Product Management :

Concepts & Issues

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At the heart of a great Brand is a
great Product.

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Product: Preview of Concepts

 Product Personality
 Product Levels
 Product Classification
 Product Characteristics
 Product System and Mixes

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Product Management

 Appraisal of product lines and that of each product in

the line
 Packaging
 Product differentiation and positioning
 Managing brands and developing brand equity
 New product development
 Managing the PLC of products
 Managing product quality

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Product Personality

 Basic constituent
 Associated features
 Brand name and Logo
 Package and Label

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Product Levels

 Core benefit
 Basic product
 Expected product
 Augmented product
 Potential product

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Product Classification

Durability and Tangibility

 Non durable goods
 Durable goods
 Services

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Product Classification

Consumer Goods
 Convenience goods
 Shopping goods
 Specialty goods
 Unsought goods

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Product Classification

Industrial Goods
 Materials and Parts: Raw materials,
Component material, Component parts
 Capital Items: Installations & Equipment
 Supplies and Business services: Operating
supplies, maintenance services, business
consulting services

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 Classification of Consumer Product
C Convenience Shopping Specialty
Major Motive Easy availability Spend effort to Make long
choose the item of deliberations before
personal taste making final selection

Knowledge prior High Medium Low

to purchase
Efforts spent to Minimal Moderate As much as
acquire a product necessary
Frequency of Regular Seasonal/Occasion Varies
purchase
Willingness to accept High Moderate Low
substitutes
Buyer behaviour Little information Comparing options to Intensive consultation
search acquire best within before actual
budget purchase
Example Grocery Clothing Fancy goods 10
FMCG Characteristics

 Frequent Purchase
 Low involvement
 Low price
 High volumes
 Low margins
 Extensive distribution networks
 High stock turnover

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Product System and Mixes

 Product Mix
 Product Line
 Product Mix Width
 Product Mix Length
 Product Mix Depth
 Product Mix Consistency

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 Product Mix for HUL
Home and personal Care Foods

Personal Fabric Skin Hair Oral Care Deo Colour Tea Coffee Foods Ice
Wash Wash Care Care cosmetics Cream

Lux Surf F&L Sunsilk Pepsodent Axe Lakme Brooke Bru Kissan Kwality
Excel Bond Walls’
Lifebuoy Rin Ponds Clinic Close-Up Rexona Lipton Knorr

Liril Wheel Annapurna

Hamam

Breeze

Pears

Rexona

Dove

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Product Line Analysis
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45
40
35
30
25 Sales
20 Profit
15
10
5
0
1 2 4 4 5

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Product line appraisal of HUL
 Skin care, home care and hair care lines
performed well
 The power brands grew by 9%
 Fair & Lovely re-launch and Pond’s talcum
range fuelled a 30% plus growth
 The re-launches of Sunsilk and Clinic, coupled
with introduction of value packs in Lux,
resulted in 15% growth in shampoos
 Fabric wash line grew by 4%, with Wheel and
Rin Shakti registering strong volume gains

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 A successful re-launch of Pepsodent helped
arrest the decline in Oral care line
 Foods line sales declined by 7.3%; the power
brands in this category saw sales fall by 3.3%
 Ice cream sales were flat due to the early
onset of monsoons
 In the beverage line, tea sales fell by 15%
 Coffee sales showed good growth

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Product Line Decisions

 Line Stretching
 Line Filling
 Line Modernization
 Line Featuring

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Need for Line Extension
 Customer segmentation (Ex. Vaseline)
 Consumer desires (GCMMF, Smithkline
Beecham)
 Modern format of distribution
 Pricing breadth (Ex. Amex)
 Excess capacity
 Short-term gain
Cont…
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..cont

 Trade pressure
 Energizing a brand
 Expanding the brand’s core promise to
new users
 Blocking or inhibiting competitors
 Testing ground for national launch

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Line Pruning- P&G
 P&G’s product roaster has become a
third shorter.
 In hair care line alone it slashed the
number of items to almost half.
 P&G had 31 versions of Head &
Shoulders shampoos and 52 versions of
crest.

