UNIT IV

Marketing Mix
1. When marketing their products firms need to create a successful mix of:

• the right product

• sold at the right price
• in the right place
• using the most suitable promotion.
2. The marketing mix refers to the set of actions, or tactics, that a company
uses to promote its brand or product in the market.
3. The 4Ps make up a typical marketing mix - Price, Product, Promotion and
Place.
4. However, nowadays, the marketing mix increasingly includes several
other Ps like Packaging, Positioning, People and even Politics as vital mix
elements.
5. The marketing mix is a business tool in marketing and by marketers.
6. Although the four Ps can be examined independently, in practice they
are often dependent on each other.
 Elements of Marketing Mix
1. Product refers to the item to be sold. What product is going to be sold?
What features differentiate the product from competitor products? Are
there associated products that can be marketed with the initial product?
2. Price refers to the sale price of the product. Consider factors such as the
cost price of the product, marketing expenses and distribution costs.
Determine if these costs are likely to be fixed or variable when
calculating an appropriate price. Price can also be used to position the
product in respect to perceived quality.
3. Place or distribution refers to where the product is going to be sold.
Consideration needs to be given to the type of product being sold when
determining where it is to be distributed, as it impacts the positioning of
the product. Basic consumer products are often made readily available.
Premium consumer products are typically only made available in select
stores. Is the product better suited to be sold at a brick-and-mortar store
or online?
4. Promotion refers to the collective marketing communications campaign
used to sell the product, often called the promotional mix. Promotional
activity includes advertising, sales promotion, personal selling and public
relations. Promotions are typically reliant on product and price and place.
Key consideration needs to be given to the budget assigned to the
marketing mix, the stage of the product's life cycle and how the promotion
can be utilized to position the product.
 Product
• A product is defined as:

1. A good, idea, method, information, object or service created as a result

of a process and serves a need or satisfies a want. It has a combination
of tangible and intangible attributes (benefits, features, functions, uses)
that a seller offers a buyer for purchase.
2. For example a seller of a toothbrush not only offers the physical product
but also the idea that the consumer will be improving the health of their
teeth.
3. Marketing: A good or service that most closely meets the requirements
of a particular market and yields enough profit to justify its continued
existence.
4. So, product is a good, service, or idea consisting of a bundle of tangible
and intangible attributes that satisfies consumers and is received in
exchange for money or some other unit of value.
 Product Life Cycle

• The product life cycle is an important concept in marketing.

• It describes the stages a product goes through from when it was first
thought of until it finally is removed from the market.
• Not all products reach this final stage. Some continue to grow and others
rise and fall.
PLC
What are the main stages of the product life
cycle?
• The main stages of the product life cycle are:

• Introduction – researching, developing and then launching the product

• Growth – when sales are increasing at their fastest rate
• Maturity – sales are near their highest, but the rate of growth is slowing
down, e.g. new competitors in market or saturation
• Decline – final stage of the cycle, when sales begin to fall
 INTRODUCTION
• The introduction stage is the stage in which a new product is first
distributed and made available for purchase, after having been developed
in the product development stage.
• Therefore, the introduction stage starts when the product is first
launched. But introduction can take a lot of time, and sales growth tends
to be rather slow.
• Furthermore, profits in the introduction stage are negative or low due to
the low sales on the one hand and high-distribution and promotion
expenses on the other hand. Obviously, much money is needed to attract
distributors and build their stocks.
• Also, promotion spending is quite high to inform consumers of the new
product and get them to try it.
• In the introduction stage, the focus is on selling to those buyers who are
the most ready to buy (innovators).
• Concerning the product life cycle strategies we can identify the proper
launch strategy: the company must choose a launch strategy that is
consistent with the intended product positioning.
• Without doubt, this initial strategy can be considered to be the first step in
a grander marketing plan for the product’s entire life cycle. The main
objective should be to create product awareness and trial.
• To be more precise, since the market is normally not ready for product
improvements or refinements at this stage, the company produces basic
versions of the product.
• Cost-plus pricing should be used to recover the costs incurred.
• Selective distribution in the beginning helps to focus efforts on the most
important distributors.
• Advertising should aim at building product awareness among innovators
and early adopters. To entice trial, heavy sales promotion is necessary.
 GROWTH
• The growth stage is the stage in which the product’s sales start climbing
quickly.
• The reason is that early adopters will continue to buy, and later buyers will
start following their lead, in particular if they hear favourable word of mouth.
• This rise in sales also attracts more competitors that enter the market. Since
these will introduce new product features, competition is fierce and the
market will expand.
• As a consequence of the increase in competitors, there is an increase in the
number of distribution outlets and sales are augmented due to the fact that
resellers build inventories.
• Since promotion costs are now spread over a larger volume and because of the
decrease in unit manufacturing costs, profits increase during the growth stage.
• The main objective in the growth stage is to maximise the market share.
• Several product life cycle strategies for the growth stage can be used to
sustain rapid market growth as long as possible.
• Product quality should be improved and new product features and
models added.
• The firm can also enter new market segments and new distribution
channels with the product.
• Prices remain where they are or decrease to penetrate the market.
• The company should keep the promotion spending at the same or an
even higher level.
• Now, there is more than one main goal: educating the market is still
important, but meeting the competition is likewise important.
• At the same time, some advertising must be shifted from building product
awareness to building product conviction and purchase.
 Maturity stage

