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Development of new products and product policies. Development of product policy. Stages of developing a product policy plan for an enterprise

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G.L. Bagiev, V.N. Naumov
Book table of contents

2.5. Product policy development

The product policy of an enterprise is determined based on the technological capabilities of production, the opinions of buyers about the expected benefits of a given product, and the availability of similar products on the market.
When forming a program for introducing a product to the market, it is necessary to make the following decisions:
- develop a multi-attribute product model;
- determine an approach to the formation of a product’s image, primarily in terms of “price-quality”;
- determine the planned relative usefulness of the product in comparison with analogues or substitutes;
- assess the life phase of the product in relation to other technologies;
- formulate an assortment policy, as well as the degree of product differentiation;
- develop a brand policy;
- position the product or brand.
Let us reveal in more detail the content of decisions in the field of product policy
Development of a multi-attribute product model
Attribute- a property of a product that is a certain benefit, usefulness in the eyes of a certain category (segment) of consumers or buyers.
A product model is developed after a thorough analysis of the advantages and disadvantages that it has in the eyes of potential consumers and buyers. For example, Table 2.6 shows how the consumer market (public) and the professional market (retail) value frozen vegetables. After this, the core of the product, basic benefits and supporting benefits are formed for each target group of buyers and consumers.
Formation of product image
The image of a product is an important attribute that must be planned simultaneously with the development of a marketing concept and taken into account when positioning the product. Most often, when developing a product image, the position of the product in relation to competitors in the “price-quality” coordinate system is established. Of course, the concept of image is broader than positioning in “price-quality” coordinates, therefore, when developing reinforcement for the core of the product, it is necessary to formulate other requirements that correspond to the desired image of the product.

Table 2.6. Rating of product "Frozen vegetables"

Consumer market (population)		Professional market (intermediaries)

beneficial properties are preserved	limited refrigerator freezer compartment	no losses (losses) from waste and natural loss	low storage temperature required (- 12 -18 C)
saving cooking time	problems in the summer - you need to buy only on the way to the house	less storage capacity cleanliness of workplaces is maintained	requires special equipment for storage and sale
aesthetics, frequency		wide range
ease of preparation	relatively expensive	(various mixtures can be made), satisfying different tastes of customers	expensive compared to fresh vegetables
economically cleaner product	no cooking skills	can be sold in season when fresh vegetables are not available	hard to buy in small towns
stable control
controlled quality			support
consumption all year round		delivery quality guarantee	when you turn off the refrigerator it may deteriorate
you can buy your favorite vegetable mixture without additional preparation		can be stored with other products
modern style of eating: this is considered all over the world		expanding market

Planning the relative utility of a product
Relative utility is the extent to which the product in question is superior in its attributes to competitors' products. If previously only a competition analysis was carried out in order to identify the main competitor and develop competitive advantages, now it is necessary to rank the most important attributes and quantitatively correlate them with the product offered by the competitor. Essentially, the overall utility of a product determines its competitiveness.
Product life phase assessment
Knowledge of the life phase of a product is necessary to resolve the issue of the product’s prospects in relation to competing products, forecast sales volumes, and select the most effective marketing tools. The stages of product life are described in detail in the literature [11, 17].
The most problematic issue remains the choice of criteria for assessing the life phase of a product. Thus, the sales volume of a given product, as the most common criterion, can be misleading, since trends in sales volumes are often caused by the conditions of a particular market. Therefore, sometimes the life phase of a product for a market of interest is assessed, for example, through indicators of public awareness of the product, their attitude towards the product, etc.
For some products, it is advisable to assess the life phase by comparing the level of technology. Analysis of the perfection of technologies and the benefits they provide to consumers allows us to predict the phase of a product’s life.
Assortment policy
The enterprise's policy regarding the range (nomenclature) of manufactured products should be based on the following considerations:
- technological capabilities of the enterprise;
- market needs for assortment or product differentiation;
- problems in positioning;
- the need to gain a competitive advantage;
- the need to release leading products, bait products, complementary products;
- achieving turnover that ensures break-even activity of the enterprise.
More details about decisions in the field of assortment policy of enterprises can be found in the literature.
Brand policy
Product (trade) brand- any graphic image that allows you to distinguish the goods of a particular enterprise from the goods of other enterprises.
Trademark- a brand or part thereof that is legally protected, i.e. entered in the trademark register of the country where the product with this trademark is sold. In Russia, trademark registration is handled by the Patent Office (Moscow).
A registered trademark is accompanied by the symbol O, and those that have not yet been submitted for registration are accompanied by the symbol O.
In general, decisions in the field of brand policy can be as follows:
- use for a product of its generic product (for example, frozen vegetables);
- use of a single trademark for all goods (monomark policy: Kodak, Bosch, etc.)
- use of a multi-brand policy (washing powders from Procter and Gamble: Ariel, Tide, etc.).
Brand names must perform memory functions, sales functions, image formation functions, positioning functions, and advertising functions.
Product packaging
Product packaging solves three problems:
1) prevents damage to goods during transportation (transport packaging), storage and packaging into parts convenient for the buyer;
2) helps the buyer obtain information about the product;
3) serves as an advertisement for a product and a company.
For example, food packaging must contain the following mandatory information:
- trademark;
- product name;
- weight (net);
- ingredients in quantity;
- calorie content;
- storage conditions;
- release date with shelf life or maximum use date;
- full name of the manufacturer, its address and telephone number;
- barcode (or country of origin).
In addition to the required information, it is recommended to place on the packaging:
- cooking methods;
- recipes;
- slogan (slogan);
- signs indicating environmental friendliness, naturalness of the starting components, dietary properties, etc.
The packaging being developed must be different from the packaging of competitors.

