CHAPTER-5

product
By: Dr.Dasari.Pandurangara

Product Levels

Product Levels: core benefit

The fundamental level is the core benefit: the service or benefit

the customer is really buying A hotel guest is buying rest and
sleep. The purchaser of a drill is buying holes.Marketers must see
themselves as benefit providers.

basic product

At the second level, the marketer must turn the core benefit
into a basic product. Thus a hotel room includes a bed,
bathroom, towels, desk, dresser, and closet.

expected product

At the third level, the marketer prepares an expected

product, a set of attributes and conditions buyers normally
expect when they purchase this product. Hotel guests minimally
expect a clean bed, fresh towels, working lamps, and a relative
degree of quiet.

augmented product

At the fourth level, the marketer prepares an augmented

product that exceeds customer expectations. In developed
countries, brand positioning and competition take place at this
level. In developing and emerging markets such as India and
Brazil, however, competition takes place mostly at the expected
product level.

potential product

At the fifth level stands the potential product, which

encompasses all the possible augmentations and transformations
the product or offering might undergo in the future. Here is where
companies search for new ways to satisfy customers and
distinguish their offering.

Classification of Consumer Products

Consumer-Goods Classification
Convenience Products

Shopping Products

Buy frequently & immediately

> Low priced
> Many purchase locations
> Includes:
Staple goods
Impulse goods
Emergency goods

Buy less frequently

> Gather product information
> Fewer purchase locations
> Compare for:
Suitability & Quality
Price & Style

Specialty Products

Unsought Products

Special purchase efforts

> Unique characteristics
> Brand identification
> Few purchase locations

New innovations
> Products consumers dont
want to think about.
>Require much advertising &
personal selling

Types of Consumer Products

Convenience
Products

Shopping
Products

Specialty
Products

Unsought
Products
10

Classification of Industrial
Products

Product System
Product Mix grid Showing Depth and Width

Depth
Depth -- number
number of
of
versions
versions of
of each
each
product
product
Length
Length -- total
total
number
number of
of items
items
within
within the
the lines
lines

Consistency

Product
Product Mix
Mix -all
all the
the product
product
lines
lines offered
offered

Width
Width -- number
number of
of
different
different product
product
lines
lines

Product Mix

Product Items, Lines, and Mixes

Product
Product Line
Line

A
A group
group of
of closely-related
closely-related
product
product items.
items.

Product
Product Mix
Mix

All
All products
products that
that an
an
organization
organization sells.
sells.

14

Product
Product Item
Item

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

Gillettes Product Lines and Mix

Blades and
Writing
razors
Toiletries instruments
Mach 3
Sensor
Trac II
Swivel
Double-Edge
Lady Gillette
Super Speed
Twin Injector
Techmatic

Series
Adorn
Toni
Silkience
Soft and Dri
Foamy
Dry Look
Dry Idea
Brush Plus

Paper Mate
Flair

Lighters

Cricket
S.T. Dupont
Atra

Right Guard

15

Depth of the product lines

Width of the product mix

Benefits of Product Lines

Advertising
Advertising Economies
Economies
Package
Package Uniformity
Uniformity

Why
Why Form
Form
Product
Product Lines?
Lines?

Standardized
Standardized
Components
Components

Equivalent
Equivalent Quality
Quality

16

Efficient
Efficient Sales
Sales and
and
Distribution
Distribution

Product Mix Width

The number of product

lines an organization offers.

17

Diversifies risk
Capitalizes on established reputations

Product Line Depth

3
The number of product
items in a product line.

18

Attracts buyers with different preferences

Increases sales/profits by further
market segmentation
Capitalizes on economies of scale
Evens out seasonal sales patterns

Adjustments
Adjustments
Adjustments to
to
Product
Product Items,
Items,
Lines,
Lines, and
and Mixes
Mixes

Product
Product Line
Line
Extension
Extension or
or
Contraction
Contraction

Product
Product
Modification
Modification

19

Product
Product
Repositioning
Repositioning

Product Modifications
Quality
Quality
Modification
Modification

Types
Types of
of
Product
Product
Modification
Modification
ss

Functional
Functional
Modification
Modification

20

Style
Style
Modification
Modification

Planned Obsolescence

21

The practice of modifying

products so those that
have already been sold
become obsolete before
they actually need
replacement.

