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Product Line Decisions &
Product Life cycle
From-
BADM Dept.
Basic Concept
 A product can be defined as a collection of
physical, service and symbolic attributes which
yield satisfaction or benefits to a user or buyer.
 A product is a combination of physical attributes
say, size and shape; and subjective attributes say
image or "quality". A customer purchases on
both dimensions.
 The product involve several decisions for its
formations as well as distribution to end
consumer.
Definition
 According to W. Alderson describes product “A
Product is a set of tangible and intangible
attributes, including packaging, color, price,
manufacturer’s and retailer’s services, which the
buyer may accept as offering satisfaction of
wants or needs.”
Characteristics of Product
 Set of Tangible & Intangible attributes
 Includes color, price, packaging and branding
 Group of utilities
 Designed and presented to satisfy some specific
consumer needs
Characteristics of Product
 Main aim is to provide maximum consumer
satisfaction
 Consumer satisfaction from product may be real
or psychological in nature
 Each brand in marketing is a separate product
 It is first ‘P’ out of four Ps of marketing mix
Product Decisions
 Marketing mix describes how a business uses
and manipulates the 4ps to market their product.
 Businesses employ different strategies when
marketing products compared to services.
 As a physical product, marketers need to
consider packaging, labelling and branding
involved in marketing the overall product.
Type Of Decisions
 Product Design Decisions.
 Production decisions.
 When and Where to Launch decisions.
 Product Mix And Product Line
Product Design Decision
 Initial design
◦ More unique design less competitors‘ hence more
profitability
◦ Uniqueness based on the technology.
 Change in existing design
◦ From Standardization to Adaptation
◦ For Improving the current prospects of sales
◦ Design decisions also culturally bound
Production Decisions
 The key question is, can we ensure continuity of
production and supply?
 Decision may involve
1. Product manufacturing process
2. Batch flow line
3. Technology to use.
4. Product Quality
(Where to Launch)
1. Local products - seen as only suitable in one
single market.
2. International products - seen as having
extension potential into other markets.
3. Multinational products - products adapted to the
perceived unique characteristics of national
markets.
4. Global products - products designed to meet
global segments.
11
Product Items, Lines, and Mixes
Product Item
Product Line
Product Mix
A specific version of a product
that can be designed as a
distinct offering among an organization’s products.
A group of closely-related
product items. Categories of product
All products that an
organization sells.
12
Product Mix Decisions
Product- mix is the total sum of products in the different product lines of a
company. It is a group of similar and consistent products marketed by a
company.
Dimensions of Product Mix-
 Width of Product Mix – how many product lines a company has.
 Depth of Product Mix – how many products are there in a each product
line. It is measured by the sizes, colors and models offered within each
product line.
 Consistency of Product Mix – how closely related the product lines are
in end use (Similarities in different product lines).
 Inconsistency of Product Mix- It refers to heterogeneity of product lines
of a company. A marketing company producing textiles, cement,
chemicals and tires can be termed a company having inconsistency in
product mix.
13
Gillette’s Product Lines & Mix
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
Width of the product mixDepthoftheproductlines
MAJOR PRODUCT MIX STRATEGIES
 Expansion of Product Mix
 Width - Mix extension.
 Depth - Line extension.
 Contraction of Product Mix
 Width- Mix extension.
 Depth - Line extension.
 Alteration of Existing Products
 Positioning the Product
 Position is the image that the product projects in relation to
competitive products and to other products marketed by the
company.
What is a Product Line?
A product line is a broad group of products, intended
for essentially similar uses and possessing
reasonably similar physical characteristics.
A product line is that combination of products which;
 Belongs to a single manufacturer
 Shares similar Attributes
 Serves the common general purpose but;
 Targets different market segments
Samsung
Why Product line decisions?
