Principles of Marketing

1. Principles of Marketing Lecture-7

2. Today’s Topics

3. Product Strategies and Features

4. Product Mix and Product Line • Product Mix • The set of all product offered for sale by a company is called a product mix. • Breadth and Depth • Breadth = the number of product lines carried • Depth = variety of sizes, colors and models within each product line. • Product Line • A group of products similar in usage and physical characteristics.

5. Product Mix – Kraft Foods • Beverages • Coffee • Refreshment Beverages • Cheese & Dairy • Snacks • Confectionery • Salty snacks • Biscuits • Convenient Meals • Grocery • Desserts • Enhancers (dressings and spreads) • Cereals

6. Kraft –Beverages • Beverages > Coffee

7. Kraft –Beverages • Beverages > Coffee

8. Kraft –Beverages • Beverages > Coffee

9. Kraft –Beverages • Beverages > Refreshment Beverages

10. Kraft –Beverages • Beverages > Refreshment Beverages

11. Kraft –Beverages • Beverages > Coffee

12. Kraft – Cheese and Dairy

13. Kraft – Cheese and Dairy

14. Product Mix – Kraft Foods • Snacks • Confectionery • Salty snacks • Biscuits • Convenient Meals • Grocery • Desserts • Enhancers (dressings and spreads) • Cereals

15. Positioning the Product • Management's ability to: • bring attention to a product • differentiate it in a favorable way from similar products goes a long way toward determining that product’s revenues and the company’s profits. • Thus management engages in positioning the product • Developing the image that a product projects in relation to competitive products and to the firm’s other products. • Marketing executives can choose from a variety of positioning strategies. Sometimes they decide to use more than one for a particular product.

16. Positioning Strategies • Positioning in Relation to Competitor • Positioning in Relation to a product Class or Attribute • Positioning by Price and Quality

17. Positioning in Relation to Competitor • This strategy is especially suitable for a firm: • Has a solid differential advantage • Trying to solidify such an advantage. Example. • Intel launched a campaign to convince buyers that its product is superior to competitors. The company even paid computer makers to include the slogan, “Intel Inside,” in their ads. • Coca-Cola and Pepsi-Cola compete directly with each other in virtually every element of the marketing mix (even celebrity endorsers). • For other products, head-to-head positioning is exactly what not to do, especially when a competitor has strong market position.

18. Positioning in Relation to a Product Class or Attribute • Positioning strategy entails associating its product with (or dissociation it from) a product class or attribute. • Promoting products as being in a desirable class, such as “Made in America,” or having an attractive attribute, such as “low energy consumption” or “environmentally friendly.” • Widely used for food products. For example, Libby’s, Del Monte, Campbell’s, Kellogg’s • No (or very little) salt. • Low calories, Low cholesterol and fat (frozen foods)

19. Positioning by Price and Quality • Certain producers and retailers are known for their high-quality products and high prices. • Saks Fifth Avenue, Neiman-Marcus • Target, Kmart are at the other.

20. Saks Fifth Avenue

21. Saks Fifth Avenue

22. Saks Fifth Avenue

23. Kmart

24. Kmart

25. Kmart

26. Think ….. • Will celebrities endorse Kmart or Saks? • Which magazines will Kmart advertise in? • Which magazines will Saks advertise in? • Others?

27. The Product Life Cycle

29. The Product Life Cycle • Management must be able to recognize what part of the life cycle its product is in at any given time. • The competitive environment and marketing strategies that should be used depends on the particular life-cycle stage.

30. The Product Life Cycle • Introduction Stage:- During the introduction stage, product is launched into the market in a full-scale marketing program. • Growth Stage:- In the growth stage, or market-acceptance stage, sales and profits rise, often at a rapid rate. Competitors enter the market, often in large numbers if the profit outlook is particularly attractive. • Maturity:- During the first part of the maturity stage, sales continue to increase, but at a decreasing rate. When sales level off, profits of both producers and middlemen decline.