• The maturity stage is the stage in which the product’s sales growth slows down or levels
off after reaching a peak. This will happen at some point, since the market becomes
saturated.
• Generally, the maturity stage lasts longer than the two preceding stages. Consequently, it
poses strong challenges to marketing management and needs a careful selection of
product life cycle strategies.
• Most products in the market are, indeed, in the maturity stage.
• The slowdown in sales growth is due to many producers with many products to sell.
Likewise, this overcapacity results in greater competition. Since competitors start to mark
down prices, increase their advertising and sales promotions and increase their product
development budgets to find better versions of the product, a drop in profit occurs.
• Also, some of the weaker competitors drop out, eventually leaving only well-established
competitors in the industry.
• The company’s main objective should be to maximise profit while defending the market
share.
• To reach this objective, several product life cycle strategies are available.
• Although many products in the maturity stage seem to remain unchanged for long
periods, most successful ones are actually adapted constantly to meet changing
consumer needs.
• The reason is that the company cannot just ride along with or defend the mature
product – a good offence is the best defence. Therefore, the firm should consider to
modify the market, product and marketing mix.

1. Modifying the market means trying to increase consumption by finding new users
and new market segments for the product. Also, usage among present customers
can be increased.
2. Modifying the product refers to changing characteristics such as quality, features,
style or packaging to attract new users and inspire more usage.
3. And finally, modifying the marketing mix involves improving sales by changing one
or more marketing mix elements. For instance, prices could be cut to attract new
users or competitors’ customers. The firm could also launch a better advertising
campaigns or rely on aggressive sales promotion.
 Decline stage 
• The decline stage is the stage in which the product’s sales decline. This happens to
most product forms and brands at a certain moment.
• Sales may fall to zero, or they may drop to a low level where they continue for many
years.
• Reasons for the decline in sales can be of various natures. For instance, technological
advances, shifts in consumer tastes and increased competition can play a key role. As
sales and profits decline, some competitors will withdraw from the market.
• Also for the decline stage, careful selection of product life cycle strategies is required.
• The reason is that carrying a weak product can be very costly to the firm, not just in
profit terms. There are also many hidden costs. For instance, a weak product may take
up too much of management’s time. It requires advertising and sales-force efforts that
could better be used for other, more profitable products in other stages.
• Most important may be the fact that carrying a weak product delays the search for
replacements and creates a lopsided product mix. It also hurts current profits and
weakens the company’s foothold on the future.
• Therefore, proper product life cycle strategies are critical. The company
needs to pay more attention to its aging products to identify products in
the decline stage early. Then, the firm must take a decision: maintain or
drop the declining product.
• The main objective in the decline stage should be to reduce expenditure
and “milk” the brand.
• General strategies for the decline stage include cutting prices, choosing a
selective distribution by phasing out unprofitable outlets and reduce
advertising as well as sales promotion to the level needed to retain only
the most loyal customers.
• If management decides to maintain the product or brand, repositioning
may be an option. The purpose behind this is to move the product back
into the growth stage of the PLC. 
• Extending the Product Life Cycle
• What can businesses do to extend the product life cycle?

1. Extension strategies extend the life of the product before it goes into

decline. Again businesses use marketing techniques to improve sales.
Examples of the techniques are:
2. Advertising – try to gain a new audience or remind the current audience
3. Price reduction – more attractive to customers
4. Adding value – add new features to the current product, e.g. improving
the specifications on a smartphone
5. Explore new markets – selling the product into new geographical areas
or creating a version targeted at different segments
6. New packaging – brightening up old packaging or subtle changes
Product Levels
1. Core Product
• This is the product that adds the fundamental value to the consumer.
Think of it as the benefit the consumer is buying.
• One way to recognize the core product is to ask about the main reason
why someone wants it.
• Example: The core product of a book is information. It is not the book
itself. The book is selling the information in it. The core product of a
restaurant is offering food. It is not the building of the restaurant or the
service in itself. The core product is the food.

2. Basic Product
• All the ingredients and other items which enable the product to satisfy
the core are together known as the basic product. 
• This represents all the qualities of the product. 
• Example: if a hotel, wanted to turn its core product (rest and food) into a
basic product, then the building of the hotel, the type of bed, the type of
food, all together form the basic product.
3. Expected Product

• The expected product is the set of features the consumer wishes to have
from the bought product. Quality is one of the main examples.
• Continuing the previous example, if a person stays at a 5 star hotel, will he
only expect a bed, and normal food? No. He will expect a lot more. His
expectation is built on the fact that the hotel is a 5 star hotel.
• As the brand grows in reputation, you have to take care of the
expectations of the consumer.
• Daikin, which is a world renowned air conditioning brand, is expected to
have world class service for its air conditioners. If it does not deliver on
this expected product, then it will affect the basic product (air conditioner)
as well.
4. Augmented Product
• This refers to all additional factors which sets the product apart from that
of the competition. And this particularly involves brand identity and
image.
• This can be defined as the product going beyond what the consumer
imagines to achieve from the purchase. For a company, this means adding
extra features to the product. 
• The examples of augmented product for a makeup kit can be a surprise
gift, samples, coupon for the next purchase, or adding an extra cosmetic
inside not offered by other brands.
• So to know what can be taken as augmented product just ask what extras
are offered to consumers other than what is needed and wanted by them.
5. Potential Product
• This is about the new development of the same product. In this, anything
is possible. The next version of it may contain some improvement.
• This is about augmentations and transformations that the product may
undergo in the future.
• For example, a warm coat that is made of a fabric that is as thin as paper
and therefore light as a feather that allows rain to automatically slide
down.
Product Classification
 Classification of products on the basis of Shopping habits :

• Based on the first variable, the shopping habits, the products can be classified into
convenience goods, shopping goods and unsought goods.

