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5 mark questions
Feb 2005
In planning its market offerings, the marketer needs to think through five levels of a
product- elaborate.
In planning the marketing offering, the marketer needs to think through five levels of the
product. Each level adds more customer value, and the five constitute a customer valuehierarchy. The five levels include.
1. Core benefit:
The fundamental service or benefit that the customer is really buying. A hotel guest is
buying rest and sleep the purchaser of the drill is buying holes. Marketers must seethemselves as benefit providers.
2. Basic product:
At the second level, the marketer has to turn the core benefit into a basic product. Thus ahotel room includes a bed, bathroom, towels, desk, dresser, and closest
3. Expected product:
At the third level, the marketer prepares an expected product, a set of attributes and
conditions that buyers normally expect and agree to when they purchase this product. Forexample, hotel guests expect a clean bed, fresh towels, working lamps, and a relative
degree of quite. Since most hotels can meet this minimum expectation, the traveler
normally will have no preference and will settle for whichever hotel is most convenientor least expensive.
4. Augmented product:
At the fourth level the marketer prepares an augmented product that meets thecustomers desires beyond their expectations. A hotel can augment its product by
54321
1 = Core benefit2 = Basic product3 = Expected product4 = Augmented product5 = Potential product
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including a remote-control television set, fresh flowers, rapid check-in express checkout,
fine dining and room service, and so on .Elmer Wheeler once observed, Dont sell the
steak-sell the sizzle Todays competition essentially takes place at the product-augmented level. Product augmentation leads the marketer to look at the buyers total
consumption system: the way a purchaser of a product performs the total task of whatever
it is that he or she is trying to accomplish when using the product. In this way marketerwill recognize many opportunities for augmenting its offer in a competitively effective
way.
5. Potential Product:
At the fifth level potential product, which encompasses all the augmentations and
transformations that the product might ultimately undergo in the future. While the
augmented product describes what is included in the product today, the potential product
points to its possible evolution. Here is where companies search aggressively for newways to satisfy customers and distinguish their offer. Some of the most successful
companies add benefits to their offerings that not only satisfy customers but also surprise
and delight them. Delighting is a matter of exceeding the normal expectations and desires
with unanticipated benefits. Thus the hotel guests find candy on the pillow, or a bowl offruit, or a video recorder with optional video tapes.
Feb 2002
What is Brand Equity?
A brand is name, term symbol or design or combination of these intended to identify,
products & services of one seller from competitors
Brand equity: The positive differential effect that knowing the brand name has oncustomer response to the product or service
Brands vary in their amount of power or value they have in the market place. At one
extreme are brands that are not known by most buyers. Then there are brands that are notknown by most buyers. Then there are brands for which buyers have a fairly high degree
of brand awareness. Beyond this are brands that enjoy a high degree of brandacceptability. Then there are brands that enjoy a high degree ofbrandpreference. Finallythere are brands that command a high degree ofbrandloyalty.
Few customers are brand loyal as OReilly hopes Heinzs customers will be. Aaker
distinguished 5 levels of customer attitude towards his of her brand, from lowest tohighest;
1. Customer will change brands, especially for price reasons. No brand loyalty
2. Customer is satisfied. No reason to change the brand.
3. Customer is satisfied and would incur costs by changing brand.4. Customer values the brand and sees it as a friend.
5. Customer is devoted to the brand.
Brand equity is highly related to how many customers are in classes 3, 4, or 5. It is alsorelated to the degree of brand- name recognition, perceived brand quality, strong mental
and emotional associations, and other assets such as patents, trademarks, and channel
relationships.High brand equity provides a number of competitive advantages:
The company will enjoy reduced marketing costs because of consumer brand
awareness and loyalty.
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The company will have more trade leverage in bargaining with distribution and
retailers because expect them to carry the brand
The company can charge a higher price than its competitors because the brand hashigher perceived quality.
The company can move easily launch extensions because the brand name carries
high credibility. The brand offers the company some defense against price competition.
A brand name needs to be carefully managed so that its equity doesnt depreciate. This
requires maintaining or improving brand awareness, perceived quality and functionally,and positive associations. These tasks require continuous R&D investment, skillful
advertising, and excellent trade and customer service.
February 2002
Name three products, which are in maturity and decline stages of the product life
cycle.
