The document defines and discusses various concepts related to products. It begins by defining a product as anything that can satisfy a want or need and is offered in the market for acquisition or consumption. It then discusses different classifications of products such as consumer vs industrial products, convenience vs shopping vs unsought vs specialty products, differentiated vs undifferentiated goods, durable vs non-durable goods, and more. The document also covers key product decisions including branding, packaging, labeling, and product mix. It discusses the product life cycle and levels of a product from the core benefit to the augmented product.

1. Semester – 5th

2. PRODUCT

3. • Anything that can be offered to a market for
attention, acquisition, use or consumption and
that might satisfy a want or need.
• Products include physical objects, services,
events, persons, places, ideas or mixes of
these entities.

4. Almost everything that we come across in our
daily life is a product: morning newspaper,
program appearing on the TV screen.
All of them have some utility, all of them cater to
& satisfy some needs of some people. So in
simple terms, we can define a product as a “need
satisfying entity”.

5. PRODUCT
A product is anything , tangible or intangible which
can be offered to a market for attention, acquisition
use or consumption that might satisfy a need or
want.
– Philip Kotler
A product is a set of tangible and intangible
attributes including packaging, color , price , quality ,
brand plus the seller services and reputation.
– W.J. Stanton

6. Product
4
PRODUCT
Product
Quality
Physical Characteristics
Of Goods
Price
Brand
Packaging
Design
Product
Warranty
Colour
Sellers
Reputation
Sellers
Service

7. CONCEPT OF PRODUCT
1. Tangible Concept
2. Intangible Concept
3. Augmented Concept
4. Total Concept

8. Levels of Products
6
Product
Core
Product
Actual
Product
Augmented
Product
Features
Design
Packaging
Quality
Level
Brand
Name
After Sale
Service
Warranty
Installation
Delivery
&
Credit

9. First Level : Core Product / Basic Constituent :
The most basic level is the “core benefit”, which addresses the question “What is
the buyer really buying?”
Thus, when designing products marketers must first define the core problem solving
benefits or services that consumers seek.
Second Level : Actual Product / Associated Features:
The product planners must turn the core benefit into an actual product.
They need to build / develop product and service features, design, a
quality level, a brand name and packaging.

10. Third Level : Augmented Level :
Finally the product planners must build an
“augmented product” around the core benefit
and actual product by offering additional
consumer services & benefits.
“Consumers see products as complex bundles of
benefits that satisfy their needs.”

11. CLASSIFICATIONS OF PRODUCTS/GOODS

12. USE
•Consumer Products: Products purchased to satisfy
personal and family needs are consumer products.
Food Items, Clothes , Cosmetics ,Car etc.
•Industrial Products: Products bought for use in an
organization or to make other products are industrial
products. Fuel, Raw Material, Machines etc.

13. 11
Consumer Product Classification
CP are further classified based on “how
consumers go about buying them”.
• Convenience Products
• Shopping Products
• Unsought Products
• Specialty Products

14. 12
a)Convenience Products :
are consumer products that consumer buys frequently immediately and with
a minimum of comparison & buying effort.
E.g. soap, inexpensive candy, newspaper, fast food,
In other words, they are tangible products that the consumer knows enough
about before going out to buy it & then actually buys it with a minimum of
effort.
A consumer is willing to accept any of the several brands & thus
will buy the one that is most accessible.
Convenience goods typically have a low unit price, are not bulky
& are not generally affected by fad & fashion.

15. 14
Convenience products are usually low
priced and marketers place them in many
locations to make them readily available
when customers need them.
Retailers usually carry several brands of the
same type of convenience item.

16. 14
b) Shopping Products :
are less frequently purchased consumer products, that
consumers compare carefully on suitability, quality, price
and style.
While buying Shopping Products consumers spend much
time & effort in gathering information and making
comparisons.
E.g. furniture, clothing, hotel & airline services

17. 15
Marketers of such products usually
distribute their products through
fewer outlets;
But provide deeper sales support to
help customers in their comparison
efforts.

18. 15
c) Unsought Products :
• are consumer products that the consumer either does not know
about or knows about but does not normally think of buying.
• Are purchased when a sudden problem must be solved or when
aggressive selling is used to obtain a sale that otherwise would not
take place.
• In general the consumer does not think of buying these products
regularly.
e.g. Emergency automobile repairs, insurance are examples of unsought
products.

