Product is a bundle of all kinds of satisfaction that offer in the form of economic utilities to satisfying the group of consumers. The product may be in the form:
- Goods such as any visible object like Pen, Book, Raw Material etc
- Ideas such as Fast-food, Traffic solutions, Medical Transcription etc
- Services such as Transportation, Tourism,
Medical, Legal, etc
- Organizations such as Service and Economic
organizations
- Persons such as Musicians, Recreations,
Agents and middlemen’s etc.
- Places such as Tourist spots, Pilgrim
centers.
Product Classification
Consumer and Industrial Goods
Consumer goods are those which are meant for the consumption or final use of consumers. For Ex: Eatable, Automobiles, Household product and applications etc
Industrial goods are those which are used by business as inputs for further commercial processing. For Ex: Raw Materials, Spare parts, Machineries, etc
Durable and Non-Durable or Perishable
Durable such long-life product for the use long period for the both consumption and commercial purposes.
Non – Durable or Perishable such short life product can utilized for the consumption and commercial purposes for a short period of time.
Convenience, Shopping and Specialty Goods
Convenience goods are those product which are brought into within the minimum efforts at short time and convenience location. For Ex: Drugs and Medicines and Provisions etc.
Shopping goods are those where consumer devote considerable time in making selection before they purchase. For Ex: Electronic items and Automobiles, etc.
Specialty goods are those which enjoy certain special features and special efforts for purchase. For Ex: Land and Building, Investments, etc
Product
Strategies
- Product Mix or Product Portfolio
- Product Line
- Product Life Cycle
- Product Planning
- Product Development
- Product Branding, Packing and Packaging
- Product Labeling
Product
Mix or Product Portfolio
Is
the list of all the products with different product lines offered for sale by a
particular organization For Ex: HUL in the FMCG Segment. It has three
dimensions such as Breadth, Depth and Consistency.
Breadth
(Width) refers Variety of product manufactured by organizations. For Ex:
Automobiles from Honda company.
Depth
(Assortment) refers to the attributes or features of the product such as Size,
Colour, Styles, and Models etc. For Ex: Two Wheelers from Honda Company with
different CC engines, Colour combinations, Different gears, etc
Consistency
refers close relationship of various product lines. For Ex: Two wheelers for
Ladies and Gents.
Product
Line refers a Group of closely related products which are
enabling to satisfy a class of people within a given price range and
distribution channels. For Ex: Product Line adopted by Hindustan Unilever
Limited such as Hair Care, Skin Care, Tooth Care, Wash Care, Water Purifying
etc. Under this, the marketer has to adopt certain practices such as
Contraction, Expansion, etc
Contraction
refers deleting the existing product from the product line due to poor
performance of the products
Expansion
refers adding the new product for existing product line. It is strategy used by
marketers to capture new marketing opportunities.
PRODUCT
LIFE CYCLE
Is
a strategy to predict the product over a period of time in the market
environment in terms of several stages such as Introduction, Growth, Maturity
and Decline. In other words, it refers the graphical representation of the
product sales history from the time of introduction to decline or withdrawn in
terms of Sales, Cost of production, Profit, Competition, promotion, etc.
Stages
in Product Life Cycle
Introduction:
Under this stage a product introducing first time in the market. The product is
promoted to create awareness in the minds of consumers, The sales level is at
low rate, High cost of production due to lower production, profit not exist and
high promotion expenses.
Growth:
Under this stage the product acceptable by the consumers. Therefore, sales at
increasing trend with small amount of profit. On account of competitor’s price
become more flexible, distribution channels are expanded and also need high
promotional expenses. The stage is also called as Break – Even Stage, where
total cost is equal to revenue. If any excess revenue over cost treated as
profit
Maturity
or Saturation: It is the longest stage of the product.
Under this the product becomes more mature and stable in the market with sales
in increasing trend. Sufficient profit, intense competition and more substitute
available in the market. Hence the marketer or producer has to concentrate more
on product modification, affordable price, extended distributed channel, brand
loyalty of the product.