Maturity is a period of slow down in sales growth because the product has achieved
acceptance by most potential buyers. Profits stabilize or decline because of increasedcompetition.
Some of the products that come under this stage are,Picture tube Television: these are the normal televisions used by middle class people.
Demand for these sets is at hike and no possibilities of still increase so they are in
maturity stage.Chalk: Chalk is an item, which is used for writing on the black board. It is still broadly
used in schools, so we can say that they are in maturity stage.
Land lane phone: Landline telephonic connections are seen almost in the maturity stage.
Declines stage is a period when sales show downward drift and profits erode. Someproducts which come under this stage are
Black and white television: black and white televisions are not in demand now, so theycan be said to be under decline stage.Traditional clothes: traditional clothes like dhotis are not commonly used. They are used
only in some religious functions, so their demand has come down. And thus industries
producing these products run under loss.Cholesterol food: In US people have become very health conscious they prefer food
which has low cholesterol level. So the demand for junk food or any other product which
has high cholesterol level is reduced causing a decline in the firms producing them.
Feb 2002
Explain the following and name at least two products that can be sold through.
(i) Specialty store
(ii) Factory outlet
(iii) Door to door marketing(iv) Automatic vending
(v) Supermarket
(vi) Convenience store(vii) Franchise
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(i) Specialty Store:
Focuses on a particular brand category, It offers narrow product lines, but good depth.Level of service is high. Examples, Walgreens, boots, crossword, Planet M
(ii) Factory outlet:
Stores, which sell branded merchandise at a discount. Example, Levis, Reebok.(iii) Door to door marketing: Companies selling products by meeting customers at their
homes is called door to door marketing. FMCG companies like HLL organize door to
door campaigns when a new offer is available.(iv) AutomaticVending:
The coin-operated vending machines are used as complementary form of retailing many
goods and services, e.g., sale of cigarettes, soft drinks, hot beverages, candy, chocolates,
platform tickets, milk, etc., and services such as laundering and insurance policies. Thus,well known pre-sold, pre packed brands with a high rate of turnover can be sold
successfully by vending machines.
(v)Supermarket:
A supermarket as a novel form of retail organization specializing in necessaries andconvenience goods. Usually it concentrates on all food articles- groceries, meat, fruits,
vegetable and timed products. Non- food items sold by these stores should satisfy a fewconditions. Firstly, it must be widely used and must appeal to general consumers.
Secondly, a non- food article must be a branded product, i.e., pre-sold to customers
through intensive advertising. Thirdly, it should be a low- priced article
(vi)ConvenienceStores:Usually located near residential areas& open long hours. Offers milk and bread.
Examples, 7 eleven, speed mart, In & Out.
(vii) Franchise:
A franchise is a contractual agreement between the franchiser and franchisee, which
allows the franchisee to conduct business under an established name, as per a particular
business format in return of a fee or compensation.Ex Archies stores, Mc Donalds stores
10 Marks Questions
February 2002
Explain the decisions that companies make when developing product lines and
mixes.
Or
What is product mix? What are the different factors that are considered while
making product line decisions? ( write only product mix decisions)
PRODUCT MIX DECISIONS:
A product mix (also called as Product Assortment) is a set of all products and items that a
particular seller offers for sale to buyers.
For example, Kodaks product mix consists of two strong product lines: informationproducts and image products. A companys product mix has a certain width, length,
depth, and consistency
The width of a particular mix refers to how many different product lines thecompany carries.
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The length of a product mix refers to the total number of items in the mix.
The depth of the product mix refers to how many variants are offered of each
product in the line.
The consistency of the product mix refers to how closely related the various
product lines are in end use, production requirements, distribution channels, or
some other way.PRODUCT LINE DECISIONS:
A product line is group of products that are closely related because they function in a
similar manner, are sold to the same customer groups, are marketed through the sametype of outlets or fall within given price ranges
Each product line is usually managed by different executives. In General Electrics
Consumer Appliance Division, there are product-line managers for refrigerators, stoves,washing machines, and other appliances.
