shaping the market offerings
DESCRIPTION
Introduction to ProductTRANSCRIPT
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LESSON PLAN
Session-3: Concept of Product Difference between
products and services Levels of product –
Customer value hierarchy
Classification of products
Session-4: Product
Differentiation Building and
Managing product mix and product lines
Product and Brand Relationship
Session-5: Packaging, labeling,
Warranties and Guarantees.
Prof. Suvendu Kr. Pratihari 2
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Session-3: Shaping the Market Offerings
Product characteristics and classificationsDifference between goods and servicesProduct Levels: The Customer Value Hierarchy
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What is a Product?
It is a need Satisfying entity. More than a physical object. It is a complex cluster of value
satisfaction i.e. it is the total package of benefits the customer receives when he buy and use it.
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Product Levels
Core Product
Basic Product
Expected Product
Augmented Product
Potential Product
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Core Product: It is the unbranded and undifferentiated commodity like rice, flour or cloth. Here the product doesn’t have any identity as it is not linked with any owner or maker.
Basic Product: When the product gets an identity through a name, it is called Branded Product. E.g. Annapurna Atta, Tata Salt etc.
Expected Product: These products enjoy further distinctions from other similar products/brands with special attributes or qualities and claim uniqueness for its offer. Example- Maggie for its two minutes preparation, Dettol for its “Total protection against germs”, Tata Nano Car for its Small Car, Nokia Handset for its Battery Life etc.
The Customized Product: A product that is adopted to the requirement of the individual customer, Example – IT and Telecom Products, Industrial Products etc.
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Augmented Product: It is the result of voluntary improvement brought by the manufacturer in order to enhance the value of the product by adding extra features or functions. Here the firm goes beyond the expectation of the customer/consumer. Example- Bluetooth technology inside the car for easy telephonic conversation as well as accessing songs from your handset. Internet TV was a kind of augmented product before few
years and now it is a successful product. Potential Product: It is the “Product of
Tomorrow”, carrying all the improvement and fineness that is possible under the given technological, economic and competitive conditions. Example-Electric Car, Solar Car, Car which can fly, Robot for domestic Use.
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Classification of Goods
Classification of Goods on the basis of Durability Durable Goods: Example – TV set, Car etc. Non-Durable : Example – Tooth Paste, Cold
Drinks etc. Business Goods
Raw Material Exp – Iron Ore, Crude Oil etc. Fabricating materials and Parts Exp – Paints,
Gas Cylinders etc. Installations Exp – Heavy Machinery for
production facilities Accessory Equipments Exp – Not-Bolts, Car
Tires and Wheels etc. Operating Supplies Exp – Safety Gloves,
Measurement instruments etc.
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Classification of Consumer goods, Ref: Panda-p-30
Convenience Goods Staple Goods: Consumer purchase on regular basis. E.g.
Tooth paste, Soap etc. Impulse Goods: Consumer purchase without any
planning. E.g. Magazine, Chocolate etc. Emergency Goods: Consumer purchase on an urgent
need. E.g. Umbrella, Antiseptic Cream etc. Shopping Goods:
It is a tangible product for which a consumer wants to compare quality, price and perhaps style in several stores before making a purchase is considered as a shopping goods
Example: Fashionable apparel, Furniture, Automobiles etc.
With shopping goods, buying habits affects the distribution and promotion strategies of both manufacture and middle man.Prof. Suvendu Kr. Pratihari 9
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Specialty Goods: Goods with unique characteristics or brand identification for which the buyer need to make a special purchasing effort. Exp- TV, Music System, Mobile Set, Wrist Watch etc.
Unsought Goods: Goods the consumer does not know about or does not normally think of buying. Exp – Health Insurance Products, Fire alarm etc.
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LESSON PLAN
Session-3: Concept of Product Difference between
products and services Levels of product –
Customer value hierarchy
Classification of products
Session-4: Product
Differentiation Building and
Managing product mix and product lines
Session-5: Product and Brand
Relationship Packaging, labeling,
Warranties and Guarantees.
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Session-4: Shaping the Market Offerings
How companies can differentiate products?How a company can build and manage its product mix and product line?
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Product Differentiation
Tangible Product Attributes Ingredient
/formula Functional
Features Additional
Features Packaging Design / Styling Product Quality /
Technology Durability Reparability
Intangible Product Differentiation Customer Care /
Service Delivery Customer Training Customer
Consulting Prestige / Status
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Product Mix Elements @ HUL
Product Line-1
Product Line-2
Product Line-3
Product Line-4
Bathing Shop
Laundry Products
Beverage X
DoveLuxPearsLirilRexonaLifebouyBreezMotiHamamJai
SurfRinSunlightWheel501
LiptonBrookebondTaj MahalBruSuper Dust
XXXXXXXXX
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Product Mix and Product Line
Product Mix: It denotes the complete set of all products offered for sale by a company. The product mix compose of several product lines.