Decline:
Is a stage where product are become obsolete or producer withdraw the product
form market. Sales are decreasing gradually, more competition, profit
decreasing, cost of product in the increasing trend because low production. At
this stage price become the primary weapon of competition and considerably
reduce expenditure on advertising and sales promotion. Cost control becomes the
key to generate profits.
Graphical
Representation of Product Life Cycle
Product
Planning
Is
the systematic determination of the product line in terms of various products
to be offered by the enterprise to his customers. It is designed to achieve
some of the specific objectives of the organization. Such as:
Meet
the consumer needs and requirements
Assess
firm and product SWOT Analysis
Better
allocation of marketing resources
Help
for the organization to survive the market
Generate
sufficient sales etc
Basic
Components of Product Planning
Innovation:
Is the process of the adoption of new idea, product or services or process
which prospectively useful to extract the commercial benefits.
Diversification:
Refers product expansion in terms of Depth and Width. Depth in terms of changes
in product attributes. Width refers to number of products in the Product line
Standardization:
Refers limiting the variety of products offered for the sale and implies the
standardize feature for the product. It provides limited choice and more
clarity for the consumers.
Deletion
or Elimination: Refers deleting the product from the
product line due to ineffective, strong substitute in the market, decline in
the sales trend etc.
New
Product Development
New
Product Development refers to a product,
that is new to the company introducing to market or any product that consumer
treat as an addition to the available choices could be consider as new idea. It
taken place in the following ways:
Any
addition to the existing product line
Improved
performance of product
New
product line
Cost
reductions
New
to the world market
Reposting
in the product
Steps
in New Product Development
Step 1 - Idea Generation: It may
happened by internal and external sources. Internal sources include R& D
Department, Employees, Agent and Middlemen’s. External sources includes from any
sources other than internal sources such as Consumer, government, Companies
etc
Step
2 - Idea Screening: After gathering ideas from a variety of sources are
evaluated by review committee to provide the required market validation to
ensure they meet customer need and wants.
Step
3 – Business Analysis: Under this stage the producer should determine
Break Even Point (BEP), Return on Investment (ROI), Cash Flows, Pay out ration
etc to evaluate business effects on the product.
Step
4 – Product Development: Under this stage the producer is try to
describe the Technical Aspect such as Product Specification, Product method
etc. Marketing Aspects such as Branding, Packaging, labeling, etc.
Step
5 – Test Marketing: Is the actual conduct of marketing of the product
with in limited areas or location for the short period to test the
acceptability from the consumers. Essentials of test marketing are
Responsiveness, Demographic validation, Competition, Profit project etc.
Step
6 – Commercialization: Refers the
actual introduction of the product in the market. Under this stage the product
enters the market with large scale production, distribution, advertising and
sales promotion.
Reasons
for the Failure of New Products
Poor
demand management
Changes
in consumer taste and preferences
Changes
in environmental factors
Low
profitability
Unattractive
features
Wrong
segmentation and targeting
Weak
positioning strategy
Distribution
related problems
Bad
pricing strategies
Branding
Brand
is an identity of the marketer that allows consumers recognize the maker of the
product. Trade Mark is the legal term for the Brand Name. A registered brand is
the exclusive property of the seller. The letter “R” in a circle on each package
will indicate that the brand is duly registered.
The
term brand is broadly applied to all identifying market such a trade names,
trademarks, trade symbols, picture, design, of the package, distinctive
coloring or lettering with or without some attractive slogan.
Branding
is a process of through which a marketer creates a unique name and image for
the product in the consumers mind through marketing communication. In other words,
is the process of determining the brand with consideration Company Objectives
and product features and Target Consumers.
Brand
Equity refers to the value of a brand to an organization in terms of Commercial
benefits. That increases reputation and goodwill of an organization.
