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1. PRODUCT
STRATEGY
SOURABH KHEDKAR,
LALJI A.S.
SHUBHAM DWIVEDI

2. TOPIC OVERVIEW
 “PRODUCT” AS CONCEPT & CLASSIFICATION
 PRODUCT SYSTEMS & MIXES
 MANAGING PRODUCT LINES
 PRODUCT-MIX PRICING
 PACKAGING AND LABELS

3. “PRODUCT” AS CONCEPT

4. What is a product?
 Anything offered to the market
 To satisfy want or need
• Goods, services, experiences, events,
persons, places, organizations and ideas.
 Most important element of marketing mix

5. Market offering
 Customer will judge the offering by three basic
elements
• Product features and quality
• Service mix and quality
• price

6. Product levels
 In planning its market offering, the marketer needs to
address five product levels .Each level adds more
customer value, and the five constitute a customer-
value hierarchy:

7. CORE BENEFIT • The service or benefit the
customer is really buying.
• A hotel guest is buying rest
and sleep.
• The purchaser of a drill is
buying holes.
• Marketers must see
themselves as benefit
providers.
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT

8. CORE BENEFIT • The marketer must turn the
core benefit into a basic
product.
• Thus a hotel room includes a
bed, bathroom, towels, desk,
dresser, and closet.
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT

9. CORE BENEFIT • The marketer prepares an
expected product, a set of
attributes and conditions
buyers normally expect when
they purchase this product.
• Hotel guests minimally expect
a clean bed, fresh towels,
working lamps, and a relative
degree of quiet
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT

10. CORE BENEFIT • The marketer prepares an
augmented product that
exceeds customer
expectations.
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT

11. CORE BENEFIT • `The potential product, which
encompasses all the possible
augmentations and
transformations the product
or offering might undergo in
the future.
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT

12. PRODUCT CLASSIFICATION
Marketers classify product based on
• Durability and Tangibility
• Use
 Consumer
 Industrial

13. Durability and tangilbility
• Non-durable goods
 Tangible goods normally consumed
in one or few uses.
 Purchased frequently
• Durable goods
 Tangible goods that survive many uses.
 They require more seller guarantee and
command higher margin.

14. Intangible products
• Services
 Intangible
 Requires more quality control, supplier credibility
and adaptability

15. Consumer goods classification
• Convenience goods
 goods purchased frequently and
immediately with minimum effort
 Staples, impulse goods and emergency
goods
• Shopping goods
 Those goods consumer characteristically compares on such bases as suitability,
quality, price, and style.
 Homogeneous and heterogeneous

16. • Specialty goods
 Those goods having unique characteristics or brand identification for
which enough buyers are willing to make a special purchasing effort.
• Unsought goods
 Those goods the consumer does not know about or normally think of
buying, such as smoke detectors, grave stones.

17. Industrial goods classification
 Material and parts
 Capital items
 Supplies and business services

18. Industrial goods classification
• Materials and parts
 Materials and parts are goods that enter the manufacturer’s
product completely
 Raw materials
o Farm products
o Natural products

19.  Manufactured materials
 Component materials
 Component parts

20. • Capital items
Capital items are long-lasting goods that facilitate
developing or the finished product.
 Installations
 equipment

21.  Supplies and business services
 supplies are two kinds
 maintenance items and repair items
 operating supplies
 business services include
 maintenance and repair services (window cleaning, copier repair)
 Business advisory services (legal, advertising)

22.  Product and service differentiation
 product differentiation
Form
Features
customizations
Performance
quality
Conformance
quality
Durability Reliability
Reparability
style

24.  Service differentiation
 Ordering ease
 Delivery
 Installation
 Customer rating
 Customer consulting
 Maintenance and repair
 Returns

25.  Design
 Design is the totality of features that affect how a product
looks, feels, and functions to a consumer.
 Design offers functional and aesthetic benefits and appeals
to both our rational and emotional sides.
e.g.. The product strategy of Hawkins is to span wide range of
cooking products with innovative product designs.

