Product Management

Marketing mix and product
management.
At the end of this module the learning outcomes
are.
– What is a marketing mix?
– What is a product?
– Various levels of product.
– How products are classified?
– What is the concept of product life cycle?
1
management.
Suggested readings.
1. Marketing Management, 13th edition by Kotler
chapter 12
2
management.
Marketing Mix
Place
Channels
Product Coverage
Product Target Market Assortments
Variety Locations
Quality Inventory
Design Price Promotion Transport
Features List price Sales Promotion
Brand Home Discounts Advertising
Packaging Allowances Sales Force
Sizes Payment Public relations
Services Period Direct marketing
Warranties Credit terms
Returns 3
management.
MARKETING MIX
It is the set of marketing tools that the firm uses to
achieve its marketing objectives in the target market.
Four P’s of marketing
– Product
– Price
– Place
– Promotion
4
management.
What is product?
Product is anything that can be offered to a market
to satisfy a want or need.
5
management.
PRODUCT LEVELS
• Core product
• Basic product
• Expected product
• Augmented product
• Potential product
6
Five Product Levels
management.
Core product
- Most fundamental benefit customer is buying.
- Heart of the system.
Refrigerator
- Basic purpose.
Preservation.
- To preserve you need a compressor and cooling
system.
- This is core. 8
management.
Basic product
- Do you buy compressor?
- You buy a basic product?
- Formal
Refrigerator
- Compressor is mounted on a body /cabinet.
- There is a door, shelves, trays.
- This is basic product.
9
management.
Expected product
- A set of attributes and conditions customers expend
- This is expected from a marketer.
Refrigerator
- Freezer.
- Bulb.
- Thermostat.
- Quiet not noisy.
- Different types of shelves.
- Antirust system.
This is expected product.
10
management.
Augmented product
- Prepare a product that exceeds customer expectation
- Add further attributes
- Each attribute adds cost
- Will customer pay enough to cover the extra cost?
Refrigerators
- Easy financing scheme
- Four year warranty on compressor
- Free rice – cooker with every refrigerator purchased.
11
management.
Potential product
- Companies search for new ways to satisfy
customers and distinguish their offer.
Refrigerator
- Water dispenser – on the door
• Prevent frequent opening of doors.
• Faster cooling.
12
management.
WHAT DO WE OBSERVE?
- Most competition at augmentation level.
- Constant innovation.
- Understand how customers use their product.
- As new features add cost.
- Marketers have to find out that whether customers
are willing to pay extra cost.
13
Marketing mix and product management .
REFRIGERATORS.
1. Whirlpool
• Quick lce making
2. Samsung
• Super x – flow
Uniform cooling.
3. LG
• Nutritional value maintained.
4. ALLWYN
• Efficient compressor.
5. KELVINATOR
• Coolest.
14
management.
PRODUCT CLASSIFICATION
A. Durability and tangibility

