Unit No.1 Product.pdf

Dept. of MBA, Sanjivani COE, Kopargaon
202
Marketing
Management-II
Presented By:
Dr. V. R. Malkar
Ph. D (Management), MBA(Mkt), BE(Mech)
Professor & Head Dept. of MBA
1
Sanjivani College of Engineering, Kopargaon
Department of MBA
www.sanjivanimba.org.in

Course Outcome
2
CO
Number
Cognitive
Abilities
Course Outcome
CO202.1 REMEMBERING DESCRIBE the key terms associated with the marketing
mix, planning & Control
CO202.2 UNDERSTANDING SUMMARIZE concepts, types, approaches related to
Product, Price, Place, Promotion, planning & control
CO202.3 APPLYING DEMONSTRATE of various channel options for a real-
world marketing offering
CO202.4 ANALYSING ANALYSE various Marketing Mix strategies for
Marketing Decision
CO202.5 EVALUATING EVALUATE marketing communication program for
business profitability.
CO202.6 CREATING DESIGN Marketing mix and Marketing Plan for a real-
world marketing offering (Products and Services)

Unit No.1 Product
• Product :Meaning of product, Goods &
Services Continuum, Classification of
consumer products – Convenience,
Shopping, Specialty, Unsought, classification
of industrial products – material & parts,
capital items, supplies & services, Product
Levels: The customer value hierarchy,
Software as a Service (Saas) products
3

• Product Mix: Width, Depth, Consistency &
Product line.
• New Product Development: Need for new
product development, Booz Allen &Hamilton
Classification Scheme for New Products, New
Product Development Process: Idea
Generation to commercialization.
• Branding: Introduction to Branding, Product
Vs. Brand, Meaning of a brand, brand equity
& brand elements.
4

• Packaging & Labeling: Meaning & role of
Packaging & Labeling, Primary, Secondary &
Shipment packages, Tetra Packaging,
Environment friendly packaging
• Product Life Cycle: Concept & characteristics
of Product Life Cycle, Relevance of PLC, Types
of PLC and Strategies across stages of the PLC
5

Task-1
• Take a one Brand, Write below things about
Brand
• Brand Name
• Company Name
• Logo, Symbol, Slogan
• Product Features
• Product Benefits, USP of Product
6

What is product?
Product is anything that can be offered to a market
to satisfy a want or need.
– An idea, a physical entity (a good), a service, or
any combination of the three that is an element
of exchange to satisfy individual or business
objectives.
7

What are Goods and Services?
• Services - Intangible tasks that satisfy the
needs of consumers and business users
• Goods - Tangible products that customers
can see, hear, smell, taste, or touch
• Goods–services continuum - Spectrum along
which goods and services fall according to
their attributes, from pure good to pure
service
8

Goods/Services Continuum
• A goods/services continuum categorizes products along a
scale from pure goods to pure services.
• Most business theorists see a continuum with pure service at
one endpoint and pure commodity goods at the other.
• Most products fall between these two extremes. For example,
a restaurant provides a physical good (prepared food), but
also provides services in the form of ambience, the setting
and clearing of the table, etc.
• Although some utilities, such
as electricity and communications service providers,
exclusively provide services, other utilities deliver physical
goods, such as water utilities.
• Goods are normally structural and can be transferred in an
instant while services are delivered over a period of time.
Goods can be returned while a service once delivered
cannot. Goods are not always tangible and may be virtual e.g.
a book may be paper or electronic.
9

Dept. of MBA, Sanjivani COE, Kopargaon 10

Goods/Services Continuum
100 : 0 %
Services: goods
Education,
Electricity,
Insurance
Mobile,
Entertainment,
Banking
70:30
Services: goods
Housekeeping Health Clubs
50-50
Services: goods
Restaurant
Cloths
Stitching
30-70
Services: goods
Automobiles
Consumer
Durables
0: 100
Services: goods
Salt Sugar
11

• The Brand you have selected.
Write percentage ratio of
Goods and Services, Explain
the reason.
Task-2
13

