product mix
DESCRIPTION
PLC STP AND BRANDTRANSCRIPT
PRODUCT MIX
TO BE STUDIED AT TWO LEVELS
INDIVIDUAL PRODUCT
DECISIONS
PRODUCT LINE
DECISIONS
INDIVIDUAL PRODUCT
DECISIONS
INDIVIDUAL PRODUCT DECISIONS
Includes decisions related to –
PRODUCT ATTRIBUTES
PACKAGING
BRANDING
PRODUCT SUPPORT SERVICES
LABELING
QUALITY
FEATURES
STYLE
DESIGN
BRAND
Brand: a name, term, sign, symbol, or design, or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitor ◦ Some desirable qualities of a brand name:
◦ It should suggest something about the product’s benefits.
◦ It should suggest product qualities.
◦ It should be easy to pronounce, recognize, and remember.
◦ It should be distinctive.
◦ It should not carry poor meaning in other countries and languages.
Individual Names : e.g P&G - Vicks ( health Care) , Ariel and Tide (Fabric care ) Pantene , Head and Shoulders , Rejoice ( Shampoo) , and Pampers ( Baby care )
Blanket Family names : Policy followed by Tata - Salt , Tea , Automobile ,and Steel
Separate Family names for all products– Aditya Birla group follows this policy to a great extent like Hindalco Aluminium , Ultra Tech Cement , Grasim Suiting and Graviera suiting
Corporate names combines with Individual product names : by Kellogg's – Kellogg's Rice Krispy's , Kellogg’s Raisin Bran , and Kellogg’s Cornflakes
Brand development Strategies
Line Extension
Brand Extension
Multibrands New
Brands
Product Category
Bran
d n
am
e
Co-Branding
Functions of Packaging
Contain and protect the product
◦ Physical protection
Promote the product ◦ Identify the brand, list the ingredients, specify
features, give directions, differentiate from competition,
◦ influence consumer perceptions and buying behavior.
Facilitate storage, use, and convenience ◦ Easy to ship, store, and stock, prevent spoilage or
breakage, extend a product’s shelf life. ◦ Easy to handle, open and reclose, ◦ tamperproof/childproof, reusable, disposable.
PRODUCT LINE DECISIONS
A GROUP OF PRODUCTS
THAT ARE CLOSELY RELATED
they function in a similar manner
they are marketed through the
same type of outlets
they fall within given price ranges
they are sold to the same
customer group
EXAMPLES –
LOREAL HAIR CARE SEGMENT
NOKIA CELL PHONES
NIKE ATHLETIC SHOES HUL
FMCG PRODUCTS P & G
PRODUCTS
Product Line Strategies
Line Stretching
Down-market Stretch
Up-Market Stretch
Two – Way Stretch
Line Filling
Line Modernization,
Pruning
PRODUCT LIFE CYCLE
PRODUCT LIFE CYCLE
The course that a product’s sales and profits take over it’s lifetime…..
5 DISTINCT STAGES……………
1.PRODUCT DEVELOPMENT
2.INTRODUCTION
3.GROWTH
4.MATURITY
5.DECLINE
New Product development
Idea Generation
Idea screening
Concept Development &
Testing
Marketing Strategy
Development
Business Analysis
Product Development
Test Marketing
• Standard
• Controlled
• Simulated
Commercialization
Managing New Product development
Customer Centered
Team based Product Development
Systematic New Product Development
Stages in Adoption Process
Awareness
Interest
Evaluation
Trial
Adoption
What Influences adoption?
Relative Advantage
Compatibility
Complexity
Divisibility
Communicability
Factors to consider when setting Prices
Other Internal & external considerations
Customer Perception of Value
Product Costs
PRICE FLOOR
PRICE CEILING
Design a product
Determine cost
Set price based on product
Convince buyers of products
value
Access Customer needs
& Value perception
Set target price to match
perception
Determine the costs that can be incurred
Design the product to
deliver desired value at target
price
Factors to be considered when setting prices
Customer perception of Value
Value based pricing
Good value Pricing
Value added Pricing
Company & Product costs
Types of Costs
Costs at different levels of Production
Cost as a function of Experience curve
Cost plus Pricing
Break Even Analysis & Target Profit
pricing
Other internal & External considerations
Overall marketing strategy, objective &
mix
The market & demand
Competitors Strategy & Pricing
Other External Factors
Pricing Methods
Mark Up Pricing
Target Return Pricing
Perceived value pricing
Value pricing
Going rate Pricing
Auction Type Pricing
New Product Pricing Strategy
Market Skimming
•Products quality & image must support its high price & enough buyers must want the product at that price
•Cost of producing a smaller volume cannot be so high that they cancel the advantage of charging more
•Competitors should not be able to enter the market easily & undercut the high price
Market Penetration
•Market must be highly price sensitive so that low price produces more market growth
•Production & distribution costs must fall as sales volume increases.
•Low price must help keep out competition
•Maintain the low price
Price Adjustment Strategies
Discount & allowance pricing
•Reducing prices to reward customer responses such as paying early or promoting the product
Segmented pricing
•Adjusting prices to allow for differences in customers, products or locations
Psychological Pricing
•It considers the psychology of prices & not simply the economics
•Reference pricing
Promotional Pricing
•Temporarily pricing products below the list price and sometimes even below cost, to increase short-run sales.
Geographical Pricing
•Setting prices for customers located in different parts of the country or world
•FOB-Origin Pricing
•Uniform delivered pricing
•Zone pricing
•Basing point pricing
•Freight absorption pricing
Dynamic Pricing •Adjusting the prices continually to meet the characteristics & needs of individual customers & situations
International Pricing
PRICE CHANGES
Initiating Price
Changes
Responding to price changes
Initiating Price Changes
Initiating Price cuts
Initiating Price
increases
Buyers reaction to
price changes
Competitors reaction to
price changes
Responding to Price changes
Has competitor cut price?
Hold current price,
continue to monitor
competitors price
Will lower price negatively affect our
market share & profits?
Can/should effective action be taken?
Reduce price
Raise perceived
value
Improve quality &
increase price
Launch low-price “fighting
brand
NO
YES YES
NO
NO
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