Types of Products

PRODUCTS

Consumer Products

Services

Industrial Products

Product Items, Lines, and Mixes

Product Item

A specific version of a product that can be designated as a distinct offering among an organizations products.

Product Line

A group of closely-related product items.

Product Mix

All products that an organization sells.

Product Mix
Width how many product lines a company has

Length how many products are there in a product line

Depth how many variants of each product exist within a product line Consistency how closely related the product lines are in end use.

C P PRODUCT LINE
ORAL CARE
Colgate Dental Cream Colgate Active Salt Colgate Max Fresh Colgate Total Colgate Visible White Colgate Plax Colgate 360 ActiFlex Colgate Sensitive Pro-Relief Toothbrush Colgate 360 Toothbrush

HOME CARE
Axio n Dish Washing Paste

PROFESSIONAL ORAL CARE

Colgate Sensitive Coalgate Periogard Coalgate Sensitive Pro Relief Coalgate Gel Kam Coalgate Visible White

PERSONAL CARE
Palmolive Thermal Spa Palmolive Aroma Shower Gel Palmolive Natural Liquid Hand Wash Fly. Health Palmolive Naturals Moisturing Body Wash

The 8Ps of Integrated Service Management vs. the Traditional 4Ps

Product elements

Place, cyberspace, and time

Process People

Promotion and education

Physical evidence Price and other user outlays

Productivity and quality

STRATEGIC MARKETING

Interaction Between Marketing & Corporate Strategy

Corporate Vs Marketing Strategy

Corporate strategy: Allocation of resources within an organisation to achieve the business direction and scope specified within corporate objectives. Marketing strategy: Defines target markets, direction and requirements in order to create a defensible position compatible with the overall corporate strategy.

Helps to control and co-ordinate the different areas of the organisation.

Marketing Plans And Programmes

Marketing plan: Turning strategies into implementable actions.

A detailed written statement specifying target markets, marketing programmes, responsibilities, time scales and resources to be used within the defined budgets.
Actions, often tactical, using marketing mix variables to gain advantage within target market. Means of implementing the marketing strategy. Normally detailed in the marketing plan.

Marketing programmes:

Influences On Marketing Strategy

Strategic Marketing Analysis Models

All these models view products as:
Manageable individual entities on an operational basis. A product portfolio (set of products each of which make a unique contribution to the corporate picture) on a strategic basis.

Analysis Models
Boston Box. GE matrix.

Shells directional policy matrix.

BOSTON BOX

Boston Box Dog - holds a weak market share in a low growth market.

Question mark - high market growth with low share.

Star - a market leader in a growth market. Cash cow - as market growth starts to trail off, stars can become cash cows. War horses - market leaders, whose cash generating position under threat due to negative market growth.

Ge Matrix

Shells Directional Policy Matrix

Porters Five Forces Model

Strategic Groupings

Examining Competitive Strengths And Weaknesses

Provides a valuable insight into their strategic thinking and actions.
Requires use of various information sources. Consider in terms of critical success factors. Rate competitors according to their strong and vulnerable points. Information can be used to plan and launch attack.

Useful Information About Competitors

Generic Strategies

Choice Of Generic Strategy

Fit between the demands of the strategy and the organisations capabilities and resources.
The main competitors abilities on similar criteria. The key criteria for success in the market and their match with the organisations capabilities.

Competitive Positions And Strategy

Attack Strategies

Defence Strategies

Co-operative And Independent Strategies

Many situations can also be characterised by peaceful coexistence and co-operative alliances between competitors.

Stages For New Product development

Idea Generation: Its a process which starts with search of idea. Sources of New Product Idea i) Customers ii) Competitor iii)Co. sales people iv) Scientist , R&D v) Dealers vi) Top mgmt. Customer needs & wants are places to start search for new products. Identify these needs through a)Surveys b) Tests c) Focused group discussion d) Suggestion & complaint letters from customers Idea Generating Technique: Brainstorm wild ideas / Problem analysis

Idea Screening: Reduction or pruning of no. of ideas is called screening DROP: Good idea is dropped GO- Poor idea is dropped. Product Idea Rating: Executive writes ideas in std. format.New product committee reviews it. Format Contents are Product, tgt., comptn., mkt. size , price, devlopment time, mfg. cost , ROI. Idea may be good but does that fall in line with Organisation Objectives? Objective: Profit, Mkt. share, Vol. , Other factors : Capacity, Capital , distribution Rating: Mktg. competence, Goodwill, R & D ,

Any product idea need to turn into a concept.

a)Who is to use this product? b) What benefit need to be built into this product? ( could be refreshment ,taste, nutrition, energy c) Occasion for the product : Breakfast drink, Lunch, Dinner Concept Positioning Each concept requires positioning. E,g i) Kellogs as a complete breakfast would compete against eggs, milk & other alternative ii) Soyfit would compete with fruit juices, soft drinks & other thirst quenchers Concept needs to be positioned against extg. Brands in the category. (Colgate Active salt)

Concept Testing & Development

Selected/shortlisted idea need to be converted into product concept. Product Idea :Possible idea that co. see itself offering to the market. Product Concept: An elaborated idea expressed in meaningful consumer term. Vino Sparkling:

Sofit: Soya As Health / Nutritional value.