 Provides better market access
 Involves huge investment/disinvestment
 Products have close mutual influence
Product Line Strategies
Expansion of product line
 Process of adding more products to the line
 Valid only if;
a) There is a well established brand arena &
customers are accustomed to switch.
b) Competitor lacks a comparable product
c) Competitor have already expanded to the
proposed area.
Contraction of the product line
 Dropping a product from the line.
 The reasons behind a drop may be;
a) Fine tuning the market performance
b) Eliminating a poor performing product
c) Uplifting a product with more potential
• This is a much difficult task since much money is
already been invested and hence products are
allowed to linger on until they become a loss.
Alteration of the existing products
 An alteration may be in;
a. Design
b. Size
c. Colour
d. Texture
e. Flavour
f. Packaging
g. Advertising appeal
Developing new use for the existing
products
 This is intended to attract a new category of
customers to the manufacturer without forming a
new product.
 Investments in R&D and Advertisement is required.
TRADING UPAND TRADING DOWN
 Trading up: Adding a higher-priced, prestige product to a line in the
hope of increasing the sales of existing lower-priced products.
 Trading down: Adding a lower-priced item to a line of prestige
products in the hopes that people who cannot afford the original
product will want to buy the new one, because it carries some of the
status of the higher-priced good.
 Problems
May confuse buyers
Sales are at the expense of older products
May permanently harm company reputation
Trading Up
 Adding a high priced prestigious product to the line
so as to increase the sales of the existing low priced
product.
Trading Down
 Introducing a low priced product to the prestigious
line so as to cater increased demand.
PRODUCT DIFFERENTIATION
AND MARKET SEGMENTATION
 Product differentiation: Developing and promoting an
awareness of differences between one company's product
and those of competitors
 Market Segmentation: To develop different products each
one suited to one or more segments of the market.
Factors influencing Product Line
Decisions
Changes in
market
demand
Competitive
action and
reaction
Marketing
Influences
Product
influences
Financial
Influences
Changes in market demand
Competitive action and reaction
Marketing Influences
Financial Influences
Product Influences
Concept of Product Life Cycle
The concept
 Every product has a life cycle, just as in case of
human beings.
 The term first time used by Theodore Levitt in 1965
in Harvard Business Review article.
 A Product after being introduced in to the market,
goes through different stages which is categorised
on the basis of product, profit, competition and
market behaviours.
 PLC is a concept which indicates various stages of
product’s sales and history.
Definition
 According to Philip Kotler “ The product life- cycle
is an attempt to recognize distinct stages in the
sales history of the product.”
 According to Kollet, Blackwell Robeson, product
life cycle is a “generalized model of sales and profit.”
Stages of Life Cycle
1. Introduction
2. Growth
3. Maturity
4. Saturation &
5. Decline
Introduction stage
 Product is Introduced in the market for the first
time.
 Slow growth rate
 Negative or low profits
 Huge marketing expenses
 No competition
 Highly volatile in nature
Growth Stage
 Sales rises at an increasing rate
 Profitable returns from the market
 Reduced promotional expenses
 Hard work for the firm to establish dealerships &
distribution outlets
 Competitors starts to explore the market
Maturity Stage
 Sales are still increasing, but at a decreasing
rate.
 Severe competition
 Profits fall in line with falling prices, which is
unavoidable to retain market share.
 Investments in promotional measures to
differentiate the product
 New distribution strategies & alliances
Saturation Stage
 Sales are stable
 Profits fall drastically
 Competition is at the peak
 Continued need for promotion to maintain sales
 Firm has to plan product modifications
The old TV is getting replaced by..
Decline
 Characterised by falling sales for the whole
industry.
 Prize cutting is continued and profit is at zero
level.
 Firm has to take a major strategic decision
whether to continue with the product or abandon
it.
This old roofing tile industry is now
switching to...
More examples for product replacement
The PLC Graph
Graph with Profit curve
An old PLC Curve!!
Conclusion
 Every product has got a life cycle and every
product will pass through the stage of decline
someday.
 But, through effective product line decisions and
other strategies, we can extend its profitability
period much longer to our benefits.