Importance
or Benefits of Banding of the product
It
helps for Product Identification
It
helps the consumer to perceive (Understanding) the product
It
creates Consumer Loyalty
Helps
for compete with other products
Enhance
revenues and market shares
Enhance
the Retailers Loyalty
Provide
Unique and differentiated image for the company
Creates
name and reputation for the company
Essentials
of Good Brand
Suggest
the product benefits
Help
for visual interpretation
Registered
and protected legally
It
should not depends on temporary
General
and common name of the products
It
should Unique, Attractive and Distinctive.
Branding
Strategies or Types
Corporate
Branding – Refers to use of company’s names as product brand
name in order to associate credibility of established company for the product.
For Ex: Reliance includes the word “Reliance” in the name of many offerings.
It’s also called as Family branding and umbrella branding.
Individual
Branding – Refers to use of unique brand name for each product
offered by a company in order to provide a separate image and identity. For Ex:
HUL for its product such as Lifeboy, Lux, Rexsona, Dove, Clinic Plus, Pepsodent
etc.
Multi
Branding – Refers to use of different brand names for two or
more mutually competing products offered by a company. For Ex: Honda Company a Two Wheeler
manufacturer are producing product in different name such as Dream Yuga, Honda
Shine, Honda Unicorn, etc. It is a strategy used by an organization to promote
internal competition between the products.
Range
Branding – Refers to use of different ranges of product in
effect creating a family or product offered by a company. For Ex: Nataraj a
Stationery, Lakmi a Cosmetics, Jhonson and Jhonson a Baby products, etc.
Private
Branding – Refers selling of products by the manufacturer in
bulk to large distribution channel member with freedom use their own brand for
the product. For Ex: Metro Cash and Carry, Bigbazzer, Electronics, etc.
Generic
Branding - Refers
selling of a product without brand name and they are usually sold at the lowest
price possible as there are no promotional expenses involved. For Ex: Bread,
Milk, Juice and Chicken item etc.
Packing
and Packaging
Packing
or Package is the term refers to provide a place for the product in the
Container or Wrapper. It provides protection, facilities to product use, and
storage, and communicates certain information’s.
Packaging
is the process of designing and producing the container or wrapper for the
product with certain marketing objectives of the organizations. It also
includes package factors.
Needs
or Importance or Benefits
Protection
and preservation
Logistic
Efficiency (In terms of Loading and Unloading, Handling the products)
Provide
relevant information about the product as well as producer
Convenience
for consumer for the time of purchase
Enhance
the product Image
Support
for product Identification
It
create better Product Positioning in the market
It
helps for product promotion
Types
of Packaging
Family
Packaging – Refers package for closely resemble products with
same design. It provide similar visuals for the all the products. It can be in
terms of colour combination produced by a company for a group of
consumers.
Multiple
Packaging – Refers to offer a range of distinctive package
configurations in basket, Wrap-style and enclosed cartons, combined, with
innovative storage and dispensing features. For Ex: Johnson’s New born baby
girl package with Baby Towel, Pampers 24 piece with Johnson’s baby Powder, Oil,
Shampoo, Cream, Soap, Brush, etc.
Reuse
Packaging – Refers to a package can be reused after consumption
of the product. It may construct of durable materials such Metal, Plastic,
Wood, Fiber, etc.
Ecological
Packaging – Refers the package which offers environmentally
responsible package for the product. The goal of ecology packaging is to sell
functional products that raise awareness and inspire individuals to change the
way they see the world and to provide the consumer better ways to save energy
and planet.
Labeling
It
refers an attractive small piece of paper, Fabric, Plastic or similar material
that is a part of package to indentify Producers, Use, Nature, Intergradient,
Distinction etc. In India Food and Safety Authority of India under the guidance
of Minister of Health and Family Welfare to give proper direction for packaging
for agriculture goods.
Needs
or Functions or Benefits
Identifies
the product or Brand
Describe
the product features, qualitative aspects
It
provides instructions for the use, store, and dispose the product
Describe
the contents
Facilitate
exchange offers.
Communicates
warranty and Guarantees of the product
Meet
the Legal Compliance