Types of Products
Goods:
Physical products
with form and
substance
Services:
Non-physical products
usually involving
performance
Consumer Products:
Those used by
consumers for their
own use and
satisfaction.
Business Products:
Those used in the
running of a business
or in the manufacture
of products for resale.
14

Product Classification
 Consumer-Goods Classification
– Classified on the basis of shopping habits
 Durability and Tangibility
Industrial-Goods Classification
– Classified in terms of their relative cost and
how they enter the production process.
15

Consumer Product Classification
• Convenience Goods
– Inexpensive, frequently purchased.
– Little effort needed to purchase them.
– Staples, Impulse and emergency goods.
16

Shopping Goods
– Not as frequently as convenience products
– Costly
– Consumer does research before purchase.
17

Specialty Goods
– Unique features
– Consumer is prepared to pay a premium price.
18

Unsought Goods
– Those good that consumers do not know or
– Doesn’t think of buying.
19

Classification of Consumer Products
20

Durability and Tangibility
• Nondurable Goods
– Tangible goods consumed in one or few uses
– Purchased frequently
– Strategy : availability , low priced , heavily
advertised
21

Durable Goods
– Tangible goods that survive many uses
– Require more personal selling and service
– Higher margins and requires seller guarantee
22

Industrial-Goods Classification
• Materials and Parts
Raw Materials
Manufactured
materials and parts
Farm Products
Natural
Products
23

Raw Materials
Manufactured
materials and parts
Farm Products
Natural
Products
24

Raw Materials
Manufactured
materials and parts
Component
materials
Component
Parts
25

Raw Materials
Manufactured
materials and parts
Component
materials
Component
Parts
26

• Capital Items
– Installations
– Equipment
27

• Supplies
– Maintenance and repair items
– Operating supplies
28

Business Services
– Maintenance and repair services
– Business advisory services
29

Consumer and Business Products
30

Classification of Business Products
31

Task-3
• Classify the brand you have taken
under Convenience, Shopping,
Specialty, Unsought, classification of
industrial products – material &
parts, capital items, supplies &
services
32

Marketing mix and product management.
PRODUCT LEVELS
1. Core product
2. Basic product
3. Expected product
4. Augmented product
5. Potential product
33

1. Core product
- Most fundamental benefit customer is buying.
- Heart of the system.
Refrigerator
- Basic purpose.
Preservation.
- To preserve you need a compressor and cooling
system.
- This is core.
34

2. Basic product
- Do you buy compressor?
- You buy a basic product?
- Formal
Refrigerator
- Compressor is mounted on a body /cabinet.
- There is a door, shelves, trays.
- This is basic product.
35

EXPECTED PRODUCT
- A set of attributes and conditions customers expect. This
depends on the chosen target audience.
- This is expected from a marketer.
Refrigerator
- Freezer.
- Bulb.
- Thermostat.
- Quiet not noisy.
- Different types of shelves.
- Antirust system.
This is expected product.
36

AUGMENTED PRODUCT
- Prepare a product that exceeds customer
expectation. Is the reason to buy.
- Add further attributes
- Each attribute adds cost
- Will customer pay enough to cover the extra cost?
Refrigerators
- Easy financing scheme
- Four year warranty on compressor
- Free rice – cooker with every refrigerator
purchased.
37

POTENTIAL PRODUCT
- Companies search for new ways to
satisfy customers and distinguish their
offer.
Refrigerator
- Water dispenser – on the door
• Prevent frequent opening of doors.
• Faster cooling.
38

Product Items, Lines, and Mixes
39
Product Item
Product Line
Product Mix
A specific version of a product
that can be designated as a
distinct offering among an organization’s
products.
A group of closely-related
product items.
All products that an
organization sells.

