Staff Name
: Ms.Vennila Gopal
Class
: II BBM
Subject
: Marketing Management
UNIT III
The product – marketing characteristics – consumer goods – industrial goods – production policy
– product life cycle (PLC) – product mix – modification and elimination – packing – developing
new products – strategies.
SECTION A
1. An item to be called a product should have a ……………. character.
a. intangible attribute
b. exchange value
c. associated attribute
d. tangibility
2. In which of the following stage, the sales are at peak and further increase is not possible?
a. growth stage
b. declining stage
c. maturity stage
d. saturation stage
3. Dimensions of product mix involves
a. length of the product mix
b. width of the product mix
c. length, width, depth, consistency of the product mix
d. none of the above
4. Product mix means
a. the list of all products of a company
b. mixing the products with one another
c. mixing the goods in the production stage
d. a collection of goods brought out by rich people
5. Packing is
a. the process of wrapping the goods
b. transporting the goods
c. picking up the goods from the shops
d. breaking the goods
SECTION B
1. What constitutes a product image?
A product image is the sum total of
 Inner value of the product
 Its ability to perform and serve
 its packaging
 its labeling
 the product warranty
 the product services
The product image also indicates the goodwill of the product and its producer.
2. Define product and explain product mix.
A product is anything that satisfies a need or wants and can be offered in an exchange.
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 need. It includes physical
objectives, services, persons, places, organizations and ideas”.
3. Explain the marketing characteristics of a product.
The marketing characteristics of a product are as follows:
1. Goods and Products:
In marketing, the term goods are used as synonym for product. But the product is not confined to
mere tangible goods. Even intangible goods like services, ideas, etc., are covered by the term
product.
2. Buyers Buy the Benefits:
Consumers buy more than a set of physical attributes. Fundamentally, consumers buy wantsatisfaction. a wise firm sells product benefits than just product.
3. Each Brand is a Separate Product:
Any change introduced in a products physical feature that is design, colour, size and
packaging, however it may be, creates another product.
4. Inclusive of All Services Accompanying the Product:
The product includes all services rendered by the marketer along with the sales. Eg. credit
facility offered to a customer, after sales services, advice given by the seller in selecting the
product covers the goods.
4. How do you classify goods?
We can classify goods into
1. Agricultural goods:
Classification of Agricultural Goods:
a) Consumer goods:
are the goods which the consumers in their natural form can use without any change
manufacturing process. Eg. fruits, vegetables, egg, milk, etc.
b) Raw materials for industries:
eg. cotton, jute, tobacco,etc.
c) consumer and industrial goods:
Both consumers and industries use these goods. When vegetables and fruits are sold to
the consumer for consumption purpose, they are called as consumer goods. When they
are sold to a canning factory for further processing, then they are called as industrial
goods. eg. sugarcane, coconut, etc.
2. Consumer goods:
Consumer goods are those goods which are designed for final consumption by individuals or
ultimate users and households. eg. television, radio, shoes, etc.
Classification of consumer Goods:
a) convenience goods:
They are the goods which the consumers buy frequently, immediately and with
minimum shopping effort. eg. newspapers, grocery items, milk, etc.
b) shopping goods:
Are the goods which consumer selects and buys only after making comparisons
on basis of suitability, quality, price and style. eg. furniture, readymade garments, etc.
c) specialty goods:
Are the goods for which significant number of buyers habitually willing to make a
special purchasing effort. They should possess unique features or have a high degree of
brand identification or both. eg. car, jewels, etc.
3. Industrial goods:
Goods that are used in the commercial production or goods used in connection
with carrying on of some business or industrial activity are known as industrial goods.
Classification of industrial Goods:
a) equipments and physical facilities:
It includes major capital assets such as plant, machinery, building, etc.
b) materials entering in to the product:
These industrial goods include raw materials, semi manufactured goods and fabricating
parts.
c) manufacturing or service supplies:
These are the products that are essential for business operations of the industrial users but
do not become part of the finished product. eg. fuel, oil, coal, etc.
d) management materials:
They cover both office equipments and office supplies. eg. stationary, typewriters,
calculators, etc.
5. Explain product policy.
Meaning
According to G B Giles, ‘product policy is concerned with defining the type, volume and timing
of the product a company offers for sale”.
Product policy includes
1. product planning and development
2. product line and product mix
3. product identification (branding)
4. product style
5. product packaging
6. Explain product planning.
Definition:
karl H Tietjen defined product planning as the “act of marketing and commercialization of new
products, the modification of existing lines and the elimination of unprofitable items”.
Product planning involves,
1. The development and introduction of new product.
2. Modification of existing lines to suit the changing consumer needs and preferences.
3. The discontinuance or elimination of unprofitable products.
6. What are the functions of packaging?
Package of a product represents its personality. Package is advertising on shelf.
Packaging enables branding and advertising of products.
Packaging may be defined as the general group of activities in the planning of a product.
Package itself acts as a registered brand. Packaging is a physical action and provides a handling
convenience. It is essential to maintain freshness and quality. It can prevent the danger of
adulteration.
Functions of packaging
 It is a sales tool
 Identifies the maker as well as the product
 Informs the buyer how to use them
 Is biggest advertising and promotion tool
8. What is the pricing strategy adopted for new products?
Two broad strategies followed are
 Skimming pricing
 Penetration pricing
9. What is the significance of new product development?
The significance of new product development are :
 new products are necessary to meet changes in consumer demand
 new products are necessary to make new products
 new products are necessary for combating environmental threats
10. How do you classify new products?
New products can be classified into  new products arising out of technological innovations
 new products arising out of market oriented modifications
11. How do you estimate demand for new products?
The main methods for estimating the demand for new products are
 substitution method or replacement method
 end-use method
 market tests
12. Define product mix.
Product mix is the complete set of all products offered for sale by a company. The
product mix may be composed of several product lines.
