PRODUCT

 Is anything that can be offered to a market to

satisfy a want or need.
 Product can be defined as any conceivable
item offered by someone in the market for
attention, acquisition, use, re-use or
consumption, and it may include physical
objects, services, personalities, places,
organizations and ideas.
PRODUCT LEVEL/CUSTOMER VALUE HIERARCHY
PRODUCT MIX(ASSORTMENT OF PRODUCTS)
DECISIONS

 Consists of all the product lines and items that

a particular items marketer offers for sale.
Eg- HUL, P&G, ITC and Reliance etc
PRODUCT MIX/PRODUCT ASSORTMENT

4 Elements :
1. Width

2. Length

3. Depth

4. Consistency
PRODUCT LINE

 A group of products within a product class that

are closely related because they perform a
similar function, are sold to the same customer
groups, are marketed through the same
channels, or fall within given price ranges
 Eg Nike shoes, Nokia, Bata
PRODUCT LINE – TWO TYPES

1. Product line stretching

- Upward
- Downward
- Two way
2. Product line filling
NEW PRODUCT DEVELOPMENT

 A product must be entirely new or changed in a

functionally significant or substantial respect.
 Need of New product development

 Fuzzy Front End

NEW PRODUCT DEVELOPMENT PROCESS – 8

1. Idea generation
2. Idea screening
3. Concept development and testing
4. Marketing strategy
5. Business analysis
6. Product development
7. Testing
8. Commercialization
1. IDEA GENERATION/"NPD" OF THE NPD PROCESS

 Interacting with others

- Customers
- Dist channel members
- Competitors
- Sales force
- MR and AD agencies
- Suppliers
- Top Mgt and Scientists and consultants.
 Idea Generating techniques/Creativity techc
- Brainstorming – Alex osborn
2.IDEA SCREENING

 Ideas 3 groups
- Promising ideas

- Marginal ideas

- Rejects

2 types of errors
- Drop error

- Go error
3. CONCEPT DEVELOPMENT AND TESTING

Is an elaborated version of the idea expressed in

meaningful will Consumer term.
 Who will use the product

 What benefit should this product use the

product
 When the consumer should use the product.
 Concept testing
 Conjoint Analysis tools
4. MARKETING STRATEGY

3 parts
 Target markets size, structure and behavior

 Outlines the planned price, Dist and marketing

budget for one year
 Long run sales and profit goals and marketing
mix strategy
5. BUSINESS ANALYSIS

Needs to prepare sales, cost and profit

projections to determine whether they satisfy
company objectives.
6. PRODUCT DESIGN AND DEVELOPMENT

 Product idea can be translated into a

technically and commercially feasible product
 R&D

 Prototype products – test

 Functional test – Alpha test

 Consumer test – Beta test

7. MARKET TESTING

Consumer goods market testing and business

goods market testing.
 Consumer goods market testing

- Ranking
- Monadic test 1 – 7

- Direct comparison test

- Sales – Wave research
- Printed shopping list/Stimulated test
marketing/accelerated test marketing
- Controlled test marketing/mini market testing.
 Business – goods market testing/industrial
goods
 Alpha testing

 Beta testing

 Trade shows

 Distributor and dealer display rooms

Mgt faces Several decisions :
 How many test cities?

 Which Cities

 Length of tests

 What information

 What action to take?

8. Commercialization
 When ( Timing)

- First entry
- Parallel entry
- Late entry
 Where ( Geographic strategy)

 To Whom ( Target – Market prospects)

THE CONSUMER ADOPTION PROCESS /STAGES-5

1. Product awareness
2. Product interest
3. Product evaluation
4. Product trial
5. Product adoption
THE CONSUMER ADOPTION PROCESS/STAGES

Everett . M . Rogers
1. Innovators

2. Early Adopters

3. Early majority

4. Late majority

5. Laggards
WHY NEW PRODUCTS FAIL?/REASONS FOR NEW
PRODUCT FAILURES

 Too small a target market

 Poor product quality/performance

 Insignificant point of difference

 No protocol

 Poor positioning

 Inadequate budget

 Inadequate competitive analysis

 Blinders (=“Vision”?)
 No Access to Market

 Bad timing

 Poor execution of marketing mix

ORGANIZING THE NEW PRODUCT DEVELOPMENT

 4 Basic Methods:
1. Product manager approach

2. New product committees

3. Full time new product department

4. Venture teams
PLC

 PLC curves are portrayed as bell shaped. This

curve is typically divided into four stages:
Introduction, growth, maturity and decline.
 S shaped sales curve
PRODUCT LIFE CYCLE /PLC

