CAIIB RB 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.