Product

Decisions
Types
 Physical- Automobiles, books
 Services – Insurance, banking
 Persons – Shahrukh Khan, Sachin
 Places – Goa, Hawaii
 Organization – Pepsi, HLL
 Ideas- Safe driving
Customer Value Hierarchy
 5 levels of Product
 each level adds value to customer
1. Core/Generic
2. Expected
3. Augmented
4. Potential
 Product Levels

1. Core/Generic – fundamental service

or benefit that the customer is really
buying- hotel guest is buying “rest and
sleep” – hotel room includes bed,
bathroom, linen, closet etc
2. Expected – set of attributes and
conditions that buyers normally expect
– clean room, fresh linen etc.
 Product Levels
3. Augmented – consumer desires beyond
expectations- higher degree of service, efficient
housekeeping

4. Potential- all augmentations and

transformations that a product might ultimately
go through- surprise and delight the customer

 Competition is not between what companies produce in

their factories but what they add to their output in terms
of packaging, services, advertising, customer care, delivery
systems- things that people add value to.
Product Hierarchy
1. Need Family – core need
2. Product Family- all product classes that can
satisfy a core need with reasonable effectiveness
3. Product Class – group of products within a
product family that have certain coherence –
financial instruments
4. Product Line- group of products within a product
class - closely related - perform similar functions,
marketed through same channels, same price
range- life insurance, FD’s etc.
Product Hierarchy

5. Product Type- group of items within

a product line that share several
possible forms of the product
6. Brand – name associated with one or
more items in the product line that
identify character
7. Item- Stock Keeping Unit (SKU)
Product Hierarchy - example
 Need – look fresh and better
 Product family- toiletries
 Product class – cosmetics
 Product Line - lipstick
 Product Type – tube, roll-on lipstick
 Brand- Revlon, Lakme
 Item- 20g.tube – frosted/matte
 Product hierarchy - example

 Need – Travel
 Product family- Modes of transportation viz
Road, Air, Sea
 Product class – Automobiles
 Product Line – 4 wheelers
 Product Type – cars, SUV’s, LCV, HCV,
 Brand – Maruti, Hyundai,
 Item- Alto 800cc std car, 999cc delux,I-10
Product hierarchy - example
 Need – Imagery
 Product family- Cine, Music, Sports, Literary,
Political, Stars etc
 Product class – Bollywood, Tollywood stars
 Product Line – Male,
 Product Type – Romantic hero’s, villain,
comic
 Brand – Ranveer Singh
 Item – Gully boy, Simba, Bajirao…
 Product Classification
1. Consumer Goods Classification
 Convenience – frequent purchase
 Shopping – more thought given – price, suitable, quality
 Specialty-unique, fancy
 Unsought – life insurance, encyclopedias

2. Industrial Goods Classification

 Materials and parts – raw materials and manufactured
 Capital items – installations and equipment
 Supplies and business Services – operating and advisory

2. Durability and Tangibility

 Non-durable
 Durable
 Services
 Key Product Decisions
1. Individual Product
2. Product Line
3. Product Mix

Product Attributes Branding Packaging

Product Support Labeling

Quality Services
Features
Style
Design
Individual Product 1

a)Product Attributes
b)Branding
c) Packaging
d)Labeling
e)Product Support Services
Product Attributes 1a

 Quality- level and consistency - major positioning

tool-direct impact on performance,closely linked to
customer value satisfaction
 Features- differentiating tool-add-on features in
cars, white goods, cosmetics etc.
 Style – competitive advantage - appearance of
product – eye-catching, grab attention.
 Design- competitive advantage - more than skin
deep – heart of the product and its usefulness.
Branding 1b

 Brands with strong equity have many

competitive advantages:
 High consumer awareness
 Strong brand loyalty
 Helps when introducing new products
 Legal protection to sellers
 Represent consumer perceptions
 Help consumers identify products –consistent
quality,features, benefits
 Brands reside in the consumers mind
Branding - Brand equity
 Positive differential effect that knowing the
brand has on consumer response to
product/service.
 Extent to which consumers are willing to pay
more for the brand.
 World’s strongest brands- Apple – valued at
$170 billion, Google-$120 billion in 2018
 Others- Coke at $78 billion, Microsoft at $67
billion, IBM, Toyota, Samsung, McDonald's,
etc.
 TOP TEN BRANDS IN 2019
1. Apple - Brand value: $214.48 billion
2. Google -Brand value: $155.50 billion
3. Amazon - Brand value: $100.76 billion
4. Microsoft - Brand value: $92.72 billion
5. Coca-Cola - Brand value: $66.34 billion
6. Samsung - Brand value: $59.89 billion
7. Toyota - Brand value: $53.40 billion
8. Mercedes-Benz - Brand value: $48.60 billion. 
9. Facebook -Brand value: $ 45.17 billion
10. McDonald -Brand value: $ 43.42 billion
Branding - Key Decisions