1. Convenience Goods
• Convenience products are inexpensive frequent purchases, there is little effort needed
to purchase them. Examples include fast food, toiletries.
• Convenience products are split into staples, such as milk, egg, Impulse goods like
chocolate and emergency products which are purchased when the need arises e.g.
Umbrellas.

2. Shopping Goods
• Shopping goods are products that consumers do not buy as frequently as convenience
goods. They usually cost more than convenience goods and consumers expect to have
them for longer, so they will do some research prior to purchase.
• The research will include comparing product features and price. Examples of shopping
goods include white goods (such as fridge/freezers and washing machines), clothing
and furniture.
3. Specialty Goods and Services

• Specialty goods are products with unique features or branding. Consumers do not
compare them with other products as the goods have features unique to them.
Instead they will spend time searching for the retailer selling the product they want.
• Consumers are often prepared to travel to purchase their product and pay a
premium.
• Specialty goods include designer clothes, luxury cars, antiques.
• Professional services provided by a person known for the effectiveness and quality of
their work can also come under this category. For example Lawyers and Accountants
provide specialty services.

4. Unsought Goods 

•  Goods that the consumer does not know about or does not normally think of
buying, and the purchase of which arises due to danger or the fear of danger and
lack of desire.
• The classic examples of known but unsought goods are funeral services,
encyclopedias, fire extinguishers and reference books.
 On basis of Durability and Tangibility
1. Durable Products
• Durable products can last for a longer period and can be repeatedly used
by one or more persons.
• Television, computer, refrigerator, fans, electric irons, vehicles, etc., are
examples of durable products.
• Brand, company image, price, qualities (including safety, ease, economy,
convenience, durability, etc.), features (including size, colour, shape,
weight, etc.), and after-sales services (including free installation, home
delivery, repairing, guarantee and warrantee, etc.) are important aspects
the customers consider while buying these products.
2. Non-durable Products:
• As against durable products, the non-durable products have short life.
They must be consumed within short time after they are manufactured.
Fruits, vegetables, flowers, cheese, milk, and other provisions are non-
durable in nature. They are used for once.
• They are also known as consumables. Mostly, many of them are non-
branded. They are frequently purchased products and can be easily
bought from nearby outlets.
• Freshness, packing, purity, and price are important criteria to purchase
these products.
3. Services:
• Services are different than tangible objects. Intangibility, variability,
inseparability, perishability, etc., are main features of services. Services
make our life safe and comfortable. Trust, reliability, costs, regularity, and
timing are important issues.
• The police, the post office, the hospital, the banks and insurance
companies, the cinema, the utility services by local body, the
transportation facilities, and other helpers (like barber, cobbler, doctor,
mechanic, etc.,) can be included in services.
• All marketing fundamental are equally applicable to services. ‘Marketing
of services’ is the emerging facet of modern marketing.
 Industrial Product
• Product bought by individuals and organization for further processing or for use
in conducting a business. 

1. Materials and parts: Raw materials are the basic materials that actually
become part of the product. They are provided form mines, forests, oceans,
farms and recycled solid wastes. 
2. Capital Items: Capital items consist of office accessories and operating
materials. Eg-Machinery, generator etc.
3. Supplies: Supplies facilitate productions, but they do not become part of he
finished product. Paper, pencils, oils, cleaning agents and paints are examples. 
4. Industrial Services: Industrial services include maintenance and repair services
such as machinery repair and business advisory services such as legal,
management, consulting, advertising, marketing research services. These
services can be acquire internally as well as externally. 
 PRODUCT MIX
• The complete range of products present within a company is known as the
product mix. In any multi brand organizations, there are numerous
products present.
• None of the organizations wants to take the risk of being present in the
market with a single product.
• If the company has only a single product, than the demand of the product
will be too great or the company does not have the resources to expand
the number of products it has.
• Apple, Microsoft, Nestle, Hindustan Unilever, Pharmaceutical companies,
so on and so forth. These companies need to have a wide product
portfolio to be present in the market and to have a sustainable business
model. The combination of products that they have in their product
portfolio can be the product mix.
• A company like HUL has numerous product lines like Shampoos,
detergents, Soaps etc. 
2. Product line – The product line is a subset of the product mix. The
product line generally refers to a type of product within an organization.
As the organization can have a number of different types of products, it
will have similar number of product lines.
• Example: In Nestle, there are milk based products like milkmaid, Food
products like Maggi, chocolate products like Kitkat and other such product
lines. Thus, Nestle’s product mix will be a combination of the all the
product lines within the company.

3. Length of the product mix –Product mix length pertains to the number
of total products or items in a company's product mix, according to Philip
Kotler's textbook "Marketing Management: Analysis, Planning,
Implementation and Control.“
• For example, ABC company may have two product lines, and five brands
within each product line. Thus, ABC's product mix length would be 10.
Companies that have multiple product lines will sometimes keep track of
their average length per product line. In the above case, the average
length of an ABC Company's product line is five.
• Thus, the total number of products against the total number of product lines forms the
length of the product mix. This equation is also known as product line length.

4. Width of the product mix – Where product line length refers to the total number of
product lines and the products within the product lines, the width of the product mix is
equal to the number of product lines within a company.
• Thus, taking the above example, if there are 4 product lines within the company, and 10
products within each product line, than the product line width is 4 only.
• Thus, product line width is a depiction of the number of product lines which a company
has.

