The learning objectives
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Product
Product classification
Product life-cycle strategies
New-product Development
Product-line decision
Brands decisions
1. What is product?
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Anything that can be offered to a
market for attention,acquisition,use,or
consumption that might satisfy a want
or need.
Components of the
Market Offering
Value-based prices
Attractiveness of
the market offering
Product features
and quality
Services mix
and quality
2. Product classifications
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Consumer products
Industrial products
Consumer product
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Convenience products
Shopping products
Specialty products
Unsought products
Consumer-Goods Classification
Convenience Products
Buy frequently & immediately
> Low priced
> Many purchase locations
> Includes:
• Staple goods
• Impulse goods
• Emergency goods
Specialty Products
Special purchase efforts
> Unique characteristics
> Brand identification
> Few purchase locations
Shopping
Products
Buy less frequently
> Gather product information
> Fewer purchase locations
> Compare for:
• Suitability & Quality
• Price & Style
Unsought Products
 Products consumers don’t
demand normally.
Require much advertising &
personal selling
Industrial Product
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Material and parts
Capital items
Supplies and services
6.Product-line decision
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Product mix
Product-line analysis
Product –line length
Product mix(assortment)
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The set of all products and items that a
particular seller offers for sale.
A company’s product mix has a certain
width,length,depth, and consistency.
Product Mix Concepts:
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Width:how many different product lines.
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Length:the total number of items.
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Depth:how many variants are offered of each
product in the line.
Consistency:how closely related the various
product lines are in end use,production
requirement,distribution channels, or some
other way.
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Product Mix & Product Line- HUL
Personal wash
Personal wash : Lux , lifebuoy , Liril , Hamam , Breeze , Dove , Pears ,
Laundry
Laundry : Surf Excel , Rin , Wheel
Skin Care
Skin Care : Fair and Lovely , Ponds
Hair Care
Hair Care: Sunsilk , Clinic Plus
Oral care
Oral care : Pepsodent , Close Up
Color Cosmetic
Color Cosmetic : Lakme
Beverage
Tea : Broke Bond , Lipton
Coffee: Bru
Foods
Foods: Kissan , Knorr Annapurna
Ice-Cream
Quality Walls
Product Mix
Width - number of
different product
lines
Length - total
number of items
within the lines
Depth - number of
versions of each
product
Product Mix all the product
lines offered
Product-line analysis
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Sales and profit
Market profile
Product-Line Length
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Line Stretching
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Downmarket (TATA Nano)
Upmarket (Maruti 800 to Maruti SX4)
Two-way
Line Filling
Line Modernization
Line Featuring & Line Pruning
Trading Up and
Trading Down
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Trading up: Adding a higher-priced product to
a line to attract a higher-income market and
improve the sales of existing lower-priced
products.
Trading down: Adding a lower-priced item to
a line of prestige products to encourage
purchases from people who cannot afford the
higher-priced product, but want the status.
3.Product Life Cycles (PLC)
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The course of a product’s sale and
profit over it lifetime.It involves five
distinct stages:product
development,introduction,growth,maturi
ty,and decline.
Sales & profits
Sales & Profit Life Cycles
Introduction
Growth
Maturity
Time
Decline
Product Life
Cycle Stages
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Introduction—most risky and expensive.
Growth—both sales and profits rise, often
rapidly.
Maturity—sales increase at a decreasing rate
and profits decline.
Decline—demand drops, often because of
another product development.
Strategic Implications
of the Stages
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introductory stage: developing the market, creating
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growth stage: competition begins, sales grow quickly, profits
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maturity stage: competition is intense, sales slow down,
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decline stage: customers move to other options, competitors
awareness, reaching the innovators
peak, market penetration
differentiated product offerings, customers are brand loyal, few
new entrants
leave, profits are low, consider exit
Characteristics of Introduction Stage
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Low sales
High cost per customer
Zero or Negative profits
Create product awareness and trial
Offer a basic product
Use cost-plus
Build selective distribution
Awareness building advertising
Four Introductory
Price-Promotion Strategies
Promotion
High
Low
High
Rapidskimming
strategy
Slowskimming
strategy
Low
Rapidpenetration
strategy
Slowpenetration
strategy
Price
Characteristics of the Growth Stage
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Rapidly rising sales
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Average cost per customer
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Rising profits
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Offer product extensions
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Target new market segments
Characteristics of Maturity
stage
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Peak sales and profits
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Increased advertising and trade and consumer promotion.
