Unit 3

Marketing Management

By: Rashi Baliyan

 Product
• Philip Kotler:
• “Product is anything that can be offered to someone to satisfy a need or a want.”
• Product can also be referred as a bundle of satisfaction, physical and
psychological both. Product includes:
1. Core Product:
Core product includes basic contents, benefits, qualities, or utilities.
2. Product-related Features:
They include colour, branding, packing, labeling, and varieties.
3. Product-related Services:
They include after-sales services, installation, guarantee and warrantee, free
home delivery, free repairing, and so forth. As per the definition, anything which
can satisfy need and want of consumers is a product. Thus, product may be in
form of physical object, person, idea, activity, or organisation that can provide any
kind of services that satisfy some customer needs or wants.
 Product Dimensions:

There are three dimensions, as stated below:

Managerial Dimension:
• According to management, a product is viewed as the total product. It includes
all those tangible and non-tangible aspects that management wants to offer.
Managerial dimension of product covers mainly core products, product-related
features, and product-related services.
Consumer Dimension:
• To consumers, a product is a bundle of expectations. They view product as a
source of expectations or satisfaction. Thus, for consumer, total benefits
received from product are important. This view is very important for a marketer.
Social Dimension:
• Society considers the product as a source of long-term welfare of people.
Society expects high standard of living, safety, protection of environment, and
peace in society.
 Characteristics of Product:

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

• Products can be classified as:- A. Consumer

Products B. Industrial Products.
• Some of the types of consumer goods are:- 1.
Convenience Goods 2. Shopping Goods 3. Speciality
Goods 4. Impulse Goods 5. Emergency Goods.
• Some of the types of industrial goods are:- 1. Raw
Materials 2. Fabricating Materials and Parts 3.
Installations 4. Accessory Equipment 5. Supplies 6.
Services.
 Products may be classified on the basis of users of the
products, the type of consumers who use the product that is:

• 1. Consumer products, and

• 2. Industrial products.
• 1. Consumer Products:
• Consumer products are those products that are bought by
the final customer for consumption.
• Consumer products are of four types:
• i. Convenience products,
• ii. Shopping products,
• iii. Speciality products, and
• iv. Unsought products.
• i. Convenience Products:
• Convenience Products are usually low priced, easily available products that customer
buys frequently, without any planning or search effort and with minimum comparison
and buying effort. Such products are made available to the customers through
widespread distribution channels-through every retail outlets. This category includes
fast moving consumer goods (FMCG) like soap, toothpaste, detergents, food items like
rice, wheat flour, salt, sugar, milk and so on.
• ii. Shopping Products:
• Shopping products are high priced (compared to the convenience product), less
frequently purchased consumer products and services. While buying such products or
services, consumer spends much time and effort in gathering information about the
product and purchases the product after a careful consideration of price, quality,
features, style and suitability.
• Such products are distributed through few selected distribution outlet. Examples
include television, air conditioners, cars, furniture, hotel and airline services, tourism
services.
• iii. Speciality Products:
• Speciality Products are high priced branded product and services with unique
features and the customers are convinced that this product is superior to all other
competing brands with regard to its features, quality and hence are willing to pay
a high price for the product. These goods are not purchased frequently may be
once or twice in lifetime and are distributed through one or few exclusive
distribution outlets. The buyers do not compare speciality products.
• iv. Unsought Products:
• Unsought product is consumer products that the consumer either does not know
about or knows about but does not normally think of buying. In such a situation
the marketer undertakes aggressive advertising, personal selling and other
marketing effort. The product remains unsought until the consumer becomes
aware of them through advertising. The price of such product varies. Examples of
unsought product are cemetery plots, blood donation to Red Cross, umbilical cord
stem cell banking services.
 Industrial Products:

• Industrial Products are purchased by business firms for further

processing or for use in conducting a business .The distinction
between consumer product and industrial is based on the
purpose for which the product is bought. Like a kitchen
chimney purchased by a consumer is a consumer product but a
kitchen chimney purchased by a hotel is an industrial product.
• Business products include:
• i. Material and parts,
• ii. Capital items,
• iii. Supplies, and
• iv. Services.
• i. Material and parts – Material and parts include raw material like
agricultural products, crude petroleum, iron ore, manufactured
materials include iron, yarn, cement, wires and component parts
include small motors, tires, and castings.
• ii. Capital items – Capital items help in production or operation and
include installations like factories, offices, fixed equipments like
generators, computer systems, elevators and accessory equipments
like tools office equipments.
• iii. Supplies – Supplies include lubricants, coal, paper, pencils and
repair maintenance like paint, nails brooms.
• iv. Services – Services include maintenance and repair services like
computer repair services, legal services, consultancy services, and
advertising services.
Classification of Products – 2 Important Categories: Consumer Products and
Industrial Products