2.6. Development of pricing policy
"Price is the lifeblood of marketing" F. Kotler
The formation of prices for products brought to the market occurs simultaneously in several parallel ways, so that at a later moment a final decision can be made on the price for a specific product.
A diagram of the phased development of a pricing policy is presented in Fig. 2.8.

Fig.2.8. The sequence of developing a pricing policy when introducing a product to the market.

Formation of pricing policy goals
By setting the price of a product, an enterprise can achieve the following goals:
- capture the intended market share;
- increase demand for products;
- maximize current profit;
- maximize turnover;
- establish price barriers for new competitors
When realizing your goals, you must carefully weigh the capabilities of your enterprise in relation to the strength of competitors, as well as the size of potential demand in each market segment. If there is no potential demand, then the only method of gaining market share is to displace a competitor. The main weapon in this case is low prices in relation to the prices of competitors. In price competition, the financially stronger competitor wins, having the ability to keep prices low for a long time (for example, at the expense of other markets or goods). All other things being equal, the one whose product has a lower cost will win (see Fig. 2.4).
Maximizing current profits involves searching for the optimal state between price, sales volumes and costs. Table 2.7 shows an example of the implementation of this model.

Table 2.7. Determination of price and conditions for maximizing profit

The example shows that the company will receive the greatest profit with a sales volume of 800 units and a price of 15 deniers. units.
If we set goals for maximizing turnover, then in this example the price will be equal to 14 den. units with a turnover of 900 units.
Note. In this case, turnover refers to sales volume for a certain period of time (month, quarter, year), i.e. trade turnover, and not commodity turnover, calculated by the time during which inventory is turned over.
To calculate the selling price, the following pricing methods have been used in practice:
- cost plus profit method;
- competitor-oriented method;
- consumer cost method.
An example of calculating the price “cost plus profit” [2]:
1. Variable (direct) costs
a) for materials - 9000
b) for labor - 1000
Total - 10000
2. Fixed costs (indirect and overhead) - 3800
3. Total total costs - 13,800
4. Planned profit (20%) - 2760
5. Planned gross income - 16,560
6. Production volume - 1000
7. Unit price: 16560 / 1000 = 16.5 cu.
The application of the considered method allows you to control the break-even activity of the enterprise through prices.
The pricing method based on competitors' prices assumes the existing demand for a given product. When setting a price for a product being launched on the market, it is necessary to take into account the reaction of competitors to price offers.
For example, at prices lower than prices for similar products of competitors, the latter may:
a) also lower the price and thereby prevent the product from entering the market
b) leave the price unchanged if there is no price elasticity of demand or the difference in prices is not so noticeable.
When setting a price higher than the prices of competitors' products, it is necessary to include in the product additional value that competitors missed, but is very necessary for the buyer. For example, refrigerators are supplied to stores along with quick-frozen vegetables.
The method for determining the price of a product in relation to the price of a competitor is given in the guidelines [14].
Finally, the customer value-based pricing method is based on the study of consumer price perception. This method is used for unique, expensive goods, goods requiring maintenance, when there are no clear criteria for the consumer properties of the product. The more unique the product, the wider the range of sensitivity to the prices set. Setting prices using the consumer value method involves studying the buyer’s solvency, level of need for a given product, and purchasing behavior.
Prices for products (goods) are set by parallel calculation using the above methods, however, in markets with strong competition, priority remains with market-oriented methods (competitors and buyers). In this case, it is necessary to revise the cost structure:
cost = price - profit
The final stage of pricing is the development of a pricing policy based on the immediate objectives of the enterprise.
The following pricing policies are distinguished:
- the policy of “cream skimming”, when a new product is introduced to the market at high prices, but due to its usefulness, it is in high demand;
- a policy of low prices in relation to the prices of competitors, which allows you to penetrate the market, increase market share, and create entry barriers for new competitors.
When implementing a low price policy, you need to remember that many people associate low prices with low quality goods. Therefore, some buyers may switch to a competitor who sells a similar product at higher prices (brand fee).
A graphical illustration of pricing policies is shown in Figure 2.9.