5. Depth of the product mix – It is fairly easy to understand what depth of the product
mix will mean. Where length and width were a function of the number of product
lines, the depth of the product mix is the total number of products within a product
line.
6. Thus if a company has 4 product lines and 10 products in each product line, than the
product mix depth is 10. It can have any variations within the product for form the
product line depth.
Hindustan Lever Limited
Product Mix : Width = 4; Length = 13; Total Depth = 74; Average Depth = 5.7
Soap (Length = 5) Detergent (Length = 4) Shampoo (Length = 2) Toothpaste (Length = 2)

Lifebuoy (D = 8) Wheel (D=4) Clinic (D=8) Closeup (D=4)

Lux (D=6) Rin (D = 4) Sunsilk (D=12) Pepsodent (D=6)

Dove (D=2) Surf (D=6)

Breeze (D = 12) Surf (D = 2)
Excel

Pears (D = 2)
Total 30 Total 16 Total Depth 20 Total Depth 10
Depth Depth

Avg 6 Avg 4 Avg Depth 10 Avg Depth 5

Depth Depth
 Product line decisions
1. Product line length
• A Product line can be strengthened by adjusting more items within the
present range
• One of the key decisions that a firm needs to make is the length of its
product line. That means, how many products varieties should the firm
offer.
• It is defined as the total number of items the company carries within its
product lines. The product line length shows the number of different
products in a product line. 
• A long product line has lots of different products in it and a short
product line has a small number of different products.
• If there are too many product types in a product line, they will begin to
compete with each other, increase costs unnecessarily and even confuse
customers.
• If the product line is too short it will limit customer choice and send
customers to competitors with a greater selection of products.
• Generally, firms look to increase the product line length – the number of
similar products offered.
• A company lengthens its product line in two ways:
A. Line stretching - Line stretching means lengthening the product line
beyond the current range.
• Three types of line stretching are- downward, upward, and 2-way
stretching.
1. A company located at the upper end of the market may choose to stretch
the product line downward. Thus, it may attract low-end customers and
reach new targets. Eg- Hul was already manufacturing surf when it
launched wheel to counter Nirma.
• Firms would engage in downward stretching of their product line for
several reasons:
1. to block competitor activities and competitive product offerings
2. to compete in the budget end of the market, particularly if it is a high
volume part of the market
3. to help broaden their brand’s positioning to be seen as a more
affordable brand overall.
• However there are significant dangers to downward stretching,
particularly for a prestige brand, including:
 product cannibalization of their higher-margin products
 overall deterioration in their brand image
 needing to support multiple products in the marketplace, or multiple
positioning
2. Upward stretching is appropriate if the company wants to add prestige
to the current product line. Also, better growth rates and higher margins
may be the attractive factor for upward stretching. Eg- Kwality walls
launching Magnum.
• Firms often target high quality products and stretch their product line
upwards because of several reasons, including:
 high quality products often have a higher unit margin and can be quite
profitable at a relatively low turnover
 offering high-quality products helps position the overall brand towards
being a status brand, which often enables price premiums to be charged
across the full product line
• The downsides of an upward stretch include:
 The existing brand equity and image may not carry to the high-quality end
of the market – and it may be necessary to introduce new brand names
 Competitors already in the higher end of the market may look to defend
their position
 Additional or expanded distribution channels may be required to support
high-quality products
 The level of sales volume may not be sufficient, given that the turnover is
generally less at this end of the market.

3. For a company in the middle range of the market, stretching the product
line in both directions may be best. Thereby, the company can serve
both the upper and lower ends of the market.
• Eg- Tata Motors had Multi-purpose Utility Vehicles (MU V) like Sumo and
Safari targeted for middle segment of the market. It had launched Indica
for lower segment of the market as well as Indigo Marina and Indigo
Estate for up-market consumers.
B. Line filling
• A business strategy that involves increasing the number of products in an
existing product line to take advantage of market place gaps and reduce
competition.
• Many businesses use line filling to round out an already well established
product line and to help increase the market success of new related
products.
• It’s the process of introducing new products into a product line at about
the same price as existing products.
• It is the addition of further items to the current line of products that a
company is dealing in.
• So rather than expanding into the higher or lower quality end of the
marketplace, the brand simply introduces more variations. This is common
in fast-moving consumer goods where, snack foods in particular, have a
variety of similar products.
• Eg-In the year 2000 Maruti Suzuki launched Alto. This product was
between Maruti 800 and Maruti Zen. Here company was trying to fill the
gap existing in the segment by introducing ALTO, i.e. line filling.
2. Line Modernization
• A strategy in which items in a product line are modified to suit modern
styling and tastes and re-launched.
• In rapidly changing product markets, modernization is carried on
continuously.
• Companies plan improvements to encourage customer migration to
higher-valued, higher-priced items.
• Software companies such as Microsoft and Lotus, continually introduce
more advanced versions of their products. 
• A major issue is timing improvements so they do not appear too early
(damaging sales of the current line) or too late (after the competition has
established a strong reputation for more advanced equipment). 

