L 2.1 _ L 2.2 (2).pptx

www.cuchd.in Campus: Gharuan, Mohali
DISCOVER . LEARN .
EMPOWER
Defining Product, Product Mix,
Product Mix Strategies
Session Name: Product Mix Strategies
Delivered By : Rohit Guleria
Assistant Professor, USB-MBA
Course Name: Marketing Management
Course Code: 22ONBBT119

• Product Decisions
2
Product Decisions
CO
Numbe
r
Title Level
CO1 To understand the scope of Marketing,
Marketing Mix, Marketing Environment,
Market, Segmentation, Targeting and
Positioning and their role in Marketing of
products and services.
Rememb
er
CO2 To understand the Product and Pricing
Decisions, New Product Development
Process, Pricing Process, Policies and
Strategies and apply them in formulating
marketing strategies in ethical context.
Understa
nd
CO3 To understand the Promotion and
Distribution Decisions, Channel Design,
Selection and Management of
Intermediaries and apply them in
marketing of products and services in
ethical context.
Understa
nd
Course Outcome
Will be covered in
this lecture

TOPICS TO BE COVERED
• Introduction, Meaning, Classification,
• Product Line and Mix
• Product Innovation/New Product
• Product
Standardization/Elimination/Diversification
• Packaging Labeling

Product
• The Best Way to hold customers is to constantly
figure out how to give them more or less.
• Anything that can be offered to a market for
acquisition, use, or consumption that might satisfy a
want or need.

Service and Experience
• Service—Any activity or benefit that one party can
offer to another that is essentially intangible and
does not result in the ownership of anything.

Five Product
Levels
Potential product
Augmented product
Expected product
Basic product
Core benefit

Five Product levels
Core benefit: The core benefit is the basic need or want that the customer satisfies
when they buy the product. For example, a hotel provides a bed to sleep in when a
person is away from home.
Generic product: The generic product is a basic version of the product made up of
only those features necessary for it to function. In this example, a hotel would provide
not only a bed, but a few additional items such as sheets, towels and a bathroom.
Expected Product: The expected product includes additional features that the
customer might expect. In the hotel example, the sheets, towels and bathroom would
be clean.
Augmented Product: The augmented product refers to any product variations or extra
features that might help differentiate the product from its competitors and make the
brand a clearer choice amongst the competition. This could be additional amenities
such as a helpful concierge service or tourist guides available to hotel guests.
Potential Product: The potential product includes all augmentations and
improvements the product might experience in the future. This means that to
continue to surprise and delight customers the product must be constantly improved.
In the hotel example, this could mean gifts, chocolates, or luxury bath products that
will make the customer happy and choose that product over others in the future.

Product classifications
• Durable Goods
• Consumer products
• Industrial product
• Organizations, persons, places, and ideas

Types of Products

Specialty Products Unsought Products
Shopping Products
Buy less frequently
> Gather product information
> Fewer purchase locations
> Compare for:
• Suitability & Quality
• Price & Style.eg- TV,
furniture,Clothing
Convenience Products
Special purchase efforts
> Unique characteristics
> Brand identification
> Few purchase locations.eg-
luxury goods, designer clothes
New innovations
> Products consumers don’t
want to think about.
>Require much advertising &
personal selling.eg-LIC,
Dentist services
Buy frequently & immediately
> Low priced
> Many purchase locations.eg-
toothpaste,
magazines,detergents
Consumer-Goods Classification

Industrial Product

Product Mix

Product Mix
• The product mix is a combination of products
manufactured or sold by the same organization.
Generally companies offer an assortment of related or
unrelated products to the markets instead of focusing
on a single product to strengthen their presence in the
market and increase profitability.
• Smaller or medium firms usually offer products that
are related to each other while bigger ones go for large
scale diversification.
•

Product Line
• Product line is a group of products that are
closely related either because they satisfy a
class of need, or used together, are sold to the
same customer group, are marketed through
the same types of outlets, or fall within given
price ranges or that are considered a unit
because of marketing, technical, or end-use
considerations. For example, The Sunsilk range
of shampoos and conditioners constitute a
product line.

