Learning Objectives

By the end of this lecture learners should be able to understand:

 Products classification

 Dimensions of Product Mix

 Product Mix Decision-

 Product Management

 BCG Matrix
 Products Classification

• Consumer product: Personal/ family use/

consumption

• Industrial / Organisational Products- Firms

or institutions buy to produce other products
or to resell or to run day to day operation
Consumer products classificatiob based
on durability

• Durable goods

• Non-durable goods
Consumer Products based on consumer
shopping habits

– Convenience

– Shopping Products

– Specialty Products

– Unsought products
 Convenience products
• Products are relatively in-expensive

• Purchased frequently and spend less effort

in buying

• Example- egg, bread, salt etc.

 Shopping Products
• Consumers devote considerable time and
effort in making the purchase

• Consumers concerned about product

features, price, quality, service, warranty etc

• Example- Music System/ Ready made

garments
 Specialty Products
• Unique & differentiated characteristic

• Buyers do not compare with different alternatives

• Purchased infrequently

• Promotional efforts are limited to advertising in high end

glossy magazines

• Example- Nikon Camera/ Rolex Watch

 Unsought Products
• Consumers do not generally think of buying or
about which they are not aware

• Companies undertake advertisement it make

people aware and influence purchase

• Involves personal selling to persuade customers

• Example- Encyclopaedias, insurance etc

Consumer Products Classification
 Industrial Products & Services
• Products bought for further processing or the purposes of resale.

• Distinction based upon the purpose for which the product is purchased.

– Raw materials- Chemical,, steel etc

– Capital items-

– Component parts/ Accessory equipment.

– Process Materials- Example- Alcohol in case of cosmetic manufacture

– Industrial Services- Marketing research, financial and legal services etc

Why we do product classification ?
 Product Decision
• Marketers make product decisions at three
levels:
– Individual product decisions
– Product line decisions
– Product mix decisions
Product mix is the set of all products and items a
particular seller offers for sale
• Product Mix– The total assortment of products
and services marketed by a firm

• Product Line– A group of individual products that

are closely related in some way (Ex: Milk-Amul
Gold, Amul Taza, Amul Shakti)

• Individual Product: – Any brand or variant of a

brand in a product line (Ex: Amul Gold- 500 ml). 
 Dimensions of Product Mix
• Product Mix width

• Product Mix Length

 Company’s of a product mix has a
certain :- Width, Length, Depth &
• Product Line Length Consistency

• Product line depth

• Product Mix Depth

• Product Consistency
Product Mix Of Amul
Example- Product Mix Width of HUL
• The width of the product mix refers to the number of different
product line the company carries
• Personal wash
• Laundry
• Skin care
• Oral care
• Deodorants
• Colour cosmetics
• Ayurvedic personal and health care
• Shampoo
• Coffee
• Ice cream
• Water purifier

What is the product mix width of HUL ?

Width = 11 
 Product mix length of HUL
• The lenght of the product mix refers to the total number of items in the
product mix.
• Personal wash: Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears,
Rexona
• Laundry: Surf excel, Rin, Wheel
• Skin care: Fair & Lovely, Ponds, Vaseline, Aviance
• Oral care: Pepsodent, Close up
• Deodorants: Axe, Rexona
• Colour cosmetics: Lakme
• Ayurvedic personal and health care: Ayush
• Shampoo: Sunsilk, Clinic
• Tea: Broke bond, Lipton.
Product Mix length ?
• Coffee: Bru
• Foods: Kissan, Annapurna, Knorr Length of personal
• Ice cream: Kwality walls wash product line ?
• Water purifier: pureit
 Product mix length of HUL
• The lenght of the product mix refers to the total number of items in the
product mix.
• Personal wash: Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears,
Rexona
• Laundry: Surf excel, Rin, Wheel
• Skin care: Fair & Lovely, Ponds, Vaseline, Aviance
• Oral care: Pepsodent, Close up
• Deodorants: Axe, Rexona
• Colour cosmetics: Lakme
• Ayurvedic personal and health care: Ayush
• Shampoo: Sunsilk, Clinic
• Tea: Broke bond, Lipton. Product Mix length =
• Coffee: Bru 31
• Foods: Kissan, Annapurna, Knorr Length of personal
• Ice cream: Kwality walls
• Water purifier: pureit
wash product line=8
 Depth of Product Mix HUL
• The depth of the product mix refers to the
number of variants of each product offered in the
line

