• Meaning and Importance;

• Product Classifications;
• Concept of Product Mix;
• Branding, Packaging and Labelling;
• After-sales Services;
• Product Life Cycle;
• New Product Development
 A product is defined as:

1. A good, idea, method, information, object or service created as a result of

a process and serves a need or satisfies a want. It has a combination of
tangible and intangible attributes (benefits, features, functions, uses) that
a seller offers a buyer for purchase.
2. For example, A seller of a toothbrush not only offers the physical
product but also the idea that the consumer will be improving the health
of their teeth.
3. A good or service that most closely meets the requirements of a
particular market and yields enough profit to justify its continued
existence.
4. So, product is a good, service, or idea consisting of a bundle of tangible
and intangible attributes that satisfies consumers and is received in
exchange for money or some other unit of value.
 A product characteristic is an attribute or property of the product
that describes the product’s ability and capacity to satisfy its
purpose. The characteristics of a product explain its composition and
its other features.
1. Explicit Characteristics.
 Explicit Characteristics of a product are those whose perception is
reasonably uniform among the observers, i.e., there is a common
agreement as to both the existence and the nature of these attributes
of the product. The explicit product characteristics are seller
oriented as they define only the parameters.
2. Implicit Characteristics.
 When one considers the product from the consumer’s point of view,
some product characteristics are not explicit. Each person perceives
the product in somewhat different and therefore., unique way. The
perception of one consumer may not be same as that of another. His
disagreement is the point. Theses disagreeing points can be called
as implicit product characteristics.
1. PHYSICAL CONFIGURATION: As we all know, a product is
a bundle of physical stuff. It is made up of certain materials –
wood, plastic, glass, stone, etc. related in a particular way.
Every product has its own shape, size, density, odour, taste,
texture, colour and host of other such physical attributes. On
the basis of its physical attributes, it has an apparent
function or set of functions to perform.
2. ASSOCIATED SERVICES: Products are sold with implicit
understanding that the seller will render associated
services in case of each product. These are before and after-
sales services. Before-sales services are its demonstration,
credit facilities available and the after-sales services are its
delivery, installation, making available spare-parts, repair
services to maintain the operating condition of the product
and warrantees expressed or implied.
3. PACKAGE AND BRAND NAME: The package must be
considered as the essential part of product because it is
sometimes difficult to separate product into contents and
package. E.g., deodorants, photograph records, etc. Further,
brand or brand name is intrinsic to the product. It exists with
product it is associated with. We need not name the product
but name it by brand. When we say TITAN, we need not say
what does it stand for, the brand itself suggests it is for
watches. Similarly, CLOSE-UP for toothpaste, CADBURY for
chocolates, RAYMOND for fabrics, and so on.
4. PRODUCT MIX: This highlights the relationship of the
product to other products sold by the firm or made and sold
by the firm. A seller considers the width (how many different
product lines), depth (the average number of items within
each product line) and consistency (the similarity among
the product lines) of products offered. Similarly, consumer
does not think of a single product in isolation as he knows
that the producer also makes other products.
5. PRODUCT LIFECYCLE: At any point of time, a product can
be located in some stage of its existence. Through time, the
industry sales of a given product follow a characteristic
pattern of increasing, at first slowly, then at increasing rate,
them at decreasing rate and finally absolute sales decline.
The time required for each of these stages adjusts widely
among the products and has implications for the producers
and the consumers.
1. PRODUCT SYMBOLISM: A product is a group of symbols.
Among other things, a product is a symbol by virtue of its
form, size, colour and facilities. It is and it has significance
which varies according to how much it is associated with
individual needs and social interaction. A product may be a
status symbol of economy, performance, achievement and
so on.
2. COMMUNICATION MEDIA: A product is not only the
cluster of symbols, but it is also a bundle of communication.
Now, what this information is, of course determined by the
consumer’s personal interpretation of the symbols,
mediated by his culture groups and group influences and
personality. Every product says something about itself. A
product is a story-teller of itself – it tells about its purpose,
reason for use, price, manufacturing, place of availability,
etc. and this information is provided along with the product.
3. PRODUCT PERCEPTION: The products are perceived by the
consumers in different ways. Perception is really critical to a
product’s market viability and perceptual process is central to the
meanings that consumers attach to a given product. E.g., when we
are served with a cup of coffee, we have a clue of its
characteristics such as its fragrance, its aroma, its taste, its colour
or its quality. The sense send messages to our brain to compare
the sensed clue with the stored ones. This comparison gives us an
answer, say, it is NESCAFE or BRU or any other brand. This will
help the producers to develop the relevant product to its
customers.
4. PRODUCT EVALUATION: It is not that easy and simple to
separate the perception of a product from its evaluation, both
conceptually and operationally. Though, literally distinctive, but
they occur simultaneously. Along with the perception, evaluation
implies the invocation of a set of criteria in order to determine
expected satisfaction. It is comparing the efforts involved and
rewards received by that consumer. The evaluation may differ
from individual to individual and time to time in case of same
individual.
 CORE PRODUCT

