Module -2 Product

Product Mix- Product – Meaning- Classification of products- -

Product Line and Product Mix-New Product development- Steps-
Reasons for failure of new products- - Product Life Cycle- –
Branding-Types of brand- Brand Equity- Brand Loyalty- Trade
Mark-Packaging-Role of packaging- Essentials of good packaging-
Product Labelling- Marketing of services- Pricing of Products-
Factors Influencing- Pricing- Pricing Policies and Strategies -
Types of Pricing Pricing-Factors affecting pricing decision- Role of
pricing in marketing strategy- Steps in formulating pricing- Pricing
methods and strategies- Pricing of a new product- Resale Price
Maintenance
(16 Hours)
Product
 Product Meaning
• It is anything that can be offered to a market to satisfy the needs or wants
of the customer.
• Of the 4Ps Marketing the first P-the product (is a major carrier of consumer
value )
• Philip Kotler: “A product is anything that can be offered to a market for
attention, acquisition, use or consumption. It includes physical objects,
services, personalities, place, organizations, and ideas.”
Components of Product
• The core product
• The associated features
• The brand name
• The logo
• The package and label
 Product classification
1. Consumer Products
2. Industrial Products
Product classification
Consumer Products
Product Mix
Product Mix
• Product mix, also known as product assortment or product portfolio, refers to
the complete set of products and/or services offered by a firm.
• A product mix consists of product lines, which are associated items
that consumers tend to use together or think of as similar products or
services.
 Dimensions of a Product Mix
1 Width : Width, also known as breadth, refers to the number of product lines offered by a company. For
example, Health care products of HUL
2 Length : Length refers to the total number of products in a firm’s product mix. For example, consider a car
company with two car product lines (3-series and 5-series).
3 Depth : Depth refers to the number of variations within a product line. For example, Sedan , Pick up, truck , Bus
etc.
4 Consistency : Consistency refers to how closely related product lines are to each other. It is in reference to their
use, production, and distribution channels.
Products Of HUL | Brands of Hindustan Unilever (HUL) | How Big is HUL | - YouTube
Products of Procter and Gamble India | Top Products of P&G | list of P&G products | Product Mix || - YouTube
Human Life Cycle
Product Life Cycle?
• The Product Life Cycle (PLC) defines the stages that a product moves
through in the marketplace as it enters, becomes established, and
exits the marketplace.
• Product life cycle describes the stages that a product is likely to
experience.
Stages in the Product Life Cycle

The four stages in the product life cycle are:

• Introduction
• Growth
• Maturity
• Decline
1. Introduction Stage

• The introduction stage requires significant marketing efforts, as

customers may be unwilling or unlikely to test the product.
• When a product first launches, sales will typically be low and grow
slowly.
 There are two price-setting strategies in the
introduction stage:

• Price skimming: Charging an initially high price and gradually reducing

(“skimming”) the price as the market grows.
• Price penetration: Establishing a low price to quickly enter the marketplace
and capture market share, before increasing prices relative to market growth.
2. Growth Stage

• In the growth stage, sales revenue usually grows well from the take-
off point.
• If the product continues to thrive and meet market needs, the
product will enter the growth stage.
3. Maturity Stage

• The market grows to capacity, and sales growth of the product

declines.
• In this stage, price undercutting and increased promotional efforts are
common as companies try to capture customers from competitors.
4. Decline Stage

• In the decline stage, sales of the product start to fall and profitability
decreases. This is primarily due to the market entry of other
innovative or substitute products that satisfy customer needs better
than the current product.
Introduction of New Product /
Evolution of New Product
• Why do firms needs new products
• Marketing’s role in introducing new products
• Classification of New Products
 Why do firms needs new products

