UNIT 3

MBA(PA)
MARKETING
MANAGEMENT
Snehal Trivedi(Research Scholar)
 PRODUCT
• In marketing, a product is an object or system made available for
consumer use; it is anything that can be offered to a market to
satisfy the desire or need of a customer.
• Definition: A product is the item offered for sale. A product
can be a service or an item. It can be physical or in virtual or
cyber form. Every product is made at a cost and each is sold
at a price.
 Characteristics of Product:

1. 1. Product is one of the elements of marketing mix or programme.

2. Different people perceive it differently. Management, society, and
consumers have different expectations.
3. Product includes both good and service.
4. Marketer can actualize its goals by producing, selling, improving,
and modifying the product.
5. Product is a base for entire marketing programme.
• 6. In marketing terminology, product means a complete product
that can be sold to consumers. That means branding, labeling,
colour, services, etc., constitute the product.
• 7. Product includes total offers, including main qualities, features,
and services.
• 8. It includes tangible and non-tangible features or benefits.
• 9. It is a vehicle or medium to offer benefits and satisfaction to
consumers.
• 10. Important lies in services rendered by the product, and not
ownership of product. People buy services, and not the physical
object.
 Types of Product:

• A company sells different products (goods and services) to its target

market.
• They can be classified into two groups, such as:
• 1. Consumer Product
• 2. Industrial Products
 1. Consumer Products
• Consumer Products:
• Consumer products are those items which are used by ultimate
consumers or households and they can be used without further
commercial and engineering processes.
• Consumer products can be divided into four types as under:-
• i. Convenient Products:
• Such products improve or enhance users’ convenience. They are used in a
day-to-day life.
• For example, soaps, biscuits, toothpaste, razors and shaving
creams, newspapers, etc.
• ii. Shopping Products:
• These products require special time and shopping efforts. They are
purchased purposefully from special shops or markets. Quality,
price, brand, fashion, style, getup, colour, etc., are important
criteria to be considered.
• They are to be chosen among various alternatives or varieties. Gold
and jewelleries, footwear, clothes, and other durables (including
refrigerator, television, wrist washes, etc.).
• iii. 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
• iv. 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.
• v. 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.
 2. Industrial Products:

• Industrial products are used as the inputs by manufacturing firms

for further processes on the products, or manufacturing other
products. Some products are both industrial as well as consumer
products. Machinery, components, certain chemicals, supplies and
services, etc., are some industrial products.
• Industrial products include:
• 1. Machines and components
• 2. Raw-materials and supplies
• 3. Services and consultancies
• 4. Electricity and Fuels, etc.
 What is product differentiation?

• Product differentiation is what makes your product or service stand out

to your target audience. It’s how you distinguish what you sell from what
your competitors do, and it increases brand loyalty, sales, and growth.
• Focusing on your customers is a good start to successful product
differentiation.
 Why is product differentiation important?

• The goal of product differentiation is to create a competitive advantage or

to make your product superior to alternatives on the market. In other
words, you don’t just want to stand out from the competition, you want
to stand above it.
• It’s important to differentiate your product in any industry, but especially
if you’re in a crowded market with lots of competitors.
 3 components Of competitive advantages

1. Benefits
2. Target audience
3. Competition
• Benefits
• Benefits are the values a customer receives when they purchase your
product or service. They’re different from features, which are the things
your product can do. Businesses often focus on features, but customers
are interested in benefits.
• Target audience
• Your product's differentiated benefits should align with the interests,
needs, and values of a defined target audience.
• To differentiate your product, first think about who wants to buy your
product, why they want it, how they want it to look, where they want to
purchase it, and how much they will pay for it. If you’re not sure about
any of those considerations, conducting marketing research is a great way
to find answers.
• Competition
• You can only differentiate your own product once you know what's
already on the market. Take plenty of time to study products and services
that potential customers might compare to yours.
• What does a competing product do? Who buys it? Why? Where? How
much do they pay for it? Keep an eye on branding, features, size, price,
and packaging to see what you can do differently to appeal to your target
audience.
 Types of product differentiation