Product line length:
An issue facing product- line managers is optimal product-line length. A product line istoo short if the manager can increase profits by adding items; the line is too long if the
manager can increase profits by dropping items.Company objectives influence product-line length. Companies seeking high market share
and market growth will carry longer lines. They are less concerned when some items failto contribute to profits. Companies that emphasize high profitability will carry shorter
lines consisting of carefully chosen items.
A company can enlarge the length of its product line in two ways; by line stretching andline filling.
Line stretching:
Every companys product line covers a certain part of the total possible range. Forexample, BMW automobiles are located in the upper piece range of the automobile
market. Line stretching occurs when a company lengthens its product line beyond its
current range. The company lengthens its product line beyond its current range. Thecompany can stretch its line downward, upward, or both ways.Downward stretch:
Many companies initially locate at the upper end of the market and subsequently stretch
their line downward. A company positioned in the middle market may want to introducea lower price line for any of three reasons:
The company may notice strong growth opportunities in the downmarket as mass
retailers such as Wal- Mart, Best Buy, and other attract a growing number ofshoppers who want value-priced goods.
The company may wish to tie up lower-end competitors who might otherwise try
to move up-market. If the company has been attacked by a low-end competitor, it
often decides to counterattack by entering the low end of the market. The company may find that the middle market is stagnating or declining.
Moving downward carries risks. Kodak introduced Kodak Funtime film to counter lower
priced brands. But it didnt price Kodak Funtime low enough to match the lower pricedfilm. It also found some of its regular customers buying Furniture, thereby cannibalizing
its core brand. So it withdrew Funtime.
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Up market stretch:
Companies may wish to enter the high end of the market for more growth, higher
margins, or simply to position themselves as full-line manufacturers. Many markets havespawned surprising upscale segments such as Starbucks in coffee, Haagen-Dazs in ice
cream, and Evian in bottled water.
Two way Stretch:Companies serving the middle market might decide to stretch their line in both directions.
Texas Instruments (T I ) introduced its first calculators in the medium- price- medium
quality end of the market. Gradually, it added calculators at the lower end, taking marketshares away from Bowmar and in the higher end to complete with Hewlett Packard. This
two way stretch won TI early market leadership in the hand- calculator market.
Line filing:
A product line can also be lengthened by adding more items within the present range.There are several motives for line filling: reaching for incremental profits, trying to
utilize excess capacity, tying to be the leading full-line company and trying to plug holes
to keep out competitors.
Line filling is overdone if it results in self cannibalization and customer confusion. Thecompany needs to differentiate each item in the consumers mind. Each item should
possess a just- noticeable difference. According to Webers law, customers are moreattuned to relative than to absolute difference. They will perceive the difference between
boards 2 or 3 feet long but not between 29 and 30 feet long. The company should make
sure that new products items have a noticeable difference.
Feb 2002
Explain different stages of product life cycle along with different marketing
strategies
or
Explain the marketing strategies during introduction and growth stages of product
life cycle.
or
A companys positioning and differentiation strategy must change as the product,
market and competitors change over time. In this context, discuss the suitable
marketing strategies for the various stages of product life cycle.
Products life cycle can have a direct bearing on a companys survival. The life cycle of a
product consists of four stages: introduction, growth, maturity, and decline. The conceptof product life applies to a generic category of product. A product life cycle consists of
aggregate demand over an extended period of time for all brands comprising a generic
product category.A life cycle can be graphed by plotting aggregate sales volume for a product category
over time, usually years. It is also worth while to accompany the sales volume curve with
the corresponding profit curve for the product category. After all a business is interestedultimately in profitability, not just sales. The shapes of these two curves vary from one
another.
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INTRODUCTION STAGE:
During this stage, sometimes called pioneering stage, a product is launched into themarket in a full-scale marketing programme. It has gone through product development,
including idea screening, prototype, and market tests. The entire product may be new,
such as the zipper, the videocassette recorder, and the fast substitute for prepared foods.
Or it may be well known but have a significant novel feature that, in effect, creates a newproduct category; microwave ovens and in line skates are examples.
Marketing strategies in introduction stage:
In launching a new product marketing management can set a high or a low level for eachmarketing variable. Considering only prices and promotion, management can perceive
one of the four strategies shown below.