19. 17
Most major new innovations are unsought until the
consumer becomes aware of them through
advertising.
Thus, by their nature these products require a lot of
advertising, personal selling and other marketing
efforts.

20. 19
Buyers normally do not compare Specialty Products.
They invest only the time needed to reach dealers
carrying the wanted products / desired brand.
e.g. specific brands or types of cars (BMW), high priced
technical goods, designer clothes (Armani, Versace)

21. 21
2.Industrial Products : are those purchased for further
processing or for use in conducting a business.
There are 3 groups of industrial products:
• Materials & Parts
• Capital Items
• Supplier & Services

22. 22
a) Materials & Parts :
include raw materials and manufactured materials & parts.
Raw materials consist of farm products or goods that become a
part of another tangible product prior to being processed –
wheat, cotton, livestock, fruits, vegetables.
Natural Products – fish, crude petroleum, iron ore.
Manufactured Products – cement, wire.

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

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

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

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

27. 23
b) Capital Items :
are fully manufactured product that are used in the production
of other product or for providing services . There are two
categories of capital items – installation and equipment.
Installation consists of major purchases such as buildings
(factories & offices) & fixed equipment (generators, computer
systems).
Accessory equipments consist of portable factory equipment
& tools (hand tools, lift, trucks)

28. 23
c) Suppliers & Services :
Supplies include operating supplies – lubricants, coal,
paper, pencil.
Repair & maintenance items like paint, nails, brooms.

29. ACCORDING TO DIFFERENTIATION
•UNDIFFERENTIATED GOODS
•Products whose physical characteristics
are identical that it would not be difficult,
if not impossible, to distinguish one
purchased from one another or another.
•Source from nature.

30. ACCORDING TO DIFFERENTIATION
•DIFFERENTIATED GOODS
•Varied in their characteristics and features
that make them distinguishable from one
another.
Branding- distinguish products from other
competitors
Brand Equity- appreciation in a brand’s value

31. ACCORDING TO DURABILITY
•Durability- refers to the length of time a
consumer can drive benefit from the
product or good purchased.
•Consumable- product whose benefit can only
be used by a consumer for a short period of
time.

32. ACCORDING TO DURABILITY
•Semi- durables- provide benefits to the
consumer for a longer period of time.
•Durables- products that are
manufactured to last a long time.
•Capable of providing consumers with years of
beneficial use.

34. Product Life Cycle
• A product passes through certain distinct stages during its life and this is called
Product Life Cycle.
• There are four distinct stages in a PLC :
• # Pioneering / Introduction Stage
• # Growth Stage
• # Maturity Stage
• # Decline Stage

35. PLC is normally presented as a sales curve. Most
PLC curves are portrayed as bell shaped.
2
Intro
Growth
Maturity
Decline
Sales
Time
Product Life Cycle

36. 1)Pioneering Stage :
During the market pioneering stage, the product is in its introductory
stage.
-Sales are low
-Product may undergo problems.
-Profit seems a remote possibility.
-Demand has to be created & developed.
3
Customers have to be prompted to try out the product.
Promotional expenditures are at their highest ratio to sales because of
the need to :
- Inform potential consumers
- Induce product trial
- Secure distribution in retail outlets

37. Crucial decision to be taken at this stage is the pricing strategy.
-If the product is new thus no past data or comparisons are available &
the firm normally opts for one of the following pricing strategies:
Some Features:
Slow growth of sales
Market pioneers buy the product
Small production level
Technological Problem
Higher Price
Negative Profit
No Competition

38. 2) Growth Stage :
Is marked by rapid climb in sales.
Demand for product increases & size of the market grows.
New competitors enter, attracted by new opportunities.
The competitor introduces new product features & expands distribution.
14
Product Life Cycle

39. Strategy :
 Company improves product quality, adds new features & improves
styling.
 It adds new models, product of different sizes, flavors & so forth to
protect the main product.
 Enters new market segments.
 Increases distribution coverage & enters new distribution channels.
15
Product Life Cycle
 Re - looks at pricing.
 Company shifts from product awareness advertising to product
preference advertising.

