ch-3-product policy and mktg mix

7/30/2019 CH-3-Product Policy and Mktg Mix

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CHAPTER :- 3


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Product :- is a bundle of satisfaction that a

customer buys.

A productis anything that can be offered to a

market to satisfy a want or need, including

physical goods, services, experiences, events,

persons, places, properties, organizations,

information, and ideas.


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Core benefit:- the service or benefit the

customer is really buying

Basic product :- the marketer has to turn thecore benefit into a basic product

Expected product:- a set of attributes and

conditions buyers normally except when they

purchase this product

Augmented product:- that exceeds customer

expectations


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Potentialproduct:- encompasses all the possible augmentation

Example of car:-

Core product : Transportation from one place to another.

Actual Product : Brand of the car, looks and design of the car etc.

Expected Product : Decent mileage, proper engine, inflated tyres etc.

Augmented Product : After-sale services, insurance policy etc.

Potential Product : May run more smoothly as it wears off a little.


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Durability and tangibility1. Nondurable goods

2. Durable goods3. services


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Nondurable goods:- are tangible goods normallyconsumed in one or few uses, like soap.

Durable goods:- are tangible goods that normally survivemany uses ,refrigerators, machine tools and clothing .

Services:- are intangible ,inseparable ,variable, and

perishable product .


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Convenience goods: frequently ,immediatelyand with minimum of effort. Example(soap

,toothpaste0) ConvenienceProducts


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Convenience goods consumers useminimal effort for frequently purchased low

cost items Staples - goods purchased on a regular basis

(ex. milk, eggs) Emergency goods - purchased when the need

is urgent (ex. umbrella, boots) Impulse purchases no conscious pre planning


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Shopping goods:- are goods that the consumer ,in theprocess of selection and purchase characteristically compares

on such base as suitability,quality,price, and style.

Example(clothes , electrical appliances)

Shopping

Products


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Specialty goods:- have unique characteristics or brandidentification for which a sufficient number of buyer are

willing to make a special purchasing effort. Example(cars

luxury watches)

Unsought goods:- are those the consumer does notknow about or does not normally think of buying like smoke

detector.

SpecialtyProducts


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Materials and parts:- are goods that enter themanufacturers product completely.

Materials and parts

Manufacturers material

and partsRaw materials


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Capital items :- are longlasting goods that facilitatesdeveloping or managing the finished product

Capital items

EquipmentInstallations


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Supplies and business service:- are shorttermgoods and services that facilitate developing or managing

the finished product

Supplies

Operating supplies

Maintenance& Repair

items


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Form Features

Performance quality Conformance quality Durability Reliability Repair ability style


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Ordering ease Delivery

Installation Customer training Customer consulting Maintenance and repair Returns


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1. Need family :- the basic need that actualizethe product family . Example:- security

2. Product family:- all the product classes thatcan satisfy a basic need with reasonableeffectiveness . Example: -saving and income

3. Product class:- a group of product within the

product family recognized as having a certainfunctional coherence . Also known as productcategory .Example :-financial instruments


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4 Product line:- a group of product is within a productclass that are closely related because they perform a similar

function are sold to the same customer groups , are marketed

through the same outlets . Example : life insurance5 Product type :- a group of items within a product line

that share one of several possible forms of the product .

Example : term life insurance

6 Item :- a distinct unit within a brand or product linedistinguishable by size ,price ,appearance , or some other

attribute . Example : ICICI prudential renewable life

insurance


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Product needto satisfy a need e.g. feet protection Product classa family of products having similar

function e.g. all shoes

Product linea group of products with closelyrelated functions e.g. sports shoes

Product typeproducts within a line having similarform e.g. basket-ball shoes

Branda name representing a product or line e.g.Nike Item (Stock Keeping Unit)a unit item e.g. one pair

of Nike basket-ball shoe


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Product mix : is the set of all product s and items a particular selleroffers for sale.

Width of product mix : refers to how many different product linesthe company carries. Example:- Anchor

Length of product mix: refers to the total number of items in themix.

