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Product Strategy
The document discusses product strategy and management. It defines a product and different levels of a product from core benefit to potential product. It also discusses classifying products as durable/non-durable goods and consumer/industrial goods. Product systems and mixes are covered along with managing product lines through line length, stretching, and filling. Product-mix pricing strategies and packaging objectives are summarized. Packaging aims to promote products, define identity, provide information, express customer needs, ensure safe use, and protect the product. Labels are also discussed in types like brand and descriptive labels.
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Product Strategy
- 1.
- 2. TOPIC OVERVIEW “PRODUCT”AS CONCEPT & CLASSIFICATION PRODUCT SYSTEMS & MIXES MANAGING PRODUCT LINES PRODUCT-MIX PRICING PACKAGING AND LABELS
- 3.
- 4. What is aproduct? Anything offered to the market To satisfy want or need • Goods, services, experiences, events, persons, places, organizations and ideas. Most important element of marketing mix
- 5. Market offering Customerwill judge the offering by three basic elements • Product features and quality • Service mix and quality • price
- 6. Product levels Inplanning its market offering, the marketer needs to address five product levels .Each level adds more customer value, and the five constitute a customer- value hierarchy:
- 7. CORE BENEFIT •The service or benefit the customer is really buying. • A hotel guest is buying rest and sleep. • The purchaser of a drill is buying holes. • Marketers must see themselves as benefit providers. BASIC PRODUCT EXPECTED PRODUCT AUGMENTED PRODUCT POTENTIAL PRODUCT
- 8. CORE BENEFIT •The marketer must turn the core benefit into a basic product. • Thus a hotel room includes a bed, bathroom, towels, desk, dresser, and closet. BASIC PRODUCT EXPECTED PRODUCT AUGMENTED PRODUCT POTENTIAL PRODUCT
- 9. CORE BENEFIT •The marketer prepares an expected product, a set of attributes and conditions buyers normally expect when they purchase this product. • Hotel guests minimally expect a clean bed, fresh towels, working lamps, and a relative degree of quiet BASIC PRODUCT EXPECTED PRODUCT AUGMENTED PRODUCT POTENTIAL PRODUCT
- 10. CORE BENEFIT •The marketer prepares an augmented product that exceeds customer expectations. BASIC PRODUCT EXPECTED PRODUCT AUGMENTED PRODUCT POTENTIAL PRODUCT
- 11. CORE BENEFIT •`The potential product, which encompasses all the possible augmentations and transformations the product or offering might undergo in the future. BASIC PRODUCT EXPECTED PRODUCT AUGMENTED PRODUCT POTENTIAL PRODUCT
- 12. PRODUCT CLASSIFICATION Marketers classifyproduct based on • Durability and Tangibility • Use Consumer Industrial
- 13. Durability and tangilbility •Non-durable goods Tangible goods normally consumed in one or few uses. Purchased frequently • Durable goods Tangible goods that survive many uses. They require more seller guarantee and command higher margin.
- 14. Intangible products • Services Intangible Requires more quality control, supplier credibility and adaptability
- 15. Consumer goods classification •Convenience goods goods purchased frequently and immediately with minimum effort Staples, impulse goods and emergency goods • Shopping goods Those goods consumer characteristically compares on such bases as suitability, quality, price, and style. Homogeneous and heterogeneous
- 16. • Specialty goods Those goods having unique characteristics or brand identification for which enough buyers are willing to make a special purchasing effort. • Unsought goods Those goods the consumer does not know about or normally think of buying, such as smoke detectors, grave stones.
