PRODUCT DIFFERENTIATION

• Service Differences ( eg., delivery,

installation, training, consulting,
maintenance, repair )
• Price Differences ( eg., very high price,
medium price, low price, very low price )
• Image Differences ( eg., symbols,
atmosphere, events, media )
 PRODUCT CLASSIFICATION
ON THE BASIS OF PRODUCT
CHARACTERISTICS :DURABILITY,
TANGIBILITY AND USE (consumer or
industrial )
(1) NON-DURABLE
(2) DURABLE
(3) SERVICES
( CONTD . )
 (1) NON-DURABLES

• These are tangible goods normally

consumed in one or few uses. Because
these goods are consumed quickly and
purchased frequently, the appropriate
strategy is to make them available at
many locations, charge only a small
mark up and advertise heavily to induce
trial and build preference.
 (2) DURABLES

• These are tangible goods that normally

survive many uses. Normally require
more personal selling and service,
command a higher margin, and require
more seller guarantees.
 (3) SERVICES

These are intangible,

inseperable,
variable and
perishable products.
Normally require more quality control,
superior credibility, and adaptability.
 PRODUCT CLASSIFICATION

ON THE BASIS OF CUSTOMER

SHOPPING HABITS :
(1) CONVENIENCE GOODS
(2) SHOPPING GOODS
(3) SPECIALITY GOODS
(4) UNSOUGHT GOODS
 (1) CONVENIENCE GOODS
• are goods that the customer usually
purchases frequently, immediately, and
with a minimum of efforts.
• (A) Staples: Consumers purchase on a
regular basis.
• (B) Impulse Goods: are purchased
without any planning or search efforts.
• (C) Emergency Goods: are purchased
when a need is urgent.
 (2) SHOPPING GOODS
• are goods that the customer , in the process
of selection and purchase, characteristically
compares on such basis as suitability,
quality, price and style.
• (A) Homogeneous Shopping Goods: are
similar in quality but different enough in
price to justify shopping comparisons.
• (B) Heterogeneous Shopping Goods: differ in
product features and services that may be
more important than price.
 (3) SPECIALITY GOODS

• are goods with unique characteristics or

brand identification for which buyer is

willing to make a special purchasing

effort.
 (4) UNSOUGHT GOODS

• are goods the consumer does not know

about or does not normally think of
buying. These goods require advertising
and personal selling support.
 PRODUCT STRATEGY

• Calls for coordinated decisions on :

• (1) Product Mix
• (2) Product Line
• (3) Individual Product
• (4) Service Product
 PRODUCT MIX

• A product mix (also called product

assortment) is the set of all products and
items that a particular seller offers for
sale.
• A total group of products that an
organization markets.
• A company’s product mix has a certain
width, length, depth and consistency.
 DIMENSIONS OF PRODUCT MIX

• The width of company’s (say HLL’s)

product mix refers to how many different
product lines the company carries, such
as bathing soap, detergents, shampoos,
toothpaste, food products.
 DIMENSIONS OF PRODUCT MIX

• The length of a company’s product mix

refers to the total number of items in its
product mix. Thus in each of the product
line HLL has a number of product items.
Eg., in the product line of bathing soaps,
HLL has several product items like Lux,
Liril, Lifebuoy, Pears.
 DIMENSIONS OF PRODUCT MIX

• The depth of a company’s product mix

refers to how many variants are offered
of each product in the line. Thus if close
up toothpaste comes in three
formulations and in three sizes, Close up
has a depth of nine (3x3). The average
depth of HLL product mix can be
calculated by averaging the number of
variants within the brand groups.
 DIMENSIONS OF PRODUCT MIX

• The Consistency of the product mix

refers to how closely related the various
product lines are in end-use, production
requirements, distribution channels, or
some other way. HLL’s product lines are
consistent insofar as they are consumer
goods that go through the same
distribution channels.
 DIMENSIONS OF PRODUCT MIX
• These four dimensions of the product mix
provide the handles for defining the company’s
product strategy. The company can expand its
business in four ways.
• 1. The Co. can add new product lines, thus
widening its product mix.
• 2. The Co. can lengthen each product line.
• 3. The Co. can add more product variants to
each product and deepen its product mix.
• 4. The Co. can pursue more product-line
consistency or less, depending upon whether it
wants to acquire a strong reputation in a single
field or participate in several fields.
 PRODUCT LINE

• A product line is a group of products that

are related because of customer,
marketing and production consideration.
 PRODUCT LINE ANALYSIS

• Product line managers need to know the

sales and profits of each item in their line
in order to determine which items to
build, maintain, harvest,, or divest. They
also need to understand each product’s
market profile, i.e. how their product line
is positioned against competitors’
product lines (The Product Map).
 PRODUCT LIFE CYCLE

• The Product Life Cycle ( PLC ) is an

important concept in marketing that
provides insights into a product’s
competitive dynamics.
• To fully understand the concepts of PLC ,
one should first understand its parent
concept, the demand and technology life
cycles.
 STAGES IN THE PRODUCT LIFE
CYCLE

Sales
&
Profits

Time
Introduction Growth Maturity Decline
 PRODUCT LIFE CYCLE

Reasons for change in behavior of PLC :

• --Changes in the consumer needs and
preferences
• --Advancing Technology
• --Competition, Government Policies etc.
• --Changes in number of potential buyers
Stages in PLC :
Introduction, Growth, Maturity, And Decline.
 MARKETING STRATEGIES IN THE
INTRODUCTION STAGE
Promotion
Low
Rapid Slow
High Skimming Skimming
Strategy Strategy
Price
Rapid Slow
Low Penetration
Strategy Strategy
 MARKETING STRATEGIES IN THE
GROWTH STAGE
• It improves product quality and adds new
product features and improved styling.
• It adds new models and flanker products (i.e.,
products of different sizes, flavors, and so forth
that protect the main product ).
• It enters new market segments.
• It increases its distribution coverage and enters
new distribution channels.
• It lowers prices to attract the next layer of price-
sensitive buyers.