Product planning

Product Planning

 How are decisions made to

introduce new products and
delete old ones?
 What is Product Planning?
• Product Planning: The decisions made about what
features should be used in selling of a business’s
products.
• These decisions relate to:

 packaging  guarantees

 labeling  branding

 warranties  product mix

 What is Product Planning? (cont.)
• Product Mix: All the different products that a company makes or sells.
– Product Line: A group of closely related products manufactured or
sold by a business.
– Product Item: A specific model, brand, or size of a product within a
product line.
– Product Width: The number of different product lines a business
manufactures or sells.
– Product Depth: The number of product items in a product line.
 PRODUCT MIX
= all the types of products a company makes or
sells. The particular assortment of goods and
services that a business offers to meet the
needs of its market(s) and its company goals.
Product Mix and Product Line

PRODUCT MIX
The set of all products offered
for sale by a company

PRODUCT LINE
A broad group of
products for similar uses
and with similar characteristics
 ITC

FMCG HOTELS PAPER BOARD AGRIBUSINESS

& PACKAGING

FOOD WELCOME SPECIALLY PAPER RURAL SERVICES

GROUP PACKAGING
CIGARETTES LEAF TOBACCO
WELCOME
LIFE STYLE HARITAGE SPICES
RETAILING
FORTUNE AGRI-INPUT
EDUCATION &
STATIONARY THE LUXURY
COLLECTION
PERSONAL CARE

SAFETY MATCHS

AGARBATTI
 ITC
FMCG

FOODS CIGARETTS LIFESTYLE EDUCATION & PERSONAL SAFETY AGARBATTI

RETAILING STATIONERY CARE MATCHES

KITCHEN INSIGNIA WILLS LIFESTYLE CLASSMATE ESSENZA D’WILLS i-KNO MANGALDEEP

OF INDIA
INDIA KINGS JOHN PLAYER PAPERCAFT FIAMA D’WILLS MANGALDEEP EXPRESSION
AASIRWAAD
GOLD FLAKE MISS PLAYER EXPRESSION VIVEL D’WILLS AIM
SUNFEAST
SILK CUT SUPERIA
MINT-O
NAVY CUT
CANDYMAN
CAPSTON
BINGO
SCISSORS

BERKELEY

BRISTOL

FLAKE
 Product width-
The number of different product lines the company
carries. HUL carries a wide variety of product lines.
• Home care,
• Personal wash,
• Foods & Beverages.
These are categories in which HUL sells its products
through various items
PRODUCT MIX
Product line width/ depth
 Product-Mix Strategies

Expansion
Contraction

Alteration of
Trading Up and
existing products
Trading Down
 EXPANSION
ADVANTAGES DISADVANTAGES
• Extend product lifecycle • Adding items to a product line
or introducing an entire
• Adding items to a product product line can be expensive,
line or introducing an be difficult to manage, and not
entire product line can always be successful.
capture market share and
meet customer’s needs
and wants.
Deleting a Product or Product Line
• Obsolescence
• Loss of appeal
• Conflict with current company objectives
• Replacement with new products
• Lack of profit
• Conflict with other products in the line
 CONTRACTION
ADVANTAGES
• Cut losses
• Reallocate resources to more
profitable products
• Deleting products from a
product line or the entire
product line can be cost
effective and easier to
manage while creating
simplicity and consistency
DISADVANTAGES
• Deleting products from a product
line or the entire product line is
conceding market share to your
competitors.
• It may be wiser to improve the
existing product or line to
recapture market share.
 Developing Existing Products
(ALTERATION)

• Companies constantly review their product mix to see if

they can further expand their product lines or modify
existing products.

• Two ways to do this:

 Developing Existing Products (cont.)

Line Extensions – new product lines, items,

or services
Original Product

Newer Products
Developing Existing Products (cont.)

Product Modifications – an alteration in a

company’s existing product
 ALTERATION
ADVANTAGES DISADVANTAGES
• Improving an • Improving an established
established product product is expensive and not
can capture new always a success. Example:
customers and meet New Coke
customer’s unmet
wants as trends
change. Ex:
McDonald’s opening
stores in India
 Describe trading up / down product-mix
strategies.
• 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.
 TRADING DOWN
ADVANTAGES DISADVANTAGES
• Adding lower priced items • Adding lower priced items to a product line of
prestige products can hurt the image and sales
to a product line of of the higher priced items in the line
prestige products can • Consumers may be confused about the new
capture a lower income product or line.
market who cannot afford • Profits from the cheaper product may be
eroded by reduced sales in the more
the higher priced items. expensive line.
• Dealers may not be willing to add the lower
priced product to their offering.
• Competition may become stronger at the high
end of the market.
• Gaining short-term sales at the expense of
long term sales