Fig.2.9. Graphic illustration of enterprise pricing policy options

2.7. Development of sales policy
The goal is an acceptable choice of distribution channels for a given market, taking into account the planned sales volumes.
Sales volumes are calculated based on the expected price level for manufactured products, their quantity in physical measurement (tons, pieces, liters, etc.), as well as taking into account the seasonality of demand.
The choice of distribution channels depends on the characteristics of the product and the goals of the enterprise. In particular, if an enterprise intends to sell products (consumer goods) on the local market, then the following can be considered as potential sales channels:
- organizing a network of branded stores;
- organizing an agent network for supplying products to existing retail enterprises;
- organize sales through independent wholesale intermediaries.
In Fig. 2.10 shows the options for organizing sales of the manufacturing enterprise "Cryofood". Possible trade margins to the selling price of the goods are indicated in brackets.

To evaluate a channel, you first need to consider:
- channel power, i.e. What volume of goods can this channel pass through (sell, resell)?
- what price level will be acceptable for the end consumer from the point of view of competitors’ prices and the psychological perception of this price by buyers?
- what investments are necessary for the operation of a channel of the required power?
- what are the terms of delivery and mutual settlements with each type of buyer (intermediary)?
The result of the analysis should be the possible sales volume of goods from marketing activities and forecasting the time to achieve three financial states of the enterprise:
- time to cover direct costs;
- time to reach the break-even point
- time to achieve the planned profit (or turnover profitability indicator).
Let's analyze the possibilities of each sales option (see Fig. 2.10).
Option 1. Organizing a network of branded stores
The initial basis for the analysis is to determine the number of retail outlets capable of selling the volume of products that will be produced at the enterprise, minus the volume of goods shipped to wholesalers and existing retail stores.
To organize your own retail trade, you need to invest in renting or purchasing premises, purchasing equipment, hiring and training staff.
The store's turnover must cover current costs and ensure the return of borrowed funds. The determining factors for opening a store are the choice of location and product range in terms of sales volumes, turnover and profitability. In some cases, it is advisable to rent only a section in a retail establishment.
Option 2. Organization of sales through existing retail trade
First of all, it is necessary to analyze the number of stores in St. Petersburg that are technically suitable for selling BZO (Table 2.7), as well as the number of wholesale enterprises (local and regional) potentially interested in launching such products.

