Transcript Marketing mix and product management.

Product Management
PRODUCT
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Marketing mix and product
management.
At the end of this module the learning actuates
are.
1. What is a product?
2. Various levels of product.
3. How products are classified?
4. What is the concept of product life
cycle?
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Marketing mix and product
management.
Suggested readings.
1. Marketing management, Millennium edition
by Kotler chapter10 and 13 .
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Marketing mix and product
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What is product?
Product is anything that can be offered to a
market to satisfy a want or need.
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Marketing mix and product
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PRODUCT LEVELS
1. Core product
2. Basic product
3. Expected product
4. Augmented product
5. Potential product
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Marketing mix and product
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1. Core product
Most fundamental benefit customer is
buying.
Heart of the system.
Refrigerator
Basic purpose.
Preservation.
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To preserve you need a compressor and
cooling system.
This is core.
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Marketing mix and product
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2. Basic product
Do you buy compressor?
You buy a basic product?
Formal
Refrigerator
Compressor is mounted on a body
/cabinet.
There is a door, shelves, trays.
This is basic product.
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Marketing mix and product
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EXPECTED PRODUCT
A set of attributes and conditions customers expect.
This depends on the chosen target audience.
This is expected from a marketer.
Refrigerator
Freezer.
Bulb.
Thermostat.
Quiet not noisy.
Different types of shelves.
Antirust system.
This is expected product.
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Marketing mix and product
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AUGMENTED PRODUCT
Prepare a product that exceeds customer
expectation. Is the reason to buy.
Add further attributes
Each attribute adds cost
Will customer pay enough to cover the extra
cost?
Refrigerators
Easy financing scheme
Four year warranty on compressor
Free rice – cooker with every refrigerator
purchased.
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Marketing mix and product
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POTENTIAL PRODUCT
Companies search for new ways to
satisfy customers and distinguish their
offer.
Refrigerator
Water dispenser – on the door
Prevent frequent opening of doors.
Faster cooling.
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Marketing mix and product
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WHAT DO WE OBSERVE?
Most competition at augmentation level.
Constant innovation.
Understand how customers use their
product.
New features add to the cost.
Marketers have to find out that whether
customers are willing to pay extra cost.
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Marketing mix and product management.
REFRIGERATORS.
1. Whirlpool
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Quick lce making
2. Samsung
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Super x – flow
Uniform cooling.
3. LG
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Nutritional value maintained.
4. ALLWYN
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Efficient compressor.
5. KELVINATOR
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Coolest.
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Marketing mix and product
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PRODUCT CLASSIFICATION
A. Durability and tangibility
Nondurable goods.
Durable goods
Services.
B. Consumer –goods classification
Convenience good.
Shopping goods
Speciality goods
Unsought goods.
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Marketing mix and product
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A.
1.
Durability & Tangibility
Non-durable goods
Consumed in one or few uses
Consumed quickly
Frequent purchase
Need to make them available in many locations
Heavy promotion
Induce trial
Example
Coke, Modern bread, Lux Soap, Mother Diary Milk
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Marketing mix and product
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2. Durable goods
Used many times
More personal selling/service
Seller’s assurance about product longevity
Example
Refrigerators
Mixer
Car
Higher priced than non-durable
Consumer involvement is high as they are high
priced
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Marketing mix and product
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3. Services
Intangible
Inseparable
Variable
Perishable
Example
Beauty parlour
Education Services
A Surgery
Listening to concert
Airlines
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Marketing mix and product
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Therefore
Products which are predominantly
tangible are called goods
Products, which are predominantly
intangible, are called services.
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Marketing mix and product management.
B. Consumer – Goods classification
Based on shopping habits
1. Convenience goods
Goods purchased
Frequently
Immediately
Minimum effort
Example
Newspapers
Bread
Milk
Distributed at shops very near to households
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Marketing mix and product
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2. Shopping goods
Goods that the customer in the
process of selection and purchase
Characteristically compares on such
basis as suitability, quality, price and
style
Examples
Furniture
Clothing
Appliances
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Marketing mix and product
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3. Speciality goods
Unique characteristics
Unique brand values
Buyers willing to make extra efforts
Example
Arrow shirts
Very few outlets, exclusive
Honda showrooms
One in Badarpur, Udyog Nagar
Customers willing to travel that far to buy
their choice of goods
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Marketing mix and product
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4. Unsought goods
Goods the consumer does not know
about or does not normally think of
buying
Consumers made aware through
promotional efforts of the firm.
Examples
Life insurance
Security equipments
Fitness equipment
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Marketing mix and product
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PRODUCT MIX
Set of all products and items that a particular
seller offers for sale
Example:
BPL

Consumer products
TVs, Washing Machine

Cellular Services
Mobile operations in Mumbai

Telecom
Instruments
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Marketing mix and product
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Product Mix-concepts
1. Width
How many different product lines are
carried by the organization
P&G
 Five lines
Detergents, Toothpaste, Bar soap,
diapers, paper tissue
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2. Length

Total number of items in the mix

Total items 25

Average length of a line is 25/5 = 5
3. Depth

How many variants are offered of each
product in the line
Proctor and Gamble

Crest Toothpaste
Comes in five sizes
Two formulations

Mint

Regular
Total Depth = 5 * 2 = 10
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Marketing mix and product management.
4. Consistency
How closely related the various product lines are
in end use, production requirements, distribution
channels or some other way.
Proctor and Gamble
Very consistent
Why
Products are available through the same
distribution channels
GE
Products

Refrigerators

Aircraft Engine’s

Electricity equipments
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Marketing mix and product
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GE
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•
•
•
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Very inconsistent
Are Refrigerators, Aircraft engines and
Electricity equipment available from same
places
No ?
Refrigerators
Shops
Aircraft Engine’s
Direct
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Marketing mix and product
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PRODUCT LIFE CYCLE
Four stages
1. Introduction
2. Growth
3. Maturity
4. Decline
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Marketing mix and product management.
PRODUCT LIFE CYCLE
 Products have limited life
 Products pass through distinct stages
 Each stage
Different challenges
Different opportunities
Problems to the seller
 Profits and sales vary in different stages
 Different strategies
Marketing
Human resources
Purchasing
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Marketing mix and product management.
1. Introduction
Slow sales growth
Product introduced
Profits less or non-existent
Heavy expenses
Promotion
Distribution
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Marketing mix and product management.
2. Growth
Rapid market acceptance
Substantial profit improvement
3. Maturity
Slowdown in sales growth
Achieved acceptance by most potential buyers
Increasing competition
Profits stabilize or decline
4. Decline
Sales show decline
Profits also decline
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Marketing mix and product management.
Product life cycle
Product categories
Longest
- Newspaper
- Sugar
- Ice-cream
Branded categories
Shorter
- Pioneer Newspaper
- Dollops Ice-cream
Newspaper, ice-cream sales are rising
Pioneer & dollops sales have declined
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Marketing mix and product management.
Why four stages in Product lifecycle
Marketers deploy different marketing
strategies in different stages of product
life-cycle .
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