It become necessary for various reasons

• New product are required for filling the strategic planning the gap e.g
HUL diff. pdt line
• New products reflect the value Game the firm plan to play e.g (Tata
Nano)
• New product are required for making new profit
• For meeting Changes in Consumer Expectation
• For Combating Environmental threats
 Product Development?
• Product development typically refers to all of the stages involved in bringing
a product from concept or idea to final Product
incorporates a product’s entire journey, including:
• Identifying a market need
• Conceptualizing and designing the product
• Building the product roadmap
• Developing a minimum viable product (MVP)
Classification of new products
• Intrinsically new products arise out of technological innovation
• New products out of marketing oriented modifications
 Stages in New Product Development
• Generating new product idea
• Idea screening
• Concept testing
• Market analysis
• Actual product development
• Market test
• Commercialization
Generating New Product idea
• New product idea come from , customers , dealers , R&D etc
• Market Research Group sources
• E.g Development of Walkman (personal portable stereo cassette
player of Sony of Japan
Idea Screening
• The various new product ideas are put under rigorous screening by
evaluation committees / team
• Is there a felt need for the new product?
• Is it an improvement over the existing product?
Concept Testing
• Different from market testing
• Whether the prospective customer understand the product idea
Business /Market Analysis
• More on the market and financial feasibility
• Estimating the demand for new product
Actual development of New Product
• The firms develop the product from R&D to production and
marketing of the new product
Market Test
• To be tried out in selected market segments.
Commercialization of New product

• Launching of new product

Reason for Failure of New Product
• Poor Timing
• Lack of Specialty
• Inferior quality
• Unfair Price
• Lack of Promotion
• Poor Distribution Network
• Poor After Sale Service
• Availability
Measures to Prevent Product Development
failure
• The firm has to ensure that there is sufficient demand
• The pricing of the new product must be fair and rational
• Must meet the quality standard
• Product is free from defects
• Adopt adequate promotion strategies
• Need to set up proper distribution channels
• After Sales and Service
• Adequate product modification is required
Pricing
• Pricing refers to the process of determining the monetary value a
customer will pay for a product or service.

• It is a critical element of the marketing mix as it directly affects

revenue and profitability.
Factors Influencing Pricing

Internal Factors
•Cost of Production: Includes fixed and variable costs.
•Company Objectives: Profit maximization, market share, or brand positioning.
•Product Lifecycle Stage: Introduction, growth, maturity, or decline.
•Marketing Strategy: Coordination with product, promotion, and distribution
strategies.
External Factors
•Market Demand: Higher demand can lead to higher prices.
•Competition: Pricing depends on competitor prices.
•Customer Perceptions: Value customers associate with the product.
•Economic Conditions: Inflation, recession, or purchasing power.
•Legal Regulations: Price controls or anti-profiteering laws.
 Pricing Policies
• Penetration Pricing: Setting low prices initially to gain market share.
• Skimming Pricing: Setting high prices initially and lowering them over time.
• Competitive Pricing: Aligning prices with competitors.
• Psychological Pricing: Pricing to appeal emotionally (e.g., ₹999 instead of
₹1000).
2. Pricing Strategies
• Cost-Plus Pricing: Adding a markup to the product cost.
• Value-Based Pricing: Setting prices based on customer-perceived value.
• Dynamic Pricing: Adjusting prices based on market conditions in real-time.
• Premium Pricing: Charging higher prices to reflect superior quality.
Factors Affecting Pricing Decisions
• Cost-Based Factors
• Cost of production, distribution, and marketing.
• Demand-Based Factors
• Elasticity of demand.
• Environmental Factors
• Economic, social, and political factors.
• Competition-Based Factors
• Competitor pricing strategies.
Resale Price Maintenance (RPM)
• Resale Price Maintenance (RPM) is a practice in which manufacturers
or suppliers set a fixed or minimum price at which their products
must be sold by retailers.