3. Line Featuring
• It is a strategy in which certain items in a product line are given special
promotional attention, either to boost interest (at the lower end of the
line) or image (at the upper end).
• The idea is to attract customers into showrooms and then try to get them
exposed to other models.
• Product line manager may select one/few items in the line to feature i.e.
to be considered as Traffic Builders/ Flagship products. •
• This could be done: By a premium marketer with a low price but quality
product.
• Example: Mercedes Benz economy at Rs. 18 Lakhs.
4. Line Pruning
• Product line needs to be reviewed periodically for pruning/ dropping
markets.
• So when the products are not satisfactorily performing, the product
managers need to drop them form the product line. This may lead to
increase in profitability. Thus line pruning is consciously taken decision by
the product manager to drop some product variants from the line. 
• Pruning could be due to:
 Dead products that depress profits.
 Company being short production capacity in this case, company should
concentrate on higher margin products.
• For example Heads and Shoulders is a well-known brand of shampoo
from P&G, which had 31 versions. They went for line pruning and now
they have around 15 versions.
 BRANDING
• Brands are different from products in a way that brands are “what the
consumers buy”, while products are “what concern/companies make”.
• Brand is an accumulation of emotional and functional associations.
• Brand is a promise that the product will perform as per customer’s
expectations.
• It shapes customer’s expectations about the product.
• Brands usually have a trademark which protects them from use by others.
• A brand gives particular information about the organization, good or
service, differentiating it from others in marketplace.
• Brand carries an assurance about the characteristics that make the
product or service unique.
• A strong brand is a means of making people aware of what the company
represents and what are it’s offerings.
•  A brand is the idea or image of a specific product or service that
consumers connect with, by identifying the name, logo, slogan, or design
of the company who owns the idea or image.
• Branding is when that idea or image is marketed so that it is recognizable
by more and more people, and identified with a certain service or product
when there are many other companies offering the same service or
product. 
• Branding is not only about getting your target market to select you over
the competition, but about getting your prospects to see you as the sole
provider of a solution to their problem or need. 

• According to Kotler and Amstrong, ‘a brand is a name, term, sign, symbol

or design or a combination of these that identifies the maker or seller of
a product, or services’.
 Significance of Branding:

• Branding provides benefits to buyers and sellers.

 To Buyer:

1. A brand helps buyers in identifying the product that they like/dislike.

2. It identifies the marketer.
3. It helps reduce the time needed for purchase.
4. It helps buyers evaluate quality of products, especially if they are unable
to judge a product’s characteristics.
5. It helps reduce buyers’ perceived risk of purchase.
6. The buyer may derive a psychological reward from owning the brand
(e.g., Rolex watches or Mercedes).
 To Seller:

1. A brand differentiates product offering from competitors.

2. It helps segment market by creating tailored images.
3.  It identifies the companies’ products making repeat purchases easier for
customers.
4. It reduces price comparisons.
5. It helps the firm introduce a new product that carries the name of one or
more of its existing products.
6. It promotes easier cooperation with intermediaries with well-known
brands
7. It facilitates promotional efforts.
8. It helps in fostering brand loyalty, thus helping to stabilize market share.
9. Firms may be able to charge a premium for the brand.
 Brand Name

• Brand name is one of the brand elements which helps the customers to
identify and differentiate one product from another.
• It should be chosen very carefully as it captures the key theme of a
product in an efficient and economical manner. It can easily be noticed
and its meaning can be stored and triggered in the memory instantly.
• Choice of a brand name requires a lot of research. Brand names are not
necessarily associated with the product.
• For instance, brand names can be based on places (Air India, British
Airways), animals or birds (Dove soap, Puma), people (Louise Phillips,
Allen Solly). In some instances, the company name is used for all products
(General Electric, LG).
 Features of a Good Brand Name
1. It should be unique / distinctive (for instance- Kodak, Mustang)
2. It should be extendable.
3. It should be easy to pronounce, identified and memorized. (For instance-
Tide)
4. It should give an idea about product’s qualities and benefits (For
instance- Swift, Quickfix, Lipguard).
5. It should be easily convertible into foreign languages.
6. It should be capable of legal protection and registration.
7. It should suggest product/service category (For instance Newsweek).
8. It should not portray bad/wrong meanings in other categories. (For
instance NOVA is a poor name for a car to be sold in Spanish country,
because in Spanish it means “doesn’t go”).
 BRAND STRATEGY
• Brand strategy is a long-term plan for the development of a successful
brand in order to achieve specific goals.
• A well-defined and executed brand strategy affects all aspects of a
business and is directly connected to consumer needs, emotions, and
competitive environments.
• A brand strategy is a formal plan used by a business to create a particular
image of itself in the minds of current and potential customers.
• When a company has created and executed a successful brand strategy,
people know without being told who the company is and what they do.
• We will now discuss BRAND NAME strategies in detail:
• Individual Branding 
1. Each brand has a separate name under the same company (for example,
Red label tea and Fortune oil are both owned by Tata Group).
2. Individual brand names naturally allow greater flexibility by permitting  a
variety of different products, of differing quality, to be sold  without
confusing the consumer's perception of what business the company is in
or diluting higher quality products.
3. Failure of one product wont affect the whole range of products.
4. It facilitates market segmentation.
5. Disadvantage of high costs.
• FAMILY BRANDING/Blanket Family Name
1. Umbrella branding (also known as family branding) is a marketing
practice involving the use of a single brand name for the sale of two or
more related products.
2. Umbrella branding is mainly used by companies with a positive brand
equity (value of a brand in a certain marketplace). 
3. All products use the same means of identification and lack additional brand names
or symbols. Family branding reduces cost of launching and promotion.
4. If a brand is successful, the entire product line gains.
5. Disadvantage is that no separate identity can be given to different products in
separate segments.
6. When products are of uneven quality or cater to different consumer profiles, it is
not suitable.
7. Example: Axe (by Unilever) has a range of similar products that use the same
family brand (Axe deodorants, Axe shampoos, Axe shower gels, Axe hair stylers,etc

• Separate Family Name

1.  This is normally used by the companies which produces products of different
sectors.
2. In this separate family names for all the products are given.
3. In this system a separate brand name for each line (one for each category) is used.
4. Example- Under Aaditya Birla Group
• Grasim Suitings, Ultratech Cement, Hindalco
• Combination Branding
1. Combination branding refers to the use of a combination of brand
names- a family brand name and an individual brand name.
2. Such branding allows leveraging the family brand name while also
creating a distinctive brand name that better suits the product.
3. A combination brand name also allows a company to distinguish its
different product categories and avoid confusion in the minds of the
consumers.
4. Such branding is quite popular in case of launch of a new product
category by an established brand or in case of acquisition of a new
firm/division.
5. Example-'Toyota Corolla' or 'Honda Civic
Brand Development
 Branding Development

• For developing brands, a company has four choices: line extensions, brand
extensions, multibrands or new brands.