Vino Sparkling
Key Attributes Spumante sparkling Convenient RTD format with crown cap and 375 ml bottle Inexpensive wine with higher alcohol content Easy drinking due to the carbonation

Positioning Current: The anytime refresher

Vino Sparkling
Target Profile Age group 20 to 35, Sec A to Sec C, across metros, mini metros, progressive towns to small interior towns. Students, recently employed, IT and ITES employees, older junior management sales professionals. Leading hectic lives, rely on simple amateur, inexpensive activities as stress relievers. Perceptions & Associations Carbonated grape juice Like champagne, RTD Potent fun drink

Vino Sparkling
Availability Across outlets, off premise and on premise, except the premium institutions and star properties Desired usage A convenient anytime drink, retail as well regular hang outs. An option over strong beer and an introduction to wine Marketing Activities Heavy POS with gate arcs, banners and posters Party sponsorships and association with sports Sampling sessions across permit room and beer bars

Vino Sparkling
Strengths Easy drinking, high alcohol sparkling wine Convenient handling due to bottle and crown cap Amazing price point Weakness Packaging not appealing enough to the younger higher SEC consumer Acceptability low at premium institutions

SWOT
Strength: Brand-Godrej / Infrastructure/Indigenous Weakness: Product-Composition/ Logistics-Availability Opportunity : Promotion-Awareness /Self Health/ Staple Substitute Threat: Negative Media / Innovation In Milk Substitute

Concept Testing : Testing these concepts with group of

consumers. E.g baked chips/wafers in different flavours. ( Hippo). Different set of questions are asked to peep inside consumers mind & understand which concept has strong appeal. a) Is the concept clear b) Do you see distinct benefit over comptr. Offering? c) Do you find concept & claims believable d) Do you like this above comptr.? D) Would you buy? Definitely/Probably/Probably not /Definitely not
Market Strategy Development I- Size, Behaviour of tgt. Mkt. , Estmd. Growth ,Positioning,Sales,Mkt. share,Profit II- Pricing, Distbn. Strategy, Budget III- long term sales & profit goals

Business Analysis:
Evaluation of business attractiveness of proposal. Revolves around sales, cost & profit projections. Once ok with co. policy product concept moves to product development stage.
Sales Estimation : To estimate Min. & Max. sales is to estimate risk. Product Life-cycle for three types of products. i) One time purchase: Flats /Med. Equipment ii) Infrequently purchase: Cars / Consumer durable iii) Frequently purchased: Fmcg

Estimate First Time Sales: Estimate first time purchase irrespective of product type. Estimate Replacement Sales: Actual cycle of replacement cycle would be influenced by customers economic conditions, cash flow, product alternative,company prices, finance terms & sales effort.

Estimate Repeat Sales:First time sales & repeat cycle purchase.

True for low value products. High rate of repeat purchase indicates satisfaction of customers.
Estimate Costs & Profits: On estimating sales Mgmt. needs to work on exptd. costs & profits of the proposal. Costs are estimated by concerned depts. R&D , Mfg., Mktg. ,finance . Normally projections are worked out for three years & review performance time to time. Product Development : On analysing overall proposal it moves to R&D & engg. Dept.to develop the physical product. Then this needs invstmt. i) R&D develops one or more prototypes (Physical version) ii) Prototype functioning smoothly under normal conditions. iii) Prototype is sent for budgeting mfg. cost.

Prototypes are sent to vigrous functionsl & consumer tests. Functional tests are performed in laboratory Consumer testing can take variety of forms a) Giving out samples to use it in homes b)Inviting consumers to laboratory. To know consumers likes/dislikes & their experience vis-a vis conventional products. Pre Test Marketing : Readiness of product on satisfactory functional tests. Brand Name /Preliminary Mktg. plan/ Packaging The purpose is to know how consumers/dealers react to using & repurchase of actual product & what are acceptable levels. Mkt. testing is influenced by Invst. Cost & time pressure & research cost. High invst. /risk products deserve to be mkt. tested so as not to make mistake. High risk product-create new categories.