A rapid- skimming strategy: consist of launching a new product at a high price andhigh promotion level. The firm charges a high price in order to recover as much profit per
unit as possible. It spends heavily on promotion to convince the market of products
merits even at the high price
A slow-skimming strategy: consists of launching a new product at high price andpromotion. The high price helps to recover as much profit per unit as possible, and the
low level of promotion keeps marketing expenses down. This combination is expected to
skim a lot of price from the market.
A rapid-penetration strategy: consist of launching a product at a low price and
spending heavily on promotion. The strategy promises to bring about the fastest market
penetration and the largest market share.
Profit
+
$ 0
Introduction Growth Maturity Decline
Time
Sales
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A slow penetration strategy: consist of launching a new product at a low price and low
level of promotion. The low price will encourage rapid product acceptance, and low
promotion costs bring profits up.
GROWTH STAGE:
The growth stageismarked by a rapid climb in sales. The early adopters like the product,
and additional consumers start buying the product. New competitors enter the market,attracted by the opportunities for large- scale production and profits. They introduce new
product features and expand the distribution chain.
Profits increase during the growth stage as (i) promotion cost are spread over a largevolume (ii) unit manufacturing cost fall faster than price declines owing to the producer
learning effect.
Marketing strategies in growth stage:
During the growth stage, the firm uses several strategies to sustain rapid market growth
as long as possible.
It improves product quality and adds new product features and improved styling
It adds new models and flanker products (i.e., product of different sizes, flavors,and so forth that protect the main product).
It enters new market segment.
It increases its distribution coverage and enters new distribution channels.
It shifts from product awareness advertising to product preference advertising
It lowers process to attract new layer of price sensitive buyers.
MATURITY STAGE:
At some point, a products rate of sales growth will slow down, and the product will enter
a stage of relative maturity. This stage normally lasts longer than the previous stage, andit poses formidable challenges to marketing management.
The maturity stage can be divided into three phases. in the first phase, growth maturity,
the sales growth rate starts to decline. In the second phase, stable maturity, sales flattenon per capita basis because of market saturation. In the third phase, decaying maturity,the absolute level of sales starts to decline, and customers start switching to other product
and substitutes.
Market strategies in the maturity stage:
In the maturity stage, some companies abandon their weaker products. They prefer to
concentrate their resources on more profitable products and on new products.
1. Market modifications:
The company might try to expand the market for its mature brand by working with the
two factors that make up sales volume.
The company may try to expand the number of brand user in three ways,
Convert nonusers:The company can try to attract non users of the product. For example, the key to the
growth of air freight services in the constant search for new users to whom air carriers
can demonstrate the benefits of using air freight rather than ground transportation
Enter new market segment:
The company can try to enter new market segments- geographic, demographic and so on
that use the product but not the brand. For example, Johnson and Johnson successfullypromoted its baby shampoo to adult users.
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Win competitors customers:
The company can attract competitors customers to try to adopt the brand. For example,
Pepsi-Cola is constantly tempting Cola-cola uses to switch to Pepsi-cola, throwing outone challenge after another.
Volume can also be increased by convincing current brand users to increase their annual
usage of the brand. Here are three strategiesMore frequent use:The company should try to get customers to use the product more frequently. For
example, orange juice marketers try to get people to drink orange juice at occasions otherthan breakfast time.
More usage per occasion:
The company can try to interest the users in using more of the product on each occasion.
Thus a shampoo manufacturer might indicate that the shampoo is more effective with tworinsings than one.
New and more varied uses:
The company should can try to discover new product users and convince people to use
the product in more varied ways. Food manufacturers, for example list several recipes ontheir packages to broaden the consumers uses of the product.
2. Product modification:
Managers also try to simulate sales by modifying the products characteristics through
quality improvement, features, or style improvement.
A strategy of quality improvement aims at increasing the products functional
performance its durability, reliability, speed, taste.Strategy of feature improvement aims at adding new features (for example size, weight,
materials, additives, accessories) that expand the products versatility, safety, or
convenience. For example, adding electric power to hand lawn mover s increased thespeed and ease of cutting grass.
A strategy of style improvement aims at increasing the products aesthetic appeal. The
periodic introduction of new car models amounts to style competition rather than qualityor feature competition.
3. Marketing Mix Modification:
Product managers might also try to stimulate sales by modifying other marketing-mixelements. They should ask following questions.