26. PRODUCT SYSTEMS & MIXES

27. PRODUCT SYSTEMS &
MIXES
Product Systems
Product Mixes
Product Systems Properties

28. Product System
 Is a group of diverse but related items that functions in
compatible manner
 Why its call Product System??
 Eg. Mobile Phone Industry, Automobile Industry

29. Product Mixes
Set of all products and items a particular seller
offers for sales

30. Product Mixes Properties
Product
Mixes
LENGTH
WIDTH
DEPTH
CONSISTANCY

31. • NO.DIFFERENT PRODUCT
LINE COMPAINY OFFERSWIDTH
• TOTAL NO. OF PRODUCT
IN SINGLE LINELENGTH
• NO. VARIANTS OF EACH
PRODUCT IN LINEDEPTH
• HOW CLOSELY RELATED
PRODUCT LINES ARECONSISTANCY

32. HUL Product Mixes Width and Line Length

33. HUL Product Mixes Width and Line Length

34. P&G Product Mixes Width and Line Length

35. Nestle Product Mixes Width and Line Length

36. ITC Product Mixes Width and Line Length

37. Emami Product Mixes Width and Line Length

39. MANAGING PRODUCT LINES

40. MANAGING PRODUCT LINES
MANAGING
PRODUCT
LINES
LINE LENGTH
LINE
STRETCHING
LINE FILLING
LINE ANALYSIS
SALES AND
PROFITS
MARKET
PROFILE

41. Managing “Sales and Profit”
can help determine which items to Build,
Maintain, Promote or Discontinue.

42. Sales and Profits (Cont’d)

43. Product line managers must review how
the line is positioned against competitor’s
line to enhance “Market Profile”

44. Market Profile (Cont’d)

45. Objective behind managing
product line length
 To induce up-selling
 To facilitates cross-selling
 Protects against economic ups and downs
 To use excess manufacturing capacity
 To satisfy specific customer demands

46. line stretching

47. Occurs when company lengthens its
product line beyond its current
range

48. Ways of line stretching
• Introduction of lower price line
than current offering to enter
low-end segment
Down-
Market
Stretch
• Introduction of higher price line
than current offering to enter
high end market
Up-Market
Stretch
• Stretching in both ways to gain
market dominance
Two Way
Stretch

49. line Stretching Illustration

50. Line filling
 Lengthening product line by adding more item within
present range
 Plugging holes to keep out competitors
 Overdone result in Cannibalization and Customer
Confusion
 BMW’s evolution one brand five model to 3 brands 14
Series
 Good Knight journey to market leader

51. Product line management
 Line Modernization: Introducing advance product
 Line Featuring: Introducing Special edition’s
 Line pruning: Cutting Product Line

52. PRODUCT-MIX PRICING

53. PRODUCT-MIX PRICING
STRATEGIES
PRICING
PRICE IS THE VALUE THAT IS PUT TO A PRODUCT OR SERVICE
IT IS THE RESULT OF A COMPLEX SET OF CALCULATIONS,
RESEARCH AND UNDERSTANDING AND RISK TAKING ABILITY.
PRICING STRATEGY TAKES INTO ACCOUNT SEGMENTS, ABILITY
TO PAY, MARKET CONDITIONS, COMPETITOR ACTIONS, TRADE
MARGINS AND INPUT COSTS.

54. Product-Mix Pricing Strategies
 Product line pricing takes into account the cost difference between
products in the line, customer evaluation of their features, and
competitors’ prices.

