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  1. 1. Marketing Management, 12/e A South Asian Perspective 12 Setting Product Strategy
  2. 2. Chapter Questions <ul><li>What are the characteristics of products and how can they be classified? </li></ul><ul><li>How can companies differentiate products? </li></ul><ul><li>How can a company build and manage its product mix and product lines? </li></ul><ul><li>How can companies combine products to create strong co-brands or ingredient brands? </li></ul><ul><li>How can companies use packaging, labeling, warranties, and guarantees as marketing tools? </li></ul>12-
  3. 3. Product 12- Anything that can be offered to a market to satisfy a want or need.
  4. 4. Figure 12.2 Five Product Levels <ul><li>Core benefit </li></ul><ul><li>Basic product </li></ul><ul><li>Expected product </li></ul><ul><li>Augmented product </li></ul><ul><li>Potential product </li></ul>12-
  5. 5. Product Classification Schemes <ul><li>Durability </li></ul><ul><li>Tangibility </li></ul><ul><li>Use </li></ul>12-
  6. 6. Durability and Tangibility <ul><li>Nondurable goods </li></ul><ul><li>Durable goods </li></ul><ul><li>Services </li></ul>12-
  7. 7. Consumer Goods Classification <ul><li>Convenience – Staples (Soap), Impulse (Ice-Cream), Emergency (Umbrella) </li></ul><ul><li>Shopping – Homogenous (Shoes), Heterogeneous (Car, Laptop) </li></ul><ul><li>Specialty – Photographic Equip, Suits </li></ul><ul><li>Unsought – Insurance, Umbrella, Reference Books, Encyclopedia </li></ul>12-
  8. 8. Industrial Goods Classification <ul><li>Raw Materials (Natural Products, Farm Products, Marine Products) </li></ul><ul><li>Manufactured Materials </li></ul><ul><li>Parts </li></ul><ul><li>Capital items </li></ul><ul><li>Supplies/business services </li></ul>12-
  9. 9. Product Differentiation <ul><li>Product form (RalispraY </li></ul><ul><li>Features (VIP) </li></ul><ul><li>Performance (Fevicol) </li></ul><ul><li>Conformance (Colgate) </li></ul><ul><li>Durability (Rajddot) </li></ul><ul><li>Reliability (Maruti) </li></ul><ul><li>Style (Fiat) </li></ul><ul><li>Design (Sony T 100) </li></ul><ul><li>Delivery (Fed Exp) </li></ul><ul><li>Installation </li></ul><ul><li>Customer consulting (Dr. Batra) </li></ul><ul><li>Maintenance (GM) </li></ul>10-
  10. 10. The Product Hierarchy <ul><li>Need family – Financial Security </li></ul><ul><li>Product family – Savings & Income </li></ul><ul><li>Product class – Financial Products </li></ul><ul><li>Product line – Life Insurance </li></ul><ul><li>Product type - ELEP </li></ul><ul><li>Item – LIC – Jeevan Anand </li></ul>12-
  11. 11. Product Systems and Mixes <ul><li>Product system </li></ul><ul><li>Product mix or Product assortment </li></ul><ul><li>Depth </li></ul><ul><li>Length </li></ul><ul><li>Width </li></ul><ul><li>Consistency </li></ul>12-
  12. 12. Product Line Analysis <ul><li>SALES & PROFIT ANALYSIS </li></ul><ul><li>Core product – Basic Digital Camera </li></ul><ul><li>Staples – High Zoom Attach, Blazeflash, Memory Chip, 1000 Hr. batteries </li></ul><ul><li>Specialties – Professional Movie Making & Editing Software </li></ul><ul><li>Convenience items – Photo Scanner, Photo-Printer </li></ul>12-
  13. 13. Product Line Analysis <ul><li>MARKET PROFILE BASED ANALYSIS </li></ul>12-
  14. 14. Product Line Analysis– PL LENGTH <ul><li>Line Stretching </li></ul><ul><ul><li>Down Market Stretch (Why?, Choices?) </li></ul></ul><ul><ul><ul><li>Jetlite, AirDeccan, Aerrial Gain) </li></ul></ul></ul><ul><ul><li>Up-Market Stretch (Nirma Super) </li></ul></ul><ul><ul><li>Two-Way Stretch (Hero Honda) </li></ul></ul><ul><li>Line Filling </li></ul><ul><li>(Loss of Sale, Hole Plugging, Excess Capacity, Line Leader) </li></ul><ul><li>Line Modernization, Featuring, Pruning ( AMD, HCL, Intel-Pentium) </li></ul><ul><li>(Loss of Sale, Hole Plugging, Excess Capacity, Line Leader) </li></ul>12-
  15. 15. Product-Mix Pricing <ul><li>Product-line pricing (Peter England – 3 Prices of Shirts i.e. 500, 1000, 1500) </li></ul><ul><li>Optional-feature pricing (SX4 – Leather) </li></ul><ul><li>Captive-product pricing (Gillet Mach – III) </li></ul><ul><li>Two-part pricing (Shanku’s Water Park) </li></ul><ul><li>By-product pricing (Tata) </li></ul><ul><li>Product-bundling pricing (Cox & Kings) </li></ul>12-
  16. 16. Co-Branding <ul><li>Advantage of two Known Images </li></ul><ul><li>Disadvantage of Alignment </li></ul><ul><li>Needs right kind of Balance of Brand Equity, Values, Capabilities and Goals </li></ul><ul><li>E.g. – Jet-ICICI, HP-ICICI </li></ul><ul><li>Ingredient Branding </li></ul><ul><ul><li>- IBM-Intel, HP-AMD, Sony-Zeiss </li></ul></ul>12-
  17. 17. Packaging: The 5 th P 12- All the activities of designing and producing the container for a product.
  18. 18. Packaging has been influenced by: <ul><li>Self-service </li></ul><ul><li>Consumer affluence </li></ul><ul><li>Company and brand image </li></ul><ul><li>Innovation opportunity </li></ul>12-
  19. 19. Functions of Labels <ul><li>Identifies </li></ul><ul><li>Grades </li></ul><ul><li>Describes </li></ul><ul><li>Promotes </li></ul><ul><li>Instrument to Conveys Warranties </li></ul>12-