• This ensures price uniformity across markets or retailers, often to

maintain brand value and avoid price wars.
Key Features of RPM:
• Price Control: Manufacturers dictate the minimum or maximum
resale price for retailers.
• Enforced Agreement: Retailers are obligated to sell products at
the manufacturer's specified price.
• Brand Positioning: RPM helps maintain a product’s premium or
standard image.
• Legal Aspects: RPM practices are regulated and may be illegal in
some countries if deemed anti-competitive.
Objectives of Resale Price Maintenance:

• Avoid Price Wars: Prevent retailers from undercutting each other, which
could erode profits.
• Protect Retailers' Margins: Ensure profitability for all retailers.
• Preserve Brand Value: Maintain a consistent pricing strategy to uphold
the brand image.
• Standardized Customer Experience: Ensure customers perceive equal
value regardless of the retailer.
Advantages of RPM:

• Fair Competition: Provides a level playing field for small and large retailers.
• Stable Market Conditions: Avoids sudden price drops that disrupt markets.
• Customer Confidence: Builds trust in product pricing and quality.

Disadvantages of RPM:
• Restricts Competition: Limits price flexibility, which may harm competition.
Packaging
• Packaging refers to the process of designing, producing, and using
containers or wrappers for a product. It not only serves as a
protective layer for the product but also plays a crucial role in
marketing and consumer appeal.
Role of Packaging:
• Protection: Ensures the product stays safe from damage, contamination, and
tampering during transport and storage.
• Attraction: The visual appeal of packaging attracts customers, influencing
purchasing decisions.
• Information: Packaging provides essential product details, such as
ingredients, expiration dates, and usage instructions.
• Convenience: Packaging makes products easier to handle, store, and use,
enhancing the consumer experience.
• Brand Identity: Packaging communicates the brand image and values,
reinforcing the product’s identity.
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 Essentials of Good Packaging
Key Principles:
• Durability: Packaging must be strong enough to protect the product from
damage during transportation and handling.
• Cost-Effectiveness: The packaging should not add unnecessary costs to the
product and should be efficient in terms of material usage.
• Sustainability: With growing environmental concerns, packaging should ideally
be recyclable, biodegradable, or made from eco-friendly materials.
• Ease of Use: Packaging should be convenient for the consumer to handle, open,
and store. It should enhance the product's usability.
• Aesthetic Appeal: Packaging should be visually attractive, reflecting the brand’s
values and ensuring it stands out in the marketplace.
• Compliance with Regulations: Packaging must meet the legal requirements and
regulations, such as including necessary labels, warnings, or certifications.
 Product Labelling
• Product labelling refers to the information attached to a product or its
packaging. It often includes the brand name, ingredients, usage instructions,
and legal disclaimers.
Types of Labels:
• Brand Label: Contains the brand name and logo (e.g., Coca-Cola label).
• Descriptive Label: Provides details about the product’s features,
ingredients, and instructions (e.g., food products).
• Grade Label: Indicates the quality level of the product (e.g., A-grade eggs).
• Warning Label: Provides warnings or precautions (e.g., health warnings on
tobacco products).
Functions of Labelling:
• Identification: Helps customers easily recognize the product.
• Information: Provides key details like product usage, ingredients, and
expiration dates.
• Promotion: Enhances the product's appeal and encourages consumer
loyalty by reinforcing brand messaging.
• Legal Compliance: Ensures that all legally required information is disclosed,
including nutritional content, safety warnings, and certification marks.
Brand Management
Brand
• A Brand is a name, term, sign, symbol or design or a
combination of them, which is intended to identify
the company and its product and service
Definition
• The American Marketing Association defines ‘brand’ as “a name,
term, design, symbol, or any other feature that identifies one seller's
good or service as distinct from those of other sellers”
ELEMENTS OF A BRAND
• Name
• Logo
• Tagline
• catchphrase
• Graphics
• Shapes
• Colours
• Sounds
What is Branding?
Branding is the process of creating a strong , positive
perception of your company and its products in your
customer’s mind
What Should a Brand Do?

