Classification Of Product
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Classification Of Product

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    Classification Of Product Classification Of Product Presentation Transcript

      • Product, Classification of Products, Product Line and Product Mix
    • What is a Product?
      • A product is any tangible, intangible offering that might satisfy the needs or aspirations of a consumer.
      • A product has 3 basic levels
      • Core Product: This answers WHY the buyer should have it. It is also called as Generic Requirement.
      • “ Purchasing agents do not buy drills, they actually buy its ability to make same size holes”
      • Theodre Levit
    • Core Benefit
      • The generic product concept has two key issues:
      • Its consumers view of what a given product represents.
      • The aspiration of consumer differ from place to place and time to time.
      • Eg. For someone Washing Machine would be: comfort in washing the cloths, some, tough wash, some complete dryer…
    • Tangible Specifications
      • Tangibility is added to the core product in the form of features, style, color, design, efficiency etc.
      • Eg. The Color of the machine
      • The Electricity consumption
      • Detergent Consumption
      • Capacity
      • Quality ….
    • Augmented Features
      • This fulfill more of psychological or esteem needs.
      • Eg. Brand Name
      • Services provided
      • Warranty
      • Credit Terms
      • etc….
    • Classification of Products
      • The classification of the product depends upon the TANGIBILITY and DURABILITY found in an offering.
      • Typical classification of Product:
        • Service
        • Durable
        • Non Durable
    • Non Durable Products
      • Products that are consumed fast and are purchased on a regular basis. The consumer here spends minimum time and effort in comparing and buying the item.
      • Consumer Products are further classified according to its use: Personal, Family and Household as Convenience, Shopping and Specialty.
    • FMCG
      • Fast Moving Consumer Goods are the Non Durable Goods. Eg. Sot Drinks, Chips, Ice Creams etc…. The consumer shows minimum effort in buying these articles.
      • FMCG is further sub divided into 3 Classes…
      • Staples
      • These are goods purchased on a regular basis. Eg. Soap, Pulses, Toothpaste etc…
      • Whenever the stock is about to end the consumer buys these products again.
      • Impulse Goods
      • These are the goods which are purchased without planning or search… Our external stimuli provokes us to buy these products. Eg. Cold drinks, Chocolates, Chips….
      • Most of the time the consumers aim is not buying the product solely but when spots them, feels, attracted and ends up in buying them.
      • Emergency Goods
      • These goods are purchased when the need arises. Eg. Umbrellas in rainy season, Pullovers in winters etc..
      • The marketers tries for a very good distribution chain, as the sales is not the same throughout and whenever the need arises, the product should be available at maximum places…
    • Characteristics of FMCG Consumers Point
      • FMCG has a very low shelf life
      • 1. Frequent Purchases : Salt, Rice, Chocolates
      • 2. Low Involvement : The consumer will buy an alternative if the brand ask for is not available….
      • Exceptions to the rule: Products like Cigarettes, Personal Hygiene Products, Brand Loyalty.
    • Characteristics of FMCG Marketers Point
      • High Volumes
      • The volume of the product required is very high.
      • Eg. An average family may require 3-4 Soaps a month… Imagine No. of family using it in the whole country???
      • If the organization cannot ensure high sales volume, they will have difficulties in surviving.
      • Low Margins
      • As the product is required in high volume, there is an intense competition which makes the marketer sell the product with very less margin.
      • They earn through high volume sales to maximize their turnover.
      • The Key Becomes High Volumes Low Margins.
      • Extensive Distribution Networks
      • Consumer preference in FMCG products are not that rigid.
      • Recall plays a very important role.
      • Brand Loyalty is not very high.
      • Consumer allows shopkeeper to decide for him.
      • Due to all this it becomes very important for the marketer to make its product available at maximum place possible.
      • High Stock Turnover
      • It is a characteristic feature of FMCG. It is because these products are bought frequently or on a regular basis.
      • Which in turn allows the marketer to rotate the capital invested.
    • Product Mix
      • It is the set of product lines and items that a particular company offers to buyers.
      • The Width of product mix refers to how many different product lines a company carries.
      • Product Line: It is a group of products that is closely related because they perform a similar function, targeted at the same customer groups, marketed through same channel.
      • Eg. Products line of P & G :
      • Detergents
      • Bathing Soaps
      • Shampoos
      • Disposable Diapers etc.
      • If, Pantene comes in 4 variants in 3 different sizes, the depth of the product mix becomes 4 X 3 = 12. This can also be referred as Stock Keeping Units (SKU’s)
      • Consistency of a product mix refers to how closely related the various product lines are to the end user.
      • The Width, Depth and consistency of product mix enables the company to define the Product Portfolio.
    • Product Line
      • Line Stretching
      • Downward Stretch : It takes place when the company finds a particular segment (Lower) which is un-attended by the existing product. And introduces a product to cater that lower segment.
      • Upward Stretch : It is when company a company enters Upper market through Line Extension.
      • Line Filling : A product line can be extended by adding more items to the existing range.
      • Reasons:
      • Reaching for more profits
      • Trying to satisfy dealers who complain about lost sales due to missing items in the line
      • Trying to utilize excess capacity
      • Trying to offer a full line of the production
      • Trying to plug holes in the positioning map.
      • Line Modernization : Modernization is carried out continuously as competitors are constantly growing and coming out with new products and ideas.
      • In this process an Organization should not be too early, if so, It can harm the existing product or late so that competitors already have a hold in the market.
      • Line Featuring
      • Its about featuring a particular product of the product line, so as to increase foot falls and then making the consumer exposed to other products too.
    • Growth Strategies for FMCG
      • Multi-brand Strategy
      • When a company nurtures number of brands in a single category.
      • Strategy: To capture as much market share as possible by trying to cater as much possible segments.
      • Eg. HUL Bathing Soaps:
      • Names??????
      • P&G Shampoos?
      • Names?????
      • Product Flanking
      • Basically offering same product in different and price combinations to tap diverse market opportunities.
      • Brand Extensions
      • This enables the company to enter new product categories more easily.
      • Eg. Lifebuoy: Lifebuoy Plus, Lifebuoy Liquid, Lifebuoy Gold.
      • Eg. Amul: Amul Butter, Amul Ghee, Amul cheese, Amul Milk, Amul Chocolates
      • Building Product Lines
      • Companies add related new product line to the existing Line.
      • Eg. Britannia: It has all Baked food items which are increasing. Have also added milk products to its kitty.
      • New Product Development
      • Its due to ever increasing Competition in the market
      • Innovations in Core Product
      • The life of a FMCG product is short. The marketer continuously tries to introduce new products and a consumer is also open to try new products.
      • Long Term Outlook
      • Eg. Kelloggs
      • Extending the PLC
      • Expanding Markets by Usage
      • Increase the Number of Customers
      • Encouraging more consumption.
      • Wide distribution Network
      • Advertising and Media Coverage
      • Sales Promotion
      • Sales Pomotions offer a direct incentive to buy more in the short term.
      • Thank You