 Brand Positioning
 Brand Name Selection
 Brand Sponsorship
 Brand Development
Brand Positioning
 Attributes – Dove - extra cream,
Dabur Vatika -amla, shikakai
 Benefits –Dove- softer skin,Dabur –
beautiful hair, Head & shoulders- no
dandruff, Colgate- fresh breath,Nike-
performance, ICICI- caring, Maruti-
Quality
 Beliefs and Values
Brand Name Selection
 Suggest something about the product or its
benefits- Tide,Surf, Touchwood,Goodnight,
Hit,Huggies,Smartcard,Fair & Lovely,Ziploc
 Are easy to say, recognize & remember, is
distinctive
 Translates well into other languages
 Can be registered and legally protected.
Brand Name Selection
 Names that communicate product specialty –
Sunsilk, Halo, Velvette, Taj hotels, Ford Ikon,
GM’s Opel
 Acronyms – AMUL, MRF (Madras Rubber
factory), IFB (India Fine Blanking)
 Company name- Bata, Cadbury’s, Pepsi, Coke
 Logo selection- HMV, Air India Maharaja,
Gattu, Kelvinator –Penguin, Onida- Devil
Brand Sponsorship
 Manufacturer brands
 Private/Store brands-
 Costly to establish and promote
 Higher profit margins
 Shopper’s stop –Stop brand, Food world, Spencer’s Food Bazaar etc.
 Retailers have the advantage – modern trade
 Licensed brands
 Name and character of licensing has grown- Calvin Klein, Lacoste,
Tommy Hillfiger, Gucci, Armani, Pierre Cardin, Winnie the Pooh,
Barbie, Li’l Tomatoes, Pokemon, Harry Potter
 Co-branding
 PVR- Pepsi- Fountain cups
 Coke-Mattel - Soda Fountain Sweetheart Barbie
 Brand Development Strategies

Product category
Existing New
Brand Existing Line Brand
Name Extension extension
New Multi- New
Brands Brands
Brand Development Strategies
 Line extensions -Minor changes to existing
products-flavors, forms, colors, ingredients, package
sizes-
 Colgate Gel, Calciguard, Total, Sensitive, Salt,

Vedika, extra whitening

 Surf- Ultra, Excel, Excelmatic

 Ponds- dream flower talc, sandalwood

 Brand extensions -Successful brand names help

introduce new products
 Dettol- Soap,bandage,liquid soap.

 Ponds- dream flower talc, cold cream, face wash,

body lotion
 Maggi- Noodles, Ketchup, soups
Brand Development Strategies
 Multi brands -Multiple product entries in a product
category- capture a spectrum of consumers
 Aditya Birla- Allen Solly, Van Heusen, Peter England,
Pantaloons, More, Idea
 Titan – Jewellery watches, Timex-sporty, lower end
 Dove-High-end, Lux –low end,
 Surf and Wheel,
 Ariel and Tide.
 New brands -New product category- new brand for
new product category-
 Honda’s Lexus, Accord,
 Toyota- Corolla, Innova,
 Matsushita- National, Panasonic
Individual Product 1

a)Product Attributes
b)Branding
c) Packaging
d)Labeling
e)Product Support Services
Packaging 1c

 Innovative packaging to acquire a distinctive

edge – especially true in FMCG
 Powerful marketing tool – attract customers
 Use of popular cartoon characters to sell
crayons, clothes, bottles etc.
 Value addition to product – enhance brand value
 Main decisions -
1. Materials
2. Aesthetics
3. Size and convenience
 Packaging Decisions
 Package Materials – changing trends from wood to
metal to paper to plastics and back to paper and
jute, recycle!!
 Innovations
 Tetrapacks - Frooti, Real, Milk etc
 Pillow packs – Lays, Bingo, Haldiram
 Trays in Biscuits
 Stand-up tubes in toothpastes, lotions
 Dispensers
 Sachets -pan masala, shampoos, detergents, hair oils –
smaller trial packs instead of bottles.
Packaging Size & Convenience
 Ponds cold cream and Brylcreem – glass -
plastic bottles- carry-along handy plastic
tubes- ease of use and convenience
 Harpic liquid toilet cleaner with a nozzle
 Cans / PET bottles - Coke, Pepsi
 Economy packs –large packs for use of whole
families – Parle –G biscuits
 Sachets
 Refill Packs – health drinks, coffee,
tea,cooking oil.
 Reusable containers - oil
Individual Product 1

a)Product Attributes
b)Branding
c) Packaging
d)Labeling
e)Product Support Services
Labeling 1d