• Clearly deliver a message

• Confirm the brand's credibility in the marketplace
• Emotionally connect target prospects with a product or service
• Motivate the buyer to make a purchase
• Create user loyalty
Brand Management

• Brand management begins with an analysis on how a brand is

currently perceived in the market, proceeds to planning how the brand
should be perceived if it is to achieve its objectives and continues with
ensuring that the brand is perceived as planned and secures its
objectives
TYPES OF BRANDS
• PERSONAL BRAND
• INDIVIDUAL BRAND
• FAMILY BRAND
PERSONAL BRAND
• The personal brand attached with individual personality
• It explains the character of the particular popular celebrity
INDIVIDUAL BRAND
• Individual branding, also called individual product branding or multi
branding, is the marketing strategy of giving each product in a
portfolio its own unique brand name
• This facilitates the positioning of each product, by allowing a firm to
position its brands differently.
FAMILY BRANDING
• Family branding is a marketing strategy that involves selling several
related products under one brand name. Family branding is also
known as umbrella branding
BRAND EXTENSION
• Brand extension or brand stretching is a marketing strategy in which a
firm marketing a product with a well-developed image uses the same
brand name in a different product category.
• The existing brand is the parent brand and the new brand is the sub-
brand.
Why do Firms Opt for Brand Extensions
• Extending an ongoing brand name to more products
• To keep the brand live
• Helps the new item to acquire instant recognition
• Save cost (Launching a new product )
• Helps leverage the strength of the existing brand to new addition
• Extensions also helps to build the larger family / umbrella branding
Types of Brand Extensions
• 1. Line Extension (Extended to other items in the same product line )
• 2. Category Extension ( Extended in related line)
• 3. Outside the Category Extension (Extended in unrelated line)
1. Line Extension
• Product Line Extension refers to the process of introducing
additional products within an existing product line, under the same
brand name.
E.g: Sunrise coffee: sunrise Premium ,sunrise extra , catering to
different taste requirements
Surf detergent: HUL offers Surf ultra , Surf Excel, Surf Excelmate and
Surf Gentle Wash
2. Category Extension
• Brand name is extended over different related product
• E.g: Maggi initially was a brand of noodles , Later extended to related
category of food. Maggi Ketchup, Maggi Soup, Maggi Sauce
3. Outside the category extension
• Brand name is extended to completely unrelated products
• E.g: Tata Steel, Tata Salt , TCS, etc.
 Importance of Branding in Marketing
1. Enhances Recognition: Creates a unique identity, making products/services
memorable.
2. Attracts Customers: Builds visibility, reducing customer acquisition costs.
3. Differentiates Products: Highlights what sets a brand apart in competitive
markets.
4. Builds Trust & Loyalty: Establishes credibility, driving repeat purchases.
5. Simplifies Campaigns: Provides consistency across marketing channels.
6. Boosts Ads ROI: Strengthens the impact of advertising efforts.
7. Supports Premium Pricing: Positions brands as exclusive, enabling higher
prices.
8. Encourages Advocacy: Promotes word-of-mouth marketing and brand loyalty.
9. Maximizes Cross-Selling: Easier to market new products under the same brand.
10. Improves ROI: Reduces promotional costs by creating a loyal customer base.
Importance of branding
1. Enhances Recognition and Awareness
• Branding helps create a unique identity for a product or company,
making it instantly recognizable.
For example, Coca-Cola or Nike leverage their branding for instant recall
across markets.
2. Facilitates Customer Acquisition
• A well-known brand attracts potential customers more easily,
reducing the cost of acquiring new leads.
3. Supports Market Differentiation
• Branding highlights what makes a product or service unique
compared to competitors.
Example: Apple differentiates itself by branding around innovation and
simplicity.
4. Builds Trust and Loyalty
• Marketing activities are more effective when a brand is perceived as
credible and trustworthy.
5. Simplifies Marketing Campaigns
• Branding provides a framework for marketing communication, ensuring
consistency across all channels (digital, social media, print, etc.).
• Example: Dove's marketing campaigns consistently revolve around "real
beauty," reinforcing its branding.
6. Boosts Advertising Effectiveness
• Strong branding amplifies advertising ROI by creating memorable and
relatable campaigns.
7. Enables Emotional Marketing
• Branding leverages emotional marketing strategies by creating associations
with specific values, aspirations, or feelings (e.g., happiness, quality,
sustainability).
• 8. Drives Premium Pricing Strategy
• Marketing strategies can position a brand as a premium offering through
branding efforts, allowing businesses to charge higher prices.
• Example: Luxury brands like RR rely on branding to market exclusivity and
justify premium pricing.
9. Encourages Brand Advocacy
• A strong brand generates organic marketing through word-of-mouth and
customer advocacy.
10. Maximizes Cross-Selling Opportunities
• A strong brand makes it easier to market new or related products under
the same brand umbrella.
11. Improves Marketing ROI
• Branding reduces the need for excessive promotional spending by
establishing a loyal customer base.
 Benefits of Branding in Marketing
•Recognition: Builds a distinct identity, making your business easily identifiable.
•Customer Loyalty: Creates emotional connections, leading to repeat customers.
•Competitive Advantage: Differentiates your brand from competitors.
•Trust and Credibility: A strong brand fosters customer confidence in your products or
services.
•Premium Pricing: Enables charging higher prices due to perceived value.
•Marketing Efficiency: Simplifies advertising efforts with a consistent message and
identity.
•Business Growth: Attracts new customers through brand reputation and referrals.
•Employee Morale: Inspires employees to align with the brand’s mission and values.
•Attracts Partnerships: Makes businesses more appealing to collaborators and investors.
•Resilience: Helps companies weather market challenges by maintaining customer
loyalty.
Trade Mark
• Trademark is a recognizable sign, design, symbol, word, phrase, or a
combination of these, legally registered or established by use, that
identifies and distinguishes the goods or services of one business
from those of others.