Market Testing Methods

Consumer goods Mkt. Testing:To estimate main details on sales trial, first, repeat,adoption,purchase frequency. Various trends could ne noticed in this type of testing. i)Consumers trying product but not buying: Product dissatisfaction ii) High first time repurchase but a rapid wear out effect. iii) High permananent adoption but low frequency purchase
Methods Of Consumer goods Market testing. I) Sales wave Research: Home Research Offered product free for initial Testing-Offered product 3-4 times at reduced price & report level of satisfaction. Also used to expose consumers to advtg. Concepts & its impact on repeat purchase. Helps company to estimate repeat purcahse under conditions . Gives information on impact of advtg. on repeat purchase. (Do not indicate trial rate with diff. in sales promotion nor brand power to gain shelf space).

ii) Simulated Store Technique: (Known as Laboratory test mkts.) Invite group of consumers at Mall or elsewhere to brief screening & commercials. Includes well known commercials & new range one. Advantage: Measure trial & repeat rates, Advtg. Effectiveness. These results are used in maths equation to arrive at sales estimate. iii) Controlled Test Mktg.: Agreement with select stores to carry new products at a fee. Research firm identifies shelf location,displays ,Pop, Promotions & pricing. Shelf movements are tracked / Also test small advtg. In local newspaper. Disadvantage: Do not give experience in trying to to sell trade to carry new products. Exposes product to comptr. iv)Test Mktg.: Way to test new product in a situation resembes one that could be in full scale launching product . Co. identifies small town/city & sales force sells product to trade & giving good shelf exposure & ad support. To understand consumer behaviour towards for products. Advantages: a)Reliable Sales Forecast b) If Product sale fails below certain level co, can drop /modify it. c) May discover product fault.

Methods Of Test Marketing a) Avg. amt. of advtg. With free samples of distrbution ( Door to door) b) Heavy advtg. With samples c) Avg. advtg. Linked to redeemable coupons Avg. advtg. Without special offer. Objections a) Nations behaviour cannot be predicted through survey of small area. b) Difficult to predict market behaviour due to several factors. c) Comptr. Environment d) Effect of Economic conditions & weather Industrial Goods Mkt. Testing New industrial goods undergo extensive product testing. Used to measure performance ,design , reliability & operating cost. On successful completion co. may list in catalogue & give to sales force. Mkt. testing indicate product performance under actual wkg. conditions.

Methods Of Industrial Goods Testing a)Product Use Test: Co. Select pot. Customer & use product. Tech. people observe use of it by workers May hilight unanticipated problems. b) Participate In Trade Show : Customer views product& Mfr. Can evaluate interest of the buyers. ( Need to launch product immediately as exposed to competitor). c) To keep product at distributor dealer: showroom alongwith comptr. & other products. Co. can measure preference & pricing reactions in normal selling atmosphere.

Commercialization On +ve feedback on the product co. goes with commercial launch. Co. needs to gear up production capacity to cope up with estimated sales. To be Prepared for major Advtg. Cost. Decisions to be taken on four aspects When : a) If product replaces old one ( wait for stock depletion) b) Seasonal product Where: a) Decision on city, state, region, national. International region. b) High mkt. potential c) Market size d) Competitive pentn. Whom : a) Prospective customers b) Early adopters ,Heavy leaders , Qpinion leaders How: a) Develop action plan. b) Various techniques.

Business-to-Business (B2B) Marketing

Business-to-Business (B2B) Marketing

Objectives 1 Explain each of the components of the business-to-business (B2B) market. 2 Describe the major approaches to segmenting B2B markets. 3 Identify the major characteristics of the business market and its demand. 4 Discuss the decision to 7 Classify organizational make, lease, or buy. buying situations. Describe the major Explain the buying 5 influences on business 8 center concept. buying behavior. Discuss the challenges Outline the steps in the 9 and strategies for organizational buying marketing to government, 6 process. institutional, and international buyers.

 Business-to-business (B2B) market is significantly larger than the consumer market. Eg: Companies spend more than 300 crores annually just for office and maintenance supplies. Eg: Department of Defense budget in a recent year was 12000 crores. Business-to-business (B2B) marketing Organizational sales and purchases of goods and services to support production of other products, to facilitate daily company operations, or for resale.

DERIVED DEMAND

The linkage between demand for a companys output and its purchases of resources such as machinery, components, supplies, and raw materials. Eg: Demand for computer microprocessor chips is derived from demand for personal computers. Organizational buyers purchase two types of items: Capital itemslong-lived business aspects that depreciate. Expense itemsitems consumed within short time periods.
VOLATILE DEMAND

Derived demand creates volatility. Eg: Demand for diesel engine may be reduced if demand for

diesel slows.