55. Product-Mix Pricing
Strategies
 Optional product pricing takes into account
optional or accessory products along with the main
product.
New car with ordinary
rims
8,00,000Rs
New car with sports rims
8,60,000Rs

56. Product-Mix Pricing
Strategies
 Captive product pricing involves products that
must be used along with the main product.
 Two-part pricing is where the price is broken into
 Fixed fee
 Variable usage fee

57. Copyright©2009PearsonEducationSouthAsiaPteLtd
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58. Product –Mix Pricing
Strategies
 Product bundle pricing combines
several products at a reduced price.
1 bottle: 60Rs
Bundled 2 bottles: 100Rs

59. Product-Mix Pricing
Strategies
Pricing Strategies
 Product line pricing
 Optional product pricing
 Captive product pricing
 By-product pricing
 Product bundle pricing

60. PACKAGING AND LABELS

61. PACKAGING
The package refers to physical container or wrapping for a product
It is an integral part of product planning and promotion
 10% of the retail price is spent on developing, designing, and
producing just the package
Companies sometimes change packaging to update their image
and reach a new market

62. Tropicana Famous
Packaging Failure:
PepsiCo experienced great success with its Tropicana brad, acquired in
1998.Then in 2009, the company launched a redesigned package to “Refresh
and modernize” the brand. The goal was to create an “emotional attachment
with design and trumpeting the natural fruit goodness.
After the new packing and design, Tropicana hit by record 20percent sales
dropped in 2months, PepsiCo management announced it would revert to old
packaging.

64. FACTORS INFLUENCING
PACKAGING
Self Service
 An increasing number of products are sold on a self – serve basis.
In an average supermarket, which may stock 5,000 items, the typical
shopper passes some 50-60 products per minute.
 Effective package must perform many sales tasks. Attract
attentions, describe the products features, create consumer
confidence, and make a favorable overall impression.

65. Factors Influencing Packaging
Cont’d
Consumer Affluence
Rising affluence means consumers are willing to pay a little
more for the convenience, appearance, dependability, and
prestige of better packages.

66. Factors Influencing
Packaging Cont’d
Company And Brand Image
Packages contribute to instant recognitions of the company or
brand. In the store, they can create a billboard effect.

67. Factors Influencing
Packaging Cont’d
Innovation Opportunity
Unique or innovative packaging such as resalable spouts can bring
big benefits to consumers and profits to producers.

68. OBJECTIVES OF
PACKAGING
1. Promoting and Selling the Product
2. Defining Product Identity
3. Providing Information
4. Expressing Customer Needs
5. Ensure Safe Use
6. Protecting the Product

69. 1. Promoting and Selling the Product
Attractive, colorful, and
visually appealing packages
have promotional value
A well designed package is
a powerful selling device
because it helps the product
stand out from its
competitors.

70. 2. Defining Product Identity
Packaging is sometimes used to promote and image
such as prestige, convenience, or status
Can be a crucial part of the marketing strategy,
particularly in advertising

71. 3. Providing Information
Gives customer useful information
on:
 directions for using the product
its contents
product guarantees
nutritional value
potential hazards

72. 4. Expressing Customer Needs
When designing packages, companies analyze customer
lifestyles and create packaging that meets their needs for
size and convenience.
Packages often come in various sizes
 Family size
 Single serving

73. 5. Ensure Safe Use
Proper packaging helps to eliminate potential injuries
or misuse of a product
 Formerly glass containers are now plastic
 Childproof caps
 Tamper resistant packages
 Blister packs – packages with preformed plastic
molds surrounding individual items arranged on a
backing

74. 6. Protecting the Product
 Must protect during shipping, storage, and display
 Prevent or discourage from tampering
 Prevent shoplifting
 Protect against breakage and spoilage

75. LABELING
Label – an identification tag, wrapper, seal, imprinted
message that is attached to a product or its package

76. KINDS OF LABELS
1. Brand Label – gives brand name and trademark or logo

77. Kinds of Labels Cont’d
 Descriptive Label – give information about product
use, construction, care, performance, and other
features

78. Kinds of Labels Cont’d
 Grade Label – Some products have given grade label.
Grade label shows the grade of the product. It shows
the quality of products by words, letters, or figure.

79. References and Sources
 A Marketing Management: A South Asian Perspective
By Kotler, Keller, Koshy, Jha
 www.slideshare.com