 Simple tags –complex graphics

 Identifies, describes and promotes the
product
 Food and consumables - Price, Best
before, Nutritional content, Vegetarian
etc.
Product Support Services 1e

 After sales product services

 Help-lines
 Return policies
 Customer care
 Key Product Decisions
1. Individual Product
2. Product Line
3. Product Mix

Product Line

Stretching
Filling
Pruning
Features
Product Line Decisions 2

Line Length:
 Line stretching: adding products that are
higher or lower priced than the existing line
 Line filling: adding more items within the
present price range
 Line pruning: deleting items that are not
contributing to bottom line
 Line featuring: boost demand through
attractive schemes
Line Stretching
 Aim – enter a new price slot and a new
market segment
 Stretching Up – the firm moves up form its
original posture and makes a high priced offer
 Stretching Down - a company that has taken
a position in the high price slot stretches the
line down by offering the products in the
same line at a lower price
Stretching Down
 HLL – Surf was playing in the high price slot-
competition from Nirma – HLL stretched its
detergents line down and offered a cheaper
variety of Surf in addition to Sunlight and still
cheaper Wheel.
 Parker Pens - introduced cheaper pens
 Prestige form TTK – Prestige Popular –lower
price to combat Hawkins
 Ariel – stretched down to cheaper brands in
the same line
 Stretching Up
 Philips – known for low priced 2-in-1’s. Sony
competition - Stretched up to address the Higher
income groups – launched the Philips Powerhouse
range in 1991

 Also stretch lines in both directions- Marriott-

Renaissance – and TownPlace suites moderate
and lower ends. Maruti –Alto,WagonR, Baleno,
Hyundai- I-10, I-20, Accent, Asian Paints- Royale,
Apcolite emulsion, Tractor

Stretching involves changes in positioning and targeting

Line Filling

Introduces more items/models in the line to

“plug gaps”in its current range of offers
 Vidoecon ACs – entered the market with just 1-2
models –within 2 years of entry-3 models in split-2 in
window with rotary compressor,-6 in window with
reciprocatory compressor
 Samsung TVs – 14” to Plasma range, 24”, 41” etc
 Titan- Timex watches- various designs, colors,
patterns etc for children, sports, teenagers
Line Pruning – P&G
 31 SKU’s of Head & Shoulders shampoo
– pruned to less than 15
 In Japan, cut it’s Max Factor range of
cosmetics from 1385 to 828 – sales
went up by 6 %
 Withdrew brands in soaps and cleaning
materials that were struggling
Product Line Decisions
A company undertakes product line appraisal,
evaluates each product line – bath soaps, detergents,
beverages, cosmetics etc on issues like-
 Target achievement

 Market share

 Competition

 No. of members in each line

 Is the line too heavy and unmanageable-

cannibalization and customer confusion

 Additives/ Extensions required
Key Product Decisions
1. Individual Product
2. Product Line
3. Product Mix

Product Mix

Width
Length
Depth
Consistency
Product Mix 3

 Product line width:

 number of different product lines carried
by company
 Product line depth:
 Number of different versions of each
product in the line
 Product line consistency
Product Mix 3

Set of all products and items that a particular seller

offers for sale to buyers - width, length, depth and
consistency
 Product mix width – detergents, tooth pates,

soaps, diapers, tissues

 Length- no. of products in mix – detergents – surf,

surf excel, extra power,etc.

 Depth – how many variants offered in each

product line – 100g, 250g, 500 g, 1Kg, 5 kg and

formulations- extra cleaning, added stain removers,
tooth paste - mint flavor.
 Consistency- how closely related – end use ,

distribution channels, functions they perform.

Hindustan Unilever Ltd.
Product Mix Width

Bath Soaps Detergents Beverages

Lux Surf Excel Brooke Bond
Product Dove Surf Red Label
Line
Length Liril Rin Lipton
Pears Wheel Taaza
Rexona 501
PepsiCo
Product Mix Width

Food Non Carbs Carbonated

Kurkure Tropicana Beverages

Product Lays Aquafina Pepsi

Line Mirinda
Length Uncle Chips Gatorade
Chitoo’s Slice 7 Up
Doritos Lipton Mt Dew
Quaker Oats Sierra Mist
 ITC
Product Mix Width

Cigarette Hospitality Apparels Food

Wills Navy Welcome Wills Act II
Produc India Kings group Lifestyle Ashirwad
t Line
Length Classic Milds Sheratons Sunfeast
Sunflower