PRODUCT

STRATEGY
VANDAN PATEL,
VIKASH CHAUHAN,
AJAYSINH RAJPARMAR
INTRODUCTION
PRODUCT DECISION
 Knowledge of product classification is essential not only for marketing but
also for entrepreneurial decisions.

 The important decision situations faced by marketers are:

1. Entry Decision

2. Growth Decision
Entry Decision
 How to make an entry into a business? The questions that need to be focused on
are:
a) Which product and which market (consumer segment)? Whether to offer FMCGs
or durables or services?
b) Whether to enter the market with an existing product or an innovative product?
c) Whether to offer high-quality, high-price (premium) products or value-for-money
(economy) products?
d) Whether to go by one product or a combination of different products (product
line and mix decisions)?
Growth Decision
 How to increase sales, revenues and profits? The questions that require
attention are:
a) How to increase penetration levels of the product? Is it by changes in quality,
price or promotion (product life cycle strategies)?
b) How to sustain growth in sales by creating a competitive edge?
• Is it by innovation (improvement or new product-development strategy)?
• Is it by diversification by opting for either related or unrelated products?
• Is it by integration—backward (supply side input products) or forward
integration (consumption side output products)?
Product Classification
Product Strategy Levels
 The product strategy embraces decisions at three levels:
1) Product mix: The product mix is a set of all product lines and items offered
by the company.
2) Product line: A product line is a group of closely related products priced
within a range and distributed through some channels to the same customer
groups
3) Product item: Product items are various varieties offered within product line,
which are similar in one or other ways.
Various strategies adopted at this level are:
 Width extension: Adding new product lines (related diversification or unrelated
diversification) diversification strategy.
 Length extension: Adding new product items—this extension can be done in
three ways: upward (higher-end models), downward (lower-end models) and
both ways. When leveraged on a reputed brand it is referred to as brand
extension—brand/line extension strategy.
 Line pruning: Reducing the number of product items to modernize the product
portfolio—line modernization strategy.
 Depth extension: Adding new product variants.
Concept and significance of product
strategy
concept

product strategy refers to long-term range competitive plan involving decision on products,
product line and product mix to make proper utilization of resources and achieve marketing goal

Significance

1 achieve product market fit ; a well thought out product strategy will be offee peoducts based
on market needs
2 encourages innovativeness:

the key of product strategy is innovation. Product strategy relies on creativity process ,methods, and
techniques .

3 provides competitive edge :

Companies will have to use product strategy to attack and flank their position .

4 makes better use of resources :

The product addition and deletions based on market point of view allow for better utilization of physical,
financial and HR .
Product item decision
Product or services is an offer made by marketer that has the ability to satisfy the needs and
wants of customer.

The key consideration individuals products offer is developing of the product at three levels.

1 . Core products development

2. tangible products development

3. augmented product development

Core product
A product that provides the important form utility and ensures performance of the basic function
is the core product

Core products refers to the benefits which are specified by consumer needs.

Has to focus on consumer needs.

Product is to be seen not from manufacturing point of view but from marketing point of view

Business is to be viewed. as a customer satisfying process not a good producing process

Tangible product
When psychological needs are specified in physical terms ,product concept becomes visible and
operational.

Any product or services has five characteristics.

1 quality

2 features

3 style/design

4 packaging

5 branding
1 . quality
It is the first characteristics of product and services

What quality signifies the ability of product to meet the following expectation
Durability : it should last for certain period

Capacity : posses the ability to functions

Efficiency : give desired with less inputs.

Features
Humans are progressive in thinking behaviour .they are never happy with what they have , they
continually seeks for more comfort.

Two types

1 Rational problem solving

2 emotional
Types of Strategies
 Product Innovation Strategies

 Customer Value Strategies

 Product Identity Strategies-Branding

 Product Identity Strategies-Packaging

 Brand Building Strategies

 Product Lifecycle