• HUL Oral care Product line : Pepsodent, Close

up

• E.g: If close up toothpaste comes in three

formulation and in three sizes, close up has a
depth of 9 (3*3)
Exercise on Product line and Product mix
of P & G Products
• Detergents – Arial, Arial oxyblue, Ariel bar,
Tide, Tide naturals, Tide bleach, Tide plus

• Shampoos – Head and shoulders, Head

and shoulders anti dandruff, Pantene,
Pantene damage repair, Pantene pro-v
Product mix Length ?
Product mix Width – ?
Product mix Depth – in detergents ? and in shampoos ?
Product mix consistency – High or low ?
Exercise on Product line and Product mix
of P & G Products
• Detergents – Arial, Arial oxyblue, Ariel bar,
Tide, Tide naturals, Tide bleach, Tide plus

• Shampoos – Head and shoulders, Head

and shoulders anti dandruff, Pantene,
Pantene damage repair, Pantene pro-v
Product mix Length = 12
Product mix Width – 2
Product mix Depth – 7 in detergents and 5 in shampoos
Product mix consistency – High or low ?
Examples Product Mix- Consistency
• Refers to how related the product lines are in end use, production
requirements, distribution channels ,or some other way.

• Lesser the variations between the products, the more is the

product line consistency.

• For example, Amul has various product lines which are all dairy

related. So that product mix consistency is high

• Samsung has many product lines which are completely

independent of each other. Like Air conditioners, televisions,
smart phones, home appliances, so on and so forth. Thus the
product mix consistency is low in Samsung
 Product Mix for Everyone
• Product for youth - Amul launched
Chocolate milk under brand name
of ‘Amul Kool Koko’ targeting the
youth

• Product for diabetic people - India’s

First Pro-Biotic Wellness Ice cream
& Sugar Free Delights For
Diabetics

• Product for the health conscious -

Amul Launched “low fat, low
cholesterol bread spreads”
 Product Mix for Everyone…..

• Product for the price

sensitive India - Low
Priced Amul Ice Creams
and affordable ‘sagar’
whitener

• Product for the urban

class – emmental,
gouda and pizza
mozzarella cheese
Examples Product Mix- Consistency
• Refers to how related the product lines are in end use, production
requirements, distribution channels ,or some other way.

• Lesser the variations between the products, the more is the

product line consistency.

• For example, Amul has various product lines which are all dairy

related. So that product mix consistency is high

• Samsung has many product lines which are completely

independent of each other. Like Air conditioners, televisions,
smart phones, home appliances, so on and so forth. Thus the
product mix consistency is low in Samsung
 Product Line Decisions
• Types of product mix decisions

– Product line stretching: adding products that are

higher or lower priced than the existing line

– Product line Filling: adding more items within

the present price range

– Product line Prunning

– Product line Modernisation

 Product line Filling

Adding more items

within the present range
of the product line

To reach extra Profits

To satisfy dealers
To use excess capacity
 Product line Prunning
• Pruning or removing unnecessary products
from the product line

• This is done when companies yield lower

or no profit for a product

• Brands like Close-up Renew & Close-up

Oxy fresh were pruned
 Product line Modernization

• Vim bar was coated

from 5 sides (plastic
coating) to save
from wastage

• Lifebuoy was no
more a carbolic
soap, was given
Green look, with
Tulsi & Neem
Product Line Decisions
 PRODUCT MANAGEMENT

• Product differentiation: is used to give products

unique identities to distinguish them from their
competitors.

• Product positioning- alteration of consumer

perceptions so to result in state of product
differentiation.

• Product variety management- Company needs to

have good understanding about the impact of
product variety on sales, cost, customer
satisfaction, etc
 BCG matrix
• BCG matrix created by Bruce D.
Henderson for the Boston Consulting
Group in 1970 to help corporations to
analyze their business units, that is,
their product lines

• It can be used to determine what priorities

should be given in the product portfolio of
a business unit.
Amul- BCG Matrix
 BCG Zoo

• Four squares of the BCG zoo try to predict cash

flow

– The dog or the star should have a minimal positive or

negative cash flow.

– The cash cow delivers very positive cash flow, while

the

– Wild cat has negative cash flow.