- 17. Industrial goods classification Material and parts Capital items Supplies and business services
- 18. Industrial goods classification •Materials and parts Materials and parts are goods that enter the manufacturer’s product completely Raw materials o Farm products o Natural products
- 19. Manufactured materials Component materials Component parts
- 20. • Capital items Capitalitems are long-lasting goods that facilitate developing or the finished product. Installations equipment
- 21. Supplies andbusiness services supplies are two kinds maintenance items and repair items operating supplies business services include maintenance and repair services (window cleaning, copier repair) Business advisory services (legal, advertising)
- 22. Product andservice differentiation product differentiation Form Features customizations Performance quality Conformance quality Durability Reliability Reparability style
- 24. Service differentiation Ordering ease Delivery Installation Customer rating Customer consulting Maintenance and repair Returns
- 25. Design Designis the totality of features that affect how a product looks, feels, and functions to a consumer. Design offers functional and aesthetic benefits and appeals to both our rational and emotional sides. e.g.. The product strategy of Hawkins is to span wide range of cooking products with innovative product designs.
- 26. PRODUCT SYSTEMS &MIXES
- 27. PRODUCT SYSTEMS & MIXES ProductSystems Product Mixes Product Systems Properties
- 28. Product System Isa group of diverse but related items that functions in compatible manner Why its call Product System?? Eg. Mobile Phone Industry, Automobile Industry
- 29. Product Mixes Set ofall products and items a particular seller offers for sales
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- 31. • NO.DIFFERENT PRODUCT LINECOMPAINY OFFERSWIDTH • TOTAL NO. OF PRODUCT IN SINGLE LINELENGTH • NO. VARIANTS OF EACH PRODUCT IN LINEDEPTH • HOW CLOSELY RELATED PRODUCT LINES ARECONSISTANCY
- 32. HUL Product MixesWidth and Line Length
- 33. HUL Product MixesWidth and Line Length
- 34. P&G Product MixesWidth and Line Length
- 35. Nestle Product MixesWidth and Line Length
- 36. ITC Product MixesWidth and Line Length
- 37. Emami Product MixesWidth and Line Length
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- 40. MANAGING PRODUCT LINES MANAGING PRODUCT LINES LINELENGTH LINE STRETCHING LINE FILLING LINE ANALYSIS SALES AND PROFITS MARKET PROFILE
- 41. Managing “Sales andProfit” can help determine which items to Build, Maintain, Promote or Discontinue.
- 42. Sales and Profits(Cont’d)
- 43. Product line managersmust review how the line is positioned against competitor’s line to enhance “Market Profile”
- 44.
- 45. Objective behind managing productline length To induce up-selling To facilitates cross-selling Protects against economic ups and downs To use excess manufacturing capacity To satisfy specific customer demands
- 46.
- 47. Occurs when companylengthens its product line beyond its current range
- 48. Ways of linestretching • Introduction of lower price line than current offering to enter low-end segment Down- Market Stretch • Introduction of higher price line than current offering to enter high end market Up-Market Stretch • Stretching in both ways to gain market dominance Two Way Stretch
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- 50. Line filling Lengtheningproduct line by adding more item within present range Plugging holes to keep out competitors Overdone result in Cannibalization and Customer Confusion BMW’s evolution one brand five model to 3 brands 14 Series Good Knight journey to market leader
- 51. Product line management Line Modernization: Introducing advance product Line Featuring: Introducing Special edition’s Line pruning: Cutting Product Line
- 52.
- 53. PRODUCT-MIX PRICING STRATEGIES PRICING PRICE ISTHE VALUE THAT IS PUT TO A PRODUCT OR SERVICE IT IS THE RESULT OF A COMPLEX SET OF CALCULATIONS, RESEARCH AND UNDERSTANDING AND RISK TAKING ABILITY. PRICING STRATEGY TAKES INTO ACCOUNT SEGMENTS, ABILITY TO PAY, MARKET CONDITIONS, COMPETITOR ACTIONS, TRADE MARGINS AND INPUT COSTS.
- 54. Product-Mix Pricing Strategies Product line pricing takes into account the cost difference between products in the line, customer evaluation of their features, and competitors’ prices.