• 1. Consumer Products:
• Products purchased by ultimate consumers or users for satisfying their personal
needs and desires are called consumer products. Examples are – cold drinks,
eatables, drinks, textiles, tooth­paste, shoes, pens, fans etc.
• Consumer products have been classified on two important basis:
• i. Extent of shopping effort involved, and
• ii. Durability of product.
• i. Shopping Effort Involved:
• This refers to time and efforts buyers are willing to spend on buying the product.
• On this basis, product is classified into three categories:
• a. Convenience Product
• b. Shopping Product
• c. Specialty Product.
• This classification has been given by M.T. Copeland.
• a. Convenience Product/Goods:
• These are goods purchased frequently, immediately and with least time and
efforts. Convenience in purchase is the main criterion in purchasing it, for
example easy and quick availability, nearness of shop etc.
• Important Characteristics are:
• (1) Regular and continuous demand.
• (2) Essential for consumers.
• (3) Small unit of purchase and low price.
• (4) Branded/Standardised products.
• (5) No enquiries about quality, price as customers know about them due to
regular purchase.
• (6) Keen competition among producers.
• (7) Large numbers of advertisements.
• (8) Increasing role of sales promotion schemes, discount offers, gift offers, etc.
• Types of Convenience Goods:
• (1) Staples:
• For purchasing staple goods, consumers do not spend too much time. These
items are bought frequently for immediate use; e.g., milk, bread, grocery
items.
• (2) Impulse Goods:
• Desire to buy such goods is aroused suddenly while shopping. They are
purchased on sight without forethought, e.g., magazines, gift items, etc.
Window displays are made to draw consumer’s attention.
• (3) Emergency Goods:
• Purchased on some urgent and compelling need; e.g., handkerchief by a
traveler, umbrella due to sudden rains, pain reliever for headache etc.
Customer does not have much time to bother about price/quality of a product.
• b. Shopping Products:
• Shopping goods are goods bought only after comparing quality, price, suitability and style in several stores
and putting some effort in the process and not buying in haste. Consumers select such goods only after
analysis and evaluation of merits and demerits of all substitutes of product and comparing the brands as well
as stores.
• Service and warranty work are often important considerations as well. Examples are – Furniture, clothing.
Readymade Garments, shoes, sarees, major appliances. Shopping goods are durable in nature. They are
purchased less frequently and are of high unit value. A shopping good may not be purchased for a
considerable period after the decision to buy the product is made.
• Chief characteristics are:
• (1) Durable Nature
• (2) High Unit price
• (3) Comparison in selection
• (4) Gap between decision to buy and actual buy
• (5) Persuasive Effects of salesmen/Retailers.
• c. Specialty Goods:
• When consumers search extensively for a product and are extremely reluctant to accept substitutes for it, it is
a Specialty Good. These are products with brand loyalty of highest order Examples are – expensive stereo,
gourmet food products. These goods are of very high unit value and infrequently purchased.
• d. Unsought Goods:
• These are products normally not purchased except when a certain problem arises to be solved e.g., emergency
automobile repair, polio vaccine, cancer treatment. Consumers generally are not aware of these products or
their importance till they realize it.
• 2. Industrial Goods/Products:
• Industrial products are primarily goods used as inputs in producing other goods. Examples are – raw-materials,
engines, lubricants machines, tools etc.
• Chief characteristics are:
• (a) Derived Demand, that is, their demand is derived from demand of other products; e.g., demand for leather
is derived from demand for shoes and other leather products.
• (b) Technical Considerations in their purchase include advice from experts like engineers, production managers
cost accountants.
• (c) Direct Selling (by manufacturers, and sometimes, according to buyers’ specifications).
• (d) Limited Buyers (Compared to consumer products).
• (e) Geographically Concentrated i.e., similar production units are located in a particular area.
• (f) Reciprocal Buying – (in case of basic industries like. Oil, Steel, rubber, chemicals). For instance, Ashok Ley
land may buy tyres and tubes from Ceat and sell them trucks.
• (g) Leasing instead of Buying (this is a growing trend). For example, transport agencies instead of purchasing
public carriers on outright basis, take them on hire basis.
• Major Categories of industrial goods are:
• (i) Raw-materials e.g., natural rubber, cotton, sugarcane & agricultural products, mines, forestry.
• (ii) Component parts and materials e.g., tyres and batteries for cars.
• (iii) Accessory items e.g., smaller machines.
• (iv) Installations e.g., overhead cranes, Buildings, Machines.
• (v) Supplies e.g., fuel, coal, cleaning materials, lubricating oil, electric power etc., nuts, bolts.
• (vi) Business Services e.g., consultants, hiring advertising agency.
• Another Classification:
• (i) Raw-Materials e.g., agricultural products, mines and forests.
• (ii) Semi-finished-goods, supplied by one industrial unit to another; these goods are further processed
by receiving unit.
• (iii) Fabricating Goods used by receiving unit without processing e.g., speaker/cabinet of TV, Tyre and
Tube of Cycle, Tyre, Tube, Light, Horn, Plug of Scooter.
• (iv) Production Supplies necessary for operating industrial units e.g., Coal, Gas, Fuel, Diesel etc.