SECTION C
1. Describe in detail the Product Life Cycle concept.
Like a human being, every product has certain length of life, during which they pass
through different stages. For some products, life cycle may be short and for some, it may be
sufficiently long. This variation is because of variations in tastes and preferences of customers
and development of science and technology.
Stages in product life cycle:
Every product passes through the following stages –
1. introduction or market pioneering:
The stage starts when the new product is first distributed and made available to the
customers. In this stage, profits are negative or low because of the low sales and heavy
distribution and promotional expenses. More money is needed to attract the distributors
and consumers. Promotional expenses are also very high because of the following
reasons –
a) Inform potential consumers of the new and unknown product.
b) induce trial of the product and
c) secure distribution in retail outlet
The price of the new product will also be very high because of the high cost involved.
2. growth or marketing acceptance stage:
It is a period of rapid market acceptance and increasing profits because promotion costs
are spread over a larger volume. The main problem involved in this is to produce the
production sufficient quantities and market the output in minimum delay. Since
competitors also enter, in this stage, the promotional expenses tend to be very high.
3. maturity stage:
In this stage, competition becomes more acute. Sales continue to increase but in a
decreasing rate. Therefore, the producers spend more on advertising and other sales
promotional offers to catch the market. Necessary modifications in marketing mix and
product mix should be made. The existing products should be improved, and prices can
be reduced to attract more customers and to compete with other competitors.
4. saturation stage:
This is a period of stability. The sales of the product reach the peak and there is no
further possibility to increase it. During this stage, other competitors also become
popular and invade the market.
5. decline:
Here, sales begin to decline. It may be due to technological advances, consumers’ shifts
in tastes and increased competition-domestic and foreign. As sales and profit decline,
some firms may withdraw from the market.
6. abandonment:
The last stage is abandonment or obsolescence. At this stage, there is no change for
profitable sales of the product. The products become totally out of date. So the
management must drop it from the product line.
PRODUCT LIFE CYCLE
sales
and
profit
Introduc Growth Maturity Saturation
Decline
- tion
2. What are the benefits of product life cycle?
Benefits of product life cycle:
1. The product life cycle concept is useful to chart individual items, brands, product forms
and product classes.
2. This concept can also be used to chart styles, fashions and fads.
3. The management can understand what typically happens at different stages in a product
life. Therefore, it can improve its forward planning.
4. It enables the management to try new products in order to equalize the profit or return.
5. Different suitable price policies can be formulated for different products passing through
different stages.
3. What decisions should be taken while packaging a product?
Attributes of a good package are
 Protects the contents from breakage.
 Easy to open and close
 Be safe to use
 Be proper in size and shape
 Be reusable
 Be economical to manufacture, fill and store
 Functional in transit, in store and at home
 Be attractive
 Be readily identifiable
 Act as a unique selling proposition
 Have a clearly readable description of the contents
 Communicate the benefits
 Not be deceptive
A package must have informative labeling. The headlines, illustrations, guidelines and
selling points on the package must be clear and prominent so that the matter is readable. Pictures
should help tell the story faster and more effectively.
Truth in packaging is necessary. Package label should not misrepresent the realities to
make a sale. Information on the label should be attractive but not bogus and imaginary. The
deceptions in packaging must be eliminated through self-regulation or through legislation.
Packages must be honest and helpful to the consumers.
4. What are the problems a consumer faces with regard to packaging?
 Unless the package is transparent, the buyer cannot judge the contents by appearance.
If quality information on package is absent, the buyer has to purchase blindly
 If the consumer wants a specific quantity, he may not have that amount when goods
are sold in packages.
 There is no feasible way to check weight and volume of the contents
 Package sizes and designs inflate the contents
 In deceptive packages, there are hidden declarations of contents, fine print, glorified
illustrations, unexplainable fractions (3-7/8 kgs.), etc. consumers think they may be
getting less due to the cunning package design.
 Packages are same, contents are reduced and apparently same prices are charged.
 Packages may create health hazards for consumers.
5. Why new products fail?
Failure occurs due to
 Inadequate market analysis
 Insufficient and ineffective marketing support
 Bad timing of introduction of new product
 Failure to recognize changing market environment
 Absence of formal product planning
 Failure of product to fill consumer needs
 Technical and production problems
 Higher costs that estimated costs
 Product problems and defects
 failure to estimate strength of competition
 too many new products in the market
 product not new as perceived by consumers
But a new product can be successful if it has at least one advantage of
 product advantage
 marketing advantage
 creative advertising advantage
6. Explain the stages in new product development.
A new product development undergoes the following stages:
 generating new product ideas
 idea screening
 concept testing
 business analysis and market analysis
 actual development of the new product
 test marketing
 commercialization
7. What are the different options in branding?
The different options in branding are:
 family brand
 corporate brand
 individual brands
 multiple brand
 middlemen’s brand
 brand extension
 brand rejuvenation
8. Explain decisions on packaging.
The following are the main decisions areas in packaging
 package materials
 package aesthetics
 package size and convenience
 new product development
 managing the product life cycle of products
9. Explain product policy.
The product policy involves
 appraisal of the product line and the individual products
 solving product conflicts within a product line
 decisions on product differentiation
 product positioning
 brand decisions