Amity Business School

Product, Classification of Products,

Product Line and Product Mix
 Amity Business School

What is a Product?
• A product is any tangible, intangible offering
that might satisfy the needs or aspirations of a
consumer.
• A product has 3 basic levels
 Core Product: This answers WHY the buyer
should have it. It is also called as Generic
Requirement.
 Amity Business School

“Purchasing agents do not buy drills, they

actually buy its ability to make same
size holes”

Theodre Levit
 Core Benefit Amity Business School

• The generic product concept has two key

issues:
2.Its consumers view of what a given
product represents.
3.The aspiration of consumer differ from
place to place and time to time.
Eg. For someone Washing Machine would
be: comfort in washing the cloths, some,
tough wash, some complete dryer…
 Tangible Specifications Amity Business School

• Tangibility is added to the core product in

the form of features, style, color, design,
efficiency etc.
Eg. The Color of the machine
The Electricity consumption
Detergent Consumption
Capacity
Quality ….
 Augmented Features Amity Business School

• This fulfill more of psychological or esteem

needs.
Eg. Brand Name
Services provided
Warranty
Credit Terms
etc….
 Classification of Products
Amity Business School

• The classification of the product depends

upon the TANGIBILITY and DURABILITY
found in an offering.
• Typical classification of Product:
 Service
 Durable
 Non Durable
 Non Durable Products Amity Business School

• Products that are consumed fast and are

purchased on a regular basis. The
consumer here spends minimum time and
effort in comparing and buying the item.

• Consumer Products are further classified

according to its use: Personal, Family and
Household as Convenience, Shopping
and Specialty.
 FMCG Amity Business School

• Fast Moving Consumer Goods are the

Non Durable Goods. Eg. Sot Drinks,
Chips, Ice Creams etc…. The consumer
shows minimum effort in buying these
articles.
• FMCG is further sub divided into 3
Classes…
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• Staples
These are goods purchased on a regular
basis. Eg. Soap, Pulses, Toothpaste etc…
Whenever the stock is about to end the
consumer buys these products again.
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• Impulse Goods
These are the goods which are purchased
without planning or search… Our external
stimuli provokes us to buy these products.
Eg. Cold drinks, Chocolates, Chips….
Most of the time the consumers aim is not
buying the product solely but when spots
them, feels, attracted and ends up in
buying them.
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• Emergency Goods
These goods are purchased when the
need arises. Eg. Umbrellas in rainy
season, Pullovers in winters etc..
The marketers tries for a very good
distribution chain, as the sales is not the
same throughout and whenever the need
arises, the product should be available at
maximum places…
 Characteristics of FMCG Amity Business School

Consumers Point
• FMCG has a very low shelf life
1. Frequent Purchases: Salt, Rice,
Chocolates
2. Low Involvement: The consumer will
buy an alternative if the brand ask for is
not available….
Exceptions to the rule: Products like
Cigarettes, Personal Hygiene Products,
Brand Loyalty.
 Characteristics of FMCG Amity Business School

Marketers Point
• High Volumes
The volume of the product required is very
high.
Eg. An average family may require 3-4
Soaps a month… Imagine No. of family
using it in the whole country???
If the organization cannot ensure high
sales volume, they will have difficulties in
surviving.
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• Low Margins
As the product is required in high volume, there
is an intense competition which makes the
marketer sell the product with very less margin.
They earn through high volume sales to
maximize their turnover.

The Key Becomes High Volumes Low Margins.

 Amity Business School

• Extensive Distribution Networks

 Consumer preference in FMCG products
are not that rigid.
 Recall plays a very important role.
 Brand Loyalty is not very high.
 Consumer allows shopkeeper to decide for
him.
Due to all this it becomes very important for the
marketer to make its product available at
maximum place possible.
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• High Stock Turnover

It is a characteristic feature of FMCG. It is
because these products are bought
frequently or on a regular basis.
Which in turn allows the marketer to rotate
the capital invested.
 Product Mix Amity Business School

• It is the set of product lines and items that a

particular company offers to buyers.
• The Width of product mix refers to how many
different product lines a company carries.
Product Line: It is a group of products that is
closely related because they perform a similar
function, targeted at the same customer groups,
marketed through same channel.
 Amity Business School

• Eg. Products line of P & G :

Detergents
Bathing Soaps
Shampoos
Disposable Diapers etc.
If, Pantene comes in 4 variants in 3 different
sizes, the depth of the product mix
becomes 4 X 3 = 12. This can also be
referred as Stock Keeping Units (SKU’s)
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• Consistency of a product mix refers to how

closely related the various product lines
are to the end user.
• The Width, Depth and consistency of
product mix enables the company to
define the Product Portfolio.
 Product Line Amity Business School

• Line Stretching
 Downward Stretch : It takes place when
the company finds a particular segment
(Lower) which is un-attended by the
existing product. And introduces a product
to cater that lower segment.
 Upward Stretch : It is when company a
company enters Upper market through
Line Extension.
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• Line Filling : A product line can be extended by

adding more items to the existing range.
Reasons:
 Reaching for more profits
 Trying to satisfy dealers who complain about lost
sales due to missing items in the line
 Trying to utilize excess capacity
 Trying to offer a full line of the production
 Trying to plug holes in the positioning map.
 Amity Business School

• Line Modernization : Modernization is

carried out continuously as competitors
are constantly growing and coming out
with new products and ideas.
• In this process an Organization should not
be too early, if so, It can harm the existing
product or late so that competitors already
have a hold in the market.
 Amity Business School

• Line Featuring
Its about featuring a particular product of
the product line, so as to increase foot
falls and then making the consumer
exposed to other products too.
 Growth Strategies for FMCG Amity Business School

• Multi-brand Strategy
When a company nurtures number of brands in
a single category.
Strategy: To capture as much market share as
possible by trying to cater as much possible
segments.
Eg. HUL Bathing Soaps:
Names??????
P&G Shampoos?
Names?????
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• Product Flanking
Basically offering same product in different
and price combinations to tap diverse
market opportunities.
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• Brand Extensions
This enables the company to enter new
product categories more easily.
Eg. Lifebuoy: Lifebuoy Plus, Lifebuoy
Liquid, Lifebuoy Gold.
Eg. Amul: Amul Butter, Amul Ghee, Amul
cheese, Amul Milk, Amul Chocolates
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• Building Product Lines

Companies add related new product line
to the existing Line.
Eg. Britannia: It has all Baked food items
which are increasing. Have also added
milk products to its kitty.
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• New Product Development

Its due to ever increasing Competition in
the market
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• Innovations in Core Product

The life of a FMCG product is short. The
marketer continuously tries to introduce
new products and a consumer is also
open to try new products.
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• Long Term Outlook

Eg. Kelloggs
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• Extending the PLC

• Expanding Markets by Usage
c.Increase the Number of Customers
d.Encouraging more consumption.

• Wide distribution Network

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• Advertising and Media Coverage

• Sales Promotion
Sales Pomotions offer a direct incentive to
buy more in the short term.
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Thank You