• (v) Production Facilities & Equipment e.g., Buildings, Machines, Equipment, Furniture, Fixtures etc.
• (vi) Managerial Materials used in management/administration of an enterprise, e.g., Stationery,
Accounting Machines, and Data Processing Machines.
New Product Development Process
• Stage 1: Generation of new product ideas
• To initiate a new product development, first, there has to be an
idea beforehand to create it. A lot of ideas are generated till the
business finds the most suitable ones. Businesses use internal
sources like R&D department, external sources like customers
and competitors and other sources like seminars, universities,
investors, etc. to generate ideas for new product development.
It was shown in a survey including 750 interviews of CEOs in
global businesses that 41% of new product ideas were
generated by employees, 36% of ideas were generated by
customers and only 14% of ideas were generated by R&D
department.
• Stage 2: Screening and evaluation of ideas
• At this stage, all generated ideas in Stage 1 are screened and evaluated to limit
ideas to a manageable number including most useful ideas in order to ease new
product development process in later stages and reduce costs and time spent for
not useful ideas. Firstly, all ideas are screened to distinguish more useful ideas
from less useful ones. Secondly, three questions that are involved in new product
screening framework created by a marketing expert are applied to selected
ideas. These questions are defined in a sum as R-W-W (‘real, win, worth doing’),
and business must give all these questions ‘yes’ answers:
• Is it real? Is there a need that will force customers to buy it?
• Can we win? Does it provide a considerable benefit for the business? Are there
enough resources to make new product successful?
• Is it worth doing? Is this product compatible with the business’s growth strategy?
• Stage 3: Concept development and testing
• After the most useful product ideas that are selected at
Stage 2, product concepts will be developed. The
selected product ideas will be presented in a detailed
and meaningful way as product concepts.
• Then, concept testing will be applied to the developed
product concepts. At this test, the thoughts of selected
customer groups about new product concepts will be
taken, and the product concept that received the best
score will be selected as a new product to be developed.
• Stage 4: Marketing strategy
• At this stage, a marketing strategy will be created for the selected
concept. Marketing strategy is created in three steps. These steps are:
• Identify which market will new product concept be sold, how much
profit is targeted from new product concept and what are its planned
value proposition, sales and market share for the first few years.
• Identify the price new product concept will be sold, how it will be
distributed in the market and what will marketing budget be for the
first year.
• Identify how much new product concept will be sold in the long term,
how much profit is targeted from long-term sale and what will be
long-term marketing mix strategy.
• Stage 5: Business strategy
• Business strategy is created in two steps:
• The first step is projection of new product concept sales. Sales can be
projected by market research and review of similar products’ sale
numbers in the past. Then, business calculates risk by estimating
minimum and maximum sales.
• The second one is projection of cost and profit. All costs involved in
new product development such as investment, operation, marketing,
R&D costs and profits from sales of new product are estimated at this
stage. Calculated numbers will indicate financial attractiveness of new
product.
• If these projections are compatible with the business’s objectives, it will
be moved to the next stage.
• Stage 6: Product development
• A sample or samples of new product will be created by the R&D department of the business.
Then, samples will be tested to assess new product concept whether it is attractive for
customers; it can be produced at expected cost and time. Several tests are made to samples
to ensure the safety, attractiveness and effectiveness of new product concept; therefore, test
process may take a while to choose the most suitable sample. Businesses either do tests
themselves or get a service from another business.
• Stage 7: Test marketing
• At this stage, tests will be made to identify how marketing of new product concept must be
conducted for the best results before enduring costs for unsuitable marketing strategies. All
marketing elements such as new product concept’s target market, position in the market,
advertisement, distribution, packaging, costs, etc.
• Marketing test provides businesses a suitable marketing strategy for new product concept to
be commercialized at the next stage. Passing marketing test and going to commercialization
directly may make business face with more than expected costs till the level of exceeding
profit. Therefore, it is crucial for the businesses to conduct marketing test before going for
commercialization at the next stage.
• Stage 8: Commercialization
• The first thing to be done at this stage is determining the time
when new product concept will be commercialized or
introduced to the market. Then, at in which scale new product
concept will be introduced to the market, at a small scale such
as a city, medium scale such as a region, or at a big scale such
as the national market, or the international market. Usually,
most businesses prefer to introduce new products into the
market at small or medium scales and expand the market in the
process as introduction of new product at a big scale requires
more capital, confidence and capacity which only few
businesses have.
  Brands and Branding:

• What Brands and Branding Mean?

• A brand is a symbol, a mark, a name that acts as a means of communication which
brings about an identity of a given product. Brand is product image, brand is quality
of product; brand is value; it is personality.
• It is nothing but naming the product; and naming product is like naming a child.
Parents know that the success and happiness of their children is primarily dependent
on the development of their character, intelligence and capacity and not on their
name. But they, nonetheless, take care in naming their children for the identification.
• Products are children of manufacturers, unlike human children; products are not
brought into world by accident. There is conscious decision to give birth. Once a
product takes birth, it needs an identity and that is brand; and recognizing it as
branding
• Product differentiation’ is the note-worthy feature of manufactured goods; one such
device of product differentiation is branding the products. A brand is a symbol, a
mark, a name, that acts as a means of communication which brings about an identity
of the product. Brand is the quality of a product. Brand is the value.
• Brand is the value.
• The aims of branding are to give personality to the product, to
make its existence known to the public; to create preference for
the branded product; to control the price of commodities; to
impress about product performance. For instance, ‘Tore Nylex’
Sarees, ‘Terene’ mark on Synthetic fibre cloth, Baby of Murphy,
Dog of His Master’s Voice, 501 Bar Soap, Club of Arvind Mills,
are the instances of brands or trade-marks. There is a slight
difference between a ‘brand’ and a ‘trade mark’. ‘Trade mark’ is
a legalized or registered brand. Such legalization avoids imitation
by rivals. For instance. Parley “Gluco” is a trade mark, which
cannot be imitated under Names and Emblems Act in India.
 Merits of Branding:

• The merits of branding can be discussed from the angles of manufacturers,

middlemen and consumers:
• These are:
• 1. Products Get Individuality:
• For any product, we have many competitors, though yours may be the first company
to conceive and give birth to new product. Product, like a baby has to have a name
which symbolizes the efforts and resources put into bring to light that product. Your
product, if branded will has its own personality standing out rest of all the
competitors.
• Take a simple case of tooth paste ; the Colgate in its variety, has many other
competitive brands like Pepsodent, Forhans, Neem, Dentoback, Anchor, Signal,
Babool, Miswak, Glister, Himalaya Dental cream, Promise, and so on.
• For a customer “Colgate is Colgate” or “Promise is Promise” where the customers are
divided and the producers have their own market share depending on the value
given by the user to a particular brand as he or she perceives it.
• 2. Control of Product Prices:
• Control of retail price is a significant factor because each consumer is
quality and cost conscious. Each pack or a wrapper contains in the
message the MRP-Maximum Retail Price inclusive or exclusive taxes
depending on the situation.
• Such facility makes the producers to have sound sleep because the
greedy middlemen-may is wholesalers or retailers would have charged
any price.
• Even an uneducated consumer is well informed through ads especially
TV, Cinema and other audio-visuals or audio sets. He or she insists on
buying a product at printed price on the pack. Thus, the producers
have the solace that products are reaching the final user at the prices
printed that are most economical to the consumers.
• Ever Increasing Demand:
• Powerful brands have the capacity to create, maintain and
extend the demand for a product. The strong bonds have
longest life. A recent study conducted by A and M
Magazine report, the top ten brands of the year 1999 were
Colgate, Amul, Dettol, Britannia, Life boy, Ariel, Horlicks,
Lux, Zee TV and Doordarshan.
• This power brand is all India which differs from zone to
zone-south, north east and west. Once a brand is built or
in sight and mind it leads to word of mouth advertising;
that it rolls on its own leading increased demand.
• It is A Powerful Weapon of Product Diffentiation:
• Day by day, the markets are getting more competitive and market driven and
consumer driven. In such case the companies that succeed in differentiating
the product can carve niches for themselves through this weapon.
• One is aware of the onslaught of Mc Donald’s and Domino’s Pizza impact.
Indian cooperative namely Amul came out with Pizza huts as distinct product
for using cheese that is produced.
• It is a grand success and is now felt that ‘Pizza Huts’ are preferred to Mc
Donalds and Domino’s. This product differentiation combats keen competition
by positioning and repositioning the product.
• One is aware of the war going on between Coca-Cola and Pepsi Cola. The Coca-
Cola working with “Kuch bhi ho jai Coca Cola Enjoy”. Pepsi with “Dil Mange
More”. Now come out with Pepsi “Le Chel Le Chel” on the contrary Coca- Cola
changed its slagan “Thunda Matlab-Coca Cola”.
 Merits to Wholesalers and Retailers:

• The middlemen who connect the manufacturers and consumers stand to benefit the
following because of branding:
• 1. Quicker Sales:
• The middlemen wholesalers and retailers need the shorter time for sales to take place. In
case of unbranded goods and weak brands, they are slow moving. It is because, sales stem
from final consumers.
• That is consumers should approach first the retailers and then retailers to wholesalers and
they procure from the producers or out of stock the delivery takes place. The question of
prospects being converted into customers is a big process which is done by perfect
promotion mix plus the power of the brand.
• 2. Advertising and Display of Products is Rendered Easier:
• A product which is known by its name or symbol or combination which we call brand has
the magic which needs no such advertising. Display advertising both window and counter
will be a regular feature which as the merits of POP point of purchase displays. They have
a fixed schedule making movement from one rejoins another by display-department.
• 3. Increases Market Share and Control over Market:
• Each supply chain in target market helps to increase the share in total market
sales of that market and can do better than competitors. That is by having
increased market share; it will have market leadership creating challengers by
sitting in driver’s seat. This means the company has greater control through
middlemen. It is natural that middlemen will take pride in doing so.
• 4. Introduction of New Products is Rendered Easier:
• The retailers are the first line army who are in close touch with customers.
Retailers are the purchase agents or officers for customers because it is the
customers who seek advice from the retailers as to what to buy and what not
to buy.
• Retailers have no hesitation to recommend new products. Again, they have
training and hints from wholesalers. Thus introduction of new products is not
a botheration.
 Merits to Consumers:

• The classes of consumers for whom the products are produced as per
their specifications or near specifications stand gain by branding or
branded products. These are:
• 1. Brand Stands for Quality:
• When consumers are buying the products, they are selective as certain
brands as it symbolizes the quality standards. Unbranded products, to
have quality but no assurance as greedy producers may say something
and pass on spurious stuff to the customers.
• When the days have come that duplicating of even life-saving medicines
right from stuff to packaging so much so that the consumer fails to say
which is “original” and which is “duplicate” though the measures are
taker as “bar­codes” and ‘holograms”. Generally brand stands for quality
and quality assurance where the satisfaction of consumers lies.
• 2. Consumer Protection against Cheating:
• The hard earned money of consumer does not go waste because; the manufacturers print on each pack or
container the MRP Maximum Retail Price inclusive or exclusive of local taxes.
• Therefore, the retailers can not charge more than what is printed. Even if they do so, they are losing customers as
the products are available at right prices in other outlets.
• Again, the expiry date, date of manufacturing, batch number and the like are given which help in setting disputes
as and when arise, if any.
• 3. Branded Products Reflect their Life Styles:
• Branded products speak of the personality of a product and therefore the personality and the life style of
consumers. One can easily say, by the use of certain brands of toiletries, dress-materials, ready garments, shoes,
watches, white goods, to what class the consumer belongs; it reflects their quality of life.
• When a person arranges wedding reception party in 5 star hotels, one can easily guess what the purchasing
power of the party involved is. Each person, each family wants to have their own image depending on their paying
or spending capacity.
• 4. Steady and Regular Supply of Products:
• Consumers are not only worried about the supply of quality goods at reasonable rates but equally interested in
adequate and regular supply of products. Each individual, each family has a family has not only budget but the
schedule of supply of goods in definite quantities.
• This supply chain should not be broken. Normally, it does not happen in case of branded products because there
is no scope for bungling.
 Product Packaging:

• Packaging is the other side of the product identification.