Product Mix-concepts
1. Width
- How many different product lines are
carried by the organization
P & G
 Five lines
- Detergents, Toothpaste, Bar soap,
diapers, paper tissue
40

2. Length
 Total number of items in the mix
 Total items 25
 Average length of a line is 25/5 = 5
3. Depth
 How many variants are offered of each product in the
line
Proctor and Gamble
 Crest Toothpaste
- Comes in five sizes
- Two formulations
 Mint
 Regular
Total Depth = 5 * 2 = 10
41

4. Consistency
How closely related the various product lines are in end use,
production requirements, distribution channels or some
other way.
Proctor and Gamble
- Very consistent
- Why
- Products are available through the same distribution
channels
GE
- Products
 Refrigerators
 Aircraft Engine’s
 Electricity equipment's
42

Product Mix
•Width – how many product lines a company has
•http://www.hul.co.in/brands/
•Length – how many products are there in a product line
•Depth – how many variants of each product exist within a
product line
http://www.itcportal.com/itc-business/index.aspx
http://www.coca-colaindia.com/brands/brands_home.aspx
http://pepsicoindia.co.in/brands.aspx
43

Gillette’s Product Lines & Mix
44
Blades and Writing
razors Toiletries instruments Lighters
Fusion – 5 blade
Mach 3 Turbo
Mach 3 Series Paper Mate Cricket
Sensor Adorn Flair S.T. Dupont
Trac II Toni S.T. Dupont Atra Right Guard
Swivel Silkience
Double-Edge Soft and Dri
Lady Gillette Foamy
Super Speed Dry Look
Twin Injector Dry Idea
Techmatic Brush Plus

• Write level of Brand you
Selected and Brand Mix that is
Length, Depth, Width and
Consistency
Task : 4
46

1.2 New Product
• New products are goods and services that
differ significantly in their characteristics or
intended uses from products previously
produced by the firm.
47

Need of new Product
• Consumer "Needs and Wants" Change
• Product Reaches The End Of Its Product Life
Cycle
• Product Is At The Maturity Stage Of Its
Product Life Cycle
• Environmental Changes
• Competitors
• All Products Experiencing Problems
48

Classification of New Products
49
Based on Booz, Allen Hamilton
Framework

Technological Breakthroughs/New to the world products
• Technological Breakthroughs/New to the
world products- These products are
absolutely new to the world and will create
their own market.
50

Google Driverless Car
51

• Significant improvements- these products
are not born out of a major invention but
carry significant improvements over their
existing counterparts. They offer superior
performance and hence replace existing
products.
52
Significant improvements

• Modified Products- these products are
modifications of the existing products. These
may include new flavors, new perfume, new
package, a revised size etc.
53

With more powerful
engine, better interior
quality and several new
features, the Innova
Crysta is pricier than the
old model. While the
discontinued model was
priced in the range of Rs
12.70 lakh - Rs 16.30
lakh, the new-gen
model's price ranges
between Rs 13.83 lakh -
Rs 20.78 lakh.

• Products new to company – these products
are new to the company but not to the
market.
55

• these products are existing products, but
targeted at new segments or new markets
for the reason like increasing market share,
fighting local brands etc.
56
Repositioning

• Cost Reductions - these products are
functionally similar to the existing product
but launched at a reduced price.
57
Cost Reductions

Summery
1. Technological Breakthrough
2. Significantly Improved
3. Modified
4. Products New to the Company
5. Repositioning
6. Cost Reductions
58

Task-5
Classify the Brand you have selected under
• Technological Breakthrough
• Significantly Improved
• Modified
• Products New to the Company
• Repositioning
• Cost Reductions
59

New Product Development Process
• Idea Generation
• Screening of Ideas
• Concept Development and Testing
• Marketing Strategy
• Business Analysis
• Product Development
• Test Marketing
• Commercialization
60

Step 1. Idea Generation
Systematic Search for New Product
Ideas
Internal sources
Customers
Competitors
Distributors
Suppliers
61

2. Idea screening
1. Possible Profitability,
2. Good Market Potential (Market size),
3. Availability of Production Facility.
4. Availability of Raw Materials for such a
product, if selected,
5. Availability of Finance,
6. Availability of Managerial Ability and .
7. Uniqueness of Product
62

Step 3. Concept Development & Testing
1. Develop Product Ideas into
Alternative
Product Concepts
2. Concept Testing - Test the
Product Concepts with Groups
of Target Customers
3. Choose the Best One
63