• Vertical differentiation
• Vertical differentiation is when customers choose a product by ranking
their options from best to the worst using an objective measurement, like
price or quality.
• For example, 1 meal at a restaurant may be lower in calories than another
meal. To a customer who is watching their weight, the lower-calorie meal
represents a "better" option. Another customer might place a higher
value on price and choose the higher-calorie meal if it costs less.
• Horizontal differentiation
• Horizontal differentiation is when customers choose between
products subjectively, because they have no objective
measurement to distinguish between best or worst.
• For example, there is no qualitative measurement to rank ice
cream flavors. Whether you choose chocolate, vanilla, or
strawberry is entirely a matter of personal taste.
• If most of the products on the market cost about the same and
have many of the same features or qualities, the purchase
decision comes down to subjective preference.
• Mixed differentiation
• Customers making more complex purchases tend to use a mix of vertical
and horizontal differentiation when making purchase decisions.
• Let’s say you’re shopping for a car. You might consider 2 similarly priced
four-door sedans from 2 separate manufacturers. You’ll likely use mixed
differentiation to make a decision. Objective measurements to vertically
differentiate between them include gas mileage and safety ranking.
Horizontal differentiation, between subjective preferences like design
aesthetic and impression of the car brand, also plays a role in the
decision.
 New product development
• New product development covers the complete process of bringing a
new product to market, renewing an existing product or introducing a
product in a new market. A central aspect of NPD is product design,
along with various business considerations.
• 'New products' can be:-
• products that your business has never made or sold before but have been
taken to market by others
• product innovations created and brought to the market for the first time.
They may be completely original products, or existing products that you
have modified and improved.
 New Product Development Process
1. Idea generation – The New Product Development Process
The new product development process starts with idea generation.
Idea generation refers to the systematic search for new-product ideas.
2. Idea screening – The New Product Development Process
The next step in the new product development process is idea screening.
Idea screening means nothing else than filtering the ideas to pick out good
ones. In other words, all ideas generated are screened to spot good ones
and drop poor ones as soon as possible.
• 3.Concept development and Testing
• To go on in the new product development process, attractive ideas
must be developed into a product concept. A product concept is a
detailed version of the new-product idea stated in meaningful
consumer terms. concepts need to be quite precise in order to be
meaningful. In the next sub-stage, each concept is tested. New
product concepts need to be tested with groups of target
consumers. The concepts can be presented to consumers either
symbolically or physically.
• 4.Marketing strategy development

• When a promising concept has been developed and tested, it is

time to design an initial marketing strategy for the new product
based on the product concept for introducing this new product to
the market. The marketing strategy statement consists of three
parts:-
1. A description of the target market, the planned value proposition,
and the sales, market share and profit goals for the first few years.
• 2. An outline of the product’s planned price, distribution and
marketing budget for the first year.
• 3. The planned long-term sales, profit goals and the marketing mix
strategy.
 5.Business analysis

• The fifth step in the new product development process involves a

review of the sales, costs and profit projections for the new product
to find out whether these factors satisfy the company’s objectives.
• In order to estimate sales, the company could look at the sales
history of similar products and conduct market surveys. Then, it
should be able to estimate minimum and maximum sales to assess
the range of risk.
 6 Product development

• Up to this point, for many new product concepts, there may exist
only a word description, a drawing or perhaps a rough prototype.
• In many cases, marketers involve actual customers in product
testing. Consumers can evaluate prototypes and work with pre-
release products. Their experiences may be very useful in the
product development stage.
 7. Test marketing

• The last stage before commercialisation in the new product

development process is test marketing.
• In this stage the product and its proposed marketing programme
are tested in realistic market settings. Therefore, test marketing
gives the marketer experience with marketing the product before
going to the great expense of full introduction.
 8. Commercialisation

• Test marketing has given management the information needed to

make the final decision: launch or do not launch the new product.
The final stage in the new product development process is
commercialisation. Commercialisation means nothing else than
introducing a new product into the market.
 Product life cycle (PLC)
• A product life cycle is the amount of time a product goes from
being introduced into the market until it's taken off the shelves.
There are four stages in a product's life cycle—introduction, growth,
maturity, and decline.
• For example, videocassettes are gone from the shelves. DVDs are
in the decline stage, and flat-screen smart TVs are in the mature
phase.
• A product’s life cycle is usually broken down into four
stages; introduction, growth, maturity, and decline.
 Introduction