Traditionally, the function of packaging was to protect
goods. However, it is a promotional tool and the major
image builder contributing to the product success. It is a
point of sale display that develops a favourable consumer
appeal.
• ‘Packing’ is a process that speaks of company’s ability to
contain economically man made or natural products for
shipment, storage, sale or final use. It comprises the
activities of wrapping or creating the product for performing
the marketing functions more easily and economically.
• Objectives of Packaging:
• Packaging is a market and marketing necessity, at-least five objectives can be identified so far as product
packaging is concerned. These are product protection, product identification, product convenience,
product profit generation and product promotion.
• These points can be outlined as given below:
• 1. Product protection:
• The primary objective of packaging is protection of products or contents. It is the package that keeps the
contents fresh, clean and un-spoilt by using moisture proof, vermin-proof and damage resistant materials.
• It is powerful weapon to avoid shop-lifting, stealing in shops. This protection is given to the products from
their birth till their death. Thus, product is protected against the possible theft, pilferage, leakage, spilling,
breakage, contamination, deterioration, evaporation and so on.
• 2. Product identification:
• The products available in a shop on shelves must be distinguishable for easy identification. One brand is to
be compared and distinguished from another. Next to brand names, packaging is another easy and
convenient method to identify the products of different producers or marketers.
• It is obvious that the packaging of one product is very much different from another. Thus, it becomes a
means of easy identification. The size, the colour combinations, the graphics used in each package are
unique that can be easily remembered and recalled.
• 3. Product convenience:
• A packaging aims at providing maximum convenience to the
purchasers, producers and distributors alike. A nicely designed product
package facilitates product shipping, storage, stocking, handling and
display on the part of producers and distributors. It is caused by
product density.
• Good packaging facilitates the ease of product use by consumers. The
best examples of this kind are: tear-tape, poring spouts, squeeze
bottles, aerosol cans, flip-tops pull- tubes, wrappers and the like. They
increase consumer convenience to a great extent.
• 4. Product promotion:
• Product package is a powerful promotional tool. Packaging performs
good many advertising functions.
 The functions of good packaging are
summed up as under:
• 1. It protects the contents:
• The basic function of packaging from the time is to protect the contents of it from
damage, dust, dirt, leakage, pilferage, evaporation, watering, and contamination and
so on. The intrinsic values or the properties or the quality standards are maintained
intact. Thus, the contents are kept fresh, clean, un-spoilt and unaffected.
• Seasonal fluctuations in demand may be smoothened out through packaging. The
canning and deep freezing of some perishable products like straw berries, orange
juice, and mango pulp enable all the year round consumption on the part of
consumers.
• 2. It provides product density:
• It is packaging that increases the product density. Product density implies selecting
such package materials, design and shape that it helps to use the limited space in the
best way. Product density improves relations with common carriers, permits better
use of space in storage and usage and increases the grace and poise of arrangement.
• 3. It acts as promotional tool:
• Good packaging can sell more easily and quickly as it works as a promotional tool. It
is a ‘silent’ salesman. As a promotional tool, it does self advertising, displaying,
publishing and acts as an advertising medium.
• Attractive package enhances the opportunity of impulse buying. It is the package,
size, design, colour combinations and graphics that decide its ability to attract the
valuable attention of customers or the prospects.
• 4. It provides user convenience:
• Convenience in storage, transportation, handling and usage the product is another
requirement. Good packaging does this in greater degree. As a result the marketing
functions of the transportation, storage and handling are performed with ease and
without wastage.
• Consumers are greatly assisted so long as the product is in usage. In fact, neat
packaging has brought home reduction in inventory costs, packing costs, space and
time costs.
• 5. It facilitates product identification:
• Product differentiation is the hall-mark of these days of keen competition. This process of
product differentiation is furthered by effective product identifiers; one is branding and
another is packaging.
• The product package identifies the product no matter where you see it, under what
circumstances you see it, or when you see it.
• A package is product’s personality, its reality. Product identification goes easy with
distinguished packaging as it adds to its personality or image. Consumers’ confusion over
the large variety need not confound them and mislead them in consumer decision making
because, they go by distinctive product packaging.
• 6. It allows easy product-mix:
• Product-mix relates to the product-lines and assortment of sizes, colours, measures, grades,
and package types etc., offered by the selling house. Changes in product-mix can be
possible as packaging is to influence weight, size and dimensions of the products.
• Such a selected sales or product-mix will facilitate product pricing, shipping, storage,
stocking, handling, display and so on, in diversified market segments.
• Types of Packages:
• When one speaks of types of packaging, there can be three types namely primary, secondary and shipping. Let us know
about each type.
• Primary Packaging:
• Primary packaging is basically done for protecting the quality of the product and protection against possible effects caused
by exposure. Much depends on the type of product its form namely, Solid or liquid, solids are packed in polyethylene
paper bags, hard boards, bottles both glass and plastic.
• The basic idea is to protect or preserve the basic ingredients. Say, a shampoo can be packed in sachets, pouches, plastic
bottles, so in the case with other liquids. Tetra-packing is done in case of soft-drinks, juice, and oil and so on.
• Secondary Packaging:
• Secondary packaging serves for providing quantitative convenience of the buyers and sellers. Thus Shampoo Sachets may
be in straps of 10, 20, 30, 40, and 50 and so on. The bottles may be 10, or 12, or 144 units put to together. This is done for
additional protection plus meeting the consumer’s dealers, convenient for exchange purpose. It also helps in storage.
• Shipping Packaging:
• Shipping packaging is the final packaging mainly for transportation and stocking purposes on wholesale basis. Thus, fruit
juice boxes (tetra pack) may be put in cartons of 50, 100, and 200 and so on.
• The care is taken to see that it helps in convenient handling of cartons in transportation and warehousing while loading
and unloading to cause least damages. Here, the materials used are rugged and providing cushion in handling, storing and
transportation.
• The materials used for primary, secondary and shipment packages differ very much. A continuous research is going on to
do away with conventional materials.
• Packing Strategies:
• At or a given moment of time, a company has alternative packaging policies or strategies, once it
develops an agreeable packaging concept and packaging proper is going to take these alternative
shapes as discussed below:
• 1. Family packaging strategy:
• It is a packaging option in which packages of the entire product-line closely resemble one another.
To put in other words, it is a kind of strategy where the major features of the packages in respect of
the entire product-line look alike.
• For instance, Camlin stationery products and packages have the black tiny camel on items be it an
ink bottle, a compass, a gum bottle, colours. The major plus point of this strategy is that any new
product in identical package enjoys the same market reputation and acceptance as the others.
• This also reduces the packaging costs because of bulk-buying of materials, printing, sizes and
shapes. However, such a policy has the minus point in that if the old product is a failure, the new
product is more likely to fail because of same product package or the resemblance.
• The distributors have a false psychological feeling that they are overstocking a particular brand or
package of producer. It also affects the consumer psychology that the dealers do not stock varieties
as same packages over-shadow the other packages.
• 2. Multiple packaging Strategy:
• It is a kind of strategy wherein number of closely related but heterogeneous products
used by one consumer is placed in a single package. Such a package conveys the idea of
an ideal matching set that one should possess. Thus, in case of men, shirt, pant, neck­tie,
kerchief, cuff-links, tie-pins, may be packed together.
• In case of ladies, it may be a skirt and a top, hanky, bra and panties, a belt might be
packed in one package. It may be an assorted scent collection package for men and
women separately. Such a strategy is followed in India by a few companies such as
Zodiac and Park Avenue.
• It facilitates acceptance of a new product idea by a consumer who may normally not like
to venture into buying it. This policy is a success when the items in the package are in
different stages of life-cycle.
• However, there is a danger of whole package being rejected through a consumer is very
interested in one or two items. For instance, in case of Zodiac Company, one might like
say, tie and kerchief but not other products. As he is to buy all, he will even run away
from tie and kerchief.
• 3. Reuse packaging strategy:
• Reuse packaging strategy is one wherein the manufacturers offer their
products in such packages which can be reused after the consumption
of the contents of it. ‘Maltova’ food-drink was offered in a glass jar
which might be used as a tumbler. Amul butter and shrikand are
presented in plastic jars which are reusable. Nescafe instant coffee jars
can be used as lemon-set.
• Similarly, assorted biscuits, sweets and coffees are presented in
attractive tin-tops which are reusable as embroidery sets by house-
wives. Reuse packaging stimulates repeat purchases as it offers the
added benefit for the same price.
• In order to continue this consumer interest, the reusable packaging
should be changed in shapes, sizes, designs, colours and the like.
• 4. Ecological packing policy:
• Use of the resources of the environment results in pollution problems. It is the
social responsibility of every business house to reduce the extent of pollution of
any kind in any form.
• Today’s greatest concern of the society has been the pollution created by
discarded packaging. It is throw away containers that have created problems. To
preserve the physical environment, a company is sure to design a matching
packing strategy.
• The purposes of such a strategy may be returnable’ bottles and containers, use of
containers that decompose over a reasonable period of time, use of light weight
packaging material and arranging of packaging material and recycling it.
• That is why; many manufacturers are now packaging their products in reusable
containers as a means of recycling the packaging materials. Further, research is
continually carried out to develop new packaging materials that are bio-
degradable or that minimize pollution problems.
 Product Labelling:

• Labelling is another significant means of product

identification like branding and packaging. Labelling the
act of attaching or tagging labels. A label is anything may
be a piece of paper, printed statement, imprinted metal,
leather which is either a part of a package or attached to
it, indicating value of contents of price of product name
and place of producers.
• It carries verbal information about the product, producer
or such useful information to be beneficial to the user.
Thus, a label is an informative tag, wrapper or seal
attached to a product or product’s package.
 The Purposes of Labelling:
• 1. To bring home the product features:
• A label goes on describing the product specialties which makes the
product a quick-mover. It gives its correct use. Thus, bottle
containing poison, if not labelled, it fails to tell about its contents.
Wrong labelling does more harm than no labelling at all.
• 2. To facilitate the exchange process:
• As good many competitive products are available in a given product
range, label helps in avoiding the unwanted confusion. This is of
special importance in case of drugs and chemicals where even
spelling mistakes prove fatal to the users. That is why; druggists and
chemists are having qualified pharmacists in the pharmacies.
• 3. To encourage self-service:
• A lable is a strong sales tool that encourages self-service operations. If the
customers are supplied with necessary information of the contents of the
package or the container, as its contents, weight, use, price, taxes, and
instructions and so on, consumers can pick the package of their choice from shop
shelves. Thus, labelling has a special role to play in self-selling units.
• A label may be descriptive, informative or grade designating or a combination of
these. A ‘descriptive’ label describes the contents of the package or the
ingredients of the product. Thus, a descriptive label on a cane of pineapple
describes the contents by size, weight, number of slices, syrup cups and the
number of servings.
• An ‘informative’ label includes detailed description with emphasis on how the
product is made? How to use it? How to care for it? In order to drive maximum
satisfaction. A ‘grade’ label designates customary or regulated standards. Thus, a
pack of ghee or honey might have ‘Ag-mark’ grading, certificates as A, B, or C.
 Product life cycle
• When project managers refer to a product they’re working on as
their ‘baby’, they’re not exactly wrong. Like a human being, a
product is born, grows up, matures, and then passes. These four
stages are known as its life cycle.
• While some product lives are extended (how many versions of the
iPhone have there been?), others are expected to pass through
these phases before disappearing. This is generally because they are
superseded by new products that meet consumer needs better.
Think about how CD walkmen gave way to MP3 players.
• The product life cycle not only explains how sales trends work over
the lifetime of a product. It also helps dictate marketing efforts and
how much support is needed to enable the product’s future success.
 Stage One: Introduction

