Download - Lect13-3rd Mar - Product Decisions & PLC
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
1/28
Recap of the last Class:
Various bases of segmenting themarket
Requirements of effectivesegmentation
Targeting strategies
Positioning strategies Determinants of good positioning
Positioning Pitfalls
1
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
2/28
2
Five Product Levels:
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
3/28
3
Product Hierarchy:
Need Family: To pass time while on move Product Family: Entertainment
Product Class: Portable Entertainment
Instruments Product Line/Category: Portable DVD
players, CD players, MP3 players
Product Type/Form: High-end MP3 player Item/SKU: Apple ipod nano 4GB
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
4/28
4
Other Product Hierarchy Concepts:
Product System: Product Mix
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
5/28
5
Product Classifications:
On Basis of Durability & Tangibility:
Non Durable Goods
Eg: FMCG products
Durable Goods
Eg: TV, Mobiles
Services
Eg: Aviation Industry
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
6/28
6
Consumer Goods Classification:
Convenience Goods: Purchased Frequentlywith min. effort.
Staples: Eg: Food items, soaps etc.
Impulse Goods: Eg: Chocolates, Magazines etc.
Emergency Goods: Eg: Some pharma products
Shopping Goods: Selection & ComparisonProcess before purchase Eg: Apparel, Furniture
Specialty Goods: Unique Characteristics/BrandEg: Mercedes Benz, Bose Speakers
Unsought Goods:Consumer normally doesntbuy them till persisted Eg: Helmets, Reflectors
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
7/28
7
Industrial Goods Classification:
Materials & Parts:
Raw Material: Eg: Milk for Ice Cream etc.
Manufactured Material: Eg: Cement
Capital Items:
Installations: Eg: Factories, power plants
Equipment: Eg: Tools, Lift trucks
Supplies & Business Service
Eg: Office Stationary, cleaning services
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
8/28
8
Product Mix:
Width of Product Mix (Product Categories):Eg: For HUL it is Detergents, Deodorants,Soap, Shampoo, Tea, Ice Cream etc.
Length of Product Mix (Brands): Eg: ForHUL it is Surf, Rin, Lux, Axe, Sun Silk,Brooke Bond, Lipton, Kwality-Walls etc.
Depth of Product Mix (SKUs): Variants ofeach brand.
Consistency of Product Mix: Close relation
among product categories
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
9/28
9
Product Line Strategies:
Line Stretching: Taking product line to newsegment
Down Market Stretching/Trading Down: Eg:
Kelloggs MazzaUp Market Stretching/Trading Up: Eg: Hyundais
Verna, Elantra, Sonata, Tuscon
Two-Way Stretching:Tata selling Nano as well as Jaguar & LandRover
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
10/28
10
Line Filling: Adding More Variants/FillingProduct Depth E.g. Marutis Strategy
Line Modernization: E.g: Onidas newtechnologically advanced products
Line Featuring: E.g: Tata Indica & Indigo
Line Pruning: E.g: HUL concentrating on 30power brands out of its 110 brands.
Product Line Strategies (Cont.):
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
11/28
11
Product-Mix Pricing:
ProductLinePricing
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
12/28
Product-Mix
Pricing (Cont..): Optional Feature
Pricing Eg: In
case of variantsof Car Models,Laptops
12
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
13/28
13
Product-Mix Pricing (Cont.): Captive Product
Pricing Eg: lowpriced HP printer +high priced cartages
Two-part Pricing By-Product Pricing
Eg: molasses fromsugar firms
Product BundlingPricing
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
14/28
14
Packaging & Labeling
Why is it done?
