This document provides an overview of key concepts for setting product strategy. It discusses defining a product, different levels of products from core to potential benefits. It outlines classifications like durability, tangibility, consumer vs industrial goods. It also covers differentiating products based on form, features, customization, quality levels. The document discusses product hierarchies, lines, mixes and pricing approaches. It briefly introduces co-branding, ingredient branding, packaging objectives, labels, warranties and guarantees.

1. setting product strategy
by
Mahendranath reddy
Manohar
Venkata ravindranath reddy
Venkata suresh
Mohana shyam
Balakrishna
Sharath chandra
4/28/2014

2. SYNOPSIS
Product
Product levels
Products classifications
Products differentiation
Product Hierarchy
Product line and Product mix
Co-Branding and ingredient Branding
Packing, labeling, warranties and guarantees
conclusion
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3. 4/28/2014
product
product is anything that can be offered to a market that might
satisfy a want or need.
It can be goods or service or ideas such as intellectual property
Product may be tangible or intangible

4. 4/28/2014
Core benefit
Basic
product
Expected
product
Augmented
product
Potential
product
Product levels

5. Product levels of house

6. Product classifications
Durability and tangibility:-
• Nondurable:
• Tangible goods consumed in one or few uses
• Purchased frequently
• Strategy : availability , low priced , heavily advertised
•
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7. Contd..
• Durable goods:
• Tangible goods that survive many uses
• Require more personal selling and service
• Higher margins and requires seller guarantee
31-Mar-14

9. Contd..
• Service:
• Intangible product.
• Requires more quality control and credibility.

10. Consumer goods classification
• Convenience Goods
• Inexpensive, frequently purchased.
• Little effort needed to purchase them.
• Staples, Impulse and emergency goods.
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11. Contd..
• Shopping Goods
• Not as frequently as convenience products
• Costly
• Consumer does research before purchase.

12. Contd..
• Specialty Goods
• Unique features.
• Consumer is prepared to pay a premium price.

13. Contd..
• Unsought Goods
• Those good that consumers do not know or
• Doesn’t think of buying.

14. Industrial goods classification
Materials and Parts
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Raw Materials
Manufactured
materials and parts
Farm
Products
Natural
Products

15. contd..
• Materials and Parts
Raw Materials
Manufactured
materials and
parts
Component
materials
Component
Parts

16. contd…
• Materials and Parts
Raw Materials
Manufactured
materials and
parts
Component
materials
Component
Parts

17. Contd..
• Capital Items
• Installations
• Equipment

18. Contd…
• Supplies
• Maintenance and repair items
• Operating supplies

19. Business Services
• Maintenance and repair services
• Business advisory services
Contd…

20. Product Form: Many products can be
differentiated in the form-size, shape,
or physical structure of the product.
Product Form
Features
Customization
Performance quality
Conformance
quality
Durability
Reliability
Repairability
style
Product differentiation

21. Features: products can be offered with
varying features that supplement the
basic function.
Product Form
Features
Customization
Performance quality
Conformance
quality
Durability
Reliability
Repairability
style
Product differentiation

22. Customization: marketers can
differentiate product by
differentiating them for different user
Mass customization such example
Product Form
Features
Customization
Performance quality
Conformance
quality
Durability
Reliability
Repairability
style
Product differentiation

23. Performance : level at which the
product’s primary feature operates.
Product Form
Features
Customization
Performance quality
Conformance
quality
Durability
Reliability
Repairability
style
Product differentiation

24. Conformance quality : ensuring that the
product is oh highest grade
Product Form
Features
Customization
Performance quality
Conformance
quality
Durability
Reliability
Repairability
style
Product differentiation

25. Durability : measure of product
operating life.
Product Form
Features
Customization
Performance quality
Conformance
quality
Durability
Reliability
Repairability
style
Product differentiation

26. Reliability: it is the measure of the
probability that the product will not
fail with in a given time.
Product Form
Features
Customization
Performance quality
Conformance
quality
Durability
Reliability
Repairability
style
Product differentiation

27. Repairability: measure of how easily
product can be fixed.
Product Form
Features
Customization
Performance quality
Conformance
quality
Durability
Reliability
Repairability
style
Product differentiation