Price: would a price cut attract new customers and users? If so, should the price be
lowered, or should it be increased through price specials, volume or early-purchase
discounts, freight cost absorption, or easier credit terms/ or would it be better to raise theprice to signal higher quality?
Distribution: Can the company obtain more product support the display in the existing
outlets? Can more outlets be penetrated? Can the company introduce the product intonew distribution channels?
Advertising: Should advertising expenditure be increased? Should the advertising
message or copy be changed?
Sales promotion: Should advertising expenditures be increased? Should the advertising
message or copy be changed?
Personal selling: Should the number or quality of salespeople be increased? Should the
basis for sales force specialization be changed?
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Services: Can the company speed up delivery? Can it extend more technical assistance to
customers? Can it extend more credit?
DECLINE STAGE:
The sales of most product forms and brands eventually decline. The sales decline might
be slow, as in the case of oatmeal; or rapid, as in the case of Edsel automobile. Sales may
plunge to zero, or they may petrify at a low level.Sales decline for a number of reasons, including, including technological advances,
shifts, in consumer tastes, and increased domestic and foreign competition. All lead to
overcapacity, increased price-cutting, and profit erosion.
Marketing strategies during the Decline stage
In handling its aging products, a company faces a number of tasks and decisions.
1. Identifying the weak products
The first task is to establish a system for identifying weak products. To this, many
appoint a product-review committee with representatives from marketing, R and D,
manufacturing, and finance. This committee develops a system for identifying weak
products. A computer programmer then analyzes this information to help managersdecide which products are dubious. The manages responsible for dubious products fill out
rating forms shoeing where think sales and profits will go, with and without any changesin marketing strategy. The product review committee examines this information and
makes a recommendation for each dubious product, leave it alone, modify its marketing
strategy, or drop it
2. Determining marketing strategies
In the study of company strategies in declining industries, Harrigan identified five decline
strategies available to the firm
Increasing the firms investment (to dominate the market or strengthen its
competitive position)
Maintaining the firms investment level until the uncertainties about the industryare resolved.
Decreasing the firms investment level selectively, by dropping unprofitable
customer groups, while simultaneously strengthening the firms investment in
lucrative niches.
Harvesting (milking) the firms investment to recover cash quickly.
Divesting the business quickly by disposing of its assets as advantageously as
possible.
3. The drop decision:
When a company decides to drop a product, it faces further decisions. If the product has
strong distribution and residual goodwill, the company can probably sell to another firm.
If the company cant find any buyers, it must decide whether to liquidate the brandquickly or slowly. It must also decide on how much parts inventory and service to
maintain for past customers.
Feb 2005
Mention the reasons for new product planning and development. Explain the new
product development process.
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middle aged adults or older adults. Second, what primary benefit should this product
provide? Taste, nutrition , refreshment, energy? Third, when will people consume this
drink? Breakfast, mid morning, lunch, mid afternoon, dinner, late evening? By answeringthese questions, a company can form several concepts.
Concept testing:
Concept testing calls for testing product concepts with an appropriate group of targetconsumers, then getting those consumers reactions. The concepts can be presented
symbolically or physically. At this stage, a word and/or picture description can suffice.
4. Marketing Strategy Development:
After testing, the new-product manager must develop a preliminary marketing strategy
plan. The marketing strategy plan consists of three parts. The first part describes the
target markets size, structure, and behavior, the planned product positioning; and the
sale, market share and profit goals sought in the first few years.
5 .Business Analysis:
After management develops the product concepts and marketing strategy, it can evaluate
the proposals of business attractiveness. Management needs to prepare sales, cost and
profit projections to determine whether they satisfy the companys objectives. If they do,the product concept can move to the product development stage. As new information
comes in, the business analysis will undergo revision and expansion.
6. Product development:
If the product concept passes the business test, it moves to R and D and/ or engineering to
be developed into a physical product. Up to now it has existed only as a word description,
a drawing, or a prototype. This step calls for large jump in investments that dwarfs theidea- evaluation costs incurred in the earlier stages. At this stage the company will
determine whether the product idea can be translated into a technically and commercially
feasible product. If it cannot, the companys accumulated project costs will be lost exceptfor any useful information gained in the process.
