Setting Product Strategy

Defining Product Components of Market Offering Product Levels Product Classifications Product Differentiation Services Differentiation Product System & Mixes Packaging Labeling Warrantees & Guarantees

12/16/2012

Setting Product Strategy

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.

12/16/2012

Setting Product Strategy

Components of Market Offering
Value-based Prices

Attractiveness of the Market Offering Product Features & Quality Services Mix & Quality

12/16/2012

Setting Product Strategy

Five Product Levels
Core benefit: It is the fundamental level. It is the benefit the customer is really buying. Basic product: The marketer has to turn the core benefit in to the basic product. Expected product: A set of attributes and conditions buyers normally expect when they purchase this product. Augmented product: The product that exceeds customer expectations. Potential product: It encompasses all the possible augmentations and transformations the product or offering might undergo in the future.

12/16/2012

Setting Product Strategy

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
5

12/16/2012

Setting Product Strategy

Product Differentiation
To be branded, products must be differentiated on any or most of the following parameters. Form: The size, shape, or physical structure of a product. Features: Most products can be offered with varying features that supplement its basic function. Performance Quality: It is the level at which products primary characteristics operates. Conformance Quality: It is the degree to which all the produced units are identical and meet the promised specifications. Durability: A measure of the products expected operating life under natural conditions, is a valued attribute for certain products. Reliability: A measure of the probability that a product will not malfunction or fail within a specified time period. Reparability: It is a measure of the ease of fixing a product when it malfunctions or fails. 12/16/2012 Style: It described the products look and feel to the buyer. 6

Setting Product Strategy

Services Differentiation
Ordering ease: It refers to how easy it is for the customer to place an order with company. Delivery: It refers to how well the product or service is delivered to the customer. It included speed, accuracy, and care attending the delivery process. Installation: It refers to the work done to make a product operation in its planned location. Customer training: It refers to training the customers employees to use the vendors equipment properly and efficiently. Customer consulting: It refers to data, information systems, and advice services that the seller offers to buyers. Maintenance and repair: It describes the service program for helping the customers keep purchased products in good working order.

12/16/2012

Setting Product Strategy

Portfolio Decisions Product Mix/Portfolio Depth Length Width Consistency

12/16/2012

HUL Product Mix/Portfolio

Food

Fabric Wash Fabric Softner Household Cleaners

Comfort Cif Domex

Dish Wash
Vim

Beauty

Water Hair Care Personal Wash Oral Care

Clear Clinic Plus Sunsilk Ayush Dove Hamam Lifebuoy Liril Lux Pears Rexona Breeze Close Up Pepsodent

Brooke Bond Wheel Annapurna Rin Taaza Surf Taj Mahal Surf Excel Bru Surf Excelmatic Kissan Sunlight Knorr Kwality Wall's Lipton Modern

Aviance Pureit Axe Fair & Lovely Lakme Ponds Vaseline

12/16/2012

Setting Product Strategy

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 items in 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 are offered 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.
12/16/2012 10

Setting Product Strategy

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 consisting of 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.

12/16/2012

11

Setting Product Strategy

Line Stretching
It occurs when company lengthens its product line beyond its current range. Down-Market Stretch: A company positioned in the middle market may want to introduce a lower-priced line for any reasons.
Up-Market Stretch: Companies may wish to enter the high end of the market for more growth, higher margins, or simply to position themselves as full-line manufacturers. Two-Way Stretch: Companies serving the middle market might decide to stretch their line in both directions.

Line Filling
A product line can also be lengthened by adding more items within the present range. There are several motives for line filling: reaching for incremental profits, trying to satisfy dealers who complain about lost sales because of missing items in the line, trying to utilize excess capacity, trying to be the leading full-line company, and trying to plug holes to keep out competitors.

12/16/2012

12

Setting Product Strategy

Line Modernization, Featuring and Pruning Product lines need to do be modernized. The issue is whether to overhaul the line piecemeal or all at once. In rapidly changing product markets, modernization is continuous. Product line managers must periodically review the line for deadwood that is depressing profits. The weak items can be identified through sales and cost analysis. Pruning is also done when the company is short of production capacity. Companies typically shorten their product lines in periods of tight demand and lengthen their lines in periods of slow demand.

12/16/2012

13

Setting Product Strategy

Packaging

It includes all the activities of designing and producing the container for a product. Packages might include three levels of material primary package, secondary package, shipping package. Various factors have contributed to the growing use of packaging as marketing tool: self service, consumer affluence, company and brand image, innovations opportunity.
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

12/16/2012

14

Setting Product Strategy

Labeling

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

Warranties and Guarantees

Warranties are formal statements of expected product performance by the manufacturer. Products under warranty can be returned to the manufacturer or designated repair center for repair, replacement, or refund. Many seller offer either general guarantees or specific guarantees. Guarantees reduce the buyers perceived risk. Guarantees are most effective in two situations. First is where the company or the product is not well known. Second is where the products quality is superior to the competition.

12/16/2012

15

12/16/2012

16