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PRINCIPLES OF MARKETING - UNIT 3 Product
PRINCIPLES OF MARKETING - UNIT 3 Product
PRINCIPLES OF MARKETING - UNIT 3 Product
MARKETING
UNIT 3 :Product
PRODUCT
Product refers to a good, service or idea consisting of a
bundle of tangible and intangible attributes that satisfies
consumers and is received and exchanged for money or
some other unit of value.
4 Ps
ii. Availability by Place
PRODUCT AND SERVICE
DIFFERENTIATION
Product Differentiation
1. FORM
Many products can be differentiated in form—the size, shape, or physical
structure of a product
Although essentially a commodity, it can be differentiated by dosage
size, shape, color, coating, or action time.
5) STYLE :
Describes the product’s look and feel to the buyer. It creates distinctiveness that
is hard to copy.
Car buyers pay a premium for Jaguars because of their extraordinary looks.
Aesthetics play a key role in such brands as Apple computers, Montblanc pens,and
PRODUCT & SERVICE DIFFERENTIATION
Service Differentiation
1. ORDERING EASE : Refers to how easy it is for the customer to place an
order with the company
4) CUSTOMER TRAINING :
Helps the customer’s employees use the
vendor’s equipment properly and efficiently. General Electric not only sells
and installs expensive X-ray equipment in hospitals, it also gives extensive
training to users
PRODUCT & SERVICE DIFFERENTIATION
MAINTENANCE AND REPAIR
Maintenance and repair programs help customers keep purchased
products in good working order
PRODUCT CLASSIFICATIONS
Marketers classify products on the basis of
Durability & Tangibility,
use (consumer or industrial).
On the basis of shopping habits terms of their relative cost and how
they enter the production process
CONSUMER-GOODS CLASSIFICATION
1. Convenience goods
Purchased frequently, immediately, and with minimal effort.
Examples include soft drinks, soaps, and newspapers.
2. Shopping goods
Are those the consumer characteristically compares on such
bases as suitability, quality, price, and style.
Examples include furniture, clothing, and major appliances.
3. Specialty goods
Specialty goods have unique characteristics or brand
identification for which enough buyers are willing to make a
special purchasing effort.
Examples include cars, stereo components, and men’s suits. A
Mercedes is a specialty good because interested buyers will
travel far to buy one.
Specialty goods don’t require comparisons;
Buyers invest time only to reach dealers carrying the wanted
products.
Dealers don’t need convenient locations, although they must let
prospective buyers know where to find them.
4. Unsought goods
Unsought goods are those the consumer does not know about or
normally think of buying, such as smoke detectors.
Classic examples of known but unsought goods are life insurance,
gravestones.
Farm products are supplied by many producers, who turn them over to marketing
intermediaries, who provide assembly, grading, storage, transportation, and selling
services
2. Manufactured materials :
1. component materials (iron, yarn, cement, wires) : are usually fabricated further—pig
iron is made into steel, and yarn is woven into cloth.
The standardized nature of component materials usually makes price and supplier
reliability key purchase factors.
2. component parts (small motors, tires, castings) : e finished product with no further
change in form,
It can add new product lines, thus widening its product mix.
It can add more product variants to each product and deepen its
product mix.
The length of a product mix refers to the total number of items in the mix. In Table it is 20.
The depth of a product mix refers to how many variants are offered of each product in the line.
If Tide came in two scents (Mountain Spring and Regular),
PRODUCT MIX
The consistency of the product mix describes how closely
related the various product lines are in
end use,
Production requirements,
Distribution channels, or some other way.
Product line
The product line is a subset of the product mix. The
product line generally refers to a type of product within an
organization.
As the organization can have a number of different types of
products, it will have similar number of product lines
Thus, in Nestle, there are
milk based products like milkmaid,
Food products like Maggi,
chocolate products like Kitkat and other such product lines
PRODUCT MIX
Product line consistency
The 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.
It is an emotional association.
The Amazon is famous as the world’s biggest river, and the name
suggests the wide variety of goods that could be shipped, an
important descriptor of the diverse range of products the company
now sells.
Athletic brand Nike and technology giant Apple have been working
together since the early 2000s, when the first line of iPods was
released.
The co-branding partnership started as a way to bring music from
Apple to Nike customers' workouts using the power of technology:
Nike+iPod created fitness trackers and sneakers and clothing that
tracked activity while connecting people to their tunes.
BRAND REJUVENATION-
PACKAGING
Process of the developing a design & a
container for the product.
A secured, transparent & easy-to-use
packaging helps in having the better sales
PACKAGING
Packaging includes all the activities of designing and producing
the container for a product.