To Add Value
States the contents of the product
To Advertise
To protect the product
Mandatory Requirement
Enable self selection
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
15/28
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
16/28
16
Product Life-Cycle-Sales & Profit:
SalesAnd
Profit
Time
Sales
Profit
INTR
ODUCTI
ON
GRO
WTH
MATURITY
DEC
LINE
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
17/28
Introduction Growth Maturity Decline
17
ProductCategory
Blu-ray discs DVDs VCDs VideoCassettes
ProductForm
Eco-friendlyPens
Gel Pens Ball PointPens
Ink Pens
Brands Force MotorsTraveler Strong
Volvo FM& FH
Tata ACE
Tata 407,AshokLeylandEcomet
912
DCMToyota,Matador
Examples of Product Life-Cycle:
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
18/28
18
Various Product Life Cycle Patterns
Example:a) b) c)
http://en.wikipedia.org/wiki/Image:Orkut.gifhttp://en.wikipedia.org/wiki/Image:Thums_up_logo.jpg -
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
19/28
19
Marketing Strategies:
Introduction StageHigh Promotion Level Low Promotion Level
High
Price
Rapid
Skimming
Slow Skimming
LowPrice
Rapid
Penetra-
tion
Slow Penetration
-
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
20/28
20
Marketing Strategies:
Growth Stage Growth stage for Mahindra & Mahindras Scorpio
Sales of 3,519 units in Sept. 07 vis--vis 3,333 inSept06
What is being done to the product?
Quality Improvement, Addition of new features, ImprovedStyling: New version of Scorpio launched on 28th Sept. 2007.
Add New Models: Scorpio Getaway
Enter new market Segments: Russia, South Africa Increase Distribution Coverage: 275 dealers at present
Prices are lowered: Getaway priced at Rs7.13 lakh to Rs8.18 lakhvis--vis Rs 8.33 lakh to Rs 9.72 lakh for other variants
Shift from product awareness to product preference ads.
http://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_01082006_huge.jpg -
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
21/28
21
http://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_01082006_huge.jpg -
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
22/28
22
Three phases of this stage are:
Growth (Sales growth rate starts to decline) Eg:
Tata Indigo sold 3,436 units in Feb 07 (7% increase over
Jan 07 but less than Feb 06 over Jan 06 increase)
Stable (Sales flatten) Eg: Maruti Suzukis Alto, Zen,Estillo and Swift sales stood at 34,759 units in July 08 as
against 34,737 units in July 07 (up 0.2%).
Decaying Maturity (Absolute level of sales starts
to decline) Eg: Maruti 800 sold 5,970 units in July 07,but only 4,953 units in July 08 (17% decline)
Maturity Stage
http://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpg -
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
23/28
23
Market Modification: Volume = No. of Brand Users*Usage rate/user
Expand No. of Brand Users:
Convert Nonusers: Eg Competitive pricing
Enter New Market Segments: Eg - International Markets
Win Competitors Customers: Eg Better service
Increase usage of Brands:
Use Product More Frequently: Eg Loyalty programs, FFP
Using more product on each occation: Eg - More usage ofShampoo, toothpaste per occasion
Varied Uses:
Marketing Strategies:
Maturity Stage
http://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpg -
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
24/28
24
http://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpg -
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
25/28
25
Marketing Strategies:
Maturity StageProduct Modification
Quality Improvement
Feature Improvement
Style Improvement
Marketing-Mix
Modification
http://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpg -
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
26/28
26
Source:http://www.expressindia.com/latest-news/Maruti-Suzuki-to-launch-new-M800-Uniq/340367/
http://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpg -
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
27/28
27
Harvest
Divest
Marketing Strategies:
Decline Stage
http://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://bp1.blogger.com/_1pKvii0Z9Cs/RYY2auOvf9I/AAAAAAAAAF0/3xScrPJQrZI/s1600-h/Vanilla_coke_ad.jpg -
8/2/2019 Lect13-3rd Mar - Product Decisions & PLC
28/28
28
Critique of PLC:
PLC too varied in shape & duration
Cannot be used as a forecasting tool
Problem in telling what stage a productis in
http://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpghttp://www.agencyfaqs.com/advertising/newcamps/grfx/newcampaigns_inside/newcampaigns_huge/2006/scorpio_18052006_huge.jpg