40. • Some Features:
• Sales increase rapidly
• New buyer group
• Technological Improvement and new features
• New Market Segments
• Stable price and promotion levels
• High profit

41. 3) Maturity Stage :
Demand tends to reach a saturation point.
Price competition becomes intense.
Competitors begin marking down prices, increasing their advertising &
sales promotion
Dealers have become multi-brand dealers & have started dictating terms.
17
Strategy :
 Companies abandon their weaker products.
 Companies prefer to concentrate their resources on their more
profitable products & on new products.
 Companies spends on R&D to find better versions of the product.
 Company tries considers modifying the market, product or the
marketing mix.

42. 18
Some Features:
Early majority and late majority are major buyers
Tough competition
Slower growth of sales
Price cuts
Heavy promotion
Lower profits

43. 4) Decline Stage :
Sales begins to fall
Demand for product shrinks probably due to :
- new & functionally advanced products becoming available in the
market or
- the market becomes apathetic to the product
- consumer taste shifts
- increasing domestic & foreign competition.
23
Slow
Rapid
As sales& profit decline, some firms withdraw from the market.
Those remaining may prune their product offerings.
They may drop the smaller market segments & marginal trade channels,
or they may cut the promotion budget & reduce their prices further.

44. 25
Strategy :
The firm’s first task is to identify those products in the decline stage by
regularly reviewing sales, market shares, costs & profit trends.
Then the management must decide whether to maintain, harvest or drop
each of these declining products.
 Companies abandon their weaker products.
 Management may decide to maintain its brand without change in the
hope that competitors will leave the industry or management may
decide to reposition or reformulate the brand in hopes of moving it
back into growth stage of the PLC.

45. New Product Development
• The Development of original products, product improvements, product
modification and new brand through the firm’s own R & D efforts.
• Generally Company develop new product in two ways –
• Acquisition – by buying a whole company or a license to produce someone
else’s product.
• New product development – NPD through the company’s own research and
development department.

46. NPD PROCESS
• Idea Generation – The systematic search for new product ideas.
Ideas include internal sources and external sources such as
customer, competitor, distributor and supplier.
• Idea Screening – Screening new product ideas in order to spot
good ideas and drop poor ones as soon as possible.
• Concept Development & Testing
A. Concept Development - An attractive idea must be developed
into a product concept.
B. Concept Testing – Testing new product concept with a group of
target customers to find out if the concepts have strong consumer
appeal.

47. Marketing Strategy Development – Designing an initial marketing strategy for
a new product based on the product concept.
.MSD consist of three parts – Finding target market, the planned product
positioning and sales , market share and profit goals for the company
Business Analysis – A review of the sales, costs and profit projections for a
new product to find our whether these factors satisfy the company's objectives.
Product Development – Developing the product concept into a physical
product in order to ensure that the product idea can be turned into a workable
product.
Test Marketing – The stage of new product development in which the product
and marketing program are tested in more realistic market settings.
Commercialization – Introducing a new product into the market.

48. Individual Product Decision
12
Product
Attributes
Branding
Packaging
Labeling
Product
Support
Services

49. 1.Product Attributes Decision
Developing a product or services involves defining the benefits that it will offer.
These benefits are communicated and delivered by products attributes such as
quality, features, and style & design.
• Product Quality – The ability of a product to perform its functions, it includes
the product’s overall durability, reliability, precision, ease of operation and
repair and other valued attributes.
• Product Features – Features are a competitive tool for differentiating the
company’s product from competitor’s product.
• Product Design – Simply describes the appearances of a product.

50. 17
2) Branding :
is a name, term, sign, symbol or design or a combination of these
intended to identify the goods or services of one seller or group of
sellers and to differentiate them from those of competitors.
- Consumers view a brand as an important part of a product and
branding can add value to a product.
Brands speak about quality, features, Trust etc.
Components of Branding:
- Brand Name
- Brand Mark
- Trade Mark

51. Branding Objective:
a. Design Brand loyalty
b. Develop Brand awareness
c. Achieve brand image
d. Get favorable brand attitude
e. Customer loyalty
f. Brand equity
Importance of Branding:
a. Product identification and choice
b. Promotion
c. Value Building
d. Product Position
e. Quality Assurance
f. Prestige and status

52. Packaging
• The activities of designing and producing the container of wrapper for a product. It
plays major role for communicating.
• The package includes a product’s primary container (toothpaste tube)
• Also include secondary package that is thrown away when the product is about to
used. i.e. Carton Box
• Traditionally, the primary function of the package was to contain and protect the
product.
• But now it is seen as a marketing tool So consumers can differentiate one product
from the other.

