Product Decision - MM

PRODUCT DECISIONS
Product Defined
Product Levels
Product Classifications
Product Mix, Product Line & Product Item
Branding Decisions
Packaging
Other Product Attributes
New Product Development
PLC
PRODUCT DEFINED
Product is anything that can be offered to
a market for attention, acquisition, use or
consumption that might satisfy a want or a
need .
PRODUCT LEVELS
Core Product
Tangible Product
Augmented Product
Characteristics of physical products
Augmented Tangible Product

Product
Core
Benefit
What is made Core
need
Turning a core product/need into

something we really want
Additional services and benefits

Ways of enhancing the product
Physical products - example car sale
Augmented
Product Tangible Product
Brand
Credi
Afte name
Capabilities t
r Features
sales Core
Benefit
transpor
Colou t
Quality/
r durabilit Personnel
Warranty Design y
/
styling
Delivery speed
PRODUCT CLASSIFICATION
Industrial goods: Purchased for the sake of
using them to produce other goods. They
include raw materials, Capital items and
industrial services.
Consumer goods: Purchased by ultimate
consumers. . They include convenience goods,
shopping goods and Specialty goods
PRODUCT MIX, PRODUCT LINE AND
PRODUCT ITEM
Definitions of Product Mix, Product Line and
Product Item
Product Mix Dimensions
Product Mix Determinants
Product Mix Strategies
DEFINITIONS OF PRODUCT MIX, PRODUCT
LINE AND PRODUCT ITEM
Product Mix is the set of all product lines and items

that a particular seller offers for sale to buyers
A product line is a 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 same types of outlets, or fall within
given price ranges.
A product item is a specific version of a product that
can be designated as a distinct offering among an
organization’s products.
PRODUCT MIX DIMENSIONS
Width: Number of different product lines
carried.
Length: Total number of items in the product
mix.
Depth: Number of variants of each product in
the line.
Consistency: Closeness of various product
lines in end use, production requirements,
distribution channels or some other way.
2 - The product mix
PRODUCT LINE PRODUCT MIX

Group of products WIDTH
related in terms of Number of different
functions/benefits product lines
PRODUCT
MIX
PRODUCT
LENGTH
Total number of items
in product mix
PRODUCT MIX DETERMINANTS
Market Demand
Competitive Actions and Reactions
Marketing influences
Production influences
Financial influences
Desire to change company image
PRODUCT MIX STRATEGIES
Expansion of the product mix
Contraction of the product mix
Alteration of existing products
Developing of new uses for existing products
Positioning the product
Trading up and down
Product differentiation
BRANDING DECISIONS
Definition of a brand and branding
Parts of a brand
Benefits of branding
Characteristics of a good brand
DEFINITION OF A BRAND AND BRANDING
A brand is a name, term, symbol, design, or a

combination thereof, that identifies a seller’s
products and differentiates them from
competitors’ products.
Branding constitute the activities involved in
giving a name to a product item.
Brand – the outer circle
Tangible Product
Augmented Customer service
Product
Brand
name
Capabilities Features
Core
Benefit
Packaging Quality/
durabilit
Afte Design y
r /
salesInstillatio styling Warranty
Potential n Delivery
Brand Personnel /
credit
PARTS OF A BRAND
Brand name
Brand mark
Trade Mark
Trade Name
Why brand?
Customer Company
perspective perspective
Helps with ever growing Can obtain premium prices
choice Or sell at market price to
increase volume
Reduces search costs And then benefit from
Reduces psychological risks economies of scale
Reduces new product risks
Gives customers confidence Distinctive identity – difficult
– heritage/reputation to copy
Therefore allows for easier Good products/brands add
choice – one more decision value
you don’t have to make! Builds internal pride
BENEFITS OF BRANDING
Identification of the products