Thank You!!

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Product decision

  • 1. Product Line Decisions & Product Life cycle From- BADM Dept.
  • 2. Basic Concept  A product can be defined as a collection of physical, service and symbolic attributes which yield satisfaction or benefits to a user or buyer.  A product is a combination of physical attributes say, size and shape; and subjective attributes say image or "quality". A customer purchases on both dimensions.  The product involve several decisions for its formations as well as distribution to end consumer.
  • 3. Definition  According to W. Alderson describes product “A Product is a set of tangible and intangible attributes, including packaging, color, price, manufacturer’s and retailer’s services, which the buyer may accept as offering satisfaction of wants or needs.”
  • 4. Characteristics of Product  Set of Tangible & Intangible attributes  Includes color, price, packaging and branding  Group of utilities  Designed and presented to satisfy some specific consumer needs
  • 5. Characteristics of Product  Main aim is to provide maximum consumer satisfaction  Consumer satisfaction from product may be real or psychological in nature  Each brand in marketing is a separate product  It is first ‘P’ out of four Ps of marketing mix
  • 6. Product Decisions  Marketing mix describes how a business uses and manipulates the 4ps to market their product.  Businesses employ different strategies when marketing products compared to services.  As a physical product, marketers need to consider packaging, labelling and branding involved in marketing the overall product.
  • 7. Type Of Decisions  Product Design Decisions.  Production decisions.  When and Where to Launch decisions.  Product Mix And Product Line
  • 8. Product Design Decision  Initial design ◦ More unique design less competitors‘ hence more profitability ◦ Uniqueness based on the technology.  Change in existing design ◦ From Standardization to Adaptation ◦ For Improving the current prospects of sales ◦ Design decisions also culturally bound
  • 9. Production Decisions  The key question is, can we ensure continuity of production and supply?  Decision may involve 1. Product manufacturing process 2. Batch flow line 3. Technology to use. 4. Product Quality
  • 10. (Where to Launch) 1. Local products - seen as only suitable in one single market. 2. International products - seen as having extension potential into other markets. 3. Multinational products - products adapted to the perceived unique characteristics of national markets. 4. Global products - products designed to meet global segments.
  • 11. 11 Product Items, Lines, and Mixes Product Item Product Line Product Mix A specific version of a product that can be designed as a distinct offering among an organization’s products. A group of closely-related product items. Categories of product All products that an organization sells.
  • 12. 12 Product Mix Decisions Product- mix is the total sum of products in the different product lines of a company. It is a group of similar and consistent products marketed by a company. Dimensions of Product Mix-  Width of Product Mix – how many product lines a company has.  Depth of Product Mix – how many products are there in a each product line. It is measured by the sizes, colors and models offered within each product line.  Consistency of Product Mix – how closely related the product lines are in end use (Similarities in different product lines).  Inconsistency of Product Mix- It refers to heterogeneity of product lines of a company. A marketing company producing textiles, cement, chemicals and tires can be termed a company having inconsistency in product mix.
  • 13. 13 Gillette’s Product Lines & Mix 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 Width of the product mixDepthoftheproductlines
  • 14. MAJOR PRODUCT MIX STRATEGIES  Expansion of Product Mix  Width - Mix extension.  Depth - Line extension.  Contraction of Product Mix  Width- Mix extension.  Depth - Line extension.  Alteration of Existing Products  Positioning the Product  Position is the image that the product projects in relation to competitive products and to other products marketed by the company.
  • 15. What is a Product Line? A product line is a broad group of products, intended for essentially similar uses and possessing reasonably similar physical characteristics. A product line is that combination of products which;  Belongs to a single manufacturer  Shares similar Attributes  Serves the common general purpose but;  Targets different market segments
  • 17. Why Product line decisions?  Provides better market access  Involves huge investment/disinvestment  Products have close mutual influence
  • 19. Expansion of product line  Process of adding more products to the line  Valid only if; a) There is a well established brand arena & customers are accustomed to switch. b) Competitor lacks a comparable product c) Competitor have already expanded to the proposed area.