Coca Cola Launches Flavoured MIlk VIO In
INDIA
Dabur fruit-based carbonated drinks-
fizzy drinks
 Assignment- 1
• Product Mix of Hindustan Unilever Limited

• Product Mix of Cadburry India

• Product Mix of GlaxoSmithkline

• Product Mix of Dabur

• Product Mix of ITC Limited

• Product Mix of Nestle

• Product mix of Tata products and services

 Assignment 1……
• Product Mix of Pepsico

• Product Mix and Product Line of Patanjali Ayurveda Ltd

• Product Mix of Reliance Industries Ltd

• Product Mix of Godrej

• P & G Products and Product Mix

• Coca Cola Product Line and Product Mix

• Product Mix of Marico

 Thank You
nirmal@ksrm.ac.in / nirmal.mandal@gmail.com
 Learning Objectives
By the end of this lecture learners should be able to understand:

 Product Life Cycle (PLC)

 PLC Stages & Marketing strategy in each stage

 New Product Development Stages

 New Product Adoption Process

 Product Life Cycle
• Product Life Cycle is the course of a product’s sales
and profits over time.

• Product life cycle(PLC) deals with the life of a

product in the market with respect to business or
commercial costs and sales measures.

• The four stages of each product lifecycle are

– Introduction
– Growth
– Maturity
– Decline.
 Life Cycle of products

8- 10 years
2 years
 Why Product Life Cycle
• A company’s positioning and differentiation strategy must change
as the product, market, and competitors change over the product
life cycle(PLC)

• When we say that a product has a life cycle we assert four things:

– Products have a limited life.

– Products sales pass through distinct stages, each posing different

challenges, opportunities and problems to the seller.

– Profits rise and fall at different stages of the product life cycle.

– Products require different marketing, financial, manufacturing, purchasing,

and human resource strategies in each life – cycle stages.
Life cycle of FMC Product- life long

Still market leader in India,

South Arica, Brazil,
Thailand
 Examples of Different Stages of PLC

• Introduction – 3D TV, Sugar free Ice cream

• Growth Stage – LED bulbs, Tablet PCs

• Maturity Stage – Laptop Computer

• Decline Stage – CFL Bulb, Type Writer

 4 Stages of Product Life Cycle-
Introduction Stage
• Market Introduction Stage also called product launch stage

• Expensive stage- as it involves higher promotion cost to

create awareness and demand

• High investment= Less Profit

• Companies tries to create acceptance of the product

• Not suffcient to recover the product development cost

• Who buys products- Early adopters

 4 Stages of Product Life Cycle-
Growth Stage
• Once early adopters use the product, other consumers are likely to
follow

• Product visible in the media and through words of mouth (viral

marketing)

• Competition intensifies

• Most crucial stage- as the product may catch or fail

• Product quality maintained with additional features and services

• Distribution channels added as demand and distribution increases

 4 Stages of Product Life Cycle-
Maturity stage
• Product is established in the market

• Sale increases but slowly

• Costs associated with distribution and

promotion is low and company makes very
large profit

• Major focus to maintain the market share

Case of Pepsi- Maturity – 1980s –
Present day
Despite growing consumer interest in healthier lifestyles,
sales of Pepsi show no signs of slowing down in the
immediate future
 4 Stages of Product Life Cycle-
Retirement/ Declining stage
• Unable to find new customers for the given product

• As sales decline, company has the following

options

– Temporary decline can be reversed by changing price

or new ad campaign

– If efforts are unsuccessful, the company may redesign,

repackage the product or reformulate marketing efforts
 PLC Curve may be different
• Generally all the products pass through all these 4
stages

• In some cases, Bell shaped PLC Curve may be

different

• Examples of temporary period of high sales and

immediate decline
– N95 respirator masks demand increased during swine
flue outbreak (Fads)
– Sales of country flags on national independence day
(Fads)
Example- N95 respirator masks demand
increased during swine flue outbreak
 Three Special Category of PLC
• A Style is a basic and distinctive mode of expression
appearing in a field of human endeavor. Styles appear in
homes, clothing, art etc.

• A Fashion is a currently accepted or popular style in a

given field. Fashion pass through four stages:
Distinctiveness, emulation, mass fashion, decline.

