Marketing – Module 3

3M
Philips
WIPRO
Godrej
Sinter Plast Container
 Managing the Product
• Product

• 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
Product Levels
 Product Levels
• Core Benefit
• Basic Product
• Expected product
• Augmented Product
• Potential Product
• Two friends get frustrated because of the daily
journey by bus, metro and auto rickshaw. The
need arises for buying a new car. They decide to
visit a Toyota Showroom and look for a car that
suits their requirements. The Toyota
representative takes their budget into
consideration and suggests “Toyota Etios” as the
ideal car.

• Core Product
• Actual Product
• Augmented Product
 Product Classification
• Durability
– Non Durable
– Durable
– Services
• Consumer Goods Classification
– Convenience Goods – Staples, Impulse and Emergency Goods
– Shopping Goods – Homogeneous and Heterogeneous
– Specialty Goods
– Unsought Goods
• Industrial Goods Classification
– Materials and Parts – Raw Materials (Farm and Natural Products),
Manufactured Materials (Component Materials and Component Parts)
– Capital Items – Installations and Equipment
– Supplies and Business Services – Maintenance and Repair items,
Operating Supplies, Maintenance and Repair Services, Business Advisory
Services
 Product Hierarchy
• Need Family - Security
• Product Family – Savings and Income
• Product Class – Financial Instruments
• Product Line – Life Insurance

• Product Type – Term Life Insurance

• Item - SKU
New Product Development Process
• A firm can obtain new product through
– Acquisition
– New Product Development
• Reasons for new product failure
– Overestimation of Market Size
– Poor Design
– Wrong Positioning
– Wrong timing
– High Price
– Ineffective promotion
– Management influence
– High development cost
– Competition
New Product Development Process
• Idea Generation
– Internal Sources, External Sources
• Idea Screening
• Concept Development and Testing
• Marketing strategy Development
• Business Analysis
• Product Development
• Test Marketing
• Commercialization
Diffusion Process
 Factors Affecting Adoption
• Relative Advantage
• Compatibility
• Trialability or Divisibility
• Communicability
• Complexity
 PLC
• A course that a product’s sales and profit takes
over its lifetime
• Introduction
• Growth
• Maturity
• Decline
Product Life Cycle and Strategies
 Introduction
• Takes time, sales growth is slow
• Profits are negative
• Promotion spending is high
• Firms focus their selling on those customers
who are ready to buy
 Growth
• Sales will start climbing quickly
• Early adopters will continue to buy
• Late adopters will follow suit
• New competitors will enter the market
• Introduction of new market features
• Promotion spending same or higher
• Profits increase
• Trade off between high market share and high
current profit
 Maturity
• Lasts longer than other strategies
• Challenging stage
• Slowdown in sales results in many producers with
many products to sell
• This overcapacity leads to greater competition
• Prices will be marked down
• Modify the Market
• Modify the product
• Modify the marketing mix
 Decline
• Sales may plunge to zero
• Firms withdraw from markets
• Maintaining or harvesting
 Product Mix
• Set of all products and items a particular seller offers for
sale.
• Consists of various product lines

• Width – How many different product lines the company

carries
• Length – Total number of items in the mix
• Depth – how many variants of are offered of each
product
• Consistency – how closely related the various product
lines are in end use, production requirements, distribution
etc.
 Product Mix Strategies
• Line stretching – Down Market Stretch,
Upmarket Stretch, Two Way Stretch
• Line Filling
 Packaging / Labeling
• All activities of designing and producing the
container for a product
• Primary Package
• Secondary Package
• Shipping Package
 Packaging as a Marketing Tool
• Self Service
• Consumer Affluence
• Company and Brand Image
• Innovation Opportunity
 Objectives of packaging
• Identify the brand
• Convey descriptive and persuasive information
• Facilitate product transportation and
protection
• Assist at-home storage
• Aid Product Consumption
 Labeling
• Simple tag attached or an elaborate designed
graphic that is part of the package
• Identification
• Grade
• Describe
• Promote
LA FIN