PRODUCT

1. PRODUCT Marketing Management

2. SYLLABUS: Bcom(Marketing Management) Product: Meaning and Importance – Classification – Concept of Product Mix – Packaging – Branding – Brand Loyalty and Brand Equity – Labeling – Product Life Cycle – New Product development – Pricing – Factors Influencing Product Price – Pricing Policies and Strategies

3. SYLLABUS: BBAMarketing Management Product: Meaning and Importance – Concept of Product – Consumer and Industrial Products - Product Planning and Development – Discounts and Rebate - Classification – Concept of Product Mix – Packaging – Branding – Brand Loyalty and Brand Equity – Labeling – Product Life Cycle – New Product Development – Pricing – Factors Influencing Product Price – Pricing Policies and Strategies

4. Product: Meaning and Definition • A product is anything that has the ability to satisfy a customer need. (Jobber, 2004) • A product is a bundle of satisfaction that a consumer buys. • Product is the reason for marketing and the object of advertisement. • A product is something that can be acquired through exchange to satisfy a need or a want.

5. Levels of Product • Core Product: The fundamental benefit that a product delivers. For ex: Rest and Sleep in hiring a room in a hotel • Basic Product: This is the actual product a consumer is buying. For ex: a hotel room includes basic products such as bed, bathroom, fan, table, chair, water etc.. • Expected Product: This is a set of attributes and conditions buyers normally expect when they purchase the product. Hotel guest expect neat and clean room.

6. Levels of Product • Augmented Product: This is what the customer gets more than his expectations in product. For ex: Free break fast, welcome drink etc..in case of hotel room. • Potential Products: This is the evolutionary process through which the product may go in the future. The potential products incorporate all the possible benefits the product can provide today and tomorrow.

7. Product Concept • Product concept refers to the augmented product or the aggregate of satisfactions that a user obtains. • When buying an offset printing machine, the product may be augmented in the following ways: 1) Provide long term credit facility 2) Periodical servicing 3) Timely supply of spare parts etc… • It provides a reason for buying the product.

8. Classification of Products On the basis of durability…. • Non- durable goods: These goods are consumed fast and purchased frequently. Ex: Soap, Paste etc.. • Durable goods: These goods can be used for a long time. Not purchased frequently. Ex; refrigerator, furniture etc.. • Services: These are activities, benefits or satisfaction offered for sale. Ex: Hair cut, Train journey etc. Services are intangible, inseparable, variable and perishable.

9. Classification of Products On the basis of Consumption…. • Consumer goods: These are goods which are purchased for final consumption. These goods are purchased by ultimate consumers to satisfy their wants directly. Ex: Milk, books, shoe etc… • Industrial goods: These goods are meant for use in the production of other goods or for some business or institutional purposes. These goods are not directly used by consumers. They are four kinds: Production facilities and equipments, production materials, production supplies and management materials.

10. Characteristics of Consumer Goods • Final Consumption • Finished Products • Utility • Brand Name • Symbolism

11. Characteristics of Consumer Goods • Communication Packages • Numerous buyers • Small Quantity Purchases • Personal Considerations • Associated Services Delivery

12. Classification of Consumer Goods:On the basis of shopping habits • Convenience goods: Consumers usually purchase frequently or immediately with little effort from convenient location • Shopping Goods: Consumers buy after comparing the suitability, quality, price etc..of different brands. More expensive than convenient goods. Ex: Clothes, Jewellery etc.. • Specialty Goods: Buyers make special efforts to buy. Reluctant to accept substitutes. Customer is willing to search the shops. • Unsought Goods: Consumer does not normally think of buying; Insurance policy

13. Classification of Consumer Goods:FMCG Fast Moving Consumer goods are non durable goods that are frequently purchased. Products that have a quick turnover and relatively low cost. Also known as Consumer Packaged Goods. They are further classified in to three: • Staple goods: These are purchased on regular basis. • Impulse goods: These are purchased without any thought or planning. These are purchased on sight. Usually, consumer is buying other products, he buys them spontaneously. • Emergency goods: These are purchased immediately to fill an urgent need. Sudden need for an umbrella.

14. Classification of Consumer Goods:Colour Classification • Brown goods: Electronic entertainment goods like TV, radio, CD players etc… • White goods: Refrigerators, Washing Machine, Air conditioners etc.. • Red goods: goods that are consumed and replaced at a rapid rate. Junk food. • Orange goods: things like clothes consumers change in a moderate rate. • Yellow goods: Goods purchased infrequently and expensive.

15. Product Line • It refers to a group of closely related products or product items that are physically similar or are intended for a similar market. • For example, a range of toilet soaps is a product line. • A product item refers to a particular version of a product that is distinct.