Table 2.7. Analysis of retail opportunities in St. Petersburg

Depending on the saturation of the market with a product and its demand, retail sales can be organized through its own agent network, through independent sales agents, as well as through the sales department of the enterprise itself.
The functions of sales agents include:
- searching for stores willing to take goods;
- conducting negotiations within the competence provided to them;
- monitoring the availability of goods in the store’s sales area;
- control over the transfer of money for the supplied goods;
- control over claims from buyers;
- monitoring the timely delivery of goods to the store.
The agent may also be entrusted with the collection of small amounts and forwarding of goods.
When designing an agent network, the following must be considered:
- assigning a certain number of stores to each agent;
- distribution between agents of city districts or types of trading enterprises;
- terms of payment for agents.
Independent sales agents purchase goods from the company at their own expense and deliver them to stores themselves. However, for a large manufacturer of this type, intermediaries are undesirable due to their small volumes of purchases and the inability to control prices and quality of work.
Option 3. Sales through wholesale companies
Wholesale intermediaries must be divided, first of all, into local ones, who supply goods to stores in St. Petersburg, and regional ones, who supply goods to other regions. Regional intermediaries can also be out-of-town wholesale companies that make purchases in St. Petersburg through their representatives.
It is necessary to take into account both the positive aspects of working with wholesale companies (the possibility of selling goods in large quantities), and the dangers associated with their unpredictability regarding the regularity of purchases, the possibility of working with competitors, and unsatisfactory financial discipline.
Before making the final choice of sales options, it should be remembered that such decisions are strategic, long-term in nature and cannot be changed quickly. The results of the analysis can be summarized in a table (Table 2.8).

Table 2.8 Evaluation of sales options

2.8. Development of an advertising campaign and product promotion plan
The goals of developing an advertising campaign plan for a new enterprise entering the market with its products are as follows:
- inform the public about the enterprise under construction, its features, planned products, time to enter the market;
- outline a business advertising strategy: amounts of funding, channels, advertising means, timing, frequency;
- name and volume of advertising representation materials (business cards, booklets, branded folders, etc.);
- develop an advertising slogan;
- develop a corporate identity (first of all, choose the main color or combination of colors).
An advertising campaign plan is developed approximately a year before the launch of the enterprise. First of all, issues such as the development of a trademark and corporate identity are resolved, then approximately six months before the start of activity, image advertising and public relations are carried out, and 1-2 months before - business advertising, the intensity of which increases by the time sales activities begin. The ratio of volumes of image and business advertising in preparation for an enterprise’s entry into the market is shown in Fig. 2.11.

Fig.2.11. The volume of image advertising in relation to business

It is advisable to carry out work to draw up a calendar plan for an advertising campaign, which indicates detailed activities, deadlines and amounts of funding.
An important and responsible moment is the choice of the contractor for advertising events. For example, when choosing an advertising agency, you need to keep in mind the following criteria:
- experience in the advertising services market in the profile of this business (for which companies the work was performed);
- availability of its own material base, its technical level;
- complexity of services performed or provided;
- the agency’s interest in the proposed work;
- level of creativity, ability to generate new ideas (examples);
- price level for services and methods of mutual settlements;
- deadlines for order fulfillment;
- guarantees of quality of execution;
- level of connections with advertising channels, printing houses, publishing houses, other manufacturers of advertising media, owners of advertising media.
A system for monitoring the progress of work and evaluating finished materials must be developed.

2.9. Development of an organizational structure for marketing management at an enterprise
The organizational structure of marketing management depends on the chosen marketing concept and on the stage (phase) of enterprise development (Table 2.9).
From Table 2.9 it can be seen that depending on what stage of its activity the enterprise is at, the functions and tasks of marketing are different.
Therefore, the marketing management structure must be adapted to the real tasks of the current stage. Based on the necessary condition for rational expenditure of resources on marketing, it is important to distribute tasks that can be performed by full-time employees of the enterprise or attracted consulting firms (scientific consultants). From the above it follows that if an enterprise is focused on solving marketing problems on its own, then the organizational structure should consist of groups of employees performing the main marketing functions. In this case, the company incurs large fixed costs. To reduce them, an enterprise can carry out research for other interested enterprises.

Table 16 Marketing functions of a new enterprise

In this case, the staff must be sufficiently qualified.
The management structure may be structured differently if the company relies on third-party marketing specialists. This leads to the minimization of full-time marketing staff.
As a rule, strategic goals are solved by involving third-party specialists, and operational goals are solved in-house.
Figure 2.13 shows an example of the organizational structure of a consumer goods manufacturer.
When developing a detailed study of the organizational structure of marketing, it is necessary to evaluate the feasibility of focusing on specializing marketing functions by market, by product, and by consumers.
If an enterprise operates in several regional markets, then functions can be distributed between central management and regional offices.
Specialists from the central marketing department develop strategic problems (new markets and products, building a brand image, improving employee qualifications, pricing strategy, etc.).
Regional representative offices may not have a separate structure for marketing, and these functions are performed by one of the employees or directly by the head of the representative office.