Step 4. Marketing Strategy Development
Part Two - Short-Term:
Product’s Planned Price
Distribution
Marketing Budget
Part Three - Long-Term:
Sales & Profit Goals
Marketing Mix Strategy
Marketing Strategy Statement
Formulation
Part One - Overall:
Target Market
Planned Product Positioning
Sales & Profit Goals
Market Share
64

Step 5. Business Analysis
Step 6. Product Development
Business Analysis
Review of Product Sales, Costs,
and Profits Projections to See if
They Meet Company Objectives
If Yes, Move to
Product Development
If No, Eliminate
Product Concept
65

Step 7. Test Marketing
Standard
Test Market
Full marketing campaign
in a small number of
representative cities.
Simulated
Test Market
Test in a simulated
shopping environment
to a sample of
consumers.
Controlled
Test Market
A few stores that have
agreed to carry new
products for a free.
66

Product Testing Stage
• Apart from mechanical performance, customer's acceptance is essential. In fact,
the following can be stated as requirements for the new product, after it is
designed:
1. Satisfactory performance,
2. Customer acceptance,
3. Economical production,
4. Adequate distribution,
5. Adequate servicing arrangements where required,
6. Effective packaging and branding.
A market test should therefore, be conducted before launching the new product.
This will help us find out whether the product can be launches! successfully on a
commercial scale or not
67

Launching The New Product
68

Summery
• Idea Generation
• Screening of Ideas
• Concept Development and Testing
• Marketing Strategy
• Business Analysis
• Product Development
• Test Marketing
• Commercialization
69

Branding
72

Branding
• A Brand name is a means of identification of the product as well as the
means of differentiation of the branded product from its rivals.
• Branding means giving distinctive name or symbol to a product for its
identification of the product.
– Brand is differentiated or Identified by
– Name
– Symbol
– Picture
– Color
– Design of package
– Lettering fonts
– Slogans
73

What is Brand?
• Brand is a product from a known
source (organization). The name of
the organization can also serve as a
brand. The brand value reflects how a
product's name, or company name, is
perceived by the marketplace,
whether that is a target audience for a
product or the marketplace in general
(clearly these can have different
meanings and therefore different
values). It is important to understand
the meaning and the value of the
brand (for each target audience) in
order to develop an effective
marketing mix, for each target
audience.
– Learnthat.com
• Is not a logo
• Is not a tag line
• Is not an advertising
strategy
• Is value
• Is heart and soul
• Is Differentiation
• R Matute, Branding and Brand Management, Oct 05
74

What is Brand?
A brand is an intangible asset that resides in
people’s minds, which is defined by the
expectations people have about the benefits
they will receive. These expectations of
benefits are developed over time by
communications and - more importantly - by
actions.
» Debra Semans AMA Internal Branding NYC, Sept 2006
75

Needs of Branding
• Increasing Competition
• Need of advertising and publicity
• Development of consumer
• Consciousness as a brand image in mind.
• Expectation of consumer from product about
Quality, Durability increases.
76

Importance of Branding
• Branding enables the firm assured control over the
market.
• Repeat sales
• Product substitution is not possible.
• Sale is not remain in the hands of middleman.
• Bright image of the organization.
• Protection to the consumer about quality.
• Branding reduces price flexibility.
• Manufacturer gets good price of the product.
77

Essentials of good Brand
• A brand should suggest something about the products
benefits.
E.g. Lijjat Papad, Vicco Vajradanti, Saver.
• The name should be short simple, easy to pronounce, to spell
and remember, easy to identify and explain.
• The brand name should be capable of being registered and
protected legally under the legislation.
• The brand should be stable life and be unaffected by time.
• The brand should create pleasant association.
• The brand name should be unique, attractive and distinctive.
78

Top 10 Brands of world
79

Top 10 Brands of India
80

Brand Building Strategies
PRODUCT BRANDING
LINE BRANDING
BRAND EXTENSION
UMBRELLA BRANDING
ENDORSEMENT BRANDING
82

1.PRODUCT BRANDING
• This is of the type one-brand one product.
• In the product branding strategy the brand is promoted
exclusively so that it acquires its own identity and image.
• This way the brand is able to acquire a distinct position in the
customer’s mind.
• Product branding allows a brand achieve exclusivity and
differentiation.
• Another advantage is that with an identifiable brand uniquely
positioned and directed at a segment, the firm is able to cover an
entire market spectrum by making multiple brand entries.
83