31. The Product Life Cycle • Decline Stage:- For most products, a decline stage, as gauged by sales volume for the total category, is inevitable for one of the following reasons: • The need for the product disappears. • A better or less expensive product is developed to fill the same need. • People simply grow tired of a product (a clothing style, for instance), so it disappears from the market.

32. Characteristics and implication of different PLC Stages

33. Brands

34. Brands • Brand • A name and/or mark intended to identify the product and differentiate from competitors. • Brand name • Words, letters, and/or numbers that can be vocalized. • Brand mark • Part of the brand that appears in the form of a symbol, design, or distinctive color or lettering. • Trademark • A brand that has been adopted by a seller and given legal protection. Includes brand mark brand name. One method of classifying brands is on the basis of who owns them thus we have producers’ brands and middlemen’s brands, the latter being owned by retailers or wholesalers.

35. Reasons for Branding • For consumers, brands make it easy to identify goods or services. They aid shoppers in moving quickly through a supermarket, discount house, or other retail store and in making purchase decisions. Brands also help assure consumers that they will get consistent quality when they reorder.

37. Reasons for not Branding • Two responsibilities come with brand ownership: (1) promoting the brand and (2) maintaining a consistent quality of output. • Many firms do not brand their products because they are unable or unwilling to assume these responsibilities.

38. Desirable Characteristics • Five characteristics determine the desirability of brand name for either a good or service. • Suggest something about the product, particularly its benefits and use. Example Mr. Goowrench, Holiday Inn, Minute Rice, and—perhaps best of all—DieHard. Product use is suggested by Dustbuster, La-Z-Boy chairs etc. • Be easy to pronounce, spell, and remember. Examples of simple, short, one-syllable names such as Tide, Surf etc.

39. Desirable Characteristics • Be distinctive. Examples National, United, Allied, or Standard. But are these really distinctive? • Be adaptable to new products that may be added to the product line. Example Kellogg, Lipton, or Ford may serve the purpose better than a highly distinctive name suggesting product benefits.

40. Branding Strategies • Both producers and middlemen face strategic decisions regarding the branding of their goods or services.

41. Branding within a Product Mix At lest three different strategies are used by firms that sell more than one product: • A separate name for each product. • This strategy is employed by Unilever and Procter & Gamble.

44. Branding within a Product Mix • The company name combined with a product name. • Examples include Johnson’s Pledge and Johnson’s Glo-Coat, and Kellogg’s Rice Krispies and Kellogg’s Corn Pops. • The company name alone. • Nowadays few companies rely exclusively on this policy. Examples Heinz in the food field, and General Electric in various industries.

45. Packaging & Product Features

46. Packaging • Packaging • Activities of designing and producing the container or wrapper for a product. • Package • The actual container or wrapper.

47. Advantages of Packaging • Protect the product on its way to the consumer. • Shipment, tampering (food, meds) • Provide protection after the product is purchased. • Cleaner, spilling, spoilage • Be part of the company’s trade marketing program. • Display and stacking • Be part of the company’s consumer marketing program. • Identify, “silent sales person”

48. Packaging Strategies • Packaging the Product Line • Create resemblance • Family packaging uses highly similar packages for all products • Multiple Packaging • Placing several units of the same product in one container e.g. tennis balls, candy bars, towels etc • Changing the Packaging • Correct a poor feature of a package or new packaging material.

49. Labeling • Label • A label is the part of a product that carries information about the product & the seller. • Types of Labels • Brand Label • Simple brand name as label e.g. mangoes • Descriptive Label • Gives objective info about product use, care, performance e.g. bottle of tomato ketchup • Grade Label • Gives info about product quality with a letter, number or symbol e.g. motor oil etc

50. Labeling Laws • The Federal Trade Commission Act (1914) • False or deceptive labels are illegal • Consumer satisfaction with labeling is low • Labels contain incomplete or misleading info • Fair Packaging and Labeling Act (1966) • Food and Drug Act (1906) • Food, Drug and Cosmetic Act (1938) • Nutrition Labeling and Education Act (1990)