Product Lines: A group of closely related products constitute a product line.
Width of Product Mix: It is the total number of product lines exist in a product mix
Length of Product Line: It is the total numbers of items/brands present in a product line.
Depth of Product Line: It denotes the total no of items under each brand in the line, in terms of variant, models, size etc.
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Product Line Decision
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Present Product
New Product
Present Product
New Product
Present Product
New Product
New Product
Quality
Pri
ce
Quality
Pri
ce
Quality
Pri
ce
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Product Management and task involved Product management means managing the
product lines and product mix of the company Tasks for Product Management
How many different product lines should the firm accommodate?
How can the different lines be grouped for effective management?
What should be the relationship among the various members in the same product line?
How to position these products in the market? How do they distinguish themselves from other competing products/brands?
Should there be individual brand or family brand? How to develop a brand equity? How to plan a new product so that in the long run the
firm retains a healthy product portfolio. How to handle the products going through different
stages of their life cycle? What are the strategic treatment they require?
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Packaging and Labeling
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Function of Packaging and Labeling
Physical protection of goods Information Transmission Security Convenience
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Components of Packaging
Package Material Package Aesthetics Handling Convenience Package Size
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Package Material: Changing Trend – From Wood to Paper Metal Container are more popular Plastics Innovation in packaging Tetra packs/Aseptic Packaging: It is used for
food packaging. It is sterilized and easy to handle. The package consists of several thin layers of polyethylene foul and paper. It has a good shelf life. Exp-Fruit Juice, Oil etc.
Package Aesthetic: It is used for enhancing the sales appeal of the product. It include package material, package size and shape etc.
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Handling Convenience: In many cases it functions as a useful differentiator. The various attributes of the packaging material, design, shape, size, shape etc together should make the handling and use the product convenient for the customers. Example: Ponds cold cream in tubes Application convenience of Harpic The Bee Can
The Package Size: Economy Pack/Family Pack- It makes the product
available in larger size. Households with larger family size buy economic packs and avoid the inconvenience of repeat purchase
Refill pack: Reusable Container Exp. Horlicks in Bottle, Amul in Tin
Container, Nescafe in Glass Bottle container The Sachet SweepProf. Suvendu Kr. Pratihari 27
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Managing Brand and Brand Equity
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Role and Significance of Brand
Definition of Brand: It is a name, term &/or symbol to identify the goods and services of one seller from the offers of other competitors.
It is a Asset of the Firm Brand Represents the value delivered
to customers. Brand offers strategic move to the firm.
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Categorization of Brands Based on Types of Value they Offer Functional Brand
Emphasize the functional value of their offer.
Exp: Nano Car, Maruti 800, Hero Honda for Mileage
Image Brand They offer image value to the user. Exp-Parker, Mercedes car, Parkavenue
Experience Brand These offer unique experience the user
gets by interacting with the brands. Exp-Kingfisher, Thomas Cook, ICICI etc.
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Brand Strategies In developing the brand Strategies, an
organization can pursue one of four approaches: Corporate umbrella Branding
Exp: Kellogg's, Cadbury's, Amul’s etc. Family Umbrella Branding
Exp: ITC, reliance, Range Branding
Exp: Lifebouy Soap & Liquid Individual Branding
Marie Gold Biscuits
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Product Life Cycle
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Market Pioneering Stage
Sales are Low Profit is either negative or negligible. Demand has to create and developed / High
investment in Consumer awareness and Promotion.
Customers have to be prompted to try out the product.
Success of this stage depends on Nature of the product Its Price Technological Newness Consumers’ view of this product
Price Strategy : Market Skimming / Market Penetration
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Market Growth Stage Demand increases Size of the market grows Sales and Profit go up Competitor may enter with similar or slightly
improves version of the product. The company need to make its product distinct
and different in the eyes of the consumer and stay ahead of his competitors.
Incremental product improvement based on market feedback and competitor product is needed.
Price shifting may be worked out with respect to the competition
Marketing and distribution efficiency now become an important factor.
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Market Maturity Stage
Relatively low price, increased marketing cost, keener competition, less profits.
Demand tends to reach at a saturation point
Enough supply from the competition sources
Marketing trade/channel may become more powerful in this stage and they become multi branded now.
More product differentiation and Building brand loyalty is required.
Sales and Trade promotional initiatives may be worked out for maintaining the sales volume.
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Market Decline Stage
Sales begin to fall and Demand shrinks – due to the new and functionally improves products availability.
Price and margin get decreased resulting decrease in total sales and profit.
Some company starts linking these declining products with other premium products they have developed to stretch the life of the declining products.
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