The product policy of an enterprise is developed based on taking into account a number of factors: the state of demand and customer expectations, technological production capabilities, the availability of analogues of goods on the proposed sales market, etc.

When formulating a product policy, it is necessary to take into account that goods may differ in type and periods of use, functionality, reliability, ease of use, durability, maintenance, warranty, etc.

When developing a product policy, the main problems are:

innovation (creating new products or updating existing ones);

ensuring the quantity and competitiveness of goods;

creation and optimization of product range;

questions about trademarks;

creating effective packaging;

product life cycle analysis and management;

positioning of products on the market.

Market success is the main criterion for assessing the activities of enterprises, and their market opportunities are predetermined by a properly developed and consistently implemented product policy. In Fig. 1.1 shows a diagram of options for modifying goods within the framework of the enterprise’s product policy, ensuring the main market success of the enterprise’s product policy. 6

Rice. 1.1. Alternative options for modifying goods within the framework of the enterprise's product policy

In modern conditions, in order for an enterprise to survive and develop, to take a stable position in the market, it is necessary to pursue a policy of forming an assortment policy based on the use of the product life cycle.

The process of forming an assortment of goods is preceded by the ability to translate existing and/or potential technical and material capabilities into products that are profitable and have consumer value that satisfies the buyer.

A well-developed product policy plan allows a company to accurately identify potential opportunities, develop appropriate marketing programs, consolidate a range of products, maintain successful ones for as long as possible, and eliminate late goods.

Product policy presupposes a certain set of actions or pre-thought-out methods and principles of activity, thanks to which the continuity and purposefulness of measures for the formation and management of the range of goods is ensured. The absence of such a set of actions leads to instability of the enterprise’s assortment, failures, and exposure of the assortment to excessive influence of random or transient market factors. Current management decisions in such cases are often half-hearted, ill-founded, based on intuition rather than on calculations that take into account long-term interests.

The role of the leadership in the formation of the assortment is to skillfully combine the resources of the enterprise with external factors and opportunities, to develop and implement a product policy that would ensure the stable position of the enterprise through increased sales of highly effective competitive goods.

A well-thought-out product policy not only allows you to optimize the process of updating the assortment, but also serves as a kind of guideline for the general direction of actions for the management of the enterprise, allowing you to correct current situations.

The policy also includes conducting statistical research from the idea of creating a new product to its sales and maintenance. Moreover, the object of research is not the product as such, but the consumer with his requests in relation to this product.

Enterprises implementing a product policy must pursue the goal of producing goods that are competitive and of appropriate quality.

To do this, it is necessary not only to determine the assessment of the competitiveness of the product, to improve the quality of products as one of the forms of competition to gain and maintain positions in the market, but also to adhere to strategies that allow achieving a competitive position.

The absence of a general, strategic course of action for an enterprise, without which there is no long-term product policy, is fraught with incorrect decisions, dissipation of forces and resources, and refusal to launch products into production at a time when everything is ready for their serial or mass production. Naturally, errors of this kind are costly for commodity producers.

1.2. Stages of developing a product policy plan for an enterprise

Product policy is not only the targeted formation and management of an assortment, but also taking into account internal and external factors influencing the product, its creation, production, promotion to the market and sale, legal support for such activities, pricing as a means of achieving the strategic goals of product policy, etc. .

The development of a product policy plan for an enterprise consists of several main interconnected stages.

1. Setting goals and objectives.

The main goals and objectives in the field of product policy of the enterprise are determined. The goals of product policy may concern such issues as: the range of goods and services produced; the pace of product renewal in general and for its individual types; launching fundamentally new products onto the market; changes in the ratio of new and old goods; introduction of new forms of customer service; increasing the competitiveness of products, etc. In a marketing plan, it is necessary to formulate the goals and objectives of both the product policy of the enterprise as a whole and for individual products or groups of products.

2. Selection of product strategies.

A strategic approach is required to solve the problems of commodity policy. Any decision in this area must be made taking into account the long-term goals of the enterprise. The developed product strategies during the period (3 - 5 years) for which the marketing plan is drawn up, as a rule, should remain practically unchanged. In the marketing plan, it is necessary to formulate and describe the strategies that the enterprise will use in its product policy. Product strategies must be consistent with the main strategies and strategies of the individual marketing mix tools.

3. Choice of product policy concept.

3.1. Assortment concept.

The assortment, or product range, is the entire set of products produced by the enterprise.