BASIC PRODUCT

EXPECTED PRODUCT

AUGMENTED PRODUCT

POTENTIAL PRODUCT
1. Core Product
 This is the product that adds the fundamental value to the consumer.
Think of it as the benefit the consumer is buying.
 One way to recognize the core product is to ask about the main
reason why someone wants it.
 Example: The core product of a book is information. It is not the book
itself. The book is selling the information in it. The core product of a
restaurant is offering food. It is not the building of the restaurant or
the service in itself. The core product is the food.
2. Basic Product
 All the ingredients and other items which enable the product to
satisfy the core are together known as the basic product.
 This represents all the qualities of the product.
 Example: if a hotel, wanted to turn its core product (rest and food)
into a basic product, then the building of the hotel, the type of bed,
the type of food, all together form the basic product.
3. Expected Product
 The expected product is the set of features the consumer wishes to
have from the bought product. Quality is one of the main examples.
 Continuing the previous example, if a person stays at a 5 star hotel,
will he only expect a bed, and normal food? No. He will expect a lot
more. His expectation is built on the fact that the hotel is a 5 star
hotel.
 As the brand grows in reputation, you have to take care of the
expectations of the consumer.
 Daikin, which is a world renowned air conditioning brand, is
expected to have world class service for its air conditioners. If it
does not deliver on this expected product, then it will affect the
basic product (air conditioner) as well.
4. Augmented Product
 This refers to all additional factors which sets the product apart from
that of the competition. And this particularly involves brand identity
and image.
 This can be defined as the product going beyond what the consumer
imagines to achieve from the purchase. For a company, this means
adding extra features to the product.
 The examples of augmented product for a makeup kit can be a
surprise gift, samples, coupon for the next purchase, or adding an
extra cosmetic inside not offered by other brands.
 So to know what can be taken as augmented product just ask what
extras are offered to consumers other than what is needed and
wanted by them.
5. Potential Product
 This is about the new development of the same product. In this,
anything is possible. The next version of it may contain some
improvement.
 This is about augmentations and transformations that the product
may undergo in the future.
 For example, a warm coat that is made of a fabric that is as thin as
paper and therefore light as a feather that allows rain to
automatically slide down.
 Based on the first variable, the shopping habits, the products can be
classified into convenience goods, shopping goods and unsought goods.

1. CONVENIENCE GOODS
 Convenience products are inexpensive frequent purchases, there is little
effort needed to purchase them. Examples include fast food, toiletries.
 Convenience products are split into staples, such as milk, egg, Impulse
goods like chocolate and emergency products which are purchased
when the need arises e.g. Umbrellas.

2. SHOPPING GOODS
 Shopping goods are products that consumers do not buy as frequently
as convenience goods. They usually cost more than convenience goods
and consumers expect to have them for longer, so they will do some
research prior to purchase.
 The research will include comparing product features and price.
Examples of shopping goods include white goods (such as
fridge/freezers and washing machines), clothing and furniture.
3. SPECIALTY GOODS AND SERVICES
 Specialty goods are products with unique features or branding.
Consumers do not compare them with other products as the goods have
features unique to them. Instead they will spend time searching for the
retailer selling the product they want.
 Consumers are often prepared to travel to purchase their product and
pay a premium.
 Specialty goods include designer clothes, luxury cars, antiques.
 Professional services provided by a person known for the effectiveness
and quality of their work can also come under this category. For
example Lawyers and Accountants provide specialty services.

4. UNSOUGHT GOODS
 Goods that the consumer does not know about or does not normally
think of buying, and the purchase of which arises due to danger or
the fear of danger and lack of desire.
 The classic examples of known but unsought goods are funeral
services, encyclopedias, fire extinguishers and reference books.
1. DURABLE PRODUCTS
 Durable products can last for a longer period and can be
repeatedly used by one or more persons.
 Television, computer, refrigerator, fans, electric irons, vehicles,
etc., are examples of durable products.
 Brand, company image, price, qualities (including safety, ease,
economy, convenience, durability, etc.), features (including size,
colour, shape, weight, etc.), and after-sales services (including
free installation, home delivery, repairing, guarantee and
warrantee, etc.) are important aspects the customers consider
while buying these products.
2. NON-DURABLE PRODUCTS:
 As against durable products, the non-durable products have short
life. They must be consumed within short time after they are
manufactured. Fruits, vegetables, flowers, cheese, milk, and other
provisions are non-durable in nature. They are used for once.
 They are also known as consumables. Mostly, many of them are non-
branded. They are frequently purchased products and can be easily
bought from nearby outlets.
 Freshness, packing, purity, and price are important criteria to
purchase these products.
3. SERVICES:
 Services are different than tangible objects. Intangibility, variability,
inseparability, perishability, etc., are main features of services.
Services make our life safe and comfortable. Trust, reliability, costs,
regularity, and timing are important issues.
 The police, the post office, the hospital, the banks and insurance
companies, the cinema, the utility services by local body, the
transportation facilities, and other helpers (like barber, cobbler,
doctor, mechanic, etc.,) can be included in services.
 All marketing fundamental are equally applicable to services.
‘Marketing of services’ is the emerging facet of modern marketing.
 Product bought by individuals and organization for further
processing or for use in conducting a business.
1. Materials and parts: Raw materials are the basic materials that
actually become part of the product. They are provided form
mines, forests, oceans, farms and recycled solid wastes.
2. Capital Items: Capital items consist of office accessories and
operating materials. Eg-Machinery, generator etc.
3. Supplies: Supplies facilitate productions, but they do not become
part of he finished product. Paper, pencils, oils, cleaning agents
and paints are examples.
4. Industrial Services: Industrial services include maintenance
and repair services such as machinery repair and business
advisory services such as legal, management, consulting,
advertising, marketing research services. These services can be
acquire internally as well as externally.
 The complete range of products present within a company is known
as the product mix. In any multi brand organizations, there are
numerous products present.
 None of the organizations wants to take the risk of being present in
the market with a single product.
 If the company has only a single product, than the demand of the
product will be too great or the company does not have the
resources to expand the number of products it has.
 Apple, Microsoft, Nestle, Hindustan Unilever, Pharmaceutical
companies, so on and so forth. These companies need to have a wide
product portfolio to be present in the market and to have a
sustainable business model. The combination of products that they
have in their product portfolio can be the product mix.
 A company like HUL has numerous product lines like Shampoos,
detergents, Soaps etc.
 Product line – The product line is a subset of the product mix. The
product line generally refers to a type of product within an organization.
As the organization can have a number of different types of products, it
will have similar number of product lines.
 Example: In Nestle, there are milk based products like milkmaid, Food
products like Maggi, chocolate products like Kitkat and other such
product lines. Thus, Nestle’s product mix will be a combination of the all
the product lines within the company.
 Length of the product mix –Product mix length pertains to the number
of total products or items in a company's product mix, according to
Philip Kotler's textbook "Marketing Management: Analysis, Planning,
Implementation and Control.“
 For example, ABC company may have two product lines, and five
brands within each product line. Thus, ABC's product mix length
would be 10. Companies that have multiple product lines will
sometimes keep track of their average length per product line. In the
above case, the average length of an ABC Company's product line is
five.
 Thus, the total number of products against the total number of product
lines forms the length of the product mix. This equation is also known
as product line length.
 Width of the product mix – Where product line length refers to the
total number of product lines and the products within the product
lines, the width of the product mix is equal to the number of product
lines within a company.
 Thus, taking the above example, if there are 4 product lines within
the company, and 10 products within each product line, than the
product line width is 4 only.
 Thus, product line width is a depiction of the number of product lines
which a company has.
 Depth of the product mix – It is fairly easy to understand what
depth of the product mix will mean. Where length and width were a
function of the number of product lines, the depth of the product mix
is the total number of products within a product line.
 Thus if a company has 4 product lines and 10 products in each
product line, than the product mix depth is 10. It can have any
variations within the product for form the product line depth.
 Hindustan Lever Limited
Product Mix : Width = 4; Length = 13; Total Depth = 74; Average Depth = 5.7
Soap (Length = 5) Detergent (Length = 4) Shampoo (Length = 2) Toothpaste (Length = 2)