16. Factors affecting Product Line Decisions • Consumers’ Preferences • Strategies and tactics of Competitors • Firms’ cost structure • Change in demand • Buying habits and patterns

17. Factors affecting Product Line Decisions • Marketing influences • Product influences • Company objectives • Product specialization • Line modernization

18. Product Line Modification • Product Line Contraction • Product Line Expansion • Changing models or styles of the existing product • Quality variation a) Trading up: process of adding higher quality products to the line b) Trading down: introducing lower quality products

19. Product Simplification • It means limiting the number of products a dealer deals in. • the policy of product simplification may either be adopted right from the beginning or it may be adopted later on. • When a company manufactures all the products of a similar nature , it is called product simplification.

20. Product Diversification • Reverse of product simplification • It is a strategy for growth and survival in the highly complex marketing environment. • It is the management policy to earn business and profits from a number of sources. • It simply means expanding breadth and length of product mix by adding new items or product lines.

21. Product Differentiation • It involves developing and promoting an awareness in the minds of customers that the companys’ products differ from the products of competitors. • Differentiation is the act of designing a set of meanigful differences to distinguish the companys’ offer from competitors offer. • It is made by using trademarks, brand names, packaging, labeling etc…

22. Product Mix • It is the total list of products which a firm offers to its buyers. • A firm with several product lines has a product mix. • HUL has 12 different product lines. • A product mix has four features: 1) Length 2) Breadth 3) Depth and 4) Consistency

23. Factors Influencing Product Mix • Change in Demand: 1) Change in population 2) Change in consumers’ income 3) Change in consumer behavior • Marketing influences • Production efficiencies: can enjoy number of efficiencies.

24. Factors Influencing Product Mix • Financial Influences: financial expenses per unit will come down • Use of waste: may produce byproducts by utilizing residual materials. • Competitors Strategy: • Profitability:

25. Product Branding • Branding means naming a product for its identification and distinction. • The word brand is derived from the Norwegian word ‘brandr’. It means ‘to burn’. • A brand lives in the mind of a consumer. A brand is a living memory of a product. • Brand is a name, term, symbol, mark or design or a combination of them which is intended to identify goods or services of one seller or a group of sellers and to differentiate them from those of competitors.

26. Product Branding • Brand can be mathematically expressed: Brand = Quality + Image + Price • A brand is a symbol of trust, warmth, value and loyalty. It is a perpetual entity that in the consumers’ mind • A brand has two parts: 1) Brand Name + 2) Brand Mark Brand name refers to that part of a brand that can be spoken including letters , word and numbers etc… Brand mark is in the form of a symbol or design. Only be recognized by sight. Can not be spoken

27. Trade Mark • It is a legal term. • When a brand name or a brand mark is registered and legalized it becomes a trade mark. • Registered brands are trade marks. • Brand, brand name, brand mark, trade mark, copy right are collectively known as thee language of ‘Branding’.

28. Brand vs Trademark • Name , symbol or combination of these • Can be copied • Limited scope • All brands are not trademarks • A symbol of the quality of a product • Registered Brand • Can not be copies • Wide scope • All trademarks are brands • A symbol of its company

29. Product vs Brand • Products are created in the factory, but the brands are created in the mind. • A product can be easily copied by a competitor, but a brand is unique. • A product can be quickly outdated; a successful brand is timeless • Products exist in the physical world; brands exist in the consumer perception

30. Reasons/ Objectives/Functions of Branding • Demand creation and pushing up sales • Makes product attractive and popular • Helps in identifying the product and distinguish it from others • Helps in advertising and sales promotion programmes • Ensures uniformity of quality and customer satisfaction • Easy to introduce new products successfully in the market • Helps the seller to earn goodwill or prestige • Develops brand loyalty and consumer preference All brands have one goal: Enhance their perceived value

31. Top brands in India • Colgate • Dettol • Rin • Ponds • Bata • Horlicks

32. Characteristics of a Good brand • Words should be simple and easy to pronounce • Should be memorable • Attracting to the eyes and pleasing to ears • Trade names must provide necessary suggestion about the products benefits • Name should be appropriate and suitable to the product • It should suggest some product quality • Should be clearly distinctive from others • Should not be outdated • Should immediately come to the mind of a customer.

33. Types of Brands • Manufacturer brands: Developed and owned by producers. Help customers to identify products with their manufacturers. Ex: Apple • Private distributor brands: Brands developed by wholesalers and retailers • Generic brands: Indicate only the product category and do not include any company name or idetifying terms • Family Brand: A single brand name for the whole line of closely related items. Ex: Amul • Individual Brand: Chelpark ink • Co-brand: Uses two individual brands on a single product. • Licensed brand: A company grants licenses to approved manufactures to use its brand for a mutually agreed terms.