1. Line extension refers to extending an existing brand name to new forms,

sizes, colors', ingredients or flavors of an existing product category. This
is a low-cost, low-risk way to introduce new products. However, there
are the risks that the brand name becomes overextended and loses its
specific meaning. This may confuse consumers.
• An example for line extension is when Coca-Cola introduces a new
flavour, such as diet cola with vanilla, under the existing brand name.
2. Brand extension also assumes an existing brand name, but combines it
with a new product category. Thus, an existing brand name is extended
to a new product category.
• This gives the new product instant recognition and faster acceptance
and can save substantial advertising costs for establishing a new brand.
• However, the risk that the extension may confuse the image of the main
brand should be kept in mind. Also, if the extension fails, it may harm
consumer attitudes toward other products carrying the same brand
name.
• For this reason, a brand extension such as Heinz pet food could not
survive. But other brand extensions work well. For instance, Kellog’s has
extended its Special K healthy breakfast cereal brand into a complete line
of cereals plus a line of biscuits, snacks and nutrition bars.

3. Multibranding Marketing of two or more similar and competing products

by the same firm under different and unrelated brands.
• While these brands eat into each others' sales ,multi-brand strategy does
have some advantages as a means of (1) obtaining greater shelf space
and leaving little for competitors' products, (2) saturating a market by
filling all price and quality gaps, (3) catering to brand-switchers users who
like to experiment with different brands, and (4) keeping the firm's
managers on their toes by generating internal competition.
• Procter & Gamble (P&G) – Is an American consumer goods company, that
sells 23 different brands. For example, Tide, Pampers, Gillette, Ace, Head &
Shoulders, etc.
• Unilever – Is the biggest manufacturer of ice-cream and a multinational
consumer goods company, that also produces several worldwide brands.
For instance, Axe, Rexona, Sunsilk, Dove, Lipton and more.

4. New brands are needed when the power of existing brand names is

waning. Also, a new brand name is appropriate when the company
enters a new product category for which none of its current brand names
are appropriate.
• Eg Tanishq jewellery by Tata and Titan watches by Tata.
 What is the difference between Brand
Extension and Line Extension?
1. Brand Extension is a marketing strategy according to which, a well
known brand uses the same brand name to enter into a totally unrelated
product category. It is done primarily to leverage on the existing brand
equity. Some marketers argue that since building a brand is costly affair,
once you have built a brand you should leverage its value by using the
same brand name to other new categories as well.
• For example, Virgin, which was initially a record label, entered into other
line of business like aviation, game stores, video stores, telecom, etc.
Godrej, which was initially a brand which signified locks and cupboards,
later on entered into whole new product categories like refrigerators,
furniture and real estate.
2. Line Extension (or product extension) is a marketing strategy according
to which the scope of the product a brand represents is increased i.e.
when you are adding varieties or variations or flavors of the same
branded product, you are basically doing line extension.
• Like brand extension, line extension is also done to leverage on the brand
equity by targeting a bigger chunk of the user base.
• For example- When Coke introduced Diet Coke to target the diet
conscious people, they did line extension. When Amazon, started selling
various other products other than books, they also did line extension.
 BRAND EQUITY
1. Brand equity refers to a value premium that a company generates from a
product with a recognizable name, when compared to a generic
equivalent.
2. Companies can create brand equity for their products by making them
memorable, easily recognizable, and superior in quality and reliability.
3. The American Marketing Association defines brand equity this way: from
a consumer perspective, brand equity is based on consumer attitudes
about positive brand attributes and favorable consequences of brand
use.
4. Components of Brand Equity
• Brand Recognition - The brand is widely known and recognized, and
consumers know what it provides in relationship to the competition.
• Brand Experience - Consumers have used and experienced the product
enough to build expectation.
• Brand Preference - The brand is preferred by consumers, and as a result,
they become returning customers.
• Brand Loyalty - The brand and the consumer have an emotional
attachment, and the consumer will go to any length to purchase it.