4 things :
1. Limited life

2. Sales pass through distinct stages

3. Profit rise and fall

4. Different strategies
PLC

4 STAGES
1. INTRODUCTION

2. GROWTH

3. MATURITY

4. DECLINE
INTRODUCTION STRATEGIES

 PRODUCT – OFFER A BASIC PRODUCT

 PRICE – CHARGE COST – PLUS
 DISTRIBUTION – BUILD SELECTIVE
DISTRIBUTION
 ADVERTISING – BUILD PRODUCT AWARENESS
AMONG EARLY ADOPTERS AND DEALERS
 SALES PROMOTION – USE HEAVY SALES
PROMOTION TO ENTICE TRIAL
GROWTH STRATEGIES

 PRODUCT – OFFER PRODUCT

EXTENSIONS,WARRANTY
 PRICE – PRICE TO PENETRATE
 DISTRIBUTION – BUILD INTENSIVE
DISTRIBUTION
 ADVERTISING – BUILD AWARENESS AND
INTEREST IN THE MASS MARKET.
 SALES PROMOTION –REDUCE TO TAKE
ADVANTAGE OF HEAVY CONSUMER DEMAND
MATURITY STRATEGIES

 PRODUCT – DIVERSIFY BRANDS AND ITEMS

MODELS
 PRICE – PRICE TO MATCH OR BEST
COMPETITIORS
 DISTRIBUTION – BUILD MORE INTENSIVE
DISTRIBUTION
 ADVERTISING –STRESS BRAND DIFFERENCES.
 SALES PROMOTION –INCREASE TO ENCOURAGE
BRAND SWITCHING
DECLINE STRATEGIES

 PRODUCT – PHASE OUT WEAK

 PRICE – CUT PRICE
 DISTRIBUTION – GO SELECTIVE : PHASE
OUT UNPROFITABLE OUTLETS
 ADVERTISING –REDUCE TO LEVEL
NEEDED TO RETAIN HARD – CORE
LOYALS
 SALES PROMOTION –REDUCE TO
MINIMAL LEVEL
PRICING

 2nd P of marketing is Pricing

 A price is an expression of value.
 Price = Value
 Price = Something
 The firm must decide where to position its
product on quality and price.
SIX STEP PROCEDURE/PRICING POLICIES

1. SELECTING THE PRICING OBJECTIVE

2. DETERMING DEMAND
3. ESTIMATING COSTS
4. ANALYZING COMPETITORS COSTS, PRICE
AND OFFERS
5. SELECTING A PRICING METHOD
6. SELECTING THE FINAL PRICE
1. SELECTING THE PRICING OBJECTIVES

 J.W. Kelvini
- Short term pricing objectives
- Long term pricing objectives
2. DETERMINING DEMAND

 Price Elasticity of Demand

 Income Elasticity of Demand

 Price sensitive
3. ESTIMATING COSTS

 Fixed cost
 Variable Cost
4. Analyzing Competitors – costs , prices and
offers.
5. SELECTING THE PRICING
METHODS/APPROACHES/STRATEGIES

 Cost Oriented
 Demand – Oriented /Perceived value pricing

 Competition oriented/Going Rate pricing

 Value pricing
 Auction type pricing
- English Auctions (Ascending bids)

- Dutch Auctions ( Descending bids)

- Sealed bid actions

 Group pricing

 Skimming pricing

 Penetration pricing
 Premium pricing
 Psychological Pricing
 Discount pricing – 4
- Trade discount
- Cash discount
- Quantity discount
- Seasonal discounts
- Allowance
 Discriminatory pricing –
- Customer segment pricing

- Product form pricing

- Place /location pricing

- Time pricing

- Image pricing

 Product Bundling pricing/ Mixed bundling

6. SELECTING THE FINAL PRICE

 Psychological pricing
 The influence of other marketing mix elements
– AD , Brand .
 Company pricing policies

 Impact of price on other parties.

NEW PRODUCT PRICING STRATEGIES

price skimming
 penetration pricing strategy
 A company will often use a price skimming or
penetration pricing strategy for new products.
Companies that use a price skimming strategy
will typically set prices relatively high versus
competitive products. Contrariwise, companies
that use a penetration pricing strategy will
usually price their new products lower than
competitive products. A company may also
price its product commensurate with
competitive products.
FACTORS INFLUENCING PRICING

 Internal factors
 External factors
INTERNAL FACTORS

- Companies marketing objectives

- Marketing mix
- Cost
- Organizational considerations
EXTERNAL FACTORS

 Nature of the market and demand

 Competition

 Other environmental factors

PACKAGING AND LABELLING
DEFINITION OF PACKAGING

 As an act of designing and producing a

suitable and attractive package for the product,
to protect and safe delivery of the product to
be sold in the market.
- Philip Kotler
 Packaging is the art, science and technology
of preparing goods for transport and sales.
FUNCTION OF PACKAGING