• Once a product has been developed, it begins the introduction stage of

the PLC. In this stage, the product is released into the market for the first
time. The release of a product is often a high-stakes time in the product's
life cycle, although it does not necessarily make or break the product's
eventual success.
• During the introduction stage, marketing and promotion are at a high, and
the company often invests quite a bit of effort and capital in promoting
the product and getting it into the hands of consumers. This is perhaps
best showcased in Apple's (AAPL) - Get Apple Inc. Report famous launch
presentations, which highlight the new features of their newly (or soon-to-
be) released products.
 Growth

• During the growth stage, consumers start taking to the product and
buying it. The product concept is proven as it becomes more
popular, and sales increase.
• Other companies become aware of the product and its space in the
market as it begins to draw more attention and pull in more
revenue. If competition for the product is especially high, the
company may still heavily invest in advertising and promotion of
the product to beat out competitors.
 Maturity

• When a product reaches maturity, its sales tend to slow, signaling a

largely saturated market. At this point, sales may start to drop. Pricing at
this stage tends to get competitive, so profit margins shrink as prices
begin to fall due to the weight of outside pressures like increased
competition and lower demand. Marketing at this point is targeted
at fending off competition, and companies often develop new or altered
products to reach different market segments.
• Given the highly saturated market, less-successful competitors are often
pushed out of competition during the maturity stage. This is known as the
"shake-out point."
• The maturity stage may last a long time or a short time depending
on the product. For some brands and products—like Coca-
Cola (KO) - Get Coca-Cola Company Report—the maturity stage
lasts a long time and is very drawn out.
 Decline

• In the decline stage, product sales drop significantly, and consumer

behavior changes, as there is less demand for the product. The
company's product loses more and more market share, and
competition tends to cause sales to deteriorate.
• Marketing in the decline stage is often minimal or targeted at
already-loyal customers, and prices are reduced.
 HOW YOUR PRODUCT’S LIFECYCLE
AFFECTS YOUR MARKETING STRATEGY

• Just as each stage of the product life cycle demands a different

approach to the product itself, the stages also have specific effects
on your overall marketing strategy.
• In the introduction stage, for example, your marketing efforts will
likely be focused on building brand and product awareness, as well
as establishing and connecting with a target market.
• Yet in the maturity stage, you’ll be fighting to maintain market
share. Here, your marketing strategy could include incentives or
promotions to further encourage adoption of your product or
service over that of your competition.
• In the decline phase, your marketing will depend on what’s
happening with your product or service. If you opt to reintroduce it
with a new feature or benefit, you’ll want to refresh your marketing
strategy accordingly to share that information with current and
prospective customers.
The BCG Matrix and the Product Life-Cycle
(PLC)
• The concept of the product life cycle is fundamental to understanding
how product portfolios will evolve over time through the quadrants of the
BCG matrix.
 BRANDING
• Branding is the process of communicating a unique
selling proposition, or differential, that sets a product or
service apart from the competition. Examples of branding
techniques include the use of logos, taglines, jingles or
mascots.
 Origins of the Word “Brand”

• The word “brand” literally refers to the process of

ranchers putting a mark on their cattle to identify their
individual cows. In addition to providing proof of
ownership, these brands began to identify the quality of
the beef.
 Creating a Brand

• If you sell shampoo, that’s not your brand, that’s your

product. If you sell a high-end, high-priced shampoo that’s
only sold in salons, that’s your brand – exclusivity and
quality. If you sell a low-price shampoo in big box stores,
that’s your brand – affordability.
• You can create a brand based on quality, price, reliability,
a warranty, customer service or other factors.
 Brand Management
• Brand management is the process of protecting your brand. For
example, If you target Millennials with your trendy fitness clothing
and add a line of apparel for senior citizens, you will confuse the
marketplace and will cause your Millennial customers to view you
differently.
• A brand manager makes sure any new product features make
sense for the product’s brand, that any prices changes don’t
conflict with the product’s brand goals, and that the places where
the product is advertised and sold align with the brand strategy.
Brand managers review branding efforts (messaging) to ensure
they support and do not conflict with the brand.
• Brand management includes not only creating, pricing
and using correct distribution chains to sell your products
so that these methods fit with your brand strategy, but
sending your message consistently, such as a specific
logotype, one slogan, a unique jingle, or celebrity
endorser.
 Types of Brands