Lifebuoy (D = 8) Wheel (D=4) Clinic (D=8) Closeup (D=4)

Lux (D=6) Rin (D = 4) Sunsilk (D=12) Pepsodent (D=6)

Dove (D=2) Surf (D=6)

Breeze (D = Surf (D = 2)
12) Excel

Pears (D = 2)
Total 30 Total 16 Total 20 Total 10
Depth Depth Depth Depth

Avg 6 Avg 4 Avg 10 Avg 5

Depth Depth Depth Depth
1. Product line length
 A Product line can be strengthened by adjusting more items within
the present range
 One of the key decisions that a firm needs to make is the length of its
product line. That means, how many products varieties should the
firm offer.
 It is defined as the total number of items the company carries within
its product lines. The product line length shows the number of
different products in a product line.
 A long product line has lots of different products in it and a short
product line has a small number of different products.
 If there are too many product types in a product line, they will begin
to compete with each other, increase costs unnecessarily and even
confuse customers.
 If the product line is too short it will limit customer choice and send
customers to competitors with a greater selection of products.
 Generally, firms look to increase the product line length – the number
of similar products offered.
 A company lengthens its product line in two ways:
1) Line stretching - Line stretching means lengthening the product
line beyond the current range. Three types of line stretching are-
downward, upward, and 2-way stretching.
a) A company located at the upper end of the market may choose to
stretch the product line downward. Thus, it may attract low-end
customers and reach new targets. Eg- Hul was already
manufacturing surf when it launched wheel to counter Nirma.
 Firms would engage in downward stretching of their product line
for several reasons:
1. to block competitor activities and competitive product offerings
2. to compete in the budget end of the market, particularly if it is a
high volume part of the market
3. to help broaden their brand’s positioning to be seen as a more
affordable brand overall.
 However there are significant dangers to downward stretching,
particularly for a prestige brand, including:
 product cannibalization of their higher-margin products
 overall deterioration in their brand image
 needing to support multiple products in the marketplace, or multiple
positioning
b) Upward stretching is appropriate if the company wants to add
prestige to the current product line. Also, better growth rates and
higher margins may be the attractive factor for upward stretching. Eg-
Kwality walls launching Magnum.
 Firms often target high quality products and stretch their product line
upwards because of several reasons, including:
 high quality products often have a higher unit margin and can be quite
profitable at a relatively low turnover.
 offering high-quality products helps position the overall brand towards
being a status brand, which often enables price premiums to be charged
across the full product line.
 The downsides of an upward stretch include:
 The existing brand equity and image may not carry to the high-quality
end of the market – and it may be necessary to introduce new brand
names
 Competitors already in the higher end of the market may look to defend
their position
 Additional or expanded distribution channels may be required to
support high-quality products
 The level of sales volume may not be sufficient, given that the turnover is
generally less at this end of the market.

