The document defines product as anything that can be offered to a market for attention, acquisition, use, or consumption. It can include physical objects, services, personalities, places, organizations, and ideas. There are three levels of a product: the core product or benefit, formal product which includes packaging and other features, and augmented product which includes total benefits received. Products can be consumer products like convenience goods, shopping goods, durables, and non-durables, or industrial products. Diversification occurs when a company offers more than one product line, and can be related or unrelated.

1. Product

2. Product
A product is anything that can be
offered to a market for
o Attention
o Acquisition
o Use or
o Consumption

3. Product …Contd.
It includes
o Physical Objects
o Services
o Personalities
o Places
o Organisations &
o Ideas

4. Different Senses of Product
Core Product: What the buyer is really buying
Formal Product: Larger ‘packaging’ of core
product. It is what the target market
recognises as tangible offer.
Augmented Product: The totality of benefits
that the person receives or experience in
obtaining the formal product.

5. Three Levels of Product
Core
Benefit
or
Service
Core
Product
Features
Packaging
Installation
Styling
Quality
Brand
Name
Free
Delivery
Warranty
Formal Product

6. Product …Contd.
A Product or Product Item
A product item refers to a specific
product or brand like Brooke Bond or
Lipton Tea.

7. Product …Contd.
Product Line
A product line is an expression used to describe
a group of closely related products. E.g. Usha
line of fans, Lakme line of cosmetics.
A line of product is often meant to meet various
segments of customers.
E.g. Soap line of HUL
Lifebuoy – aimed at lower income, Lux – for the
middle priced market; Pears – for the premium
market.

8. Product …Contd.
Product Mix Strategy
The expression ‘Product Mix’ is used to
refer to a set of all the products offered
for sale by a particular company.
The product mix strategy includes all
product lines and product items offered
by a company.

9. Product …Contd.
Types of Products
Generally products are classified into two
types
1. Consumer products
2. Industrial products

10. Product …Contd.
Consumer products can be divided
into:
1. Convenience goods
2. Shopping goods
3. Durables
4. Non-durables

11. Product …Contd.
Convenience Goods
These are goods which consumers
purchase frequently without making an
effort or as a habit.
E.g. – Soaps, Newspapers, Toothpastes,
Toiletries, Cigarettes etc.

12. Product …Contd.
Shopping Goods
These goods are purchased after going
around shops and comparing the different
alternatives offered by different
manufacturers and retailers.
Emphasis is on quality, price, fashion, style
etc.
E.g. – Purchase of sarees by ladies,
furniture, refrigerators etc.

13. Product …Contd.
Durable Goods
These goods last for some time
E.g. – Electric irons, refrigerators, T.Vs
etc.
- These require more selling effort
- In certain types of durables ‘after sales
service’ is very essential.

14. Product …Contd.
Non-Durable Goods
These get depleted on consumption.
E.g. – Bottle of soft drink, soap, etc.
- They are purchased very often.
- For ensuring repeat purchases by
customers manufacturer must ensure
quality/appropriate price
- These have to be advertised heavily

15. Product …Contd.
Services
Services in content are different from
tangible products.
E.g. – Courts offer service. So are
hospitals, fire deptt., post office, police.
- Controlling quality of service is
important for building its image.

16. Product …Contd.
MFCG – Fast Moving Consumer
Goods
Usually refer to non-durable goods.
Examples – soft drinks, toiletries, grocery
items are frequently purchased, low
involvement, low price FMCG can be
further sub-divided into 3 categories.

17. Product …Contd.
Staples
Goods that consumers purchase on a
regular basis.
For Example – A buyer purchases a
toilet soap, detergent, sauce, toothpaste,
biscuits as and when the stocks reach a
critical level.

18. Product …Contd.
Impulse Goods
Goods that are purchased without any
planning or search effort.
These are purchased due to external stimuli
For Example – Chocolates, soft drink and
potato chips are displayed in the departmental
stores because shoppers may not have
thought of buying them until spotting them.

19. Product …Contd.
Emergency Goods
These are purchased when that particular
need arises.
For Example – Requirement for umbrellas
arises during the rainy season or pullovers
with the advent of winter.
Manufacturers of emergency goods will place
them in many outlets so as to capture the sale
when the customer needs these.

20. Product …Contd.
Industrial Products
These are products sold primarily for use
in manufacturing other goods or for
rendering some service.
For Example – Machinery, components,
raw materials

21. Product …Contd.
Industrial goods include supplies and
service.
E.g. – Lubricant & oil, typing paper /
computer stationery for office.
Industrial services include –
Maintenance and repairs.

22. Diversification
As soon as a manufacturer offers more
than one product, it is described as a
product diversification.
Generally diversification is of two types:
1. Related diversification
2. Un-related diversification.

23. Diversification …Contd.
Where the new products introduced in
the product mix are similar to the existing
product diversification is related. E.g. –
HUL – Vim, Surf, Rin
When a company accepts new products
which are very different from existing
products, diversification is ‘unrelated’.
E.g. Godrej – Cosmetics, steel furniture,
animal feeds, locks.

24. Diversification …Contd.
Reasons for related diversification
1. To make a more effective use of the
existing selling and distribution facilities.
2. To use its under utilised production
capacity.
3. To meet varied customer needs.
4. To take advantage of its existing
reputation in a particular type of product.
5. To increase the sale of existing product.

25. Integrated Diversification
Backward Integration - is a term
applied where a company diversifies and
manufactures products which it
previously purchased that is industrial
products.
E.g. – A company may start
manufacturing what it uses as raw
materials for its final products.

26. Integrated Diversification …Contd.
Forward Integration - applies when a
company decides to go forward into starting
its own distribution system from mere
manufacturing.
E.g. – Bata brand of shoes are largely retailed
through company controlled outlets.
Horizontal Integration – This is where the
company starts buying up and getting control
over its competitors.