5. Advantages of Brand Equity:

 When a company has positive brand equity, customers willingly pay a
high price for its products, even though they could get the same thing
from a competitor for less. Customers, in effect, pay a price premium to
do business with a firm they know and admire.
 Another benefit of successful branding is not having to work as hard, or
spend as much money, on marketing. A company with a great reputation
has thousands of customers on the streets spreading the word for it
 Customer loyalty. Customers are not only willing to pay more for a
product with strong brand equity; they’re also willing to stay loyal to a
company over years and years, coming back to buy there again and
again.
 Expansion opportunities. Positive brand equity can facilitate a company’s
long-term growth. By leveraging the value of your brand, you can more
easily add new products to your line and people will more willingly try
your new product.
 Negotiating power. Positive brand equity can give you a considerable
advantage in negotiating with vendors, manufacturers and distributors.
When suppliers recognize that consumers are enthusiastically seeking and
buying products that bear your name.
 Competitive advantage
 Packaging
• Leading brands understand the importance of packaging not only in
keeping their goods safe, fresh, and protected, but also as an essential
part of their branding and marketing efforts.
• Packaging is the signature you leave everywhere, and it has the ability to
attract today’s customers much better than outdated sales and advertising
tactics.
• Product packaging can play a huge role in the promotion of both a
company and its goods as more consumers choose to create their own
experiences and educate themselves on their purchasing decisions instead
of being preached to and persuaded by an ad or sales pitch.
• Packaging is the activity of designing and producing the container or
wrapper for the product. It is an important and effective sales tool for
encouraging the consumers for buying.
• It must perform all the basic function such as protection, ease of handling
and storage, convenience in usage etc. and should not be deceptive and
convey any deceptive message. It is the best method for attracting the
consumers for buying the products.
• According to W.J.Stanton, “Packaging may be defined as the general
group of activities in product planning which helps in value designing and
producing the container or wrapper for a product.”
 Levels of Packaging
1. Primary Package:
• Primary package refers to the product’s immediate package. In certain
cases, such package is retained till the consumer is ready to use the
product. For example, plastic packet for socks while in some other cases
such package is used throughout the life of the product such as the bottle
carrying jam or tomato sauce etc.

2. Secondary Packaging:
• Secondary packaging is the additional packing given to a product to
protect it. Such packing is retained till the consumer wants to start using
the product. For example. Pears Soap usually comes in a card board box.
Consumer first throws the box when he desires to use it & than discards
plastic wrapper too to get hold of the soap.
3. Transportation Packaging:
• It refers to packages essential for storing, identifying or transporting. For
example, use of corrugated boxes, wooden crates etc.
 Role/Importance Of Packaging
1. Protects the contents
• The basic function of packaging is to protect the contents from damage, dust,
dirt, leakage, pilferage, evaporation, watering, contamination and so on.
• Packaging helps in the protection of the contents of the products.
• Seasonal fluctuations in demand may be smoothed out through packaging.
Packaging helps to protect the contents of all the available products.

2. Information and self service for the customer

• One of the first role that packaging plays, especially in new products
launches, is the information provided on the packaging. This information can
tell the consumer how to cook the food product, it can tell them how to use a
technology product, or it can lay out any procedures and precautions
necessary during the usage of the product.
• Thus, when products are sold in large quantity and you cannot have a
salesman for each customer, the role of packaging is to convey the
information to the customer.
• Below is an example of a Maggi packet, where it specifies how to make
maggi and also gives additional information of the beneficial nutrition to
be found in Maggi and specifically, the harmful nutrients which are NOT
there in Maggi.
3. Act as promotional tool:
• Good packaging can sell the product more easily and quickly as it works as
a promotional tool. As a promotional tool, it does self-advertising ,
displaying, publishing and acts as an advertising medium.
• It is the package, size, design, color combinations and graphics that decide
its ability to attract the valuable attention of customers or the prospects.

4. Transportation:
• Packaging facilitates transportation of products from one place to another.
It ensures easy transportation and better handling of products in transit.

5. Identification of product differentiation:

• Packaging helps to identify the product differentiation easily.It ensures the
individuality of the products and one product can be easily differentiated
with each other products in the market. The customers can easily identify
their product of choice at the time of purchase. This helps the customers
to prevent substitution of goods by other customers.
• 6. Innovation in packaging helps sales

• There have been many instances where the role of packaging in increasing
sales is evident. Look at the example of Tetra pack which was introduced
by Frooti in India. Such innovation in packaging leads to more sales
because more and more customers prefer a convenient packaging over a
non convenient one.
• Not only the tetra pack, the sachets used for small packaging of oil,
shampoo or any other small items have increased the sales tremendously
of these items. They are easy to carry, easy to be sold off and have
penetrated the market thoroughly. They can also be used as samples for
the product.
• If you look at Cadbury celebrations, a whole new gift item has spawned
just by repacking the already well selling items in the market like Dairy
milk and 5 star.
 Requisites of Good Package
*  Functional – effectively contain and protect the contents
* Provide convenience during distribution, sale, opening, use, reuse, etc.
* Be environmentally responsible
* Be cost effective
* Appropriately designed for target market
* Eye-catching (particularly for retail/consumer sales)
* Communicate attributes and recommended use of the product and
package
* Compliant with retailers’ requirements
* Promotes image of enterprise
* Distinguishable from competitors’ products
* Meet legal requirements for product and packaging
 Labelling
• Branding, packaging and labeling are the secondary functions of
marketing.
• They perform functions together as integrated parts of product planning
and development.
• The function of putting identification mark of the product on its package
is called 'labelling'.
• In other words, to put certain mark, or paste or tag with certain
instruction or description on its package is called labelling product.
• If information about the product is printed on the package or pasted on it,
then it is called label.
• Labeling gives necessary information to the customers about the products.
The customers can get knowledge about the quality and features of
product before purchasing the product.
  Importance and necessity of labelling 
1. Labelling identifies the product-Label helps to identify the product and
brand. It popularizes the product and its brand name.
2. Labelling grades the product-Label helps to express grade of the product.
For example, wheat can be express with the grades such as 1, 2, 3, 4. Label
becomes useful to grade any product according to its quality.
3. Labelling describes the product-Label gives introduction of the product,
describes and expresses its grade. Information and instructions about-
who manufactured the product, when and where it was manufactured,
how many ingredients have been used in it, how to use the product, how
to keep the product safe, etc. are given on the label. This becomes
helpful to the customers.
• 4. Labelling promotes the product-Label helps to promote the product
Customers' attention is drawn by attractive and fascinating graphs, figures
or marks. This motivates the customers to buy the product. Label plays
and important role in sales and distribution as it makes the customers take
buying decision.
5. Labelling protects the customers-Label protects the customers. As
maximum selling price, quantity, quality etc. are mentioned on the label,
the customers are protected from the possible malpractice of middlemen.
 Types Of Labels

1. Brand label
• If only brand is used on package of a product, this is called brand label.
Brand itself is expressed in label. Brand label is put on some cloth. It tells
the name of the cloth, e.g, 'Sanforised'. Similarly, label is used on soap
e.g, Lux, Hamam, Rexona etc.