c) For a company in the middle range of the market, stretching the

product line in both directions may be best. Thereby, the company
can serve both the upper and lower ends of the market.
 Eg- Tata Motors had Multi-purpose Utility Vehicles (MU V) like Sumo
and Safari targeted for middle segment of the market. It had launched
Indica for lower segment of the market as well as Indigo Marina and
Indigo Estate for up-market consumers.
2) Line filling
 A business strategy that involves increasing the number of products in
an existing product line to take advantage of market place gaps and
reduce competition.
 Many businesses use line filling to round out an already well established
product line and to help increase the market success of new related
products.
 It’s the process of introducing new products into a product line at about
the same price as existing products.
 It is the addition of further items to the current line of products that a
company is dealing in.
 So rather than expanding into the higher or lower quality end of the
marketplace, the brand simply introduces more variations. This is
common in fast-moving consumer goods where, snack foods in
particular, have a variety of similar products.
 Eg-In the year 2000 Maruti Suzuki launched Alto. This product was
between Maruti 800 and Maruti Zen. Here company was trying to fill the
gap existing in the segment by introducing ALTO, i.e. line filling.
3) Line Modernization
 A strategy in which items in a product line are modified to suit modern
styling and tastes and re-launched.
 In rapidly changing product markets, modernization is carried on
continuously.
 Companies plan improvements to encourage customer migration to
higher-valued, higher-priced items.
 Software companies such as Microsoft and Lotus, continually introduce
more advanced versions of their products.
 A major issue is timing improvements so they do not appear too early
(damaging sales of the current line) or too late (after the competition has
established a strong reputation for more advanced equipment).
4) Line Featuring
 It is a strategy in which certain items in a product line are given special
promotional attention, either to boost interest (at the lower end of the
line) or image (at the upper end).
 The idea is to attract customers into showrooms and then try to get them
exposed to other models.
 Product line manager may select one/few items in the line to feature i.e. to be
considered as Traffic Builders/ Flagship products.
 This could be done: By a premium marketer with a low price but quality product.
 Example: Mercedes Benz economy at Rs. 18 Lakhs.
5) Line Pruning
 Product line needs to be reviewed periodically for pruning/ dropping
markets.
 So when the products are not satisfactorily performing, the product managers
need to drop them form the product line. This may lead to increase in
profitability. Thus line pruning is consciously taken decision by the product
manager to drop some product variants from the line.
 Pruning could be due to:
 Dead products that depress profits.
 Company being short production capacity in this case, company should
concentrate on higher margin products.
 For example Heads and Shoulders is a well-known brand of shampoo from
P&G, which had 31 versions. They went for line pruning and now they have
around 15 versions.
 Brands are different from products in a way that brands are “what
the consumers buy”, while products are “what
concern/companies make”.
 Brand is an accumulation of emotional and functional associations.
 Brand is a promise that the product will perform as per customer’s
expectations.
 It shapes customer’s expectations about the product.
 Brands usually have a trademark which protects them from use by
others.
 A brand gives particular information about the organization, good or
service, differentiating it from others in marketplace.
 Brand carries an assurance about the characteristics that make the
product or service unique.
 A strong brand is a means of making people aware of what the
company represents and what are it’s offerings.
 A brand is the idea or image of a specific product or service that
consumers connect with, by identifying the name, logo, slogan, or
design of the company who owns the idea or image.
 Branding is when that idea or image is marketed so that it is
recognizable by more and more people, and identified with a certain
service or product when there are many other companies offering
the same service or product.
 Branding is not only about getting your target market to select you
over the competition, but about getting your prospects to see you as
the sole provider of a solution to their problem or need.

 According to Kotler and Amstrong, ‘a brand is a name, term, sign,

symbol or design or a combination of these that identifies the
maker or seller of a product, or services’.
 Branding provides benefits to buyers and sellers.

