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The Product: - Products Are Almost Always Combinations
The Product: - Products Are Almost Always Combinations
THE PRODUCT
Product is a key element in the market
offering. Marketing mix planning begins
with formulating an offering to meet
target customers needs or wants.
The customer will judge the offering by
three basic elements : product features
and quality, services mix and quality, and
price appropriateness.
Attractiveness of the
market offering
Product features and
quality
PRODUCT LEVELS
In planning its market offering, the
marketer needs to think through five
levels of the product.
Each level adds more customer value, and
the five constitute a customer value
hierarchy.
( Contd. )
(1) Core
Product
(2) Basic
Product
(3) Expected
Product
(4) Augmented
Product
PRODUCT DIFFERENTIATION
The challenge before the product marketers
is to create relevant and distinctive product
differentiation. The product differentiation
may be based on :
Physical Differences ( eg., features,
performance, conformance, durability,
reliability, design, style, packaging )
Availability Differences ( eg., available from
stores or orderable by phone, mail, fax,
internet )
PRODUCT DIFFERENTIATION
Service Differences ( eg., delivery,
installation, training, consulting,
maintenance, repair )
Price Differences ( eg., very high price,
medium price, low price, very low price )
Image Differences ( eg., symbols,
atmosphere, events, media )
PRODUCT CLASSIFICATION
ON THE BASIS OF PRODUCT
CHARACTERISTICS :DURABILITY,
TANGIBILITY AND USE (consumer or
industrial )
(1) NON-DURABLE
(2) DURABLE
(3) SERVICES
( CONTD . )
(1)
NON-DURABLES
(2) DURABLES
(3) SERVICES
These are intangible,
inseperable,
variable and
perishable products.
Normally require more quality control,
superior credibility, and adaptability.
PRODUCT CLASSIFICATION
ON THE BASIS OF CUSTOMER
SHOPPING HABITS :
(1) CONVENIENCE GOODS
(2) SHOPPING GOODS
(3) SPECIALITY GOODS
(4) UNSOUGHT GOODS
PRODUCT STRATEGY
PRODUCT MIX
A product mix (also called product
assortment) is the set of all products and
items that a particular seller offers for
sale.
A total group of products that an
organization markets.
A companys product mix has a certain
width, length, depth and consistency.
PRODUCT LINE
A product line is a group of products 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 the given
price ranges.
The product mix may be composed of
several product lines.
PRODUCT PORTFOLIO
MANAGEMENT
Product Line Length :
. Downward Line Stretching
. Upward Line Stretching
. Two Way Stretching
High
New
Present
Price
New
Product
Present
New
Product
Low
Low
Quality
Present
New
High
(Downward)
(Upward)
(Two Way)
PRODUCT PORTFOLIO
MANAGEMENT
Filling in the Product Line ( adding more
items within the present range of line )
Product Line Modernization
Product Line Featuring
Product Line Pruning
DEFINITION OF BRAND
American Management Association
defines brand as follows :
A brand is a name, term, sign, symbol,
or design, or a combination of them,
intended to identify the goods and
services of one seller or group of sellers
and to differentiate them from those of
competitors.
BRAND NAME
It should suggest something about the
products benefits.
It should suggest something about
product qualities.
It should be easy to pronounce, recognize
and remember.
It should be distinctive.
It should not carry poor meanings in
other countries and languages.
BRAND LOYALTY
First, brand loyalty reduces the marketing costs of
doing business, since existing customers are
relatively easier to hold.
Second, brand loyalty represents a substantial
barrier to competitors. Excessive resources are
required when entering a market in which existing
customers must be enticed away from an
established brand that they are loyal to.
Third, Brand loyalty provides trade leverage.
Fourth, a relatively large, satisfied customer base
provides an image of a brand as an accepted,
successful, and enduring product.
Finally, brand loyalty provides the time to respond
to competitive moves.
BRAND EQUITY
Brand
Awareness
Brand
Equity
Perceived
Quality
Brand
Identity
Brand
Loyalty
Brand
Name
New
Line
Extension
Multibrands
New
Brand
Extension
New Brand
Names
LINE EXTENSION
Line extension occurs when a company
introduces additional items in the same product
category under the same brand name, usually
with new flavours, forms, colours, added
ingredients, package sizes and so on.
Line extensions generally have a higher chance
of survival than new products.
On the down side extensions may lead to the
brand name losing its specific meanings; Ries
and Trout call this Line Extension Trap .
BRAND EXTENSION
Brand Extension occurs when a company
decides to use an existing brand name to
launch a product in the new category.
Brand Extension offers a number of
advantages.
-Instant recognition and earlier acceptance
-Saves considerable advertisement costs
BRAND EXTENSION
Brand Extension also involves risks.
- The new product might disappoint
buyers and damage their respect for
companys other products.
- The brand name may loose its special
positioning in the consumers mind
through over extension - a phenomenon
called brand dilution .
MULTI BRANDS
A company will often introduce additional
brands in the same product category.
- One of the motives for multibranding is
to establish different features and/or
appeal to different buying motives.
- It also enables the company to lock up
more distributor shelf space and protest its
major brand by setting up flanker brands.
NEW BRANDS
When a company launches products in a
new category, it may find that none of its
current brand names are appropriate.
When the present brand image is not
likely to help the new product, companies
are better off creating new brand names.
CO-BRANDS
Co-branding occurs when two different
companies pair their respective brands in
a collaborative marketing effort.
Each brand sponsor expects that other
brand name will strengthen brand
preference or purchase intention.
DEMAND / TECHNOLOGY
LIFE CYCLE
Marketing thinking should not begin with
a product or even a product class, but
rather with a need.
The product exists as one solution among
many to meet a need.
A need is satisfied by some technology.
Each new technology normally satisfies the
need in a superior way and it shows a
demand-technology life cycle.
The PLC portrays distinct stages in the
sales history of a product.
DEMAND-TECHNOLOGY-PRODUCT
LIFE CYCLES
Sales
Time
Sales
&
Profits
Time
Introduction
Growth
Maturity
Decline
Sales
Time
( When the sales of a product starts declining
marketers may choose suitable strategy for
further growth of product /business/enterprise.)
Stages in PLC :
Introduction, Growth, Maturity, And Decline.
High
Price
Low
High
Low
Rapid
Skimming
Strategy
Rapid
Penetration
Strategy
Slow
Skimming
Strategy
Slow
Strategy
MATURITY STAGE
Sales are increasing but at a decreasing
rate.
Profits are beginning to decline.
Price competition increases.
The manufacturer assume a greater
share of the total promotional effort in
the fight to retain dealers and shelf space
in their stores.
MATURITY STAGE
To understand better, we can devide
Maturity Stage into three stages :
Growth Maturity : When the rate of sales growth starts
to decline because of distribution saturation.
Stable Maturity : When the rate of sales growth starts
declining due to market saturation.
Decaying Maturity : The sales level starts to decline as
some of the customers move towards other competitive
and substitute products.