1. Utilitarian function
2. Communication
3. Profit function
4. Marketing function
1. UTILITARIAN FUNCTIONS

 Protection of product
 Convenience in product usage
 Product or brand identification
 Easy and safe to handle
2. COMMUNICATION FUNCTION

 Advertising and sales promotion

 Product message and motivate consumers to
buy.
 Point of purchase
3. Profit functions
 High price

4. Marketing mix function

- 5th P of marketing mix
PACKAGING CRITERIA/FACTOR INFLUENCING

1. Appearance
2. Protection
3. Function - Display , Easy of opening,
Convenience, Dispensing
4. Cost
5. Disposability
6. Eco friendly
PACKAGING ACTS AS A SILENT SALESMAN

It communicates – Eg
1. Quantity or Weight of contents

2. Ingredients used or Contained

3. Brand Name / Manufacturers or Marketers

identity
4. Usage pattern, occasion , dosage
5. Instructions to use
6. Price
7. Other messages or information to the
consumers
CHARACTERISTICS /ATTRIBUTES OF GOOD
PACKAGE

 Protect the contents from breakage or spoilage.

 Be easy to open, Dispense from and close

 Be safe to use

 Keep the product from deterioting

 Economical

 Available in the size appropriate to the market

segments served.
- Be attractive
- Project a favorable image of the product
- Play the role of silent salesman
- Identifiable
- Act as a unique selling preposition
- Have a clearly readable description of the
contents.
INNOVATIVE PACKAGING ( VALUE – ADDED
PACKAGE )
LABELING

 Is a part of a product. It gives verbal

information about the product and the seller.
 The label may be as simple tag attached to the
product or an elaborately designed graphic that
is part of the package.
FUNCTIONS OF LABELS

 Identifies the product or brand

 Grade
 Describe
 Promote
LABEL GIVE HELPFUL INFORMATION TO THE
CONSUMERS

1. Brand name
2. Name and address of the producers
3. Weigh , measure
4. Ingredients by the percentages where possible
5. Direction of the proper use of the product
6. Cautionary measurers
7. Recipes on food products
8. Nutritional guidelines
9. Date of packing and expiry
10 . Retail price
ECO – LABELLING
BRAND

 Major issues in product strategy

 Origin – Norwegian –brandr – meaning – to
burn.
AMA – A brand is a name , term , sign , symbol or
design, or a combination of them, intended to
identify the goods or services of one seller or
group of sellers and to differentiate them from
those of competitors
- Well know brands are ????????
Brand is something that resides in the minds of
consumers.
Branding creates mental structures and helps
consumers organize their knowledge about
products and services in a way that clarifies
their decision making and, in the process,
provides value to the firm.
CAN EVERYTHING BE BRANDED?

1. Physical goods
2. Services
3. Online products and services
4. People and organizations
5. Sports , Arts and entertainment
6. Geographic Locations
7. Ideas and causes
BRAND IMPORTANCE – CONSUMERS

 Identification of source of product

 Assignment of responsibility to product maker

 Risk reducer

 Search cost reducer

 Promise, bond, or pact with maker of product

 Symbolic device

 Signal of quality
BRAND IMPORTANCE - MANUFACTURERS

 Means of identification to simplify handling or

tracing.
 Means of legally protecting unique features

 Signal of quality level to satisfied customers

 Means of endowing products with unique

associations
BRAND EQUITY – 1980, DAVID AAKER

 Brand Equity is a set of brand assets and

liabilities linked to a brand , its name and
symbol, that add to or subtract from the value
provided by a product or service to a firm and
or to that firms customers.
BUILDING BRAND EQUITY

 Brand name
 Brand logo

 Brand colors

 Brand Tagline

 Symbol
BRAND EQUITY

 Brand awareness
 Brand preference

 Brand loyalty
BRAND CHALLENGES /BRAND DECISIONS /
BRAND STEPS
1 . Brand Decision
2. Brand sponsor decision
3. Brand name decision
4. Brand Strategy decision
5. Brand Repositioning decision
BRAND DECISION

 Brand
 No brand
BRAND SPONSOR DECISION

Manufacturer brand
Distributor ( Private brand )
Licensed brand
BRAND NAME DECISION

 Individual names
 Blanket family name

 Separate family names

 Company – individual names

BRAND BUILDING TOOLS

 Public relations and press releases

 Sponsporships

 Club and consumer communities

 Factory visits

 Trade shows

 Event marketing

 Public facilities
 Social cause marketing ‘
 High value for the money

 Founders or celebrity personality

 Mobile phone marketing

BRAND STRATEGY DECISION

 Line extensions
 Brand extensions

 Multibrands

 New brands

 Co brands
BRAND REPOSITIONING DECISION

 Repositioning
 No repositioning