2. Grade label
• Some products have given grade label. Grade label shows the grade of the
product. It shows the quality of products by words, letters, or figure.
A,B,C,D grade can be put on peas packed into cans. Similarly, grade label
can be mentioned as 1,2,3,4 grades for packed wheat,. Some firms may
use labels as good, better, best etc. on their products.
3. Descriptive label
• Descriptive label give information about the feature, using instruction,
handling, security etc. of the products. Descriptive label is used for the
products whose grade cannot be differentiated.

• 4. Informative label
Informative label gives information about the product. Using method and
security of the product, name of the producer, manufactured date, expiry
date, name of intermediary, additional instructions regarding the use of the
product etc. are mentioned in informative label. Descriptive label gives
general information about the product whereas informative label gives
maximum information about the product including its use, manufacturer etc. 
 After Sales Service
• After sales service refers to various processes which make sure
customers are satisfied with the products and services of the
organization.
• Importance:
1. After sales service plays an important role in customer satisfaction and
customer retention. It generates loyal customers.
2. Customers start believing in the brand and get associated with the
organization for a longer duration. They speak good about the
organization and its products.
3. A satisfied and happy customer brings more individuals and eventually
more revenues for the organization.
4. After sales service plays a pivotal role in strengthening the bond
between the organization and 
New Product Development
 New Product Development
• New product development is a process which is designed to develop, test
and consider the viability of products which are new to the market in
order to ensure the Growth or survival of the organisation.
• Stages in New product development
(i) Idea Generation- Idea generation is continuous, systematic search for
new product opportunities. It involves delineating sources of new ideas
and methods for generating them.• Ideas for new products can be
obtained from basic research using a SWOT analysis (OPPORTUNITY
ANALYSIS), Market and consumer trends, company's R&D department,
competitors, focus groups, employees, salespeople, corporate spies.
• (ii) Idea Screening- Most companies have a "Idea Committee." This
committee studies all the ideas very carefully. They select the good ideas
and reject the bad ideas.
• Before selecting or rejecting an idea, the following questions are
considered or asked:
1. Is it necessary to introduce a new product?
2. Can the existing plant and machinery produce the new product?
3. Can the existing marketing network sell the new product?
4. When can the new product break even?
• If the answers to these questions are positive, then the idea of a new-
product development is selected else it is rejected. This step is necessary
to avoid product failure.

(iii) Concept testing

• Concept testing is done after idea screening. It is different from test
marketing. In this stage of concept testing, the company finds out:
1. Whether the consumers understand the product idea or not?
2. Whether the consumers need the new product or not?
3. Whether the consumers will accept the product or not?
• Here, a small group of consumers is selected. They are given full
information about the new product. Then they are asked what they feel
about the new product.
• They are asked whether they like the new product or not. So, concept testing is done
to find out the consumers' reactions towards the new product. If most of the
consumers like the product, then business analysis is done.

(iv) Business analysis

• Business analysis is a very important step in new-product development. Here, a
detailed business analysis is done. The company finds out whether the new product is
commercially profitable or not.
• Under business analysis, the company finds out...
1. Whether the new product is commercially profitable or not?
2. What will be the cost of the new product?
3. Is there any demand for the new product?
4. Whether this demand is regular or seasonal?
5. Are there any competitors of the new product?
6. How the total sales of the new product be?
7. What will be the expenses on advertising, sales promotion, etc.?
8. How much profit the new product will earn?
• So, the company studies the new product from the business point of view. If the new
product is profitable, it will be accepted else it will be rejected.
(v) Product development
• At this stage, the company has decided to introduce the new product in
the market.
• It will take all necessary steps to produce and distribute the new product.
The production department will make plans to produce the product. The
marketing department will make plans to distribute the product. The
finance department will provide the finance for introducing the new
product. The advertising department will plan the advertisements for the
new product.
• However, all this is done as a small scale for Test Marketing.

(vi) Test marketing

• Test marketing means to introduce the new product on a very small scale
in a very small market. If the new product is successful in this market, then
it is introduced on a large scale.
• However, if the product fails in the test market, then the company finds
out the reasons for its failure. It makes necessary changes in the new
product and introduces it again in a small market. If the new product fails
again the company will reject it.
• Test marketing reduces the risk of large-scale marketing. It is a safety
device. It is very time-consuming. It must be done especially for costly
products.

(vii) Commercialization
• If the test marketing is successful, then the company introduces the new
product on a large scale, say all over the country.
• The company makes a large investment in the new product. It produces
and distributes the new product on a huge scale.
• It advertises the new product on the mass media like TV, Radio,
Newspapers and Magazines, etc.

(viii) Review of market performance

• The company must continuously monitor the performance of the new
product. They must make necessary changes in their marketing plans and
strategies else the product will fail.