- 55. Product-Mix Pricing Strategies Optionalproduct pricing takes into account optional or accessory products along with the main product. New car with ordinary rims 8,00,000Rs New car with sports rims 8,60,000Rs
- 56. Product-Mix Pricing Strategies Captiveproduct pricing involves products that must be used along with the main product. Two-part pricing is where the price is broken into Fixed fee Variable usage fee
- 57.
- 58. Product –Mix Pricing Strategies Product bundle pricing combines several products at a reduced price. 1 bottle: 60Rs Bundled 2 bottles: 100Rs
- 59. Product-Mix Pricing Strategies Pricing Strategies Product line pricing Optional product pricing Captive product pricing By-product pricing Product bundle pricing
- 60.
- 61. PACKAGING The package refersto physical container or wrapping for a product It is an integral part of product planning and promotion 10% of the retail price is spent on developing, designing, and producing just the package Companies sometimes change packaging to update their image and reach a new market
- 62. Tropicana Famous Packaging Failure: PepsiCoexperienced great success with its Tropicana brad, acquired in 1998.Then in 2009, the company launched a redesigned package to “Refresh and modernize” the brand. The goal was to create an “emotional attachment with design and trumpeting the natural fruit goodness. After the new packing and design, Tropicana hit by record 20percent sales dropped in 2months, PepsiCo management announced it would revert to old packaging.
- 64. FACTORS INFLUENCING PACKAGING Self Service An increasing number of products are sold on a self – serve basis. In an average supermarket, which may stock 5,000 items, the typical shopper passes some 50-60 products per minute. Effective package must perform many sales tasks. Attract attentions, describe the products features, create consumer confidence, and make a favorable overall impression.
- 65. Factors Influencing Packaging Cont’d ConsumerAffluence Rising affluence means consumers are willing to pay a little more for the convenience, appearance, dependability, and prestige of better packages.
- 66. Factors Influencing Packaging Cont’d CompanyAnd Brand Image Packages contribute to instant recognitions of the company or brand. In the store, they can create a billboard effect.
- 67. Factors Influencing Packaging Cont’d InnovationOpportunity Unique or innovative packaging such as resalable spouts can bring big benefits to consumers and profits to producers.
- 68. OBJECTIVES OF PACKAGING 1. Promotingand Selling the Product 2. Defining Product Identity 3. Providing Information 4. Expressing Customer Needs 5. Ensure Safe Use 6. Protecting the Product
- 69. 1. Promoting andSelling the Product Attractive, colorful, and visually appealing packages have promotional value A well designed package is a powerful selling device because it helps the product stand out from its competitors.
- 70. 2. Defining ProductIdentity Packaging is sometimes used to promote and image such as prestige, convenience, or status Can be a crucial part of the marketing strategy, particularly in advertising
- 71. 3. Providing Information Givescustomer useful information on: directions for using the product its contents product guarantees nutritional value potential hazards
- 72. 4. Expressing CustomerNeeds When designing packages, companies analyze customer lifestyles and create packaging that meets their needs for size and convenience. Packages often come in various sizes Family size Single serving
- 73. 5. Ensure SafeUse Proper packaging helps to eliminate potential injuries or misuse of a product Formerly glass containers are now plastic Childproof caps Tamper resistant packages Blister packs – packages with preformed plastic molds surrounding individual items arranged on a backing
- 74. 6. Protecting theProduct Must protect during shipping, storage, and display Prevent or discourage from tampering Prevent shoplifting Protect against breakage and spoilage
- 75. LABELING Label – anidentification tag, wrapper, seal, imprinted message that is attached to a product or its package
- 76. KINDS OF LABELS 1.Brand Label – gives brand name and trademark or logo
- 77. Kinds of LabelsCont’d Descriptive Label – give information about product use, construction, care, performance, and other features
- 78. Kinds of LabelsCont’d Grade Label – Some products have given grade label. Grade label shows the grade of the product. It shows the quality of products by words, letters, or figure.
- 79. References and Sources A Marketing Management: A South Asian Perspective By Kotler, Keller, Koshy, Jha www.slideshare.com