P&G have been follower of the product branding strategy. P& G’ s into baby
care, beauty care, feminine care, health care, fabric care, home care, food and
beverages, etc. P&G has been an ardent follower of the product brand strategy.
Its brands are stand alones; people don’t even know that they all share a
common root in P&G. the company does not share a common identity. Thus, a
company following product branding is better positioned to venture into
unrelated areas of activity without being a subject of market scrutiny.
84

2. LINE BRANDING
• This is of the type ‘One brand many products’.
• Line branding strategy illustrates how well cultivated brand can
be extended on to a host of related products under a common
concept. This strategy seeks to penetrate the customer rather
than penetrating the market.
• For Example-
1. Lakme user wants all the products which enhance beauty-beauty
lotion, deep pore cleansing cream, lipsticks, nail enamel, eye
make up etc.
2. Colgate has a whole range of dental care products. Colgate Total,
Colgate Gel, Colgate toothpowder, as well as the various
toothbrushes.
85

3. BRAND EXTENSION
Brand extensions, which are a popular means of
introducing new products to the marketplace, fall under
the ‘One brand all products’ type of brand strategies.
Brand extensions come in two primary forms: Horizontal
and Vertical. In a horizontal brand extension situation, an
existing brand name is applied to a new product
introduction in either a related product class, or in a
product category completely new to the firm. In a vertical
brand extension situation, a second brand name or
descriptor is usually introduced alongside the core brand
name, in order to demonstrate the link between the brand
extension and the core brand name (e.g. Marriott Hotels,
Courtyard Inn by Marriott)
86

4.UMBRELLA BRANDING
This again is of the type ‘One brand all products’. An
umbrella brand is a parent brand that appears on a
number of products that may each have separate
brand images. Firms have a short-run incentive to
reduce quality and save costs, as consumers can only
observe quality ex post.
Example- Videocon’s range of home appliances – air
conditioners, refrigerators, televisions, washing
machines, etc.
Phillips also has a whole range of home appliances
under the brand name Phillips-the mixers, irons,
televisions, etc.
87

5.ENDORSEMENT BRANDING
• Endorsement branding strategy is a modified version of double
branding. It makes the product brand name more significant and
corporate brand name is relegated to a lesser status.
• The brand gets the endorsement that it belongs to specified
company.
• Kit Kat gives the signal that it belongs to Nestle and Dairy Milk
conveys that it belongs to Cadburys, Cinthol’s communication
stresses that it is a Godrej product.
• In case of Cadbury’s and Nestle, the brands mentioned above
have their own unique position and image. Cadbury’s or Nestle
support the brands to the extent that they transfer certain qualities
or associations, which enhance customer’s trust. Brands are
identified by their own name.
88

Brand Execution
90

Brand Creation Process
91

Brand Strategy
92

Brand Equity
94

Read
• https://martech.org/secret-meanings-
behind-40-brand-logos/
• https://www.convinceandconvert.com/conte
nt-marketing/brand-storytelling-examples/
96

Task-6
• Write the Brand story of the Brand you
selected.
97

PACKAGING
&
LABELING
98

Contents
1. Introduction
2. Definition - packaging
3. Types of packaging
4. Objectives of packaging
5. Consideration for packaging
6. Definition – labeling
7. Objectives of labeling
8. Case Study
9. Packaging & Labeling machines
10. Symbols
99

Introduction
Most physical products must be packaged and
labeled. Some packages such as coke bottles are
world famous.
Many marketers have called packaging as fifth P,
along with price, product, place and promotion.
PACKAGING & LABELING IN FOOD INDUSTRIES NAVEEN KUMAR P
100

Definition
Packaging
Packaging is the science, art and technology of
enclosing or protecting products for distribution,
storage, sale, and use.
Packaging is the activities of
designing and producing the
container for a product.
101