• There Are Many Types of Brands

• Many kinds of things can become brands. Different types of brands
include individual products, product ranges, services, organizations,
individual persons, groups, events, geographic places, private label
brands, media, and e-brands.
• Individual Brands
• The most common type of brand is a tangible, individual product, such as
a car or drink. such as the Mercedes S-class cars or all varieties of Colgate
toothpaste.
• Service Brands
• A service brand develops as companies move from manufacturing
products to delivering complete solutions and intangible services. Classic
service brands (such as airlines, hotels, car rentals, and banks)
• Retail brands (such as supermarkets, fashion stores, and restaurants)
• Media Brands
• Media brands include newspapers, magazines, and television channels
such as CNN.
• E-Brands
• E-brands exist only in the virtual world. Many e-brands, such as
Amazon.com
• Event Brands
• Events can become brands when they strive to deliver a consistent
experience that attracts consumer loyalty. Examples include conferences
the TED series; music festivals
 Packaging & labeling
• Packaging is essential as it is used for the identification of the
products in marketing. It enhances the appearance of the label
for promoting the product.
• labeling also helps to provide the information about a product
to the prospective customer. This function fulfills informative
purpose of using a tag.
 What is product labeling?
• Product Labeling is a key feature in marketing. It helps to
market the product allowing customers to know about the item
and give necessary messages including ingredients, instructions,
and uses.
• Product labeling can be done in a variety of sizes, materials, and
shapes. It plays a key role as a point of sale display in the
market shelves. They can also communicate information about
how to handle a product or how to dispose of it.
 Importance of labeling & packaging
in marketing
• Marketers use labeling to their products to bring identification.
This kind of labeling helps a viewer to differentiate the product
from the rest in the shelves of the market
• Labeling is used for packaging the product. In marketing, a
marketer can also use a sticker inedible products to impart
knowledge of the ingredients of the food items. This helps to
spread awareness among the customers about the item they
are consuming and labeling also helps to mention ingredients.
• Another main purpose of the use of labeling and packaging is to
exaggerate the product. A marketer needs to grab the attention
of a viewer to purchase the product.
• Labeling and packaging should be able to beautify a product to
add to its visual appeal.
 Types of labeling in marketing
• Branded Product Labels:-Products need to be branded to help
with identification and play a key role in company brand
building programs.
• There are two types of branded labels:
• Removable and
• None Removable labels
• Eco or Information Labels:-Information Labels or Eco-Labels
are used on consumer products such as foodstuff and fast
moving consumer goods. They are used to impart information
to the consumer about the product. Often these types are made
out of eco-friendly substances so that they do not interfere with
the products they are associated with.
• Other Product Label Types:-There are a number of different
label types that are in common usage around the world that are
regular mass produced by specialist printing services.
What must you include in your label?

• A label needs to comply with the Competition and Consumer

Act 2010 (CCA). This Act is required to give information to
consumers, such as:
• The mandatory consumer product information standards
under the CCA
• Industry specific regulations, such as the Food Standards
Code
• Labels required by customs for some imported products
under the Commerce (Trade Descriptions) Act.
 Comparison B/W packaging &
Labeling
Packaging
• Packaging is the process of
packing the goods in the
appropriate package, be it a
jar, tin, bottle, box, packet, etc.
to sell the product
conveniently to the consumer.
Labeling
• Labelling can be understood
as anything from a written text
to an image, from a barcode to
a symbol, which is affixed on
the package or on the product
itself.
PACKAGING
• A component of the total product
personality.
• How does the product look?
• To provide protection and act as a
5-second sales commercial.
LABELLING
• Part and parcel of the package.
• What is inscribed on the product
or its package?
• To provide complete information
about the product which can
influence consumer's buying
decision.
Levels of Packaging
Functions of Packaging
Functions of Labelling