BRAND LABEL
It is a label that contains information about the brand to which a
product belongs.
The brand label denotes the product’s brand name, trademark or
logo and does not include any other information outside the
brand name.
Some examples of brand labels include L.G., Samsung, Whirlpool,
and Raymond.
TYPES OF LABELLING
GRADE LABEL
A grade label denotes the quality or grade level of a product.
Such labels describe the features of the product and the
organization use such labels to categorize their items based on
their quality.
Descriptive Label:
INFORMATIVE LABEL
Informative labels contain a lot of information and provide
specific details regarding the product. It differs from descriptive
labelling in that it provides detailed instructions on how to use
the product and how to take care of it. These labels include
recipes, thorough clearing directions, and other similar
information.
FUNCTIONS OF LABELLING
IDENTIFICATION
Labeling gives a product a distinct identity that distinguishes it
from others on the market.
Customers may quickly identify the goods due to the label that is
affixed to it. It prevents people from becoming confused and
substituting competing products.
GRADING
Labelling categorizes things into distinct grades. For example,
one sort of goods can be classified as A, B, C, or D.
CONSUMER PROTECTION
Labelling protects consumers from manufacturer deception or
manipulation of facts. It provides accurate information on the
goods, allowing customers to make informed purchasing decisions
PRODUCT-SUPPORT SERVICES
Categories of Service Mix
1. Idea Generation:
Idea generation In this you are basically involved in the
systematic search for new product Ideas.
The company can then project these findings to the full market to
estimate sales volume.
NEW PRODUCT DEVELOPMENT
4.. Marketing Strategy Development:
The first part describes the target market, the planned product positioning
and the sales, market share and profit goals for the first few years.
The second part outlines the product’s planned price, distribution, and
marketing budget for the first year.
The third part of the marketing strategy statement describes the planned
long-run sales, profit goals, and the marketing mix strategy. Business
Analysis –
Once the management has decided on the marketing strategy, it can
evaluate the attractiveness of the business proposal.
Business analysis involves the review of projected sales, costs and profits
to find out whether they satisfy a company’s objectives. If they do, the
product can move to the product development stage.
NEW PRODUCT DEVELOPMENT
5. Product Development:
It will show whether the product idea can be developed into a full-
fledged workable product.
First, R&D will develop prototypes that will satisfy and excite customers
and that can be produced quickly and at budgeted costs.
When the prototypes are ready, they must be tested. Functional tests are
then conducted under laboratory and field conditions to ascertain
whether the product performs safely and effectively.
NEW PRODUCT DEVELOPMENT
6. Test Marketing :
If the product passes the functional tests, the next step is test marketing:
the stage at which the product and the marketing program are
introduced to a more realistic market settings.
This depends a lot on the ability of the company to bear risk and the
reach of its distribution network.
NEW PRODUCT DEVELOPMENT
PROCESS
CONSUMER ADOPTION
PROCESS.
Adoption is an individual’s decision to become a regular
user of a product and is followed by the consumer-loyalty
process.
They are:
1. Awareness—The consumer becomes aware of the innovation
but lacks information about it.
2. Interest—The consumer is stimulated to seek information
about the innovation.
3. Evaluation—The consumer considers whether to try the
innovation.
4. Trial—The consumer tries the innovation to improve his or her
estimate of its value.
5. Adoption—The consumer decides to make full and regular use
of the innovation.
CONSUMER ADOPTION
PROCESS.
The new-product marketer should facilitate movement through
these stages.
1. Innovators
are technology enthusiasts;
They are venturesome and enjoy tinkering with new products and
mastering their intricacies.
In return for low prices, they are happy to conduct alpha and beta
testing and report on early weaknesses.
2. Early adopters
Are opinion leaders who carefully search for new technologies that
might give them a dramatic competitive advantage.
They are less price sensitive and willing to adopt the product if
given personalized solutions and good service support.
READINESS TO TRY NEW PRODUCTS
AND PERSONAL INFLUENCE
Early majority :
Are deliberate pragmatists who adopt the new technology when
its benefits are proven and a lot of adoption has already taken
place. They make up the mainstream market.
Late majority
Are skeptical conservatives who are risk averse, technology shy,
and price sensitive.
• Laggards are tradition-bound and resist the innovation until the
status quo is no longer defensible.
TIME OF ADOPTION OF INNOVATIONS
Competitive
scope
Cost leadership Strategy
Involves a firm being the lowest cost producer within the industry
lower cost base allows it to earn profit and make superior profit
High market share, standardized product
Org need to invent in technology
Whatever strategic target organization broad or narrow segment ,organization choose
to concentrate its resource & capabilities on it .