• This is the stage where a product exits the development and testing phases and enters the market. Unless the seller
or manufacturer is a household name, growth is generally slow at the beginning. The product may be first-rate and
address a lot of consumer needs, but the public is not familiar with it, so demand will be lower. Other hurdles are:
• Vendors and in-house sales teams may not yet know enough about the product to sell with confidence
• There are no clearly defined distribution channels
• Unless the product is a breakaway success, it may experience a rocky start. Characteristics of the introduction phase
include:
• Low sales volumes that increase slowly.
• High costs due to marketing, consumer testing, advertising, distribution, and other awareness-spreading campaigns,
especially if the sector is competitive.
• Customers must be enticed to try the product. This could be in the form of free samples, discount codes, rebates, or
lower, ‘introductory’ pricing.
• Reduced profits due to the slower sales and the money that must be invested in advertising.
• There is a silver lining behind all this cloudiness. At this stage, there is not likely to be much competition, and if the
public embraces the product, the manufacturer has a rare opportunity to create a monopoly.
• Example: Holographic projection technology was recently introduced into the market after years of being confined to
science fiction. It allows consumers to take any flat surface and turn it into a touchscreen. There has been a lot of
money invested in research and developing holographic projection products, which is reflected in the high prices that
are making its adoption gradual. This is a good example of a technology product that is in its Introduction phase.
 Stage Two: Growth

• The introductory stage is over. The growth phase of the product life cycle is when brand awareness
 spreads and the market starts responding. Thanks to advertising and word of mouth, the product’s
advantages and benefits are being recognized by customers and distributors, allowing it to become
profitable and present a better return on investment. Depending on the strength of the response, the
manufacturer may invest even more in marketing, introduce support services or start developing
secondary products.
• Although the growth phase represents progress, it still has risks for the newly launched product. For
example:
• If public response is mostly positive, the competition may try to benefit by developing and promoting a
competing product.
• Any marketing mistakes or performance problems will receive more attention and, as the saying goes,
bad news travels fast
• Manufacturers have to take special care during this stage to prevent competitors and negative publicity
from diminishing or preventing product growth. Too many promising products have faltered this way.
• Example: When the Microsoft tablet computer appeared in 2000, it sparked an interest that Apple
capitalized on when it released its first iPad in 2010. Soon Samsung, Lenovo, and other electronics
brands developed their own tablets. The iPad is one consumer product that, so far, appears to have
staying power.
 Stage Three: Maturity

• Product sales peak during the maturity phase, which should be the longest part of its life cycle.
This is when demand is at its strongest. The public has responded favorably and competitors
have definitely taken notice. Once competing products start appearing on the market, the
manufacturer may have to:
• Lower pricing due to increased competition
• Add new features to the product to make it more attractive to consumers than alternative
products
• Offer incentives to distributors to keep ordering the product
• Adjust marketing materials to address the difference between the product and its competitors
• During the maturity phase, there is little growth potential and manufacturer focus is on
maintaining market share by extending the life cycle as much as possible before competitor-
driven oversaturation occurs. Sales levels may experience a decrease at the beginning but
should eventually stabilize.
• Example: When laptop computers appeared, consumers loved them for their portability. They
continue to be relevant because the manufacturers keep adding more advanced components,
such as high-resolution cameras and touchscreen capability, but as a concept, the laptop is in
its maturity stage, with competitive pricing and different brands to choose from.
 Stage Four: Decline

• During the decline phase, the product has essentially reached its
saturation point. Pricing will either remain stable or decline
slightly in order to remain competitive. This stage is where the
manufacturer has to decide whether to make significant changes
to the product to keep it in the market or withdraw it and move
on to something else.
• Example: When electronic word processors first appeared, they
were greeted as a revolutionary change from the manual
typewriter. Then along came personal computers, which allowed
users to type, edit, and revise documents before printing them,
sending word processors into decline. Today, word processing
software has rendered these devices obsolete.
 Lessons from the Product Life Cycle

• Some marketing professionals say there is a 

fifth stage, which is when the product is being
developed, while others believe that the life
cycle only begins after the product is launched.
Nonetheless, each life cycle stage has its own
dynamics that affect the manufacturer’s
advertising, support, and pricing strategies.
Being cognizant of them is the recommended
way of maximizing sales and profits.