UNIT 5 PRODUCT DEVELOPMENT
PROCESS
Ø Product is the fulcrum on which the entire retail banking
revolves.
Ø Product is "Anything
that has the capacity to provide the satisfaction, use and return desired by
the customer".
Ø The first stage is the 'introduction' stage when the product is introduced.
The sales volume will be low and revenue from the products will not be
sufficient to cover the cost of producing, marketing and servicing it.
Ø In the 'growth' stage, which is the second stage in the product
life cycle, the sales volume of the product picks up and the product is likely
to break even and start generating profits for the organisation.
Ø In the third stage which is the 'maturity' stage, there is more
growth and sales volume peaks. Here there is a wide customer base which will
result in maximisation of sales with inflow of business and profits.
Ø In the fourth stage, which is the 'staleness' stage or
'saturation' stage, because of competition and better products available from
the competitors, staleness will creep in, which will result in saturation of
sales.
Ø the final stage of the product life cycle called as 'decline
stage'. In this stage, the product becomes less attractive for the consumers
due to various reasons and results in drop in sales volume and profits.
Ø Augmented products are products which are developed from formal
products by combining two core products and adding value to the product in
terms of benefits and comforts to the customer.
Ø
Products can
be broadly classified into following:
(i) Deposit Products or Liability Products
(ii) Asset Products or Retail Credit Products
(iii) Other Products and Services.
Ø
The Generic
Product - the core product.
Ø
The Expected
Product - adding additional features.
Ø
The
Augmented Product- adding value in addition to features.
Ø
The
Potential Product - futuristic features in anticipation.
Ø In the liability side, Banks offer different retail products like
Demand Deposits, Time Deposits with different variations with regard to product
features and duration.
Ø In the asset side banks offer mainly Home Loans, Auto Loans,
Personal Loans and credit lines against credit card receivables.