To Buyer:
1. A brand helps buyers in identifying the product that they
like/dislike.
2. It identifies the marketer.
3. It helps reduce the time needed for purchase.
4. It helps buyers evaluate quality of products, especially if they are
unable to judge a product’s characteristics.
5. It helps reduce buyers’ perceived risk of purchase.
6. The buyer may derive a psychological reward from owning the
brand (e.g., Rolex watches or Mercedes).
To Seller:
1. A brand differentiates product offering from competitors.
2. It helps segment market by creating tailored images.
3. It identifies the companies’ products making repeat purchases
easier for customers.
4. It reduces price comparisons.
5. It helps the firm introduce a new product that carries the name of
one or more of its existing products.
6. It promotes easier cooperation with intermediaries with well-
known brands
7. It facilitates promotional efforts.
8. It helps in fostering brand loyalty, thus helping to stabilize market
share.
9. Firms may be able to charge a premium for the brand.
 Brand name is one of the brand elements which helps the
customers to identify and differentiate one product from another.
 It should be chosen very carefully as it captures the key theme of a
product in an efficient and economical manner. It can easily be
noticed and its meaning can be stored and triggered in the memory
instantly.
 Choice of a brand name requires a lot of research. Brand names are
not necessarily associated with the product.
 For instance, brand names can be based on places (Air India,
British Airways), animals or birds (Dove soap, Puma), people (Louise
Phillips, Allen Solly). In some instances, the company name is used
for all products (General Electric, LG).
1. It should be unique / distinctive (for instance- Kodak, Mustang)
2. It should be extendable.
3. It should be easy to pronounce, identified and memorized. (For
instance-Tide)
4. It should give an idea about product’s qualities and benefits (For
instance- Swift, Quickfix, Lipguard).
5. It should be easily convertible into foreign languages.
6. It should be capable of legal protection and registration.
7. It should suggest product/service category (For instance
Newsweek).
8. It should not portray bad/wrong meanings in other categories.
(For instance NOVA is a poor name for a car to be sold in Spanish
country, because in Spanish it means “doesn’t go”).
 Brand strategy is a long-term plan for the development of a
successful brand in order to achieve specific goals.
 A well-defined and executed brand strategy affects all aspects of a
business and is directly connected to consumer needs, emotions,
and competitive environments.
 A brand strategy is a formal plan used by a business to create a
particular image of itself in the minds of current and potential
customers.
 When a company has created and executed a successful brand
strategy, people know without being told who the company is and
what they do.
 We will now discuss BRAND NAME strategies in detail:
 INDIVIDUAL BRANDING
1. Each brand has a separate name under the same company (for
example, Red label tea and Fortune oil are both owned by Tata
Group).
2. Individual brand names naturally allow greater flexibility by
permitting a variety of different products, of differing quality, to
be sold without confusing the consumer's perception of what
business the company is in or diluting higher quality products.
3. Failure of one product wont affect the whole range of products.
4. It facilitates market segmentation.
5. Disadvantage of high costs.
 FAMILY BRANDING/BLANKET FAMILY NAME
1. Umbrella branding (also known as family branding) is a marketing
practice involving the use of a single brand name for the sale of two
or more related products.
2. Umbrella branding is mainly used by companies with a
positive brand equity (value of a brand in a certain marketplace).
3. All products use the same means of identification and lack additional
brand names or symbols. Family branding reduces cost of launching
and promotion.
4. If a brand is successful, the entire product line gains.
5. Disadvantage is that no separate identity can be given to different
products in separate segments.
6. When products are of uneven quality or cater to different consumer
profiles, it is not suitable.
7. Example: Axe (by Unilever) has a range of similar products that use
the same family brand (Axe deodorants, Axe shampoos, Axe shower
gels, Axe hair stylers,etc
 SEPARATE FAMILY NAME
1. This is normally used by the companies which produces products of different
sectors.
2. In this separate family names for all the products are given.
3. In this system a separate brand name for each line (one for each category) is
used.
4. Example- Under Aaditya Birla Group
 Grasim Suitings, Ultratech Cement, Hindalco
 COMBINATION BRANDING
1. Combination branding refers to the use of a combination of brand names- a
family brand name and an individual brand name.
2. Such branding allows leveraging the family brand name while also creating a
distinctive brand name that better suits the product.
3. A combination brand name also allows a company to distinguish its different
product categories and avoid confusion in the minds of the consumers.
4. Such branding is quite popular in case of launch of a new product category
by an established brand or in case of acquisition of a new firm/division.
5. Example-'Toyota Corolla' or 'Honda Civic
 For developing brands, a company has four choices: line extensions, brand
extensions, multi-brands or new brands.
1. Line extension refers to extending an existing brand name to new forms,
sizes, colors', ingredients or flavors of an existing product category. This is a
low-cost, low-risk way to introduce new products. However, there are the risks
that the brand name becomes overextended and loses its specific meaning.
This may confuse consumers.
 An example for line extension is when Coca-Cola introduces a new flavour,
such as diet cola with vanilla, under the existing brand name.
2. Brand extension also assumes an existing brand name, but combines it with a
new product category. Thus, an existing brand name is extended to a new
product category. This gives the new product instant recognition and faster
acceptance and can save substantial advertising costs for establishing a new
brand.
 However, the risk that the extension may confuse the image of the main brand
should be kept in mind. Also, if the extension fails, it may harm consumer
attitudes toward other products carrying the same brand name.
 For this reason, a brand extension such as Heinz pet food could not survive.
But other brand extensions work well. For instance, Kellogg's has extended its
Special K healthy breakfast cereal brand into a complete line of cereals plus a
line of biscuits, snacks and nutrition bars.
3. Multi-branding Marketing of two or more similar and competing
products by the same firm under different and unrelated brands.
 While these brands eat into each others' sales ,multi-brand strategy
does have some advantages as a means of (1) obtaining greater shelf
space and leaving little for competitors' products, (2) saturating a
market by filling all price and quality gaps, (3) catering to brand-
switchers users who like to experiment with different brands, and (4)
keeping the firm's managers on their toes by generating internal
competition.
 Procter & Gamble (P&G) – Is an American consumer goods
company, that sells 23 different brands. For example, Tide, Pampers,
Gillette, Ace, Head & Shoulders, etc.
 Unilever – Is the biggest manufacturer of ice-cream and a
multinational consumer goods company, that also produces several
worldwide brands. For instance, Axe, Rexona, Sunsilk, Dove, Lipton
and more.
4. New brands are needed when the power of existing brand names is
waning. Also, a new brand name is appropriate when the company
enters a new product category for which none of its current brand
names are appropriate.
 Eg Tanishq jewellery by Tata and Titan watches by Tata.
1. Brand Extension is a marketing strategy according to which, a
well known brand uses the same brand name to enter into a
totally unrelated product category. It is done primarily to leverage
on the existing brand equity. Some marketers argue that since
building a brand is costly affair, once you have built a brand you
should leverage its value by using the same brand name to other
new categories as well.
 For example, Virgin, which was initially a record label, entered
into other line of business like aviation, game stores, video stores,
telecom, etc. Godrej, which was initially a brand which signified
locks and cupboards, later on entered into whole new product
categories like refrigerators, furniture and real estate.
2. Line Extension (or product extension) is a marketing strategy
according to which the scope of the product a brand represents is
increased i.e. when you are adding varieties or variations or
flavors of the same branded product, you are basically doing line
extension.
 Like brand extension, line extension is also done to leverage on
the brand equity by targeting a bigger chunk of the user base.
 For example- When Coke introduced Diet Coke to target the diet
conscious people, they did line extension. When Amazon, started
selling various other products other than books, they also did line
extension.
1. Brand equity refers to a value premium that a company generates
from a product with a recognizable name, when compared to a
generic equivalent.
2. Companies can create brand equity for their products by making
them memorable, easily recognizable, and superior in quality and
reliability.
3. The American Marketing Association defines brand equity this
way: from a consumer perspective, brand equity is based on
consumer attitudes about positive brand attributes and favorable
consequences of brand use.
4. Components of Brand Equity
 Brand Recognition - The brand is widely known and recognized,
and consumers know what it provides in relationship to the
competition.
 Brand Experience - Consumers have used and experienced the
product enough to build expectation.
 Brand Preference - The brand is preferred by consumers, and as a
result, they become returning customers.
 Brand Loyalty - The brand and the consumer have an emotional
attachment, and the consumer will go to any length to purchase it.
5. Advantages of Brand Equity:
 When a company has positive brand equity, customers willingly pay a
high price for its products, even though they could get the same thing
from a competitor for less. Customers, in effect, pay a price premium
to do business with a firm they know and admire.
 Another benefit of successful branding is not having to work as
hard, or spend as much money, on marketing. A company with a
great reputation has thousands of customers on the streets spreading
the word for it
 Customer loyalty. Customers are not only willing to pay more for a
product with strong brand equity; they’re also willing to stay loyal to a
company over years and years, coming back to buy there again and
again.
 Expansion opportunities. Positive brand equity can facilitate a
company’s long-term growth. By leveraging the value of your brand,
you can more easily add new products to your line and people will
more willingly try your new product.
 Negotiating power. Positive brand equity can give you a
considerable advantage in negotiating with vendors, manufacturers
and distributors. When suppliers recognize that consumers are
enthusiastically seeking and buying products that bear your name.
 Competitive advantage.
 Leading brands understand the importance of packaging not only in
keeping their goods safe, fresh, and protected, but also as an essential
part of their branding and marketing efforts.
 Packaging is the signature you leave everywhere, and it has the ability to
attract today’s customers much better than outdated sales and
advertising tactics.
 Product packaging can play a huge role in the promotion of both a
company and its goods as more consumers choose to create their own
experiences and educate themselves on their purchasing decisions
instead of being preached to and persuaded by an ad or sales pitch.
 Packaging is the activity of designing and producing the container or
wrapper for the product. It is an important and effective sales tool for
encouraging the consumers for buying.
 It must perform all the basic function such as protection, ease of
handling and storage, convenience in usage etc. and should not be
deceptive and convey any deceptive message. It is the best method for
attracting the consumers for buying the products.
 According to W.J.Stanton, “Packaging may be defined as the general
group of activities in product planning which helps in value designing
and producing the container or wrapper for a product.”
1. Primary Package:
 Primary package refers to the product’s immediate package. In
certain cases, such package is retained till the consumer is ready to
use the product. For example, plastic packet for socks while in some
other cases such package is used throughout the life of the product
such as the bottle carrying jam or tomato sauce etc.
2. Secondary Packaging:
 Secondary packaging is the additional packing given to a product to
protect it. Such packing is retained till the consumer wants to start
using the product. For example. Pears Soap usually comes in a card
board box. Consumer first throws the box when he desires to use it &
than discards plastic wrapper too to get hold of the soap.
3. Transportation Packaging:
 It refers to packages essential for storing, identifying or transporting.
For example, use of corrugated boxes, wooden crates etc.
1. Protects the contents
 The basic function of packaging is to protect the contents from
damage, dust, dirt, leakage, pilferage, evaporation, watering,
contamination and so on.
 Packaging helps in the protection of the contents of the products.
 Seasonal fluctuations in demand may be smoothed out through
packaging. Packaging helps to protect the contents of all the
available products.