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 Max Factor brand of cosmetic items was
reduced from 1385 to 828 in one year. Sales
went up by 6%.
 Withdrew brands that could not be leaders. It
got rid of 11 brands in soaps and cleaning
line.
 Its Vidal Sassoon shampoo and hair
conditioners now contain a single fragrance
worldwide, with variants only in the quantity.
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Growth Strategies for FMCG

 Multi-branding
 Product Flanking
 Brand Extensions
 Building Product Lines
 New Product Development
 Long-term outlook

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Growth Strategies for FMCG

 Extending the PLC

 Expanding Market by Usage
 Wide Distribution Network
 Monitoring the Pulse of Customers
 Advertising and media coverage
 Sales promotion

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Packaging: Benefits
 Physical protection and transportation of
products
 Reduces possibility of theft & pilferage
 Preservation of nutritional value and
freshness
 Extending the shelf life of products
 Offers convenience to customers
 Helps in product differentiation
 Protecting the environment
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Growth of packaging: Factors
 Self Service
 Consumer affluence
 Company and brand image
 Innovation opportunity

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A silent Salesman
 Acts as virtual show window
 Communicates the identity and image of the
company
 Establishes direct link with customers
 Performs need identification function
 Attracts, engages and evoke interest
 Makes the product stand out in clutter
 Acts as final marketing message
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Packaging:4 C’s
 Convenience

- Frooti’s Tetra pak

- Bru Coffee Powder Aroma Lock

- Harpic

- Novo Nordisk

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 Cost
- Chik shampoo

- Marico

- Brittania

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 Conscience
Wal-Mart’s Scorecard
7 R’s of sustainable packaging:
1. Remove-unnecessary packaging
2. Reduce-optimize and right-size packaging
3. Reuse-adopt reusable transport packaging

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4. Recycle-use materials made up of recycled
content
5. Renew- use packaging made from
renewable and biodegradable products
6. Revenue-achieve cost parity and cost
savings
7. Read-learn and educate suppliers about
sustainable packaging

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 Communication
- Kissan Jam
- Calcium Sandoz
- My Can
- Colour

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Packaging tests
 Engineering tests
 Visual tests
 Dealer tests
 Consumer tests

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Labeling
 Identification
 Grading
 Description
 Promotion
 Legal stipulations

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Top 10 packaging companies
 Parksons packaging system
 ITC Limited
 Tata Tinplate company of India
 Hindalco
 Moldtek Technologies limited
..Contd.

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 Gujarat Glass Ltd
 Advance packaging
 AMAC plastic packaging
 EC Packaging Pvt. Ltd.
 The papers products limited

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Packaging trends
 Material
 Flexible containers
 Re-usable containers
 Refill packs
 Going green

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Demand Drivers

 Evolving demographics of buying population.

 Increased penetration through targeting of adults.
 Low-cost availability in the form of smaller
packages.
 Increased variety for different target segments.

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Hindrances to Growth

 Chocolates are a foreign food.

 Traditional substitutes like ‘mithais’ are easily
available.
 Chocolates are still seen as fun and indulgence
products.

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Consumer Behaviour

 Chocolates are meant for children.

 Need for special occasions to consume

chocolate.

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Cadbury

 80s – ‘Perfect Expression of Love’

 Early 90s – ‘Real Taste of Chocolate’
 94 – ‘Real Taste of Life’ – ‘Free-Child’
 98 – Social contexts
 Post 2000 – Joy of Consuming Chocolate

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Chocolate Variants

 Moulded bars – such as Dairy Milk, Crunch,

Bournville, etc.
 Countline bars – such as Bar One, Snickers, 5
Star, etc.
 Sugar panned – such as Gems, Marbles, etc.
 Choco panned

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Chocolate Variants

Product Variants Share (%)

Choco panned
4%
Sugar panned
13% Moulded Chocolates
Moulded Countline bars
Chocolates Sugar panned
Countline bars 50%
33% Choco panned

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Market Overview

Leading Player's Share (%)

Amul
8%
Nestle
22% Cadbury's
Nestle
Amul
Cadbury
70%

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Product Portfolio

Nestlé India

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Product Portfolio

Cadbury India

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Competitive Strategies

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Cadbury

 Product packaging and brand logo

 Chocolates for everyone
 Rich tapestry of human relations
 Star celebrities
 Employee satisfaction

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Nestlé

 Diversified, not predominantly into chocolates

 Set up of milk collection centres
 Long relationship with India
 Leaders in the Rs 5 segment (Munch)
 Effective stocking in stores
 Specific targeting of rural customers

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Future Growth Drivers

 Increasing the market depth including rural

India’s coverage
 Better product quality and packaging
 Launching sugar free product lines for the
health conscious
 To carve niche segments, due to growth in
disposable incomes and booming economy
 New major products to be launched every year
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