The product range is a dynamic set of product items (models, brands) that are in potential demand in the market and ensure the survival of the enterprise in the long term. The order of formation of the assortment is presented in Fig. 1.2.

Rice. 1.2. The procedure for forming the assortment

From the point of view of product preferences, the one that over a long period ensures that profits exceed financial needs in order to maintain the competitiveness of the company is important. An important role in assessing a company’s product strategy is played by product ratings. Product rating is understood as the place occupied by a particular product position in the ranked series of all positions in the product range.

The assortment concept is expressed in the form of a system of indicators characterizing the possibilities for optimal development of the production range of a given type of product. The purpose of the assortment concept is to orient the enterprise towards the production of goods that best correspond to the structure and variety of demand of specific customers.

The assortment concept should reflect the following points:

characterization of current and future customer needs, analysis of ways to use these products and features of purchasing behavior in the relevant target markets;

assessment of existing competitors' products and analysis of the competitiveness of goods produced by the enterprise;

analysis of the possibilities of producing new or improved products, taking into account issues of prices, costs and profitability;

resolving the following issues: what products should be included in the range; what should be the width and depth of the assortment; how and in what direction the assortment will change over time; what batches will be produced;

a list of marketing research and methods for conducting it necessary for successful assortment management;

methods of assortment management and control.

The assortment concept is one of the important decisions in terms of marketing, which must be taken very seriously, since correcting errors in the future will be costly for the enterprise.

3.2. New product concept.

A new product concept is a description of the physical and perceived final characteristics of a product and the set of benefits it promises to a specific group of users. The concept of a new product should reflect the following points.

basic requirements for a new product, which it must satisfy, taking into account forecasts of future consumer requirements and their needs;

analysis of the design and creative potential of the company;

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Development of the company's product policy

The concept of the product life cycle (PLC) was developed in 1965 by Theodore Leavitt and finds great practical application in management and marketing. The concept of life cycle technology is based on the fact that any product is sooner or later forced out of the market by another. Newer product.

Product life cycle – This is a concept with the help of which the process of developing a product, its sales, making a profit, the behavior of competitors, the development of strategic marketing from the moment the idea of creating a product is conceived until the moment it is withdrawn from the market is displayed.

LCT is a process consisting of the following stages:

Product development stage;

Bringing goods to market;

Growth stage;

Maturity stage;

Decline stage.

Sales and profit in value terms

I stage (Product development)

Connections are being developed with the costs of developing design activities, testing technologies, and preparing production facilities and personnel.

The company has no profit, but on the contrary, incurs losses.

II stage (Introduction) of bringing to market

It begins with the first samples of the product going on sale. At this stage, trading is unprofitable, because Sales are down and marketing costs (especially advertising) are high.

The influence of marketing policy elements on sales volume (by level of expenses) and significance is as follows:

quality of goods;

price reduction;

improvement of service.

At this stage, the manufacturer may encounter the following problems that have a negative impact on sales:

reluctance of buyers to move away from 45 stereotypes and accept a new product;

production difficulties at the basis of serial production;

insufficiently high rate of increase in output volume;

poor use of the distribution network;

incorrect pricing.

Marketing considers 4 strategies for entering the market with a new product, depending on how the consumer feels about it, what the level of competition is, and how well the advertising is organized.

Intensive Marketing Strategy– differs in that a high price is set and a lot of money is spent on sales promotion. A high price ensures significant profits, and large sales promotion efforts allow rapid penetration of the market.

According to Kotler, this strategy is applicable if

Most buyers are not aware of the product;

Those who know about the product are not behind the price.

It is necessary for 14 competitors to develop a preferential attitude towards the product among buyers.

Selective penetration strategy– this is a high price with little sales promotion, i.e. low marketing costs.

Used when:

The market capacity is not large;

The product is known to most buyers;

Buyers are willing to pay a high price for a product;

There is little competition.

Broad Penetration Strategies– the price is low and marketing costs are high. This strategy is most successful for quickly entering the market and capturing maximum market share.

Applies if:

The market capacity is large;

The buyer is poorly informed about the product;

The high price is not acceptable for most buyers;

Strong competition;

Increasing the scale of production and reducing costs per product (economies of scale).

Passive marketing strategy– low price and low sales promotion costs.