Product Item:
Width:
• Width of the product mix
means the number of different
product lines found within the
company. Thus, breadth is
measured by the number of
product lines carried. For
example, Bajaj group has a
number of subsidiaries under it
producing bulbs, fluorescent
lights, mixers and grinders,
toasters, motorcycles, pressure
cookers and a host of other
products.
Depth:
• Depth of the product mix
refers to the average number
of items offered by the
company within each product
line. It is measured by
assortment of sizes, colours,
models, prices and quality
offered within each product
line. For instance, Hindustan
Unilever offers a number of
variants like Lux Fresh Splash,
Strawberry and cream,
Peach and cream, Sandal and
cream, etc. within the product
line Lux soaps.

Consistency:
• The consistency of product mix points out how closely related the various
product lines are in terms of consumer behavior, production
requirements, distribution channels or in some other way. For example,
the products produced by the General Electric Company have an overall
consistency in that most products involve electricity in one way or the
other.
• According to Kotler, all three dimensions of product mix have a market
rationale. By increasing the width of the product mix the company hopes
to capitalize on its good reputation and skills in present markets.
• By increasing the depth of its product mix, the company hopes to entice
the patronage of buyers of widely differing tastes and needs. By increasing
the consistency of its product mix, the company hopes to acquire an
unparalleled reputation in a particular area of endeavour.
•

Factors Affecting Product Mix
• Profitability
• Objectives & Policy of the company
• Production Capacity
• Demand
• Production Cost
• Government Rules & Regulations
• Demand Fluctuations
• Competition
• Elements of Marketing Mix
• Business Conditions

Product Decisions
• Product Innovation
• Product Standardization
• Product Elimination
• Product Diversification

Every year, tens of
thousands of new
consumer products are
launched in the United
States. But how many of
those products survive
the ultra-competitive
market?
According to Harvard
Business School professor,
Clayton Christensen, 95%
of those new products
fail.

Product Innovation
• The development and market introduction of a
new, redesigned or substantially improved good
or service. Examples of product innovation by a
business might include a new product's invention;
technical specification and quality improvements
made to a product; or the inclusion of new
components, materials or desirable functions into
an existing product.

Reasons for Product Innovation
• Responding to trends and customer needs
• Utilization of excess capacity
• Developing a unique selling point
• Increasing competition
• Uplifting the standards of living of people
• For economic growth
• Progression of human well-being
• For better returns
• For business survival
• Reputation and goodwill

Product Standardization
• Product standardization refers to marketing a product
in the overseas markets with little change except for
some cosmetic changes such as modifying packaging
and labelling. Generally, products with high
technological intensity such as heavy equipment’s,
plants and machinery, microprocessors, hard disks,
projectors etc. are marketed as standardized products
across the world.
• Some of the consumer products with global appeal, viz.
Big Mac, Coke, Budweiser, Heineken, etc., are also
marketed as globally standardized products.

The benefits associated with using standardized
products in international markets include:
• i. Projecting a global product image
• ii. Catering to the global customers moving across
countries
• iii. Cost savings in terms of economies of scale in
production
• iv. Economy in designing and monitoring various
components of the marketing mix
• v. Facilitates in developing the product as a global
brand

Importance and Merits-
Customer view
• Buying Facility
• Using Facility
• Protection
• Fair price
• Market information
Seller View
• Selling facility
• Wider market
• Loan facility
• Increase in goodwill

Product Elimination
• Product elimination is the decision to drop a
product from the portfolio based on its poor
market performance. The market demand for
such products has been dipped to none and
hence product elimination or closure is carried
out. Product elimination can also mean that
only product under an umbrella brand needs
to be stopped and not the entire portfolio.