28. Style: describes the products looks and
feel to the buyer.
Product Form
Features
Customization
Performance quality
Conformance
quality
Durability
Reliability
Repairability
style
Product differentiation

29. Product Hierarchy
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30. Contd..
• Need family – core need that underlies the existence of a
product family .
• Product family – satisfy a core need with reasonable
effectiveness.
• Product class – group with in product family recognized as
having a certain functional coherence.
• Product line – group with in product class that are related they
perform a similar function.
• Product type – group with in product line that share 1 of
several possible forms of the product.
• Item – distinct unit with in a brand.
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31. Product Line
group of related products that are physically similar or are
intended for the same market.

32. Product line analysis
• Sales and profits
• Market profile
• Core product
• Staples
• Specialties
• Convenience items
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33. Product line stretching
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Down-Market
Stretch
Up-Market Stretch
company from upper/middle
market introduces
a lower-priced line
companies enter the high
end of the market to
achieve more growth
company in middle decide
to stretch their line
in both directions
Two-Way Stretch

34. Product Mix
• a company’s assortment of product lines and individual offerings.

35. Product mix dimensions
 Width: number of product lines
 Length: total number of items in mix
 Depth: number of product variants
 Consistency: degree to which product lines are related
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36. Product mix pricing
 Product line pricing:
• product lines rather than single products.
• Introduce price steps
• Ex: men’s suite at three price levels
 Optional feature pricing:
• Optional products, features, services, along with main product
• Pricing is sticky problem
• Ex: economy model of auto companies, restaurants with low
food price but high liquor price

37. Contd..
 Captive product pricing:
• Products that require use of ancillary products.
• Ex: cellular phones with lock- in period, ID makers/printers
using ink.
 Two part pricing:
• Fixed fee plus variable usage fee.
• Ex: telephone postpaid plans .
• Fixed fee low enough, profit from usage fee.

38. Contd…
 By product pricing:
• If the by-products have value to a customer group, they should be
priced on their value.
• Ex: sugar refinery which sells by products of its sugar canes
 Product bundling pricing:
• Pure bundling –product is offer only as bundle.
• “Tied in sales”.
• Ex: actor and other talents in a film company .
• Mixed bundling- less cost than if sold separately.

39. Co Branding
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•Two companies join to create a new product carrying both
their brands.
Examples:
•Taco bell and KFC.
•McDonalds & movie Mulan.
•Pizza Hut & Pepsi.
•Cereal box with other thing inside.

40. Ingredient branding
• creating a brand for an ingredient or component of a product
• Intel Inside for processors and chipsets in computers of
various producers.
• NutraSweet and Canderel, a brand name for the artificial
sweetener Aspartame in the food industry (Coca-Cola light)
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41. packaging
• All activities of designing and producing the container for a
product.
• The fifth “P”.
• An element of product strategy.
• Buyer’s first encounter with product.
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42. Contd..
 Self service:
• 50-70% of all purchase sold on self service basis .
• Packaging should: attract attention, describe the product
features, creates consumer confidence, make favorable overall
impression.
 Consumer affluence:
• rising consumer affluence means more willingness to pay for
convenience, appearance, dependability and prestige of better
packages.

43. Contd…
 Company and brand image:
• Instant recognition of company brand.
• Create visible billboard effect.
 Innovation opportunity:
• Unique materials and features that could benefit consumers
and increase profit of producers.

44. Packaging objectives
• Identify the brand
• Descriptive and persuasive information
• Transportation and protection
• At home storage
• Aid product consumption
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45. Warranties and guarantees
• All sellers are legally responsible for buyer’s normal or
reasonable expectations.
• WARRANTIES
 Formal statements of expected product performance by
manufacturer.
 Products can be returned to manufacturer for repair,
replacement, or refund.

46. Functions of Labels
• Identifies
• Grades
• Describes
• Promotes
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47. Contd..
• EXTENDED WARRANTIES
 Best Buy & Circuit City.
• GENERAL & SPECIFIC GUARANTEES
 P&G - product returned if customer satisfaction not met.
 CROSS - pens & pencils guaranteed for life.

48. Warranties and guarantees
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49. conclusion
02-Apr-14