session 8 - mabd

7/30/2019 Session 8 - MABD

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Setting Product Strategy

Defining Product

Components of Market Offering

Product Levels

Product Classifications

Product DifferentiationServices Differentiation

Product System & Mixes

Packaging

Labeling

Warrantees & Guarantees


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Product

A product is 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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Components of Market Offering

Attractiveness

of the Market

Offering

Value-based Prices

Product Features

& Quality

Services Mix

& Quality


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Five Product Levels

Core benefit: It is the fundamental level. It is thebenefit the customer is really buying.

Basic product: The marketer has to turn the corebenefit in to the basic product.

Expected product: A set of attributes andconditions buyers normally expect when they

purchase this product.

Augmented product: The product that exceeds

customer expectations.

Potential product: It encompasses all thepossible augmentations and transformations the

product or offering might undergo in the future.


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Products Classification

Products can be classified on the basis of the

following parameters.

Durability and Tangibility

Non-durable goods

Durable goods

Services

Type of Usage

Convenience goods

Shopping goods

Specialty goods

Unsought goods


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Setting Product StrategyProduct Differentiation

To be branded, products must be differentiated on any or most of thefollowing parameters.

Form: The size, shape, or physical structure of a product.

Features: Most products can be offered with varying features thatsupplement its basic function.

Performance Quality: It is the level at which products primarycharacteristics operates.

Conformance Quality: It is the degree to which all the produced unitsare identical and meet the promised specifications.

Durability: A measure of the products expected operating life undernatural conditions, is a valued attribute for certain products.

Reliability: A measure of the probability that a product will notmalfunction or fail within a specified time period.

Reparability: It is a measure of the ease of fixing a product when itmalfunctions or fails.

Style: It described the products look and feel to the buyer.


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Services Differentiation

Ordering ease: It refers to how easy it is for the customer to place anorder with company.

Delivery: It refers to how well the product or service is delivered to thecustomer. It included speed, accuracy, and care attending the deliveryprocess.

Installation: It refers to the work done to make a product operation inits planned location.

Customer training: It refers to training the customers employees to usethe vendors equipment properly and efficiently.

Customer consulting: It refers to data, information systems, and adviceservices that the seller offers to buyers.

Maintenance and repair: It describes the service program for helpingthe customers keep purchased products in good working order.


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Portfolio Decisions

Product Mix/Portfolio

Depth

Length

Width

Consistency


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HUL Product Mix/Portfolio

Brooke Bond Wheel Comfort Cif Vim Aviance Pureit Clear Dove Close Up

Annapurna Rin Domex Axe Clinic Plus Hamam PepsodentTaaza Surf Fair & Lovely Sunsilk Lifebuoy

Taj Mahal Surf Excel Lakme Ayush Liril

Bru Surf Excelmatic Ponds Lux

Kissan Sunlight Vaseline Pears

Knorr Rexona

Kwality Wall's Breeze

Lipton

Modern


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A product mix/portfolio is the set of all products and items a

particular seller offers for sale. A companys product mix has

a certain width, length, depth, and consistency.

The depth of a product mix refers to the total number of itemsin the mix.

The width of a product mix refers to how many different

product lines the company carries.

The length of a product mix refers to how many variants areoffered in each product line.

The consistency of the product mix refers to how closely

related the various product lines are in end use, production

requirements, distribution channels, or some other way.


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Product-Line Length

Companies seeking high market share and market growth will

generally carry longer product lines. Companies that

emphasize high profitability will carry shorter lines consistingof carefully chosen items. Product lines tend to lengthen over

time. Excess manufacturing capacity puts pressure on the

product-line manager to develop new items. The sales force

and distributors also pressure the company for a more

complete product line to satisfy customer. A company

lengthens its product line in two ways: by line stretching and

line filling.


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Line Stretching

It occurs when company lengthens its product line beyond its currentrange.

Down-Market Stretch: A company positioned in the middle market maywant to introduce a lower-priced line for any reasons.

Up-Market Stretch: Companies may wish to enter the high end of themarket for more growth, higher margins, or simply to positionthemselves as full-line manufacturers.

Two-Way Stretch: Companies serving the middle market might decideto stretch their line in both directions.

Line Filling

A product line can also be lengthened by adding more items within thepresent range. There are several motives for line filling: reaching forincremental profits, trying to satisfy dealers who complain about lostsales because of missing items in the line, trying to utilize excesscapacity, trying to be the leading full-line company, and trying to plugholes to keep out competitors.


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Line Modernization, Featuring and Pruning

Product lines need to do be modernized. The issue iswhether to overhaul the line piecemeal or all at once.In rapidly changing product markets, modernization is

continuous.Product line managers must periodically review theline for deadwood that is depressing profits. The weakitems can be identified through sales and cost

analysis.Pruning is also done when the company is short of

production capacity. Companies typically shorten theirproduct lines in periods of tight demand and lengthentheir lines in periods of slow demand.


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Packaging

It includes all the activities of designing and producing thecontainer for a product. Packages might include three levelsof material primary package, secondary package, shippingpackage. Various factors have contributed to the growing useof packaging as marketing tool: self service, consumer

affluence, company and brand image, innovationsopportunity.

Objectives of packaging are as follows:

Identify the Brand

Convey descriptive and persuasive information Facilitate product transportation and protection

Assist at home storage

Aid Product consumption


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Labeling

Seller must label products. The label may be a simple tagattached to the product or an elaborately designed graphicthat is part of the package. Functions of label: identification,grade, description, promotion.

Warranties and Guarantees

Warranties are formal statements of expected productperformance by the manufacturer. Products under warrantycan be returned to the manufacturer or designated repair

center for repair, replacement, or refund. Many seller offereither general guarantees or specific guarantees. Guaranteesreduce the buyers perceived risk.Guarantees are most effective in two situations. First is wherethe company or the product is not well known. Second iswhere the products quality is superior to the competition.


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session 8 - mabd

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