Reasons for Product Elimination

Example of Product Elimination
• Apple dropped its once upon a time market
leading product- the iPod because with the
advent of smartphones, the market demand
for iPod declined suddenly. Because Apple
iPod was doing well with high market share,
iPod found itself in the harvest phase. But as
demand declined further and so was the share
of Apple, it moved into the dog phase and was
subsequently eliminated. This is an example of
product elimination.

Product Diversification
• Product diversification is the practice of
expanding the original market for a product.
This strategy is used to increase the sales
associated with an existing product line, which
is especially useful for a business that has
been experiencing stagnant or declining sales

Diversification Strategies
• 1. Concentric diversification
• Concentric diversification involves adding similar products
or services to the existing business. For example, when a
computer company that primarily produces desktop
computers starts manufacturing laptops, it is pursuing a
concentric diversification strategy.
•
• 2. Horizontal diversification
• Horizontal diversification involves providing new and
unrelated products or services to existing consumers. For
example, a notebook manufacturer that enters the pen
market is pursuing a horizontal diversification strategy.
•

3. Conglomerate diversification
• Conglomerate diversification involves adding new products
or services that are significantly unrelated and with no
technological or commercial similarities. For example, if a
computer company decides to produce notebooks, the
company is pursuing a conglomerate diversification
strategy.
• Of the three types of diversification techniques,
conglomerate diversification is the riskiest strategy.
Conglomerate diversification requires the company to enter
a new market and sell products or services to a new
consumer base. A company incurs higher research
and development costs and advertising costs. Additionally,
the probability of failure is much greater in a conglomerate
diversification strategy.

ADVANTAGES & DISADVANTAGES OF
DIVERSIFICATION
• As the economy changes, the spending
patterns of the people change.
Diversification into a number of industries
or product line can help create a balance
for the entity during these ups and downs.
• There will always be unpleasant surprises
within a single investment. Being
diversified can help in balancing such
surprises.
• Diversification helps to maximize the use
of potentially underutilized resources.
• Certain industries may fall down for a
specific time frame owing to economic
factors. Diversification provides
movement away from activities which
may be declining.
•Entities entirely involved in profit-making
segments will enjoy profit maximization.
However, a diversified entity will lose out due
to having limited investment in the specific
segment. Therefore, diversification limits the
growth opportunities for an entity.
•Diversifying into a new market segment will
demand new skill sets. Lack of expertise in the
new field can prove to be a setback for the
entity.
•A mismanaged diversification or excessive
ambition can lead to a company over
expanding into too many new directions at the
same time. In such a case, all old and new
sectors of the entity will suffer due to
insufficient resources and lack of attention.
•A widely diversified company will not be able
to respond quickly to market changes. The
focus on the operations will be limited,
thereby limiting the innovation within the
entity.

Branding
• Branding is a process which involves creating a specific
name, logo, and an image of a particular product,
service or company. This is done to attract customers.
It is usually done through advertising with a consistent
theme.
• Branding aims to establish a significant and
differentiated presence in the market that attracts and
retains loyal customers. A brand is a name, term,
symbol, or other feature that distinguishes an
organization or product from its rivals in the eyes of
the customer. Brands are used in business, marketing,
and advertising.

Features of Branding
• Targetability
• Awareness
• Loyalty
• Consistency

Packing and Packaging
• The words packing and packaging often confuse us, as they
play a very significant role in the field of Marketing and are
used in the context of covering or wrapping the product for
proper storage and transportation. While packing is more
about protection, the packaging is focuses on the design and
appearance of the product which makes it attractive.
• Example- Amul milk is stored in tetra packs to preserve for
longer periods as milk is a product that perishes fast. The tetra
packs provide the freshness needed to keep milk in good
condition while ach pack having a logo of a girl in it, the blue
white colour of the pack and photo of milk in it indicates the
packaging part of it,

Comparison Chart
BASIS FOR COMPARISON PACKING PACKAGING
Meaning Packing implies the process
of wrapping up of product
into a case or container, for
the purpose of protection.
Packaging is the process of
creating a cover for the
product which identifies the
brand and also ensures its
safety for storage and
transport.
Includes Wrapping and storing the
product in a proper way.
Designing package, labeling
and sales promotion.
Objective To facilitate safety. To identify the brand and
attract customers.