2. Information and self service for the customer

 One of the first role that packaging plays, especially in new
products launches, is the information provided on the packaging.
This information can tell the consumer how to cook the food
product, it can tell them how to use a technology product, or it can
lay out any procedures and precautions necessary during the
usage of the product.
 Thus, when products are sold in large quantity and you cannot have a
salesman for each customer, the role of packaging is to convey the
information to the customer.
 Below is an example of a Maggi packet, where it specifies how to make
maggi and also gives additional information of the beneficial nutrition to
be found in Maggi and specifically, the harmful nutrients which are NOT
there in Maggi.
3. Act as promotional tool:
 Good packaging can sell the product more easily and quickly as it
works as a promotional tool. As a promotional tool, it does self-
advertising , displaying, publishing and acts as an advertising
medium.
 It is the package, size, design, color combinations and graphics that
decide its ability to attract the valuable attention of customers or the
prospects.
4. Transportation:
 Packaging facilitates transportation of products from one place to
another. It ensures easy transportation and better handling of
products in transit.
5. Identification of product differentiation:
 Packaging helps to identify the product differentiation easily. It
ensures the individuality of the products and one product can be
easily differentiated with each other products in the market. The
customers can easily identify their product of choice at the time of
purchase. This helps the customers to prevent substitution of goods by
other customers.
6. Innovation in packaging helps sales
 There have been many instances where the role of packaging in
increasing sales is evident. Look at the example of Tetra pack
which was introduced by Frooti in India. Such innovation in
packaging leads to more sales because more and more customers
prefer a convenient packaging over a non convenient one.
 Not only the tetra pack, the sachets used for small packaging of
oil, shampoo or any other small items have increased the sales
tremendously of these items. They are easy to carry, easy to be
sold off and have penetrated the market thoroughly. They can also
be used as samples for the product.
 If you look at Cadbury celebrations, a whole new gift item has
spawned just by repacking the already well selling items in the
market like Dairy milk and 5 star.
1. Functional – effectively contain and protect the contents.
2. Provide convenience during distribution, sale, opening, use, reuse,
etc.
3. Be environmentally responsible.
4. Be cost effective.
5. Appropriately designed for target market.
6. Eye-catching (particularly for retail/consumer sales).
7. Communicate attributes and recommended use of the product
and package.
8. Compliant with retailers’ requirements.
9. Promotes image of enterprise.
10. Distinguishable from competitors’ products.
11. Meet legal requirements for product and packaging.
 Branding, packaging and labeling are the secondary functions of
marketing.
 They perform functions together as integrated parts of product
planning and development.
 The function of putting identification mark of the product on its
package is called 'labelling'.
 In other words, to put certain mark, or paste or tag with certain
instruction or description on its package is called labelling product.
 If information about the product is printed on the package or pasted
on it, then it is called label.
 Labeling gives necessary information to the customers about the
products. The customers can get knowledge about the quality and
features of product before purchasing the product.
1. Labelling identifies the product-Label helps to identify the product and
brand. It popularizes the product and its brand name.
2. Labelling grades the product-Label helps to express grade of the product.
For example, wheat can be express with the grades such as 1, 2, 3, 4. Label
becomes useful to grade any product according to its quality.
3. Labelling describes the product-Label gives introduction of the product,
describes and expresses its grade. Information and instructions about- who
manufactured the product, when and where it was manufactured, how many
ingredients have been used in it, how to use the product, how to keep the
product safe, etc. are given on the label. This becomes helpful to the
customers.
4. Labelling promotes the product-Label helps to promote the product
Customers' attention is drawn by attractive and fascinating graphs, figures or
marks. This motivates the customers to buy the product. Label plays and
important role in sales and distribution as it makes the customers take buying
decision.
5. Labelling protects the customers-Label protects the customers. As maximum
selling price, quantity, quality etc. are mentioned on the label, the customers
are protected from the possible malpractice of middlemen.
1. Brand label
 If only brand is used on package of a product, this is called brand
label. Brand itself is expressed in label. Brand label is put on some
cloth. It tells the name of the cloth, e.g, 'Sanforised'. Similarly, label
is used on soap e.g, Lux, Hamam, Rexona etc.
2. 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. A,B,C,D grade can be put on peas packed into
cans. Similarly, grade label can be mentioned as 1,2,3,4 grades for
packed wheat,. Some firms may use labels as good, better, best
etc. on their products.
3. Descriptive label
 Descriptive label give information about the feature, using
instruction, handling, security etc. of the products. Descriptive
label is used for the products whose grade cannot be
differentiated.
4. Informative label
 Informative label gives information about the product. Using
method and security of the product, name of the producer,
manufactured date, expiry date, name of intermediary, additional
instructions regarding the use of the product etc. are mentioned in
informative label. Descriptive label gives general information
about the product whereas informative label gives maximum
information about the product including its use, manufacturer etc.
 After sales service refers to various processes which make sure
customers are satisfied with the products and services of the
organization.
 Importance:
1. After sales service plays an important role in customer
satisfaction and customer retention. It generates loyal customers.
2. Customers start believing in the brand and get associated with
the organization for a longer duration. They speak good about the
organization and its products.
3. A satisfied and happy customer brings more individuals and
eventually more revenues for the organization.
4. After sales service plays a pivotal role in strengthening the bond
between the organization and
 The product life cycle is an important concept in marketing.
 It describes the stages a product goes through from when it was first
thought of until it finally is removed from the market.
 Not all products reach this final stage. Some continue to grow and
others rise and fall.
 The main stages of the product life cycle are:

 Introduction – researching, developing and then launching the

product
 Growth – when sales are increasing at their fastest rate
 Maturity – sales are near their highest, but the rate of growth is
slowing down, e.g. new competitors in market or saturation
 Decline – final stage of the cycle, when sales begin to fall
 The introduction stage is the stage in which a new product is first
distributed and made available for purchase, after having been
developed in the product development stage.
 Therefore, the introduction stage starts when the product is first
launched. But introduction can take a lot of time, and sales growth
tends to be rather slow.
 Furthermore, profits in the introduction stage are negative or low
due to the low sales on the one hand and high-distribution and
promotion expenses on the other hand. Obviously, much money is
needed to attract distributors and build their stocks.
 Also, promotion spending is quite high to inform consumers of the
new product and get them to try it.
 In the introduction stage, the focus is on selling to those buyers who
are the most ready to buy (innovators).
 Concerning the product life cycle strategies we can identify the
proper launch strategy: the company must choose a launch strategy
that is consistent with the intended product positioning.
 Without doubt, this initial strategy can be considered to be the first
step in a grander marketing plan for the product’s entire life cycle.
The main objective should be to create product awareness and
trial.
 To be more precise, since the market is normally not ready for
product improvements or refinements at this stage, the company
produces basic versions of the product.
 Cost-plus pricing should be used to recover the costs incurred.
 Selective distribution in the beginning helps to focus efforts on the
most important distributors.
 Advertising should aim at building product awareness among
innovators and early adopters. To entice trial, heavy sales promotion
is necessary.
 The growth stage is the stage in which the product’s sales start
climbing quickly.
 The reason is that early adopters will continue to buy, and later
buyers will start following their lead, in particular if they hear
favourable word of mouth.
 This rise in sales also attracts more competitors that enter the
market. Since these will introduce new product features, competition
is fierce and the market will expand.
 As a consequence of the increase in competitors, there is an
increase in the number of distribution outlets and sales are
augmented due to the fact that resellers build inventories.
 Since promotion costs are now spread over a larger volume and
because of the decrease in unit manufacturing costs, profits
increase during the growth stage.
 The main objective in the growth stage is to maximise the market
share.
 Several product life cycle strategies for the growth stage can be
used to sustain rapid market growth as long as possible.
 Product quality should be improved and new product features and
models added.
 The firm can also enter new market segments and new
distribution channels with the product.
 Prices remain where they are or decrease to penetrate the market.
 The company should keep the promotion spending at the same or
an even higher level.
 Now, there is more than one main goal: educating the market is still
important, but meeting the competition is likewise important.
 At the same time, some advertising must be shifted from building
product awareness to building product conviction and purchase.
 The maturity stage is the stage in which the product’s sales growth
slows down or levels off after reaching a peak. This will happen at
some point, since the market becomes saturated.
 Generally, the maturity stage lasts longer than the two preceding
stages. Consequently, it poses strong challenges to marketing
management and needs a careful selection of product life cycle
strategies.
 Most products in the market are, indeed, in the maturity stage.
 The slowdown in sales growth is due to many producers with many
products to sell. Likewise, this overcapacity results in greater
competition. Since competitors start to mark down prices, increase
their advertising and sales promotions and increase their product
development budgets to find better versions of the product, a drop
in profit occurs.
 Also, some of the weaker competitors drop out, eventually leaving
only well-established competitors in the industry.
 The company’s main objective should be to maximise profit while
defending the market share.
 To reach this objective, several product life cycle strategies are
available.
 Although many products in the maturity stage seem to remain
unchanged for long periods, most successful ones are actually adapted
constantly to meet changing consumer needs.
 The reason is that the company cannot just ride along with or defend the
mature product – a good offence is the best defence. Therefore, the firm
should consider to modify the market, product and marketing mix.