34. Advantages or Importance of Brands • A brand has personality, character, feelings and identity • Take the name MARUTI from the car. Cr has no identity, no name, no goodwill eetc.. • Jeff Bezos (Amazon founder): “A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well”. • “It is possible to have a brand without a business. It is almost impossible to have an enduring and profitable business with out a brand.” (Vinita Bali, MD of Britannia)

35. Advantages or Importance of Brands/Advantages to manufacturers • Helps in maintaining individuality for the product • Enables the producers to popularize the product • Creates goodwill for the product • Marketing expenses can be reduced • Widens the market for the product • Facilitates introduction of new products • Creates brand loyalty

36. Advantages or Importance of Brands/Advantages to Consumers • Helps in evaluating the quality of the product • Helps in preventing adulteration of goods by middlemen • Branded products are sold in sealed packages. It gives protection • Consumers get products of uniform quality standards and design • Enables consumers to make easy buying • Assures fixed prices to consumers

37. Advantages or Importance of Brands/Advantages to distributors • It reduces the selling efforts • Helps in advertising and sales promotion programmes • Stability in the prices of branded products. This reduces risks • Reduces cost of distribution • Helps to find out quick moving products easily

38. Limitations of Branding • Expensive • Not easy to build up brand reputation and loyalty • Discourages trying out other new products by the consumers • Creates Brand monopoly • Promotes unfair competition • Branded goods are priced higher than unbranded goods • Consumers get confused to select a product from numerous brands

39. Brand Loyalty • It means the loyalty of a buyer towards a particular brand • It is a consistent preference for one brand over all others • It is a favorable attitude and consistent purchase of a particular brand. • It is the strong attachment of a buyer towards a particular brand. • Three levels for brand loyalty • Brand recognition • Brand preference • Brand insistence

40. Brand Loyalty: Advantages • Building a relationship with the brand • Customers become advocates of the brand • Brings positive word-of – mouth advertisement • Loyal customers are most profitable customers • It creates customers willing to provide more premium for the companys’ product • Cost of reaching loyal customers is lower • Helps to reduce competition

41. Determinants of Brand Loyalty • People • Product and Service Delivery • Product Features • Price • Policies and Procedures • Promotion and Advertising • Plan of the company

42. How does Brand add value? • Brands facilitate purchasing • Brands establish loyalty • Brands protect a firm from competition and price competition • Brands reduce marketing costs • Brands are assets • Brands have market value

43. What is Brand Cohotrs? A brand Cohort is a segment of loyal customers whose usage of that particular brand can be used to understand their reactions to other brands

44. Brand Equity • Brands can be treated as assets along with physical assets like building, equipments etc.. • It is the added value with which a given brand endows a product • It is the value inherent in well known brand name • It is the marketing and financial value associated with a brand’s strength in a market • It is the set of assets and liabilities linked to a brands’ name and symbol that add to or subtract from the value of provided by a product or service to a firm and /or that firms’ customers

45. Brand Equity • Brand equity is the incremental amount the customer pays to obtain the brand rather than a physically comparable product without the brand name • Brand equity is an important intangible assets. • Its significance is noticed during mergers and acquisitions • P&G bought Gillette for $ 57 billion • Godrej bought Goodnight for Rs 131 Crores (No factory , no staff , no office were given)

46. Element of Brand Equity • Brand Awareness • Perceived Quality and Perceived Value • Brand Associations • Brand Loyalty

47. Branding vs Grading

48. Product Life Cycle (PLC): • Everyone on this earth has a well defied life cycle. All human beings take birth, educate themselves, grow then become old and one day die. • The same way every product has a life cycle known as product life cycle. • Like humans, duration of cycle varies. • The concept is popularized by Theodore Levitt in 1965 • Like a man, the product also takes birth, rapid growth, attain maturity and then enters the declining stage.

49. Product Life Cycle (PLC): • Introduction ( A seed is planted) • Growth ( root takes place and leaves come out) • Maturity (Adulthood takes place) • Decline ( plant begins to shrink and finally die)

50. Product Life Cycle (PLC): • 1) Introduction ( A seed is planted) • First stage in the life of a product • Product is first available in the market • During this stage sales are low. Two reasons for that. • a) customers are unaware of the new product • b) they are cautious of buying something new • Costs are high as thee company invest large amounts of money to develop and launch the product. Profits are low • Currently products like e-books is in this stage.