7. Market Testing:
After management is satisfied with the products functional and psychologicalperformance, the product is ready to be dressed up with a brand name, packaging and a
preliminary marketing program. The goals are to test the new product in more authentic
consumer setting and to learn how large the market is and how consumers and dealersreact to handling, using, and repurchasing the actual product.
8. Commercialization:
Market testing presumably gives management enough information to decide whether to
launch a new product. If the company goes ahead with commercialization, it will face itslargest costs to date. The company will have to contract for manufacture or build or rent a
full-scale manufacturing facility.
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CLASSIFICATION OF CONSUMER GOODS:
The vast array of goods consumers buy can be classified on the basis of shopping habits.
We can distinguish among convenience, shopping, specialty, and unsought goods.
1. Convenience goods:
Convenience goods are goods that the customers usually purchase on a regular basis. A
buyer might routinely purchase Heinz ketchup, Crest toothpaste and Ritz crackers.Impulse goods are purchased without any planning or search effort. Candy bars and
magazines are placed next to check out counters because shoppers may not have thought
of buying them until they spot them. Emergency goods are purchased when a need isurgent- umbrellas during rainstorm, boots and shovels during the first winter snowstorm.
Manufacturers of emergency goods will place them in many outlets to capture the sale
when the customer needs them.
2. Shopping goods:
Shopping goods are goods that the customer, in the process of selection and purchase,
characteristically compares on such bases as suitability, quality, price, and style.
Examples include furniture, clothing, used cars, and major appliances.Shopping gods can be further divided. Into
Homogeneous shopping goodsHeterogeneous shopping goods
Homogeneous shopping goods are similar in quality but different enough in price to
justify shopping comparisons. Heterogeneous shopping goods carries a wide assortment
to satisfy individual tastes and must have well trained sales people to inform and advisecustomers.
3. Specialty goods:
Specialty goods are goods with unique characteristics or brand identification for which a
sufficient number of buyers are willing to make a special purchasing effort. Examples
include cars, stereo components, photographic equipment, and mens suits.A Mercedes is a specialty good because interested buyers will travel far to buy one.
Specialty goods do not involve making comparisons; buyers invest time only to reach
dealers carrying the wanted products. Dealers do not need convenient locations; however,they let prospective buyers know their locations.
4. Unsought goods
Unsought goods are goods the consumer does not know about or does not normally thinkof buying. Smoke detectors are unsought goods until the consumer is made aware of
them through advertising. The classic examples of known but unsought goods are life
insurance, cemetery plots, gravestones, and encyclopedias. Unsought goods requireadvertising and personal-selling support.
INDUSTRIAL PRODUCTS:
Industrial products are those products which are intended for resale, for use in producing
other products or for providing services in an organization.
Industrial products may be classified as:
1. Raw Materials
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2. Fabricating Materials and Parts
3. Installation
4. Accessory Equipment5. Operating supplies,
1. Raw materials:
Business goods that become part of another tangible prior to being processed in any way(except as necessary to assist an handling the product) are considered raw materials. They
include:
Goods found in their natural state such as minerals, land and products of theforests and the seas, and
Agricultural products such as cotton, fruits, livestock and animal products
including eggs and raw milk.
2. Fabricating materials and parts:
Business goods that become part of the finished product after having been processed to
some extend fit into the category of fabricating materials and parts. The fact that they
have been processed distinguishes them from raw materials. Fabricating parts are
assembled with no further change in form, they include such products as zippers inclothing and semiconductor chips in computers.
3. Installations:
Manufactured products that are an organizations major expensive long lived equipment
are termed installations. Examples are, large generators in a dam, a factory building,
diesel engines for rail roads and blast furnaces for a steel mill.
4. Operating Supplies;
Business goods that are characterized by low dollar value per unit and a short life and that
aid in an organizations operations without becoming part of the finished goods are called
operating supplies. Examples are, lubricating oils, pencils and stationary and heating fuel.
ADDITIONAL IMPORTANT NOTES
BRAND
A brand is a name, term, sign, symbol, or design or a combination of these that identifies
the maker or seller of product or service and to differentiate them from those ofcompetitors.
Branding help buyers in many ways. Brand names help consumers identify products that
might benefit them. Brand also tell the buyer something about product quality. Buyers
who always buy the same brand know that they will get the same features, benefits andquality each time they buy, branding also gives the seller several advantages.