This strategy is justified if the demand level is 25 at 26 prices, since in this case low marketing costs ensure sufficient profitability of sales.

Conditions for such a strategy:

Large market capacity;

Good knowledge about the product;

Refusal of buyers to purchase expensive goods;

Low risk of competition.

III growth stage

Customer recognition of the product and rapid increase in demand for it. Sales volume and profitability are growing.

The influence of marketing policy elements on sales growth:

Improving quality;

Price reduction;

Improvement of service.

At the growth stage, competition intensifies, because the product begins to displace competitors' products. In this situation, firms seek to attract independent sales organizations to their side and organize their own sales network.

Prices do not change, the company strives to maintain rapid sales growth, for which they improve the product, modernize it, expand from improving products to new market segments, and increase advertising in order to create in those who purchased the product a feeling of satisfaction from the purchase and 27 for secondary purchases.

By the end of this phase, the product is purchased by about 50% of potential buyers and then enters the maturity stage.

IV growth stage

It is characterized by the fact that the majority of buyers have already purchased the product (approximately 80% of potential buyers have the product).

Sales growth rates are declining, profits are beginning to fall, and advertising and other marketing expenses are rising.

Elements of marketing activities influence sales volume in their own way and are arranged in the following order:

quality improvement;

improvement of service.

Buyers who are slow to make decisions appear on the market; secondary buyers of goods with a short life cycle in operation are possible.

To maintain a high level of sales you must:

increasing the reliability and convenience of the product;

use new modern materials in competition;

improve packaging;

offer a set of models;

provide and expand services to consumers;

reduce prices;

enter new ways of mass media;

offer new product brands, taking into account changes in tastes and fashion.

V growth stage

A period of sharp decline in sales and profits with the help of product modernization, price changes and sales promotion, it is possible to prevent a complete decline for a short time and even introduce the product into the stage of re-saturation. However, at the end an even deeper recession occurs and the product is removed from trading and production. Trading profits fall during the renewal period due to increased marketing costs. The question becomes whether to leave the product on the market, continue to modernize it, or discontinue production, organize a quick sale at low prices and replace it with a new product. In order to make a decision on the discontinuation of a product or the need for its further modernization, marketing and accounting control is carried out, which consists of studying the dynamics of the sales volume of each product. Next, a forecast is made for the product for which one can expect to soon enter the decline stage. If a decision is made about the advisability of leaving the market, then care plan .

Care plan– schedule for the gradual cessation of production and sales, restructuring of production and redistribution of resources.

Types of product life cycles (according to Evans and Berman)

A B C

AND

The X axis represents time

The Y axis shows sales volume

Types of life cycles vary in both duration and form.

A - Traditional life cycle of goods–includes distinct stages of development, hatching, growth, maturity and decline.

B – Classic life cycle of goods– describes very popular products with stable sales over a long period of time.

IN - Infatuation curve– describes a product that rapidly rises and falls in popularity.

G - Long lasting hobby– also a manifestation of the fact that sales continue at levels constituting an insignificant share of sales volume.

D – Seasonal curve– the product sells well during periods separated in time (seasons).

E – Renewal curve– the product became obsolete, but then gained popularity again.

AND - Failure– the product was not a success at all.

Classification characteristics of the product

In marketing, products represent the unity of three components:

Useful qualities;

Physical properties;

Additional services.

Useful qualities - These are the characteristics that make it possible to satisfy certain consumer needs.

Physical properties. Useful qualities must be materialized into a tangible product, i.e. have physical properties. At the same time, we must not forget about the packaging of the product, design, and brand, since for the consumer, sometimes it turns out that what the product looks like is more important than what is inside.

Additional services. Consumers are also attracted to additional services provided after purchasing a product: delivery, installation, warranty, after-sales service.

Durability products can be divided into 3 groups:

Durable goods – As a result of the consumer's careful consideration of the purchase, the informative function of advertising, personal selling, and selectivity of distribution have a great influence.

Non-durable goods – It is important to stimulate sales through price discounts that encourage repeat purchases. Advertising is designed to express more about times and symbols that encourage consumption rather than provide information.

Product policy is a certain course of action of an enterprise in relation to the goods and services it produces.