• Fads are fashions that comes quickly into public view , are adopted
with great zeal, peak early, and decline very fast (Ex: Sales of
country flags on national independence day)
 Marketing Strategy in each stage of PLC
Introduction Growth Maturity Decline

Marketing Create market Increase market Defend market Reduce

Objective awareness share, Create share, Create expenses
strong position Profit

Product Offer basis Product quality Diversify Phase out weak

products maintained/Addi models products/Modify
tional features the product

Price Charge Cost Penetration Match price Reduce the

Plus pricing with price
competitors
Place Selective Intensive More Intensive Selective- phase
distribution distribution Distribution out unprofitable
outlets

Promotion Product Broader Product Reduce levels to

awareness audience differentiation retain loyalists
 Key Take Aways
• Generally all the products pass through all these 4 stages

• The product life cycle stages explain the changes in sales and
profitability of products over their lifespan.

• In order to improve profitability and market positions, product

managers need to use appropriate strategies for each life cycle
stage.

• Extend Growth & Maturity Stage of products

• Decision point at decline stage-

– Discontinue the product when no more profit can be made
– Discontinue when there is successor product
– Modify the product and prelaunch it as “New & Improved”
New Product Development
 New Product Development
• New to the world Products- Creates essentially
new market. Example: Sony walkman, Apple I-Pod.

• New Product Line- allows a company to enter an

established market for first time. Example: HUL
entering Toothpaste segment with Close-Up.

• Addition to the existing product line- New product

that supplement a company’s established product
lines (Pack sizes, Flavours). Example: HUL adding
Pepsodent to its toothpaste segment
 New Product Development…..
• Improvement of existing products- New product gives
increased performance & replaces existing products.
Example: Hero Honda, from Splendor to Splendor +

• Repositioning: Existing products targeted to new market /

market segment. Example: Bajaj Caliber – Caliber
Chrome – Hoodibaba.

• Cost Reduction: New product that provide similar

performance at lower cost. Example: Cadbury’s Five Star
– from ₹ 5 pack to ₹ 2 pack by using flavours instead of
pure cocoa.
Dr. Geoff Nicholson, the "Father of Post-it
Notes"
Product Development Stages
 #1. Idea Generation
• Sources for idea generation The
organization takes new ideas from two
sources Internal sources

– Internal Sources- : R&D Cell, Employees feed

backs

– External Sources : Customer Questions &

Complaints, Distributor Feed backs,
Competitor’s Ads as a clue
 Idea Generation- Internal Sources
• Employees- Example- Linked in
(Professional Social media network)
– Employees are encouraged to come out with
new ideas in “hackdays” (one Friday in each
moth)
– Form team and come out with new ideas in
each quarter and gets 90 days off from regular
work to develop the idea into reality

• Employees- Example in 3M Company

“Ihave a new idea that could
be useful to 3M, but it is not
related to business. I am
working on it. Am I allowed to
work on it “

Time

Freedom to Explore = Freedom to Grow

 Idea Generation- External Sources
• LEGO Ideas as a crowd sourcing platform for proposals
of new LEGO sets.

• Once an idea crosses the 10,000th support mark and

joins the “10K Club”, it is submitted for review sessions
that are held 3 times per year in January, May, and
September.

• If a submitted idea goes into production, the creator is

rewarded with 1% royalty on global sales and credited
inside the build instruction booklet as the designer of the
set.
# 2. Idea Screening
 # 3. Concept Testing
• Concept for testing with potential customers.

• Group discussion/ questionnaire can be used to

test product concepts

• To ascertain
– the extent of liking/disliking
– the kind of person/organization that might buy the
product
– its price acceptability,
– how likely they would be to buy the product. 
 Concept presentation

Concept is, usually, presented to consumer in a “flyer” (or movie) type,

concise format underlining its key feature and benefits.
 # 4. Market Strategy Development &
Business Analysis
• Target market’s size, structure and behavior

• Estimation of minimum and maximum sales

to assess the range of risk

• Business Analysis-
– Estimating Total Sales
– Estimating Cost and Profits
– Break-even analysis
 # 5. Product Development
• Developing product concept into physical product

• R & D Department

• May take days/ week/ month depending upon the

product

• Undergoes rigorous testing t ensure that

consumers find value in it
#6. Test Marketing
Mustard oil has a unique pungent
flavour and aroma -- it tingles
your throat and gives you a buzz
in the nose

When test marketed in

Kolkata, it was not accepted by
the consumers because of no
pungency
 # 7. Commercialisation Stage
• After successful passing the product from
the “ testing market” then the firm properly
introduce that product into market.

• Note After commercialization Stage then

that product’s life cycle ( PLC) begins.
New Product Adoption Curve
 Thank You
nirmal@ksrm.ac.in / nirmal.mandal@gmail.com