According to American Marketing Association Brand name is a part of a brand
consisting of a word letter group of or letters comprising a name which is intended toidentify the goods or services of a sellers or a group of sellers and to differentiate them
from those of competitors.
KINDS OF BRAND
1. According to ownership:
On the basis of ownership, brand may be of two types:
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(I) Manufacturers brand:
When brand is named after the name of the manufacturer of the product, it is known as
manufacturer brand. For example use of Philips on all the products of Philips companylike Philips Radio, Philips T.V. Transistor, Bulbs etc., is an example of manufacturers
brand.
(ii) Combination device:Tata company is using a combination device. Under this device each product of the
company has an individual brand name but it also has the name of the company brand to
indicate the business producing the product, e.g., Tatas Tej.
(iii) Middlemens brand:
Under this type of brand, Manufacturer does not use any brand for his product. Instead,
distributer like wholesalers, retailrers etc. sell the product under his own brand.
2. According to market area:
On this basis, the brand may be of the following five types:
(i)Local brand:
When the brand is used for local market, it is called local brand. Under this type of brand,
different brands are used in different markets.(ii) Provincial brand:When one brand is used for a particular province or state it is called as provincial brand.Different brands are used in different states for the same product.
(iii) Regional brand:
Under this type of brand, manufacturer uses his brand names only id=s a particular
region. Different names for different regions such as East, West, North, South and centralregion etc.
National brand:
When a manufacturer uses his products brand for selling his product throughout thecountry, it is called national brand.
International brand:
When the same brand is used for selling the product in all the countries it is called asinternational brand.
3. According to the number of products:
A brand may be of the following 3 types.
(i) Family brand:
When the manufacturer uses a single brand for all his products and all markets segments,
it is known as family brand. For example, all the product of Bajaj Group are marketer
with the brand name of Bajaj such as bulbs, tube light, Scooters, Pen, toaster, table andceiling fan, geyser etc.
(ii) Product line brand:
When the business or industrial houses, use different brand names for their differentproduct lines it is called product line brand.. for example Dalda is used foe vanaspati
Ghee product line and Super Surf for detergent powder by the same manufacturer
(iii) Individual brand:
When individual product is marked different brand name for the product, produced by the
same manufacturer, is called individual brand, for example toilet soaps produced by the
Hindustan lever Ltd bear different brands for the different brands for the different product
in the same product line e.g., lifebuoy, lux, supreme rexona.
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4. According to use:
Under this category brand may be of two types.
(i)Fighting brand:
When there is stiff competition n the market and the producer wants to introduce a new
product which has quite different characteristics from that of competitors brand and
which gives a impression of such a difference. It is called fighting brand. For example,ITC Ltd. has recently introduced NEW brand cigarette.
(ii) Competitivebrand;
When the brand introduced in the same market is almost similar to these of competitors,is known as competitors brand. For example, Modi Soap, Nirma soap, 555 soap etc. are
all having similar characteristics.
LABELLING:
Label is also important in marketing a product a label provides all the important
information to the consumer about the product and the producer. The important
information provided b\y label is the name of the product, names of the producer, quality
of the products, contents inside the package, weight, date of distribution, batch and lotnumber, expiry date and important instructions for the use of the product.
Advantages of labeling:1. False claims are prevented by using labels
2. It avoids variations by publishing the price on the label
3. It helps advertising activity of the organization because label is the media to popularize
the product.4. It helps the customer to assess the superiority of the product
5. It gives all needed information to the buyers and avoids confusion.
Disadvantages
1. For an illiterate population this is of no use.
2. It increases the cost of the product, since labeling involves expenditure on the part ofthe manufacturer.
3. Labeling is effective only where standardization is compulsory
4. It aims at mainly popularizing the product rather than giving information to theconsumers.
5. it enables the customers to weigh and compare the advantages of products before they
are used.
PACKAGING:
A good package is the representation of the artistic combination of the designers creative
skills and the product and marketing and sales knowledge of the manufacturersmanagement team.
Packaging may be defined as the general group of activities in production planning which
involve designing and producing the container of wrapper for a product.
Advantages:
1. Packaging protects the contents on its route from the manufacturer to the user against
breakages, spoilage, leakage, pilferage and so on.