Evaluation of the quality of the products
Symbolization of the quality perception
Easier to process orders
Legal protection of unique product features
Opportunity to attract loyal customers
Help to segment markets
Build the corporate image
Facilitates promotional efforts
CHARACTERISTICS OF A GOOD BRAND
It should suggest something about product’s
benefits
Easy to pronounce, to spell and to remember
Sufficiently versatile to be applicable to new
products added to the product line
Distinctive
Capable of being registered and legally
protected.
Why brands are so important – customer
perceptions – Coke V Pepsi
Why brands are so important
% of users who are loyal to one brand
Why brands are so important -
Durability of brands (USA example)
PRODUCT LEADING RANK 1991
BRAND
1923
Cameras Kodak 1
Canned fruit Del Monte 1
Chewing Wrigley’s 1
gum
Crackers Nabisco 1
Razors Gillette 1
Soft drinks Coca-Cola 1
Soup Campbells 1
Soap Ivory 1
Toothpaste Colgate 2
PACKAGING
Definition: Activities concerned with
designing and producing the container or
wrapper for a product.
Functions: Protection, Storage, Promotion,

Use facilitation, Transportation and
Competitiveness.
PRODUCT SERVICE AND PRODUCT QUALITY
ATTRIBUTES
Product Service include: delivery reliability,
prompt quotation, technical advice,
discounts, after sales service, sales
representation, easy of contact, replacement
guarantee, credit, warranties and repairs
Product quality include: high quality,
moderate quality and low quality.
NEW PRODUCT DEVELOPMENT
New Product Defined
Reasons for Developing New Products
Considerations in Developing New Products
Stages of New Product Development
New Product Adoption Process
STAGES OF NEW PRODUCT
DEVELOPMENT
Idea generation
Idea screening
Business analysis
Product development
Market testing
Commercialization
NEW PRODUCT ADOPTION PROCESS
Awareness
Interest
Evaluation
Trial
Adoption
THE FIVE MAJOR ADOPTER CATEGORIES
Innovators (2.5%): Venturesome, try new ideas at some risk
Early adopters (13.5%):Guided by respect, they are opinion
leaders, attempt new idea early but carefully.
Early majority (34%): Deliberate, accept new idea before the
average person.
Late majority (34%): Accept innovation after a majority of
people have tried it.
Laggards (16%): Tradition bound, adopt innovation b/se it has
now taken on a measure of tradition itself.
PRODUCT LIFE CYCLE
Product Life Cycle Defined
Product Life Cycle Stages
Characteristics of Different Stages of the
Product Life Cycle
Marketing Strategies in Different Stages of the
Product Life Cycle.
The relevance of PLC concept to the marketer
Critique of the PLC Concept
1 - The Product Life Cycle
Stages of a product’s life
sales
Revenue
(sales/
profit) Tim
e
Profi
t
Introductio Maturity Declin

n Growt Saturation e
h
1 - The Product Life Cycle
Product New Few Many Reducing Less
: Basic Differen Differen Standard Rationali
Market: Innovato t’d t’d Replaceme se
Sales: rs EAs/M LMs nt Laggards
Comp: Low s Fast Peaks Reduce Less
Profit: Little More Much Reduces Less
None Grows Reduces Reduces Reducing
Revenue
(sales/ Sales
profit) Tim
e
Profi
t
Intr Growt Saturation Declin

o h Maturity e
3 – Evaluating the product portfolio
Brings all PLCs together
Helps set broad strategic objectives (Build,
Hold, Harvest or Divest)
Checks for balanced portfolio
Allows comparison of ‘strengths’ v.
competitors
Guides flow of resources
A simple and effective presentational method
3 – 3 - The Boston Consulting Group Matrix -
evaluating the portfolio
Question
Hig
A
50%
Marks
C
?
15
h Star %
s
Cash Dog
Lo Cows B D
s
w
25 1
0
% %
M Hig Lo
ar h w
Relative Market Share
ke
t

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PRODUCT DECISIONS

Augmented Tangible Product

Turning a core product/need into

Additional services and benefits

Product Mix is the set of all product lines and items

PRODUCT LINE PRODUCT MIX

A brand is a name, term, symbol, design, or a

Identification of the products

Functions: Protection, Storage, Promotion,

Introductio Maturity Declin

Intr Growt Saturation Declin

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