Types of Packaging
1. Primary packaging
The material that first envelops the product and
holds it. This usually is the smallest unit of
distribution or use and is the package which is in
direct contact with the contents.
102

Types of Packaging
2. Secondary packaging
Secondary packaging is outside the primary
packaging, perhaps used to group primary packages
together.
103

Types of Packaging
3. Tertiary packaging
Tertiary packaging is used for bulk handling,
warehouse storage and transport shipping. The most
common form is a palletized unit load that packs tightly
into containers.
NAVEEN KUMAR P
104

Primary package
Secondary package
Tertiary package
105

Objective of Packaging
1. Physical protection
The objects enclosed in the package may require
protection from, among other things, shock,
vibration, compression, temperature etc.
Eg : Egg, Bottles
PACKAGING & LABELING IN FOOD INDUSTRIES
106

2. Barrier protection
A barrier from oxygen, water vapor, dust, etc., is
often required. Controlled atmospheres are also
maintained in some food packages, keeping the contents
clean & fresh.
Eg: Fruits, Vegetables
107

3. Containment or Agglomeration
Small objects are typically grouped together in one
package for reasons of efficiency.
Eg: Chocolates, Biscuits
108

4. Marketing
The packaging and labels can be used by marketers to
encourage potential buyers to purchase the product. Package
graphic design and physical design have been a important
phenomenon.
Eg: Chips, Biscuits
109

5. Security
Packages can be made with improved tamper
resistance to deter tampering and also can have tamper
evident features to help indicate tampering.
Eg: Coke drinks, water bottles
110

6. Convenience
Packages can have features that add convenience in
distribution, handling, stacking, display, sale, opening,
reclosing, use, dispensing, and reuse.
Eg: Sauce, Jam
111

7. Portion control
Single serving packaging has a precise amount of
contents to control usage. Commodities can be divided
into packages that are a more suitable size for individual
households.
Eg: Milk, Ice creams
NAVEEN KUMAR P
112

Consideration for packaging
1. Prevention - Use packaging where needed
2. Minimization – Minimize mass & Volume
3. Reuse - Encourage reuse of packages
4. Recycling - Reprocess materials into new products
5. Disposal - Use disposable, eco-friendly packages
113

Definition
Labeling
Labeling is any written, electronic, or graphic
communications on the packaging or on a separate but
associated label.
Display of information about
a product on its container,
packaging, or the product itself.
114

Objective of Labeling
1. Brand Identification
Labeling helps in the identification and principal
place of business of the person by or for whom the
prepackaged product was manufactured, processed,
produced or packaged for resale
NAVEEN KUMAR P
115

2. Description
Labels provide the information regarding the food
product. It describes the contents, nutritional values,
cost, product usage methods, shelf life etc
NAVEEN KUMAR P
116

3. Promotion
Finally labels helps in promoting the product
through attractive and bright graphics replacing paper
labels glued on cans and bottles.
117

CASE STUDY : TETRA PAK
118

Tetra Pak can be traced back to Akerlund & Rausing
(A&R), a packaging company established in 1920 by Ruben
Rausing (Rausing) and Erik Akerlund.
Tetra Pak is a Swedish packaging and processing solution
providers for food manufacturers across the world
In 1956, had created milk & ice cream packages, then
decided to create packages for other liquid foods
They began working towards Aseptic Packaging technology
119

Tetra Pak brought out many more innovative
products that catered to the changing needs of
customers, retailers and manufacturers
In 1997, the company introduced three packaging
ranges:
1. Tetra Prisma Aseptic.
2. Tetra Wedge Aseptic.
3. Tetra Fino Aseptic.
They differed only in shape.
120

Created a huge impact in packaging and labeling
industry.
Tetra Pak's tetrahedron packaging systems
revolutionized the beverage manufacturing industry.
In December 2002, the company began offering
packaging solutions for dry fruits, cereal, sugar,
confectionary and pet food.
121

TETRA FINO
TETRA PRISMA TETRA WEDGE
TETRA GEMINA
122

TETRA BRIK
TETRA RECART
TETRA CLASSIC
TETRA TOP
123

Packaging & Labeling Machines
The choice includes:
1. Technical capabilities.
2. Labor requirements.
3. Worker safety.
4. Maintainability.
5. Serviceability.
6. Reliability.
7. Capital cost.
8. Floorspace.
NAVEEN KUMAR P
124