Repositioning
Why
Why reposition
reposition
established
established brands?
brands?

Changing
Changing
Demographics
Demographics

Changes
Changes in
in Social
Social
Environment
Environment
22

Declining
Declining Sales
Sales

Product Line Extension

Adding additional products

to an existing product line
in order to compete more
broadly in the industry.
23

Product Line Contraction

Symptoms
Symptomsof
of
Product
Line
Product Line
Overextension
Overextension

Some products have low sales or cannibalize

sales of other items
Resources are disproportionately allocated
to slow-moving products
24

Items have become obsolete because of new

product entries

Product Life Cycles (PLC)

The course of a products sale and profit over it lifetime.

It involves five distinct stages:

product development,introduction,growth,maturity,and decline.

The
The Product
Product Life
Life Cycle
Cycle
Concept
Concept is
is Based
Based on
on Four
Four
Premises
Premises
Products have a
limited life.

Profits from a product

vary at different stages
in the life cycle.

Product sales pass through

Products require different
distinct stages, each with
strategies at different
different marketing
life cycle stages.
implications.

Sales & profits ($)

Sales & Profit Life Cycles

Introduction

Growth

Maturity

Time

Decline

Sales & profits ($)

Sales & Profit Life Cycles

Introduction

Growth

Maturity

Time

Decline

Introduction stage

The product life-cycle stage in which the new product is first

distributed and made available for purchase.

PLC Stages and Characteristics

Four Introductory
Marketing Strategies
High

Promotion

Low

High

Rapidskimming
strategy

Slowskimming
strategy

Low

Rapidpenetration
strategy

Slowpenetration
strategy

Price

Growth stage

The product life-cycle stage in which a products sales start

climbing quickly.

Maturity stage

The stage in the product life cycle in which sales growth slows or
levels off.

Modify the market,the product,and the marketing mix.

Decline Stage

The product life cycle stage in which a products sales decline

PLC Marketing Strategies

Stage
Stage

Objective
Objective

Introduction
Introduction Awareness
Awareness&&trial
trial
Growth
Growth

Marketing
Marketing Strategy
Strategy
Communicate
Communicatebenefits
benefits

Usage
Specific
Usageof
offirms
firmsbrand
brand
Specificbrand
brandcommunication,
communication,
lower
lowerprices,
prices,expand
expanddistribution
distribution

Maturity
Maturity Maintain
Maintainmarket
marketshare
share Sales
Salespromotion,
promotion,drop
dropprice,
price,
Extend
expand
Extendlife
lifecycle
cycle
expanddistribution,
distribution,new
newuses
uses
&&new
newversions
versionsof
ofproduct
product
Decline
Decline Decide
Decidewhat
whatto
todo
do
with
withproduct
product

Maintain,
Maintain,harvest,
harvest,or
ordivest
divest

What is new product?

Original products

Product improvements

Product modifications

New brands that the firm develops through its own research and
development efforts

Major stages in new product

development

Idea generation

Idea screening

Concept development and testing

Marketing strategies

Business analysis

Product development

Test marketing

Commercialization

New Product Development

Process
Marketing
Strategy
Development
Concept
Development
and Testing

Idea
Screening

Business
Analysis
Product
Development

Market
Testing

Idea
Generation

Commercialization

The Diffusion Process

Innovators
(2.5%)
Early Adopters
(13.5%)
Early Majority
(34%)
Late Majority
(34%)
Laggards
(16%)

The Diffusion Process