Depth of product mix: refers to the number of product or averagenumber of items or length offered by the company within each product line

Example :- Godrej hair dyes

Consistency of the product mix :refers to how closely related the variousproduct lines are in end use , production requirement distribution channelsor some other way


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Product mix width

Product line 1Bath soap

Product line2Fabric wash

Product line3beverages

DoveLiril

PearsRexonaHamanbreeze

Moti

BruTaj

mahalTaazaBrooke

bondred

label

SurfRin

WheelAla

Productline length


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25gm

pink 50gm75 gmLUX

25gmwhite 50gm

75gm


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Product line managers need to know thesales and profits of each item in their line

in order to determine which items tobuild, maintain, harvest,, or divest. Theyalso need to understand each productsmarket profile, i.e. how their product lineis positioned against competitorsproduct lines


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Company lengthens its product line in twoways :-

Line stretching :- is adding new products tothe existing product line of the company.Example :- Maruti 800

Line filling :- add items within the currentrange of the companys product line.

Example :- Bata


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Downward stretch :- many companies operate in the highend or in the upmarket but depending on the market potential and

opportunities, may add product in the lower end.

Example:- Honda motor

the reasons for downward stretching strategy by a company could be

(i) Slow growth rate or market situation in the upmarket

(ii) Greater opportunities in the low end

(iii) Increase in number of competitors

(iv) Economic slow down in sales decline in the upmarket


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Upward stretch :- companies which are operating inthe low end market decide to enter higher end market.

Two

way stretch:- companies which are operating inthe middle of the market range decide to expand business

operations by adding products in the upmarket and lower end

of the market and capitalize on its dominant position in the

existing mid market. Example:- Texas instruments


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Co-branding also called dual branding or brand

bundling in which two or more well-known existing

brands are combined into a joint product and/or

marketed together in some fashion

Ingredient branding is a special case of a co-

branding .it involves creating brand equity for

material , components or parts that are necessarily

contained within other branded products


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Copyright 2009 DorlingKindersley (India) Pvt. Ltd.

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Packaging, sometimes called the fifthP, is all the activities of designing and

producing the container for a product.


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Self-service

Consumer affluence

Company/brand image

Innovation opportunity


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Identify the brand Convey descriptive and persuasive

information Facilitate product transportation and

protection Assist at-home storage Aid product consumption


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Identifies

Grades

Describes

Promotes


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Packaging :- packaging can be defined as an act of adesigning and producing a suitable and attractive package for

the product ,to protect and safe delivery of the product to be

sold in the market . Labeling :-

Warranties :-

Guarantees :-


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MM/M2/SS

Products have a limited life Product sales pass through distinct stages

each with different challenges andopportunities Profits rise and fall at different stages Products require different strategies in each

life cycle stage


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MM/M2/SS


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MM/M2/SS


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MM/M2/SS


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New-to-the-world

Cost reductions

New product lines

Additions

Improvements

Repositionings


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Apple

Google Toyota

General Electric Microsoft

Procter & Gamble 3M

Walt Disney

IBM

Sony Wal-Mart

Honda Starbucks

Target BMW

Samsung


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Run informal sessions with customers Allow time off for technical people to putter

on pet projects Make customer brainstorming a part of plant

tours Survey your customers Undertake fly on the wall research to

customers


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Use iterative rounds with customers Set up a keyword search to scan trade

publications Treat trade shows as intelligence missions Have employees visit supplier labs Set up an idea vault


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Observe customers using product Ask customers about problems with products

Ask customers about their dream products Use a customer advisory board or a brand

community of enthusiasts to discuss product


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Copyright 2009 Dorling Kindersley (India) Pvt. Ltd. 20-48

Attribute listing

Forced relationships

Morphological

analysis Reverse assumption

analysis

New contexts

Mind mapping


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Gas stations + food

Cafeteria + Internet

Cereal + snacking

Candy + toy

Audio + portable


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Absolute product failure

Partial product failure

Relative product failure


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Product idea Product concept Category concept Brand concept Concept testing


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Communicability and believability Need level

Gap level Perceived value Purchase intention User targets, purchase occasions, purchasing

frequency


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Target markets size, structure, and behavior Planned price, distribution, and promotion

for year one Long-run sales and profit goals and

marketing-mix strategy over time


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Alpha testing Beta testing

Rank-order method Paired-comparison method

Monadic-rating method

Market testing


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How many test cities? Which cities?

Length of test? What information to collect? What action to take?


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First entry Parallel entry Late entry


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Market potential Companys local reputation Cost of filling pipeline Cost of communication media

ch-3-product policy and mktg mix

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