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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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
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