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 Diversification
ë Diversification means adding a new
product to the existing product-line or mix.
÷arious Products of ITC Ltd.
Diversification of ITC Ltd.
 Diversification
ë It involves the broadening of the product line.

Depth - items within a particular product line.

Width ʹ the extent of different product-lines in the

product-mix.
 Diversification
ë Product may be complementary or allied or
distinct.

Eagle Wings Industries - Automobile section

 Yeasons for diversification
ë Technological developments in the process of
production.

ë New markets are to be created.

ë Yeputation of the organization.

Diversification of BAT Industries Ltd.
 Yeasons for diversification
ë To avoid threat to existing product.

ë To utilize the resources fully.

ë To use the distribution channels more

effectively.
 Ôorms of Diversification

ë Diversification into related product-line.

ë Diversification into unrelated product-line.

ë Product replacement.
Product simplification-
implification refers to reduction of types, size colors and
other characteristics.

Product simplification essentially involves the elimination

of marginal lines, types and models of products.

It includes a reduction in the range of materials and

component parts used and a reduction in complexity and
processes of manufacture.

Yeduction of varieties of finished products to obtain the

lowest manufacturing and distribution cost.

Industrial committee determine types,sizes,varieties of

products to effectively meet consumer requirements.
Benefits of adapting simplification are
˜ Large amount capital is not tied up in slow moving
stocks of large varieties.
˜ Economical manufacturing due to simplified
inspection requirements longer runs, less stock to
handle and reduced clerical overload.
˜ Continuous employment instead of temporary or
seasonal employment depending on the demand of
product varieties.
˜ Prompt delivery of goods to the consumers.
˜ Less obsolescence of materials and machinery.
 A number of unnecessary product lines,
models,materials accumulate because of some key
people in the organizations.

͞white elephants͟-product engineers tend to have

their own product lines and projects.

ome of these products are offered at a loss.

Companies invariably have other product lines that

are profitable compensating for these ͞white
elephants͟.
 Product tandardization
˜ tandardization in general, be defined as a
model or a rule established by authority,
custom or a general consent.
˜ tandardization is essential to modern mass
production economy.
˜ It is extremely useful technique designed to
bring about overall economy by increasing
productivity.
 The aims of tandardization
˜ To achieve economy in terms of cost, human
effort, conversion of essential material.
˜ To ensure maximum convenience verity
reduction, interchangeability of parts,
reducing the inventories, elimination of waste.
˜ Adopt the best possible way to use all the
available scientific knowledge and latest
technological development.
˜ To maintain desired level of productivity.
 Advantages of tandardization
˜ Ôewer specifications, drawing and part lists
have to be prepared and issued.
˜ Better quality products
˜ Lower unit costs
˜ Increased margin of profit.
˜ Minimum inventory cost.
 Bureau of Indian tandards
In 1982, India developed a national standard
known as the I 10201-quality system in six
parts.BI is the national standard body of
India.BI provide the following service to
Indian citizen-
1. Ôormulation of Indian standard.
2. Certification chemes
3. Hallmarking of gold jewellary
4. The eco mark scheme
÷ALUE ANALYI

INTY DUCTI N
˜ Concerned with the modification of the
existing product
˜ Using less expensive material with the
objective of reducing the overall cost of
manufacturing
˜ It is a cost reduction technique
˜ Technique that is used to avoid unnecessary
cost and improve the utility of the existing
product
 AIM Ô ÷ALUE ANALYI
This includes:
˜ implifying the product
˜ Use alternate cheaper material for manufacturing
˜ Use of efficient and easier methods of
manufacture
˜ Yeduction of product cost
˜ Increase the utility of the product and
˜ ave money or increase the profits
 CAUE Ô UNNECEAYY C T
˜ Lack of information
˜ Lack of ideas
˜ Wrong beliefs, habits and attitudes
˜ Changed circumstances
˜ Yesistance to change
 ÷ALUE ANALYI PY CEDUYE
1. Identify the product
2. Collect relevant information
3. Define different functions
4. Create different alternatives
5. Critically evaluate the alternatives
6. Develop the best alternative
7. Implement the alternative
 Yesearch and development
Two forms :

1.basic research - tends to focus on the

development of fundamental knowledge

2. applied research ʹ attempts to explore

the potential applications for the
fundamental knowledge so developed
BAIC YEEAYCH TECHNIQUE

Personal interview survey

Questionnaire

Telephonic urvey
 IMP YTANCE
Production of new product ʹ the marketer gets valuable
information regarding customers preferences through research.

Uses of the product- PY ÷IDE INÔ Y MATI N YEGAYDING ÷AYI U

UE Ô THE PY DUCT.

÷aluable information about the customers - who

are our customers, where and when do they purchase the product.

Planned production - estimating the demand of the product.

 Cont͙
EXITENCE IN C MPITI÷E ITUATI N - company
studies the marketing policies, practices and strategies of the competitors
through research and makes necessary changes.

DIC ÷EYING Ô P TENTIAL MAY
ET - potential

markets are discovered where companies product can be sold.
 LIMITATI N
˜ LIMITATI N Ô TIME - the researcher is to complete the
research in a given time.
LIMITATI N Ô M NEY - The researcher is provided with a
limited amount of money, within which he has to complete his work.
LIMITATI N Ô 
ILL - Yequires an able efficient and
experienced worker.
˜ If productivity improvement has to be an ongoing , continuous,
competitive process for the survival and growth of an organization, YD
becomes and efficient techniques that should be introduced formally.
By collecting the information's gathered by the research activities . The
company comes to know the weaknesses of their product and try to
improve or develop the product as per the needs of the customers . Here
we can define development as the process of converting the results of
applied research into commercial applications.
This is what research and development mean.
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 Product Yeliability Improvement

ë Probability of a product.
ë Depends on technical decisions and commercial
outcomes.
ë Internationally enforced techniques.
ë Perform without failure for a longer time.
ë Effective methodology for reliability performance
.
ë Develops a framework which links reliability
specifications and product performance.
 How reliability improves?

ë Yeliability improves with a similar no of

parts .
ë ÷ulnerable parts
ë
eep as far as less possible complex parts.
ë Ôlexibility.
ë Provision for any disastrous situations.
Product Yeliability Improvement