There are three levels of packaging:
• Primary Package: The immediate cover, in which the
product is made available, which can be a polythene
wrapper, tube, cane etc.
• Secondary Package: Apart from the primary packaging, one
more package is provided to the product, to ensure its
safety. You might have seen a cardboard box, in which the
product is covered.
• Final Packaging: Final packaging is mainly for
transportation and storage purposes. You might have seen
that when a product is transported in large quantities, from
one place to another, a number of products are placed in
cartons and in this way several cartons are used to
transport the product, to protect them from any damage.

FUNCTIONS
• Containment
• Protection
• Identification
• Promotion
• Prestige
• Information
• Utility of use
• Convenience
• Stacking and storage

LABEL
• Marketers use labeling to their products to bring
identification. This kind of labeling helps a viewer to
differentiate the product from the rest in the shelves of
the market. There are several used of the label for the
products in the market.
• Labeling is used for packaging the product. In
marketing, a marketer can also use a sticker inedible
products to impart knowledge of the ingredients of the
food items. This helps to spread awareness among the
customers about the item they are consuming and
labeling also helps to mention ingredients.

Types of labeling in marketing
• Branded Product Labels
• Products need to be branded to help with identification and play a key role in company brand
building programs. Branded Product Labels need to be securely bonded to the product
surface in a way that is best suited to that product.
• There are two types of branded labels:
• Removable and
• None Removable labels
• With permanent labels, the bonding has to be permanent and the label must be difficult to
remove and resistant to a number of factors.
• Removable product labels, on the other hand, need to adhere to the product only until they
need to be removed.
• Eco or Information Labels
• Information Labels or Eco-Labels are used on consumer products such as foodstuff and fast
moving consumer goods. They are used to impart information to the consumer about the
product. Often these types are made out of eco-friendly substances so that they do not
interfere with the products they are associated with.
• Other Product Label Types
• There are a number of different label types that are in common usage around the world that
are regular mass produced by specialist printing services.

FUNCTIONS
• Describe the product and specify its contents
• Identification of the product and brand
• Grading of Product
• Helpful in promotion of products
• Providing information required by law

Which of the following is not a function of
marketing?
• Bending the customers according to product
• Marketing planning
• Product designing and development
• Gathering and analyzing market information

49
Blackboard
Assessment Pattern
49
Componen
ts
HT-1 HT-2 Assignme
nt
Surprise
Test
Business
Quiz
GD
Forum
Attendanc
e
Scaled
Marks
Max.
Marks
10 10 6 4 4 4 2 40

REFERENCES
• 1. Ramaswamy, V.S and Namakumari, S., Marketing Management: Global Perspective Indian
Context,Macmillan Publishers India Ltd., New Delhi.
• 2. Saxena, Rajan, Marketing Management, Fourth Edition, Tata McGraw Hill Education Pvt.
Ltd. New Delhi.
• 3. Louis E. Boone and David L. Kurtz, Principles of Marketing, Cengage Learning.
• 4. http://www.businessdictionary.com/definition/product-innovation.html
• 5. https://www.yourarticlelibrary.com/international-business/product-standardization-and-
adaptation-differences/77048
• 6. https://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/17884-
product-elimination.html
• 7. https://corporatefinanceinstitute.com/resources/knowledge/strategy/product-
diversification/
• 8. https://efinancemanagement.com/mergers-and-acquisitions/diversification
• 9. https://www.packaging-labelling.com/articles/importance-of-labelling-in-marketing
50

THANK YOU

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