The development and implementation of a product policy plan requires compliance with the following conditions: a clear understanding of the goals of production and marketing; availability of marketing strategies coordinated with each other; good knowledge of the market, the nature of its requirements and prospects for its development; a real idea of the enterprise’s capabilities at present and in the future. All these conditions must be taken into account when planning the enterprise’s product policy.

The development of a product policy plan for an enterprise consists of several main interconnected stages.

1. Setting goals and objectives.

In a marketing plan, it is necessary to formulate goals and objectives. both the product policy of the enterprise as a whole and for individual products or groups of products.

2. Selection of product strategies.

In terms of marketing, it is necessary to formulate and describe the strategies that the enterprise intends to use in its product policy.

Product strategies must be consistent with the main strategies and strategies of the individual marketing mix tools.

3. Choice of product policy concept.

1) Assortment concept.

The assortment, or product range, is the entire set of products produced by the enterprise.

The assortment concept should reflect the following points:

Characteristics of current and future customer needs, analysis of ways to use these products and features of purchasing behavior in the relevant target markets.

Assessment of existing competitors' products and analysis of the competitiveness of goods produced by the enterprise.

Analyze the possibilities of producing new or improved products, taking into account issues of price, cost and profitability.

Resolving issues: what products should be included in the range; what should be the width and depth of the assortment; how and in what direction the assortment will change over time; what batches will be produced?

A list of marketing research and methods for conducting it necessary for successful assortment management.

Methods of assortment management and control.

The assortment concept is one of the important decisions in terms of marketing, which must be taken very seriously, since correcting errors in the future will be costly for the enterprise.

2) The concept of a new product.

A new product concept is a description of the physical and perceived final characteristics of a product and the set of benefits it promises to a specific group of users.

The concept of a new product should reflect the following points.

· Basic requirements for a new product, which it must satisfy, taking into account forecasts of future consumer requirements and their needs.

· Analysis of the design and creative potential of the company.

· Market forecasts at the time of product release and beyond.

· Predicted technical and economic indicators of new products.

· The nature of possible competition and the degree of its development.

· Product positioning - determining the product’s place among other products.

The developed concepts are evaluated by the management of the enterprise. If necessary, business plans are drawn up.

3. Drawing up a product plan.

The essence of planning is for the commodity producer to promptly offer a certain set of goods that, while generally corresponding to the profile of its activities, would most fully satisfy the requirements of customers.

The product plan indicates: a list of goods and services of all product groups that the enterprise must produce over the planned period of time; volume of manufactured products in physical and value terms; average batch size; production schedule; start and end dates of production. At the same time, it is necessary to note in it not only those goods that the company has produced previously and intends to produce in the future, but also planned new brands of goods.

Action plans include the activities that need to be carried out to achieve the set goals within the framework of the selected strategies and concepts. The list of activities mainly depends on the characteristics of the enterprise in a competitive environment and its internal specifics. Most of the activities are aimed at creating new products. These include: creating a concept for a new product; carrying out design and technological preparation; market testing of a new design; release of a pilot batch; preparation of business plans; clarification of sales methods; conducting various marketing research in the field of product creation; carrying out coordination with other divisions of the enterprise, etc.

The following information must be provided in the action plan.

1. List of all events and actions with a brief description of their implementation.

2. Timing of events.

3. Expected outcome from the events.

4. Responsible executors and controlling persons.

5. List of cost items and the required amount of financial resources for their implementation.

6. It is necessary that all activities are coordinated with each other.

The enterprise's product policy budget is based on the costs of all ongoing activities and actions related to the formation of product policy, the creation of new products and their implementation in the life cycle. Almost all leading specialists and management of the company participate in the discussion of the budget, since the development and production of new products affects all main divisions of the enterprise.

During budget preparation, the following actions are carried out:

1. Possible cost items for all activities are determined.

2. Costs for each event are calculated.

3. Cost items of the same name for all marketing activities are summed up.

4. The total budget for implementing the enterprise’s product policy is determined.

Drawing up a control plan is carried out in the following stages:

1. The areas of control over the enterprise’s product policy are determined.

2. The objects and parameters that need to be controlled are listed in detail and control cards are drawn up.

3. Responsible persons exercising control are selected and their powers are determined.

4. Determine the timing, frequency of control and the form of presentation of control results.

Creating new products involves high commercial risk with high costs. Therefore, it is necessary to pay special attention to the quality of development of the enterprise’s product policy and the organization of its implementation.

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