1. Modifying the market means trying to increase consumption by

finding new users and new market segments for the product. Also,
usage among present customers can be increased.
2. Modifying the product refers to changing characteristics such as
quality, features, style or packaging to attract new users and inspire
more usage.
3. And finally, modifying the marketing mix involves improving sales
by changing one or more marketing mix elements. For instance,
prices could be cut to attract new users or competitors’ customers.
The firm could also launch a better advertising campaigns or rely on
aggressive sales promotion.
 The decline stage is the stage in which the product’s sales decline. This
happens to most product forms and brands at a certain moment.
 Sales may fall to zero, or they may drop to a low level where they
continue for many years.
 Reasons for the decline in sales can be of various natures. For instance,
technological advances, shifts in consumer tastes and increased
competition can play a key role. As sales and profits decline, some
competitors will withdraw from the market.
 Also for the decline stage, careful selection of product life cycle
strategies is required.
 The reason is that carrying a weak product can be very costly to the
firm, not just in profit terms. There are also many hidden costs. For
instance, a weak product may take up too much of management’s time. It
requires advertising and sales-force efforts that could better be used for
other, more profitable products in other stages.
 Most important may be the fact that carrying a weak product delays the
search for replacements and creates a lopsided product mix. It also
hurts current profits and weakens the company’s foothold on the future.
 Therefore, proper product life cycle strategies are critical. The
company needs to pay more attention to its aging products to
identify products in the decline stage early. Then, the firm must take
a decision: maintain or drop the declining product.
 The main objective in the decline stage should be to reduce
expenditure and “milk” the brand.
 General strategies for the decline stage include cutting prices,
choosing a selective distribution by phasing out unprofitable outlets
and reduce advertising as well as sales promotion to the level
needed to retain only the most loyal customers.
 If management decides to maintain the product or brand,
repositioning may be an option. The purpose behind this is to move
the product back into the growth stage of the PLC.
 What can businesses do to extend the product life cycle?

1. Extension strategies extend the life of the product before it goes

into decline. Again businesses use marketing techniques to
improve sales. Examples of the techniques are:
2. Advertising – try to gain a new audience or remind the current
audience
3. Price reduction – more attractive to customers
4. Adding value – add new features to the current product, e.g.
improving the specifications on a smartphone
5. Explore new markets – selling the product into new
geographical areas or creating a version targeted at different
segments
6. New packaging – brightening up old packaging or subtle
changes
 New product development is a process which is designed to develop, test and
consider the viability of products which are new to the market in order to ensure
the Growth or survival of the organisation.
 Stages in New product development:
(i) Idea Generation - Idea generation is continuous, systematic search for new
product opportunities. It involves delineating sources of new ideas and
methods for generating them.
 Ideas for new products can be obtained from basic research using a SWOT
analysis (OPPORTUNITY ANALYSIS), Market and consumer trends, company's
R&D department, competitors, focus groups, employees, salespeople,
corporate spies.
(ii) Idea Screening- Most companies have a "Idea Committee." This committee
studies all the ideas very carefully. They select the good ideas and reject the
bad ideas.
 Before selecting or rejecting an idea, the following questions are considered
or asked:
1. Is it necessary to introduce a new product?
2. Can the existing plant and machinery produce the new product?
3. Can the existing marketing network sell the new product?
4. When can the new product break even?
 If the answers to these questions are positive, then the idea of a new-product
development is selected else it is rejected. This step is necessary to avoid
product failure.
(iii) Concept testing

 Concept testing is done after idea screening. It is different from test

marketing. In this stage of concept testing, the company finds out:
1. Whether the consumers understand the product idea or not?
2. Whether the consumers need the new product or not?
3. Whether the consumers will accept the product or not?
 Here, a small group of consumers is selected. They are given full
information about the new product. Then they are asked what they feel
about the new product.
 They are asked whether they like the new product or not. So, concept
testing is done to find out the consumers' reactions towards the new
product. If most of the consumers like the product, then business analysis
is done.
(iv) Business analysis
 Business analysis is a very important step in new-product
development. Here, a detailed business analysis is done. The
company finds out whether the new product is commercially
profitable or not.
 Under business analysis, the company finds out...
1. Whether the new product is commercially profitable or not?
2. What will be the cost of the new product?
3. Is there any demand for the new product?
4. Whether this demand is regular or seasonal?
5. Are there any competitors of the new product?
6. How the total sales of the new product be?
7. What will be the expenses on advertising, sales promotion, etc.?
8. How much profit the new product will earn?
 So, the company studies the new product from the business point of
view. If the new product is profitable, it will be accepted else it will
be rejected.
(v) Product development
 At this stage, the company has decided to introduce the new product in the
market. It will take all necessary steps to produce and distribute the new
product.
 The production department will make plans to produce the product. The
marketing department will make plans to distribute the product. The finance
department will provide the finance for introducing the new product. The
advertising department will plan the advertisements for the new product.
However, all this is done as a small scale for Test Marketing.
(vi) Test marketing
 Test marketing means to introduce the new product on a very small scale in a
very small market. If the new product is successful in this market, then it is
introduced on a large scale.
 However, if the product fails in the test market, then the company finds out the
reasons for its failure. It makes necessary changes in the new product and
introduces it again in a small market. If the new product fails again the
company will reject it.
 Test marketing reduces the risk of large-scale marketing. It is a safety device.
It is very time-consuming. It must be done especially for costly products.
(vii) Commercialization

 If the test marketing is successful, then the company introduces the new
product on a large scale, say all over the country.
 The company makes a large investment in the new product. It produces
and distributes the new product on a huge scale.
 It advertises the new product on the mass media like TV, Radio,
Newspapers and Magazines, etc.
(viii) Review of market performance

 The company must continuously monitor the performance of the new

product. They must make necessary changes in their marketing plans
and strategies else the product will fail.