mm chap 11,product & product lines
TRANSCRIPT
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Product & Product Lines
Chapter 11
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Product Personality
Core Features
Associated Features
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Nature of the Product
Generic Product
– Unbranded, Plainly Packaged
Expected Product – Contains attributes required by the customers
Augmented Product
– Additional attributes for differntiation Potential Product
– All possible improvements.
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Product Hierarchy
• PH can be defined as an organisationalchart that depicts the array of productsoffered in a given market.
• In automobile sector levels of producthierarchy are product class & productform.
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Product Classification.
• Durables.
• Tangible. Consumed over relatively longperiod
• Non durables.
• Tangible. Consumed over short period
• Services
• Intangible. Perishable.
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• Product can also be classified dependingupon who the final purchaser is & how heuses them.
• They are divided into consumer products& industrial product.
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Consumer Products
Convenience Products
– Inexpensive, Frequently bought
– Staples & Impulse
Shopping Products – Buyer Time & Effort. Longer life. Less frequent
Purchase.
Specialty Products – Unique characteristic features. Brand, Store or personloyal
Unsought Products
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Industrial Products
Raw Materials
Component Parts
Process Material
Capital equipment
Accessory equipment
Consumable supplies
Business Services
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Product Policy.
• Product mix is set of all the products thatan organisation offers to its customers.
• Product Width is total number of productlines a company carries.
• HLL offers Confectionaries,ColorCosmetics,Hair Care,Skin care,oralcare,Deodrants,Soaps & Detergent,Toiletsoaps,Beverages,Food.
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• Product length is total number of items inthat mix.
• The average length of a line is obtained by
dividing total length by the number of linesi.e. 46/10=4.6.
• The depth of a product mix is the
assortment of sizes,colors,& variationoffered,for each product in the productline.
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• For example Lifebuoy comes in differentsizes.
• Consistency refers to the closeness
exhibited by the product lies in productionrequirements,distributions,etc.
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• Most of the HLL product lines areconsistent as they are consumergoods,distributed by the same channel of
distribution & are produced in similarmanufacturing plant.
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• Trading Up:Companies offer higherpriced,prestige products to their existingproduct line in an effort to increase sales
of their low priced products & enhance thecompany’s image.
• Trading down:Companies offer low pricedproduct in order to provide a new productto customer who cannot afford the originalproduct.
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Product Life Cycle
Session-14
Time
S a l
e s
Introduction
GrowthMaturity
Decline
S t a g e o f P L C
o
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Products like people have a life cycle.
PLC refers to the progression or course of aproduct's sales & profit over its life time.
Product may pass through five stages.
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Product development.
Introduction.
Growth. Maturity.
Decline.
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Product may not pass through all the fivestages.
A product may be developed,introduced &then withdrawn from the market.
A relaunched product will have new life cycle.
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Introduction stage.
At this stage sales is low, promotionalexpenditure is high ,profit is negligible orproduct may not earn any profit at all.
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Strategies for Introduction stage.
Rapid Skimming.
Slow Skimming.
Rapid Penetration. Slow Penetration.
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➲Rapid Skimming
Marketer launches the product at higher price& higher promotional level to skim the marketrapidly.
The strategy is more successful when a largepart of potential market is unaware of theproduct.
The firm tries to build brand preferences.
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Slow Skimming
In this product is launched at higher price &at low promotional level.
This strategy is feasible when market isaware of the product,the market size islimited,competition is not intense& customersare ready to pay higher price.
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Rapid Penetration.
In this product is launched at at lower pricewith heavy promotion.
This strategy is applied when market is largein size ,customer are unaware of theproduct,they are more pricesensitive,competition is high.
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Slow Penetration.
In this product is launched at lower price &low level of promotion.
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Growth Stage.
Rapid Growth in sales.
Rise in profits.
Competition may increase. Unit manufacturing cost falls.
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Strategies for growth stage.
Price cut to attract price sensitive customer.
Introduction of more product features andmodels.
Introduce new marketing channels
Enter new markets.
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Maturity.
Stagnation of sales that is sales growth rateslows down.
The reason could be introduction of newproduct/substitutes,increase competition.
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Strategies for Maturity stage.
Product Modification.
Increase advertising and sales promotion
Attractive promotional scheme. Exit from unprofitable market areas.
Invest more in R & D
New packaging and product re-launch
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Decline Stage.
During decline stage of PLC sales of aproduct falls rapidly.
The reson could be technologicaladvances,increase in competition,shift's inconsumer's taste & preferences.
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Strategy for decline stage.
Reduce unprofitable products from productline
Cut down promotional budgets and prices
Cut down unprofitable distributors
Reinvent the brand to make it more
appealing. Divest the business through disposal of
asset.
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