53. Packaging Objective:
• Containment
• Protection
• Identification
• Communication
• Promotion
• Product Differentiation
Importance of Packaging
• Convenient
• Attractive
• Communicative
• Economic
• Environmentally friendly

54. Labeling
• A label is that part of the product in which the brand
name, brand mark , information about the product , its
use, ingredients , date of manufacture, manufactures'
name and addresses etc.
Product Support Services
Product support services is also known as customer services that
is part of the augmented product design. It includes :
Handling Customer Complaints
Credit Support
Technical Support
Repair and Maintenance

55. 18
Product Mix Decisions : Product Mix is a set of all product lines and
items that a particular seller offer for sale.
- Complete set of all products offered for sale by a company.
- Product Mix is composed of several product lines.
- Product Mix has 4 dimensions : width, length, depth & consistency.
Product Mix Width: refers to the number of different product lines the
company carries.
Product Line Length: refers to the total number of items the company
carries in its product line.
- Number of items / brands in the line.

56. Product Line Depth : refers to the number of versions offered of each
product in the line.
- The total number of items under each brand in the line;
in terms of variants, shades, models, pack sizes.
Consistency : of the product mix refers to how closely related the
various product lines are in
-end use,
-production requirements,
-distribution channels or in some other way.

57. 23
Product Line 1
BATH SOAPS
Product Line 2
FABRIC WASH
Product Line 3
BEVERAGES
Dove
Liril
Le Sancy
Pears
Rexona
Lifebuoy
Hamam
Breeze
Jai
Moti
Lux
Surf
Rin
Wheel
Sunlight
Ala
Bru
Brooke Bond Red Label
Lipton Green Label
Taaza
Taj Mahal
HUL Product Mix
PRODUCT MIX
WIDTH
PRODUCT
LINE
LENGTH
Different Shapes
Different Packs
PRODUCT
LINE
DEPTH

58. Product Line Decision
• A group of products that are closely related because they function in a similar
manner, are sold to the same customer groups are marketed through the
same types of outlets or fall within given price ranges.
The product line strategy involves four basic decision:
Product line expansion
Product line contraction
Product line modernization
Product line Featuring

59. Service Marketing
• A service is any act or performance that one party can offer to another
that is essentially intangible and does not result in the ownership of
anything. Its production may or may not be tied to a physical product.
• - Philip Kotler
• The demand for services expands with social development , cross
cultural exchanges and growth in per capita incomes of people. E.g.
• Hotel Industry
• Health Services
• Educational Services
• Internet based Services
• Banking Services
• Transportation
• Communication

60. 2
Nature of Service Marketing
Service Intangibility:
Services can not be seen, tasted, felt, heard or smelled before purchase.
Service Inseparability:
A major characteristic of services – they are produced and consumed at
the same time and can not be separated from their providers, whether the
providers are people or machines.
Service Variability:
A major characteristics of services – their quality may vary greatly,
depending on who provides them and when, where and how.
Service Perishability:
A major characteristics of service - they can not be stored for later sale
or use.

61. Service Marketing Strategies
• Service Profit Chain:
• Successful service companies focus their attention on both their customers
and their employees. They understand the service profit chain which links
service firm profits with employee and customer satisfaction.. This chain
consists of five links:
• Internal Service Quality: Superior employee selection and training, a quality
work environment and strong support for those dealing with customers which
results in.
• Satisfied and Productive Employees: More satisfied, loyal and hard working
employees, which results in…

62. • Greater Service Value: More effective and efficient customer
value creation and service delivery , which results in…
• Satisfied and loyal Customers: Satisfied customers who remain
loyal, repeat purchase and refer other customers, which results
in…
• Healthy service profit and growth: More profit in firm invest more
in its employees that result in higher service quality.
• Service Differentiation
• Differentiation factors are competitive advantages a firm is able to
exercise in a market in relation to its competitors. Differentiation
strategy creates values for customers for which the customers are
willing to pay.

63. Tools for service Differentiation:
• Service Differentiation
• Process Differentiation
• Personnel Differentiation
• Physical Evidence Differentiation
• Image Differentiation
• Service Quality
• Service Productivity