specialty goods are a number of buyers is habitually willing to make a special purchasing effort for purchasing specialty products. These products are particular brands stores and persons to which consumers are loyal. So, if you are loyal to something if you are stick on to that particular things so you will go to that particular store only and you will purchase that specific product. Then unsought goods are like the buyers do not know about the existence of the product or they do not want to purchase. It may be regularly unsought products such as service of life insurance company, a layers of service, maybe safety alarm etc. All these comes under your unsought products. Now we will discuss the industrial products. As I have already said like consumer products are for the purpose of consumption of the ultimate customers. But industrial products are like industries they purchase the product for the preparation of the consumer goods. So, industrial products are goods which are used for commercial production or in carrying of some business activities are known as industrial goods. So, it is for commercial use not for personnel use. Different types of industrial goods are your installation of some machineries, then purchase of raw materials, purchase of fabricated materials and then parts of different machineries. Then operation supplies, accessory equipments, different kinds of accessory equipments which they might need to carry from one place to the place of the production. So, all these things comes under your industrial products. So, next we will discuss the products based on its durability. Products can be classified under three categories based on its durability. One is your perishable products, then non-durable products and durable products. Parishable products, these are the products which have very short life and cannot be stored for a long time. Suppose all these food items, vegetables, fish, then flowers, newspaper, all these has a very shorter lifespan. So, it is called as perishable products. Then what is non-durable products? When the consumer starts consuming or using the products, the product lasts for a few uses and get depleted on consumption are non-durable products. Suppose all fast-moving consumer goods like toothpaste, soap, powder, all these things it is considered as non-durable products because it gets over very quickly and maybe within a month and then again we require to repurchase it. Then comes the durable products. These products which have long life and consumers may use it for several years. Generally durable products last for around five years. So, for example, TV, refrigerator, furniture, all these things comes under our durable products. Then we will go to the product classification based on its tangibility. So, here we can categorize it into two groups. One is your tangible product and another one is your intangible product. Tangible products are like which we can see, which we can touch and intangible products are all kinds of services, ideas, etc. Now we will go to the product planning and development. What is product planning? Product planning is the act of marketing and commercialization of new products and modification of the existing products and discontinuance of the marginal or unprofitable items. So, when we plan for a product, what we see? Suppose there is a chance of getting market in the new product. So, we will innovate some product, we will develop some product. Then suppose the product is getting matured, then we will do some kind of modification on that product. And if the product becomes obsolete, then what we will do? We will just discontinue with that product and we will start with some other new products. So, main components of product planning includes product development, then product diversification, product standardization and product simplification. So, few of these aspects we will discuss in our second video lecture and some of that we will discuss here only. So, first we will go to the stages of new product development. How a new product can be developed in a market? So, first we should know what is product development? Product development is the introduction of new products in the existing product line or introduction of an entirely new product line. A product is said to be new when the consumers consider it a new. So, usually in marketing a new product means, firstly, an entirely new product or service. That means a genuine innovation in the product category. Then secondly, slight modification and adding new features in the existing product and thirdly, an existing product if introduced in the new market. So, the consumers of new market may consider the whole product as new product in their geographical area. Suppose some products get obsolete in the developed country, then what they do? They will sell it in the developing countries and for the developing countries it is considered as the new product. Now, we will go to the stages of new product development. The first stage of new product development is the idea generation. New products are produced on the basis of new ideas. Ideas may be generated from various sources like customers, dealers, distributors, salesman, top sales executives. So, they might give different kinds of ideas. So, research and development, all these organizations everywhere can get the new ideas for the development of the product. The first step is to collect the ideas and then secondly, in the second stage, what we do? We do screening of this idea. All the new ideas cannot be converted into products as it requires heavy capital investment. So, those ideas which should be screened and all unworkable ideas should be dropped. Only most viable, feasible and promising ideas should be selected for further processing. Then in the third stage, what we do? We do the business analysis. During this stage, an attempt is made to predict the economic consequences of the product for the company. In this stage, the management should perform the following. First, they will identify the product features. Then they will estimate market demand and product profitability. Then establish a program to develop the product. Then assign responsibility for further study of the product feasibility. And then they will develop marketing strategies for this particular product. So, after doing this, in the fourth stage, what the marketers will do? They will develop, actually develop the product and the prototype testing. So, this step consists of, first one is prototype development, giving visual image of the product. That means how the product will look like, what will be the packaging of the product, all those things. And then consumer testing of the model or prototype of the product. Then branding, packaging, labeling, all the accessories, whichever is required for the product. Then they will design in the product development stage. So, once your product is, suppose, already as a sample, then what they will do? In the fifth stage, they will go for market testing. So, test marketing is the stage at which the product and marketing programs are introduced into more realistic market settings. The basic purpose here is to evaluate the product performance and marketing program in a real setting prior to the commercialization. So, before opening it for all the public, what they do in the market testing stage? They will just introduce the product in a small segment of market and they will see the feedback. Whether product is accepted by the customers, whether the product has got some drawbacks, all that they will analyze. And then if the product requires any kind of modification at this stage, they will withdraw the product from the market and then they will do the necessary modification. But if it passes all these market testing, then the company will go for the final stage, that is the commercialization of the product. So, the sixth stage is the commercialization of the product. After favorable response in test marketing, full-scale production and marketing program are planned and then the product is launched in the market. So, it may be in a phased manner, the product may be launched, suppose, in a small area, then gradually it may cover up all the targeted areas. Or at a time also, the company can commercialize their product in the whole market. And after commercializing the products, the company gets the feedback from the customers. So, this is your new product development stages. Hope you have understood till this much. Now, we will just sum up whatever we have discussed in this video lecture. So, in this video lecture, first we have discussed about the product, its importance. Like a product is a sum of physical and psychological satisfaction which a buyer expects. It is anything that can be offered to a market and which has satisfying capacity of needs, wants and desires of purchaser. A product may be tangible, it may be intangible, or it may be services. Or it may be the combination of both tangible and intangible features. The product can be classified into different groups based on certain common characteristics such as based on use, durability and tangibility. We can categorize it differently. These classifications are essential to prepare and implement appropriate marketing strategy. The product planning means an attempt to establish the product in line with the market needs. Product planning covers all activities which enable producers and middlemen to determine what should constitute a company's line of products. And at the end of this video lecture, we have discussed the stages of new product development, how new product can be developed. Hope you have understood this video lecture. I will see you again with another video lecture. Thank you.