Symbols
125

Symbols
Poly Ethylene
Terepthalate
Use no clamps Use clamps Use no hooks
Avoid sunlight Fragile Avoid water This side Up
126

Symbols
127
127

Symbols
128
Vegetarian Non-vegetarian
128

Future Trends
129

Future Trends
PACKAGING & LABELING IN FOOD INDUSTRIES NAVEEN KUMAR
130

Future Trends
131

Future Trends
132

Task-7
• Comments on Packaging of Brand you
selected
133

Product Life Cycle (PLC)
• Product Life Cycle – shows the stages that
products go through from development to
withdrawal from the market
 Each product may have a different life cycle
 PLC determines revenue earned
 Contributes to strategic marketing planning
 May help the firm to identify when
a product needs support, redesign,
reinvigorating, withdrawal, etc.
 May help in new product development planning
 May help in forecasting and managing cash flow
134

Product Life Cycle
135
Time
Product
Develop-
ment
Introduction
Profits
Sales
Growth Maturity Decline
Losses/
Investments ($)
Sales and
Profits ($)

Introduction Stage of the PLC
136
Sales
Costs
Profits
Marketing Objectives
Product
Price
Low sales
High cost per customer
Negative
Create product awareness
and trial
Offer a basic product
Use cost-plus
Distribution Build selective distribution
Advertising Build product awareness among early
adopters and dealers

Growth Stage of the PLC
Sales
Costs
Profits
Product
Price
Rapidly rising sales
Average cost per customer
Rising profits
Maximize market share
Offer product extensions, service,
warranty
Price to penetrate market
Distribution Build intensive distribution
Advertising Build awareness and interest in the
mass market
137

Maturity Stage of the PLC
Sales
Costs
Profits
Product
Price
Peak sales
Low cost per customer
High profits
Maximize profit while defending
market share
Diversify brand and models
Price to match or best competitors
Distribution Build more intensive distribution
Advertising Stress brand differences and benefits
138

Decline Stage of the PLC
Sales
Costs
Profits
Product
Price
Declining sales
Low cost per customer
Declining profits
Reduce expenditure and milk the brand
Phase out weak items
Cut price
Distribution Go selective: phase out unprofitable
outlets
Advertising Reduce to level needed to retain
hard-core loyal customers
139

The Product Life Cycle and strategies
140
Sales
Time
A
B
C
D
The product
portfolio – four
products in the
portfolio
(1)
(1) ‘A’ is at maturity
stage – cash cow.
Generates funds for
the development of
‘D’
(2)
(2) Cash from ‘B’
used to support ‘C’
through growth
stage and to launch
‘D’. ‘A’ now possibly
a dog?
(3)
(3) Cash from ‘C’
used to support
growth of ‘D’ and
possibly to finance
extension strategy
for ‘B’?
Importance of
maintaining a
balance of products
in the portfolio at
different stages of
the PLC – Boston
Matrix helps with the
analysis

• Draw the PLC of Brand You Selected and
comment on strategies of Each stage of PLC.
(Go through the sample example of Maruti-800 to
write the PLC strategies in each stage)
Task-8
141

1 INTRODUCTION
2 GROWTH
3 MATURITY
4 DECLINE
143
CONTENTS

INTRODUCT
ION
GROWTH DECLINE
PRODUCT LIFE CYCLE
MATURITY
144

TYPE : PUBLIC COMPANY
FOUNDED : 1981
HEADQUARTERS : NEW DELHI, INDIA
KEY PEOPLE :RC BHARGAVA ( CHAIRMAN ), KENICHI AYUKAVA ( CEO )
REVENUE : $369.34 BILLION
146
COMPANY PROFILE

Took 2 years for Maruti & Suzuki to sign
the dotted line
First car imported, assembled and sold
in 1983
Cheapest car in the market
Huge gap between demand and supply
Waiting list often took upto 3 years to
clear
Targeted urban areas, “Consumers who
desire for a car”
Based on SS80, Suzuki fronte
147
SCENARIO INTRODUCTION
STAGE ( 1983 – 1986 )