2. It facilitates branding and advertising products.
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3. It serves as a silent salesman. It includes the buyer to make reorders.
4. It has got display value
5. It helps the seller to increase the sales and obtain higher prices than he could get fromunpacked goods.
6. It protects the quality value.
Disadvantages:1. Unless package is transparent, the buyer cannot judge the contents by appearance. If
information of the quality on the package label is absent, the buyer has to buy almost
blindly.2. If a consumer wants a specific quantity, he may not have that amount when goods are
sold in packages.
3. There is no way to check the weight and volume of the contents unless the buyer opens
the package to ascertain the weight.4. During the period of rising prices, less contents are packed in the same package and
apparently same prices are charged.
5. Packaging may create health hazards for consumers. Certain plastic food packaging
has been shown to cause cancer. Package stored in godowns are susceptible to infection.PRODUCT MIX STRATEGIESTo be successful in marketing, producers and middlemen need carefully planned
strategies for managing their product mixes.
Positioning the product:
Managements ability to bring attention to a product and to differentiate it in a favorable
way from similar products goes a long way toward determining that products revenues.Thus management needs to engage in positioning.
Positioning in relation to a competitor
For some products the best position the best position is directly against the competition.This strategy is especially suitable for a firm that already has a solid differential
advantage or is trying to solidify such an advantage.
Positioning in relation to a product class or attribute:
Sometimes a companys positioning strategy entails associating its product with (or
distancing it from) a product class or attribute. For example, some companies try to place
their products in a desirable class, such as Made in the USA
Positioning by price and quality
Certain producers and retailers are known for their high-quality products and high prices
in he the retailing field, Saks Fifth Avenue and Neiman Marcus are positioned at one end
of the price- quantity continuum. Discount stores such as Kmart and Dollar General are atthe other end. Were not saying that discounters ignore quality, rather, they stress low
prices.
Product- Mix Expansion
Product-mix expansion is accomplished by increasing the depth within a particular line
and/or the number of lines a firm offers to customers When a company adds a similar
item to an existing product line with the same brand name, this is termed a lineextension.The line-extensionstrategy is also used by organizations in services fields. For example,
some years ago the Roman Catholic Church broadened its line of religious services by
adding Saturday and Sunday evening masses, and universities offer programs to appeal to
prospective older students.
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Another way to expand the product mix, referred to as mixextensions .is to add a new
product line to the companys present assortment. Under a mix-extension strategy, the
new line may be related or unrelated to the present product.. Furthermore, it may carryone of the companys existing brand names or may be given an entirely new name.
Alteration of existing productsRather than developing a completely new product, management might do well to take a
fresh look at the organizations existing products. Often, improving an established
product, termedproduct alteration, can be more profitable and less risky than developinga completely new one. Product alteration is not without risks. When Coca- Cola Co.
modified the formula for its leading product and changed its name to new coke, sales
plunged. As a result, the old formula was bought back three months later under coca- cola
Classic name.
Product mix contraction
Another strategy, product mix contraction, is carried out either line or by simplifying the
assortment within a line. Thinner and/ or shorter product line or mixes can weed out lowprofit and unprofitable products. The intended result of product-mix contraction is higher
profits from fewer products. In services fields, some travel agencies have shifted fromselling all modes of travel to concentrate on specialized tours and trips to exotic places.
And, to reduce their liability risks and insurance costs.
Trading up and Trading down
The product strategies of trading up and trading down involve a change in product
positioning and expansion of the product line. Trading up means adding a higher price
product to a line in order to attract a broader market. Also, the seller intends that the newproducts prestige will help the sale of its existing lower priced products.
Trading down means adding a lower-price product to a companys product line. The firm
expects that people who cannot afford the original higher-price product or who see it tooexpensive will buy the new lower price one.
FOUR DIMENSIONS OF PRODUCT MIX
A companys product mix has certain width, length, depth, and consistency.
1. The width of a particular mix refers to how many different product lines the company
carries.
2. The length of a product mix refers to the total number of items in the mix.3. The depth of the product mix refers to how many variants are offered of each product
in the line.
4. The consistency of the product mix refers to how closely related the various productlines are in end use, production requirements, distribution channels, or some other way.
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