Product

Of the 4 P¶s, the first P is a major carrier of

customer value. Product constitutes the core of the
offer made by a firm
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áhat is a Product?
A —
 is




  
    
 
 including
physical goods, services, experiences, events,
persons, places, properties, organizations,
information, and ideas.
iomponents of the Market Offering



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{ive Product Levels
{ive product levels
a iore benefit ± The fundamental reason why the product is purchased ± ex.
Soft drink ± refreshment, book ± knowledge, hotel ± rest and sleep, Mobile ±
communicate etc
a Basic product ± tangible aspects ex. Size, shape, packaging of the book; cot,
bed, towels, etc in case a hotel; the size, style, color of the Mobile phone
a Expected product ± a set of attributes a buyer expects in a product. Example a
fresh towel, clean toilet in case of a hotel; pages intact and readable print,
latest information in case of books; Mobile phone -ilarity in communication,
easy to use etc
a Augmented product ±attributes that exceeds the customers expectation.
Example ± a i of question bank free with the book; warranty with a laptop,
soft music / aroma in case of a hotel, Mobile ± features like high speed
internet etc.
a Potential product ± Something for the future. R& ; Tomorrows product.
Evolution of a product. Example ± a robot that can drive the car; Mobile
phones ± instruments that support 4 G technology
Jncreasing the value by augmentation
a Aristocrat Luggage ± Jn Jndia Aristocrat
introduced Luggage with wheels
a Haier Refrigerator - launched Jndia¶s first
bottom mounted refrigerator
a Google ± Search Engine Google
augmented its initial offer with mapping
service ± google earth
Product Mix and Product lines
a Product Mix ± denotes the complete set of
all products offered by the company
a Product Line ± A group of closely related
products constitutes a product line. The
product mix of a company is composed of
all the product lines it caries
a áidth of the product mix ± denotes the
number of product lines the company
carries
a Length of the product line ±number of
products / brands in the line
a epth of the product line ± enotes total
number of items in each brand in terms of
variants, shades, models, pack sizes etc
a SKU (Stock Keeping Unit) ± Each
independent item kept for sale
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a ÿ Roses
a Brooke Bond Taaza
a Lipton
a Red Label
a Taj Mahal



 
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a Breeze
a ove
a Hamam
a Lifebuoy
a Liril
a Lux
a Pears
a Rexona
Product Mix decisions
a Expansion of the product mix ± adding new product lines
related or unrelated to the existing product lines
a iontraction of product mix ± dropping of the unprofitable
product lines to save cost
a Altering existing products ± ihanging the product
example - launching in tetra packs. Launching upgraded
versions of software etc.
a Line pruning ± getting rid of brands or variants that are
not generating profits
Product line decisions
a Line stretching ± Addition of products in product line
a Trading up (up market stretch)± Addition of higher priced
prestige product to existing line. Example ± Maruti
launching high end sedan µKizashi¶
a Trading down ( own market stretch)± Adding new low
priced product variations to existing products. Example -
Mercedes introduced c-class.
 Traditional Product ilassification
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ionsumer Goods ilassification
  
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Product ifferentiation
a Product form ± oy soap, iheetos, Polo mint
a {eatures ± Zen LXi has power steering which is not
there in Zen LX
a iustomization ± Levis, ell
a Performance ± Mercedes
a urability ± uracell
a Reliability - Nokia
a Repair ability - Nokia
a Style ± Apple, Sony viao
esign ifferentiation
Service ifferentiation
a elivery ± pizza
a Jnstallation ± for industrial buyers
a iustomer training ± Mainly for
industrial buyers
a iustomer consulting
a Maintenance and repair
a Returns
Ginger Hotels has
carved a profitable
niche through its
innovative service
-
configuration
smart basics
 eveloping products for rural markets
a Products should be designed keeping in mind the
rural conditions
a Packaging is one of the key drivers of success in
rural areas
Jssue of transfer and storage: Rugged packing
The issue of affordability: small-unit packs
a Brand elements should be decided keeping in
mind rural consumers
áhat is the {ifth P?
 , sometimes called the fifth
P, is all the activities of designing and
producing the container for a product.
{actors iontributing to the emphasis on Packaging





 




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Jnnovations in Packaging
Packaging Objectives
a Jdentify the brand
a ionvey descriptive and persuasive
information
a {acilitate product transportation and
protection
a Assist at-home storage
a Aid product consumption
{unctions of Labels
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áarranties and Guarantees
Product Life iycle
a Businesses should manage their products
carefully over time to ensure that they
deliver products that continue to meet
customer wants.
The stages through which individual
products develop over time is called
commonly known as the  



 
The classic product life cycle has four stages
(illustrated in the diagram below):
introduction; growth; maturity and decline
Jntroduction Stage
a At this stage market size and growth is slight. it is possible that
substantial research and development costs have been incurred in
getting the product to this stage.
a Pricing ± Penetration or skimming can be done
a Jt is highly unlikely that companies will make profits on products at
the Jntroduction Stage. Products at this stage have to be carefully
monitored to ensure that they start to grow.
a Technology is unproven and not standardized
a {irst movers have to generate capital internally
a Business models are unproven
a iustomers lack information and are hesitant to buy. Advertising is an
effective tool
a Biotech, green products, bioinformatics, drug development, organic
food are some products in the take off stage
 Growth Stage
a The Growth Stage is characterized by rapid growth in
sales and profits.
a Profits rise due to an increase in output (economies of
scale)and possibly better prices.
a Jndustries with products in growth stage are called
Sunrise industries
a Business models take shape and possibly on a better
footing. Standardization increases.
a Automobile, mobile, information technology, organized
retailing, private healthcare, primary education are
examples of Sunrise industries.
a Jntroduction of new distribution channels
a Price may be reduced / increased
a Product brought out in different variations
Maturity Stage
a Jt is in this stage that competition is most intense as
companies fight to maintain their market share. Here, both
marketing and finance become key activities. Marketing
spend has to be monitored carefully, since any significant
moves are likely to be copied by competitors.
a The Maturity Stage is the time when most profit is earned
by the market as a whole.
a Abandon weaker products
a Jnvest in R& , Repositioning
a Jncrease sales promotion
a Steel, Textiles, oil and gas, BPO are some of the
industries which are considered to be mature in Jndia
 ecline Stage
a Jn the ecline Stage, the market is shrinking, reducing the
overall amount of profit that can be shared amongst the
remaining competitors.
a Jnvestment and capital practically cease. Returns decline
a Products tend to lose their brand power and become
commodities
a Agriculture, postal services are some of the industries
which are in decline in Jndia
a At this stage, great care has to be taken to manage the
product carefully. Jt may be possible to take out some
production cost, to transfer production to a cheaper
facility, sell the product into other, cheaper markets.
a epending on whether the product remains profitable, a
company may decide to end the product.