MARUTI 800
PRODUCTS

Engine 796cc
Power 39bhp
Car
weight
600kg
Mileage
18.2
kmpl
Capacity
4
person
149
PRODUCT SPECIFICATION

Pricing
strategy
Ex-
Showroom 47500
On Road 52500
PRICE
SLOW
SKIMMING

1. Keys handed over to the first owner
Harpal Singh by the then PM Mrs.
Indira Gandhi
2. “People’s Car” : Sanjay Gandhi
151
PROMOTION
“SMALL IS BEAUTIFUL”

NEWSPAPER ADS

Consumers
Dealers/Distributors
Assembly Unit (Gurgaon)
DISTRIBUTION

Expectations from people matched product
promise
Production of 65% components in India by
1991
Liberalization of Indian economy
New opportunities opened
Objective to increase the market shares
A lot of 500 units exported to Hungary
154
GROWTH STAGE ( 1987 – 1996 )

SALES

PRODUCT VARIANTS
MARUTI 800 AC
UNIQ
MARUTI- BASIC
MODEL

Air-Conditioning
variant
Music System
Maruti 1000, the
first
contemporary
sedan unleashed
157
PRODUCT SPECIFICATION

PRICE

“CHANGE YOUR LIFE”
Occasional discounts
given by the dealers
159
PROMOTION

PRINT MEDIA ADS

TV COMMERCIAL

Consumers
162
DISTRIBUTION

Sales touched 200,000 mark in 1999
Entry of competitors like General
motors, Ford, Tata
40 million two wheeler owners targeted
Repositioning of Maruti Products
New soft edged jelly bean shape
introduced in 1997
Maruti 800′s carburetor with fuel
injection
163
MATURITY STAGE ( 1997 – 2002 )

PRODUCT VARIANTS
MARUTI 800 EX MARUTI 800
DUO

Shock
Absorbers
Gas
charged
Suspension
Coil Spring
based
165
MARUTI 800 EX

1. Air conditioned
2. Green tinted glass
3. Front bucket seats with larger
armrests
4. Vanity mirror for co-driver
166
MARUTI 800 DUO

1.Slashed its prices
2.Insurance offered for Re.
1 only
3.Service network of
Maruti covered 1314 cities
PROMOTION

1. 250 customer service outlets
along 20 highway routes
2. Pick and drop service facility
for servicing
3. Express Service to ensure
minimum time consumption
SERVICE

MARUTI SERVICE STATION

PRODUCT WEBSITE

TVC

Consumers
DISTRIBUTION

1. Heavy Competition from
Alto, i10, Spark etc.
2. Drastic decrease in sales
3. Just 1288 units sold in
2008-2009.
4. Withdrawn from 13 cities
including metros
5. Repositioned to Alto 800
174
DECLINE STAGE ( 2003 – UPTO NOW)

SALES

A response to increasing market
of Matiz
LPG & CNG variable
Face-lift to grille
Halogen headlamps
Stylish tail-lamps
176
PRODUCT VARIANTS

1. A response to Hyundai Santro
2. Outsold by Maruti 800 itself
initially
3. Forced roll back of Maruti-
800 EX to 4-speed gearbox
177
MARUTI SUZUKI ALTO

RS 1,93,000+TAX
178
PRICE

New technology/engine not to be infused to
meet BS IV norms
Sale stopped in 13 cities including the 4
metros
Selling continued in semi-urban and rural
areas
179
PHASE – OUT,APRIL 2010

1.2599 Offer” Consumers can
buy Maruti by paying EMIs of
2599 for 7 year
2.Dealers offered
exchange/loyalty bonus upto Rs.
10000/-
3.Cash discount upto Rs. 25000/-
offered
PROMOTION OF MARUTI ALTO

MARUTI TRUE VALUE

Consumers
DISTRIBUTION

hodmbacoe@sanjivani.org.in
Dr. V. R. Malkar

Unit No.1 Product.pdf

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Unit No.1 Product.pdf