  • 20.
  • 21. Contraction of the product line  Dropping a product from the line.  The reasons behind a drop may be; a) Fine tuning the market performance b) Eliminating a poor performing product c) Uplifting a product with more potential • This is a much difficult task since much money is already been invested and hence products are allowed to linger on until they become a loss.
  • 22.
  • 23. Alteration of the existing products  An alteration may be in; a. Design b. Size c. Colour d. Texture e. Flavour f. Packaging g. Advertising appeal
  • 24.
  • 25. Developing new use for the existing products  This is intended to attract a new category of customers to the manufacturer without forming a new product.  Investments in R&D and Advertisement is required.
  • 26.
  • 27. TRADING UPAND TRADING DOWN  Trading up: Adding a higher-priced, prestige product to a line in the hope of increasing the sales of existing lower-priced products.  Trading down: Adding a lower-priced item to a line of prestige products in the hopes that people who cannot afford the original product will want to buy the new one, because it carries some of the status of the higher-priced good.  Problems May confuse buyers Sales are at the expense of older products May permanently harm company reputation
  • 28. Trading Up  Adding a high priced prestigious product to the line so as to increase the sales of the existing low priced product.
  • 29.
  • 30. Trading Down  Introducing a low priced product to the prestigious line so as to cater increased demand.
  • 31.
  • 32. PRODUCT DIFFERENTIATION AND MARKET SEGMENTATION  Product differentiation: Developing and promoting an awareness of differences between one company's product and those of competitors  Market Segmentation: To develop different products each one suited to one or more segments of the market.
  • 33. Factors influencing Product Line Decisions
  • 40. Concept of Product Life Cycle
  • 41. The concept  Every product has a life cycle, just as in case of human beings.  The term first time used by Theodore Levitt in 1965 in Harvard Business Review article.  A Product after being introduced in to the market, goes through different stages which is categorised on the basis of product, profit, competition and market behaviours.  PLC is a concept which indicates various stages of product’s sales and history.
  • 42. Definition  According to Philip Kotler “ The product life- cycle is an attempt to recognize distinct stages in the sales history of the product.”  According to Kollet, Blackwell Robeson, product life cycle is a “generalized model of sales and profit.”
  • 43. Stages of Life Cycle 1. Introduction 2. Growth 3. Maturity 4. Saturation & 5. Decline
  • 44. Introduction stage  Product is Introduced in the market for the first time.  Slow growth rate  Negative or low profits  Huge marketing expenses  No competition  Highly volatile in nature
  • 45.
  • 46. Growth Stage  Sales rises at an increasing rate  Profitable returns from the market  Reduced promotional expenses  Hard work for the firm to establish dealerships & distribution outlets  Competitors starts to explore the market
  • 47.
  • 48.
  • 49. Maturity Stage  Sales are still increasing, but at a decreasing rate.  Severe competition  Profits fall in line with falling prices, which is unavoidable to retain market share.  Investments in promotional measures to differentiate the product  New distribution strategies & alliances
  • 50.
  • 51.
  • 52. Saturation Stage  Sales are stable  Profits fall drastically  Competition is at the peak  Continued need for promotion to maintain sales  Firm has to plan product modifications
  • 53.
  • 54. The old TV is getting replaced by..
  • 55. Decline  Characterised by falling sales for the whole industry.  Prize cutting is continued and profit is at zero level.  Firm has to take a major strategic decision whether to continue with the product or abandon it.
  • 56.
  • 57. This old roofing tile industry is now switching to...
  • 58. More examples for product replacement
  • 59.
  • 62. An old PLC Curve!!
  • 63. Conclusion  Every product has got a life cycle and every product will pass through the stage of decline someday.  But, through effective product line decisions and other strategies, we can extend its profitability period much longer to our benefits.