• It serves as a form of intellectual property, protecting the brand

identity of the business.
Importance of Trademark:

• Legal Protection: Protects the brand's identity from unauthorized use

or imitation.
• Exclusive Rights: Grants the owner the exclusive right to use the mark
and prevent others from using it in the same market.
• Brand Recognition: Trademarks are integral in building brand
recognition and trust with consumers.
• Value Creation: Trademarks add value to the brand, making it a
tangible asset for the company.
Types of Trademarks:
• Word Marks: Protect words, letters, or numbers.
• Design Marks: Protect logos or symbols.
• Combination Marks: Protect combinations of words and designs.
• Service Marks: Protect services instead of physical goods.
Service Marketing
• Service Marketing refers to the process of promoting and selling
intangible services, rather than tangible goods, to customers. It
involves using various marketing strategies to address the unique
characteristics of services such as intangibility, inseparability,
perishability, and heterogeneity.
Characteristics of Services
Intangibility:
•Services cannot be seen, touched, or stored.
•Example: Education, healthcare, or consulting.
Inseparability:
•Services are produced and consumed simultaneously.
•Example: A haircut or a concert.
Perishability:
•Services cannot be stored for future use.
•Example: An airline seat or a hotel room for a specific date.
Variability (Heterogeneity):
•Service quality may vary based on the provider, customer, or
circumstances.
•Example: Different dining experiences in the same restaurant.
Importance of Service Marketing
• Addresses Intangibility: Helps customers understand and trust intangible services.
• Customer-Centric: Focuses on personalized experiences to build satisfaction and
loyalty.
• Builds Relationships: Ensures repeat business through strong customer connections.
• Creates Differentiation: Distinguishes services from competitors.
• Enhances Perceived Value: Highlights benefits and outcomes for customers.
• Encourages Word-of-Mouth: Drives positive referrals through excellent service.
• Ensures Consistency: Maintains quality across interactions through training and
standardization.
• Emphasizes People: Focuses on staff training to align service delivery with brand
values.
• Supports Innovation: Promotes new offerings and technological advancements.
• Boosts Economic Growth: Drives business success and creates job opportunities.
Service Marketing Mix (7Ps)

• In service marketing, the traditional 4Ps (Product, Price, Place, and

Promotion) are extended to the 7Ps, which also include:
• People: The employees delivering the service and the customer
interaction.
• Process: The procedures, mechanisms, and flow of activities involved
in service delivery.
• Physical Evidence: The tangible elements that help customers
evaluate the intangible service (e.g., brochures, website, or physical
environment).