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Frequent markdowns
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Market nicher develops.
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Market Modification Strategy
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Marketing Mix Modification Strategy
Characteristics of Declining Stage
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Declining sales
& Profits
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Phase out unprofitable outlets
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Cut on promotional expenditure
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Liquidating, Divesting and Harvesting the
business
Special categories of PLC (Style, Fashion,
Fad)
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Style is a basic/distinctive mode of expression
appearing in a field of human endeavors.-Once a
style is invented, it can last for generations.
Fashion is a currently accepted/popular style in a
given field.
Fads are fashion that comes quickly into the public
eye, are adopted with great zeal, peak easily and
decline fast
5.new-product development
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What is new product?
Major stages in new product
development
What is new product?
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Original products
Product improvements
Product modifications
New brands that the firm develops
through its own research and
development efforts
Major stages in new product
development
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Idea generation
Idea screening
Concept development and testing
Marketing strategies
Business analysis
Product development
Test marketing
Commercialization
New Product Development
Process
Marketing
Strategy
Development
Concept
Development
and Testing
Idea
Screening
Idea
Generation
Business
Analysis
Product
Development
Market
Testing
Commercialization
Probability of Success
Overall
probability
of success
=
Probability
of technical
completion
X
Probability of
commercialization
given technical
completion
Probability of
economic
success given
commercialization
X
Concept Development &
Testing
1. Develop Product Ideas into
Alternative Product Concepts
2. Concept Testing - Test the Product
Concepts with Groups of Target Customers
3. Choose the Best One
Expensive
High price/oz.
Bacon
and
eggs
Pancakes
Hot
cereal
Cold
cereal
Instant
breakfast
Inexpensive
Low in calories
b) Brand-positioning
map
(instant breakfast market)
Brand C
Brand B
Brand A
Low price/oz.
High in calories
(a) Product-positioning
map
(breakfast market)
Quick
Slow
Product & Brand Positioning
Conjoint
Analysis
Brand name
Retail Price
Utility
1.0 -----|
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0 $1.19 $1.39
Glory Bissell
Good Housekeeping Seal?
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No
Yes
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Money-Back
Guarantee?
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0 No
Yes
$1.59
Utility
Utility
Utility
1.0 -----0 K2R|
Consumer-Goods Market
Testing
Simulated
Test Market
Test in a simulated
shopping environment
to a sample of
Sales- consumers.
Controlled
Test Market
A few stores that have
agreed to carry new
products for a fee.
Wave
Research
Standard
Test Market
Test offering trail to
a sample of
consumers in
successive
periods.
Full marketing campaign
in a small number of
representative cities.
Adopter Categorization of the Basis of Relative
Time of Adoption of Innovations
34%
Early
majority
2 1/2%
Innovators
13 1/2%
Early
adopters
34%
Late
majority
16%
Laggards
Time of adoption innovations
6.Brand Decision
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What is brand?
Band decision
What is brand?
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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 differentiate them from those of
competitors.
What is a Brand?
User
Culture
Attributes
Personality
Benefits
Values
An Overview of
Branding Decisions
Branding
Decision
•Brand
•No brand
BrandSponsor
Decision
BrandName
Decision
BrandBrandStrategy Repositioning
Decision
Decision
•Manufacturer
brand
•Individual
brand
names
•Distributor
(private)
brand
•Blanket
family
name
•Line
extension
•Brand
extension
•Multibrands
•New
brands
•Cobrands
•Licensed
brand
•Separate
family
names
•Repositioning
•No
repositioning
Good Brand Names:
Distinctive
Suggest
Product
Qualities
Suggest
Product
Benefits
Lack Poor
Foreign
Language
Meanings
Easy to:
Pronounce
Recognize
Remember
Brand Strategies
Brand Name
Product Category
Existing
New
Existing
Line
Extension
Brand
Extension
New
Multibrands
New
Brands
Why Package Crucial as a
Marketing Tool
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Self-service
Consumer affluence
Company & brand image
Opportunity for innovation
Labels
Promote
Describe
Identify