- Nondurable goods.
- Durable goods
- Services.
15
management
B. Consumer –goods classification
- Convenience good.
- Shopping goods
- Speciality goods
- Unsought goods.
16
management.
C. Industrial –goods classification
- Material and parts
- Capital items
- Supplies and business services.
17
management.
Durability & Tangibility
Non-durable goods
- Consumed in one or few uses
- Consumed quickly
- Frequent purchase
- Need to make them available in many locations
- Heavy promotion
- Induce trial
Example
Coke, Modern bread, Lux Soap, Mother Diary Milk
18
management.
Durable goods
- Used many times
- More personal selling/service
- Seller’s assurance about product longevity
Refrigerators, Mixer, Car
• Higher priced than non-durable
• Consumer involvement is high as they are high priced
19
management
Services
- Intangible
- Inseparable
- Variable
- Perishable
20
management
Services
Example
- Beauty parlour
- Education Services
- A Surgery
- Listening to concert
- Airlines
21
Marketing mix and product management.
Therefore
• Products which are predominantly tangible are
called goods
• Products, which are predominantly intangible, are
called services.
22
Consumer – Goods classification
Based on shopping habits
Convenience goods
Goods purchased
- Frequently
- Immediately
- Minimum effort
Newspapers, Bread, Milk
Distributed at shops very near to households
23
Marketing mix and product management
Convenience goods
Staples
• Goods consumers purchase on a regular
basis
• Buyer purchasing toothpastes
24
management
Convenience goods
Impulse goods
• Purchased without planning or search effort
• Chocolates
• Potato chips
25
management
Convenience goods
Emergency goods
• Urgent need
• Umbrellas, Rain coats
26
management
Shopping goods
- Goods that the customer in the process of selection
and purchase
- Characteristically compares on such basis as
suitability, quality, price and style
Examples
- Appliances
- Clothing
- Furniture
27
management
Shopping goods
• Homogenous shopping goods
• Heterogeneous shopping goods
28
management
Homogenous shopping goods
• Similar in quality
• Different in prices
29
management
Heterogeneous shopping goods
• Differ in product features
• More important than price
• Wide assortment
• Advise customers
30
Speciality goods
- Unique characteristics
- Unique brand values
- Buyers willing to make extra efforts
- Don’t need convenient locations
31
management
Speciality goods
Arrow shirts
• Very few outlets, exclusive
Honda
• One in Badarpur, Udyog Nagar
• Customers willing to travel that far to buy their
choice of goods
32
Unsought goods
- Goods the consumer does not know about or does
not normally think of buying
- Consumers made aware through advertising and
personal selling
Examples
- Fire fighting
- Security equipments
- Fitness equipment
33
management
Industrial – Goods classification
• Materials and parts
• Capital items
• Supplies and business services
34
management
Materials and parts
Two types
• Raw materials
• Manufactured material and parts
35
management
Raw materials
• Farm products
• Natural products
36
management
Farm products
• Wheat
• Cotton
• Fruits
• Supplied by many producers
• Handover to market intermediaries
• Provide grading
37
management
Natural products
• Petroleum
• Iron ore
• Limited in supply
• Great bulk and low unit value
• Fewer marketer handle such products
• Long-term supply contracts
38
management
Manufactured material and parts
Two categories
• Component materials
• Component parts
39
management
Component materials
• Usually fabricated further
• Cast iron into steel
• Yarn into cloth
40
management
Component parts
• Enter the finished product
• With no further change
• Tyres in cars
41
management
Capital items
• Long-lasting goods
• Facilitate developing or managing the
finished products
Two groups
• Installation
• equipments
42
management
Installation
Consists of
• Buildings, generators
• Major purchases
• Bought directly from the producer
43
management
Equipment
• Shorter life and lighter than installations
• Numerous buyers
• Widespread
• Hand tools
44
management
Supplies & Business Services
• Short-term goods and services
• Facilitate developing or managing the
finished product
Two types
• Supplies
• Business services
45
management
Supplies
Two types
• Maintenance and repair items
• Operating supplies
46
management
Maintenance and repair items
• Paint, nails
• Minimum effort
• Marketed through intermediaries
• Low unit value
47
management
Operating supplies
• Lubricants
• Writing paper
• Similar to maintenance and repair items
48
management
Business services
Two types
• Maintenance and repair services
• Business advisory services
49
management
Maintenance and repair services
• Maintenance of air conditioners,
photocopier
• Contracts from original equipments
50
management
Business advisory services
• Legal
• Management consultancy
• Based on reputation and staff
51
PRODUCT MIX
- Set of all products and items that a particular seller
offers for sale
HUL
 Soaps
 Detergents
 Beverages
 Foods
-
52
Product Mix-concepts
Width
- How many different product lines are carried by the
organization
P& G
 Five lines
- Detergents, Toothpaste, Bar soap, diapers, paper
tissue
53
Length
 Total number of items in the mix
 Total items 25
 Average length of a line is 25/5 = 5
54
management
Depth
 How many variants are offered of each product in the line
Proctor and Gamble
 Crest Toothpaste
- Comes in five sizes
- Two formulations
 Mint
 Regular
Total Depth = 5 * 2 = 10
55
Consistency
How closely related the various product lines are in
end use, production requirements, distribution
channels or some other way.
Proctor and Gamble
- Very consistent
- Why
- Products are available through the same
distribution channels
56
management
Consistency
GE
- Products
 Refrigerators
 Aircraft Engine’s
 Electricity equipments
57
GE
• Very inconsistent
• Are Refrigerators, Aircraft engines and Electricity
equipment available from same places
• No ?
• Refrigerators
- Shops
• Aircraft Engine’s
- Direct
58
PRODUCT LIFE CYCLE
Four stages
1. Introduction
2. Growth
3. Maturity
4. Decline
59
PRODUCT LIFE CYCLE
 Products have limited life
 Products pass through distinct stages
 Each stage
- Different challenges
- Different opportunities
- Problems to the seller
 Profits and sales vary in different stages
 Different strategies
- Marketing
- Human resources
- Purchasing
60
Introduction
- Slow sales growth
- Product introduced
- Profits less or non-existent
- Heavy expenses
• Promotion
• Distribution
61
Growth
- Rapid market acceptance
- Substantial profit improvement
62
management
Maturity
- Slowdown in sales growth
- Achieved acceptance by most potential buyers
- Increasing competition
- Profits stabilize or decline
63
management
Decline
- Sales show decline
- Profits also decline
64
Product life cycle
- Product categories
• Longest
- Newspaper
- Sugar
- Ice-cream
- Branded categories
• Shorter
- Pioneer Newspaper
- Dollops Ice-cream
• Newspaper, ice-cream sales are rising
• Pioneer & dollops sales have declined
65
Why four stages in Product lifecycle
Marketers deploy different marketing strategies in

different stages of product life-cycle .
66
Market Evolution
Market Evolution
• PLC
• Focus on product
• Less on market
• Need to focus on market affected by needs,
technology, competitor, channels
67
Market Evolution
Market Evolution
Four stages
• Emergence
• Growth
• Maturity
• Decline
68
Market Evolution Stages
Emergence Growth
Maturity Decline
Market Evolution
Emergence
• Latent need
• Before market materializes
• Three options
– Single-niche strategy
– Multiple-niche strategy
– Mass-market strategy
70
Market Evolution
Single-niche strategy
• Design the product to meet the preferences
of one of the corners of the market
71
Market Evolution
Single-niche strategy
• Design the product to meet the preferences
of one of the corners of the market
72
Market Evolution
Multiple-niche strategy
Launch two or more products simultaneously to
capture two or more parts of the market.
73
Market Evolution
Mass-market strategy
Design the new product for the middle of the market
74
Market Evolution
Growth
• If product is accepted
• Attract new players
• New player
• Big or small
• Head-on or indirect
75
Market Evolution
Maturity
• More competitors
• Cover almost all segments
• Invade each other’s segments
76
Maturity Strategies
Market Evolution
Market fragmentation
• Markets split into finer segments
• Some segments too small to operate
78
Market Evolution
Market consolidation
• Follows market fragmentation
• Shakeouts tend to happen
• Emergence of a new attribute that has a strong
appeal
• Short period
• Again tend to fragment
• Swing between fragmentation and consolidation
79
Market Evolution
Decline
• Demand decline
• Change in priorities
• New technology replaces old
80

Product Management

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Product Management

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Marketing mix and product

A. Durability and tangibility

Why four stages in Product lifecycle

Marketers deploy different marketing strategies in

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