Product mix
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This document summarizes key considerations for product mix decisions at both the individual product and product line levels. At the individual product level, decisions include attributes, quality, design, branding, packaging, and support services. Branding strategies can include individual, family, or corporate names. Packaging serves functions like protection, promotion, and convenience. Product line decisions involve grouping related products for similar functions, markets, outlets, or price ranges. Strategies include line extensions, filling, stretching, modernization, and pruning. The product life cycle framework outlines stages from development to decline. Pricing considerations involve costs, customer perceived value, competition, and strategies like market penetration, skimming, and adjustments.
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Product mix
- 1. PRODUCT MIX
- 5. TO BE STUDIED AT TWO LEVELS INDIVIDUAL PRODUCT DECISIONS PRODUCT LINE DECISIONS
- 7. INDIVIDUAL PRODUCT DECISIONS Includes decisions related to – PRODUCT ATTRIBUTES QUALITY FEATURES STYLE DESIGN BRANDING PACKAGING LABELING PRODUCT SUPPORT SERVICES
- 8. Brand: 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 competitor ◦ ◦ ◦ ◦ ◦ ◦ Some desirable qualities of a brand name: It should suggest something about the product’s benefits. It should suggest product qualities. It should be easy to pronounce, recognize, and remember. It should be distinctive. It should not carry poor meaning in other countries and languages. BRAND
- 9. Individual Names : e.g P&G - Vicks ( health Care) , Ariel and Tide (Fabric care ) Pantene , Head and Shoulders , Rejoice ( Shampoo) , and Pampers ( Baby care ) Blanket Family names : Policy followed by Tata Salt , Tea , Automobile ,and Steel Separate Family names for all products– Aditya Birla group follows this policy to a great extent like Hindalco Aluminium , Ultra Tech Cement , Grasim Suiting and Graviera suiting Corporate names combines with Individual product names : by Kellogg's – Kellogg's Rice Krispy's , Kellogg’s Raisin Bran , and Kellogg’s Cornflakes
- 10. Product Category Brand Extension Multibrands Brand name Line Extension New Brands Brand development Strategies
- 11. Co-Branding
- 14. Contain and protect the product Promote the product Facilitate storage, use, and convenience ◦ Physical protection ◦ Identify the brand, list the ingredients, specify features, give directions, differentiate from competition, ◦ influence consumer perceptions and buying behavior. ◦ Easy to ship, store, and stock, prevent spoilage or breakage, extend a product’s shelf life. ◦ Easy to handle, open and reclose, ◦ tamperproof/childproof, reusable, disposable. Functions of Packaging
- 18. PRODUCT LINE DECISIONS A GROUP OF PRODUCTS THAT ARE CLOSELY RELATED they function in a similar manner they are marketed through the same type of outlets they are sold to the same customer group they fall within given price ranges
- 19. EXAMPLES – NIKE ATHLETIC SHOES LOREAL HAIR CARE SEGMENT HUL FMCG PRODUCTS NOKIA CELL PHONES P&G PRODUCTS
- 21. Down-market Stretch Line Stretching Product Line Strategies Up-Market Stretch Line Filling Two – Way Stretch Line Modernization, Pruning
- 23. The course that a product’s sales and profits take over it’s lifetime….. 5 DISTINCT STAGES…………… PRODUCT LIFE CYCLE
- 26. Test Marketing Idea Generation Product Development Idea screening Business Analysis Concept Development & Testing • Standard • Controlled • Simulated Marketing Strategy Development Commercialization New Product development
- 27. Customer Centered Team based Product Development Systematic New Product Development Managing New Product development
- 29. Relative Advantage Compatibility Complexity Divisibility Communicability What Influences adoption?
- 31. Customer Perception of Value PRICE CEILING Other Internal & external consideration s Product Costs PRICE FLOOR Factors to consider when setting Prices
- 32. Design a product Determine cost Set price based on product Access Customer needs & Value perception Set target price to match perception Determine the costs that can be incurred Convince buyers of products value Design the product to deliver desired value at target price
- 33. Customer perception of Value Company & Product costs Other internal & External considerations Value based pricing Types of Costs Overall marketing strategy, objective & mix Good value Pricing Costs at different levels of Production The market & demand Value added Pricing Cost as a function of Experience curve Competitors Strategy & Pricing Cost plus Pricing Other External Factors Break Even Analysis & Target Profit pricing Factors to be considered when setting prices
- 34. Mark Up Pricing Target Return Pricing Perceived value pricing Value pricing Going rate Pricing Auction Type Pricing Pricing Methods
- 35. Market Skimming Market Penetration •Products quality & image must support its high price & enough buyers must want the product at that price •Cost of producing a smaller volume cannot be so high that they cancel the advantage of charging more •Competitors should not be able to enter the market easily & undercut the high price •Market must be highly price sensitive so that low price produces more market growth •Production & distribution costs must fall as sales volume increases. •Low price must help keep out competition •Maintain the low price New Product Pricing Strategy
- 36. Discount & allowance pricing •Reducing prices to reward customer responses such as paying early or promoting the product Segmented pricing •Adjusting prices to allow for differences in customers, products or locations Psychological Pricing •It considers the psychology of prices & not simply the economics •Reference pricing Promotional Pricing •Temporarily pricing products below the list price and sometimes even below cost, to increase short-run sales. Geographical Pricing •Setting prices for customers located in different parts of the country or world •FOB-Origin Pricing •Uniform delivered pricing •Zone pricing •Basing point pricing •Freight absorption pricing Dynamic Pricing •Adjusting the prices continually to meet the characteristics & needs of individual customers & situations International Pricing Price Adjustment Strategies
- 38. Initiating Price cuts Initiating Price increases Buyers reaction to price changes Competitors reaction to price changes Initiating Price Changes
- 39. Has competitor cut price? N O Hold current price, continue to monitor competitors price YES YES Will lower price negatively affect our market share & profits? NO NO Can/should effective action be taken? Reduce price Raise perceived value Improve quality & increase price Launch lowprice “fighting brand Responding to Price changes
- 40. THANKYOU