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1. WHAT IS PRODUCT?
Product is anything that can be offered in a
market for attention, acquisition, use, or
consumption that might satisfy a need or
want

3. Components of the Market Offering
Value-based prices
Services mix
and quality
Product features
and quality
Attractiveness of
the market offering

4. Five Product Levels
Potential product
Augmented product
Expected product
Basic product
Core benefit

5. Product Classification Schemes
Durability
Use
Tangibility

6. Durability & Tangibility

7. Nondurable goods
 Tangible goods
 Normally has to be consumed in one or few
uses
 Strategy- to make product available in many
locations

8. Durable goods
 Tangible goods
 It can survive to many uses
 Strategy- more personal selling & service

9. Services
Services are intangible, inseparable, variable,
& perishable product that normally require
more quality control, supplier credibility, &
adaptability.
Example:-
Haircuts
Legal advice
Appliance repairs

10. Customer-Goods Classification

11. Convenience goods
Convenience products are consumer products
and services that the customer usually buys
frequently, immediately, and with a minimum
buying effort

12. Shopping goods
Shopping products are consumer products and
services that the customer compares carefully
on suitability, quality, price, and style

13. Speciality goods
Specialty products are consumer products
and services with unique characteristics or
brand identification for which a significant
group of buyers is willing to make a special
purchase effort

14. Unsought goods
Unsought goods are those the customer does
not know about or normally think of buying
such goods.
Examples:-

15. Industrial-Goods Classification

16. Materials & Parts
They are the goods that enters the
manufacturer’s product completely. They falls
into 2 parts i.e. Raw material & manufactured
material and parts.
Raw material can be of
 Farm products (fruits, vegetables) &
 Natural products (crude oil, iron ore)

17. Capital Items-long lasting goods
Installations – building & heavy equipments
Equipments – portable factory equipments,
tools, office equipments

18. Supplies & business services-
short term goods
• Maintenance & repair items
• Operating supplies
• Maintenance & repair services
• Business advisory services

19. Product and Service Differentiation

20. Product differentiation -is a business level strategy in which firms
attempt to create and exploit differences between their products and those
offered by competitors. These differences may lead to competitive
advantage if customers perceive the difference and have a preference for the
difference.

21. Form : Many products can be differentiated in form – the size, shape,
or physical structure of a product.

22. Features : Most products can be offered with varying features that
supplement their basic function.

23. Customization : Marketers can differentiate products by making them
customized to an individual.
Mass customization is the ability of the company to meet each customers
requirement – to prepare on a mass basis individually designed products,
services, programs and communications.

24. Performance quality : is the level at which the product's primary
characteristics operate. Most product are established at one of four
performance levels : low, average, high, or superior.
Daag achhe hain

25. Quality : is the degree to which all the produced units are identical and meet
the promised specifications.

26. Durability : is a measure of the product`s expected operating life under
natural of stressful conditions, and a valued attribute for certain products .

27. Reliability : is a measure of the probability that a product will not
malfunction or fail with in a specified time period.

28. Reparability : is measure of the ease of fixing a product when
it malfunction or fails

29. Style : describes the product`s look and feel to the buyer .

30. Service Differentiation
• Ordering Ease
• Delivery
• Installation
• Customer Education
• Consulting Repair

31. Ordering Ease- It refers to how easy it is for
the customer to place on order with the
company

32. Delivery- It refers to how well the service is
delivered to the customer covering speed ,
accuracy and customer care

33. Installation- It refers to the work done to make
a product operational in its planned location

34. Customer education- It refers to how the
customer’s employees are trained to use the
equipment

35. Consulting- Customer consulting refers to data
information systems and advice services that
the seller offers to buyers

36. Repair- Repair describes the service program
for helping customers keep purchased
products in good working orders

37. Product Hierarchy
Need Family
Product Family
Product Class
Product Line
Product Type
Item

38. Product system and mix
Product system is a group of diverse but related
items that function in a compatible manner.
Product mix consists of all the products and
items that a particular seller offers for sale
• Width
• Length
• Depth
• Consistency

39. Product mix width is the number of different
product lines the company carries
Product mix length is the total number of items
the company carries within its product lines
Product line depth is the number of versions
offered of each product in the line
Consistency is how closely the various product
lines are in end use, production
requirements, or distribution channels

41. Product line
Product line is a group of products that are
closely related because they function in a similar
manner, are sold to the same customer groups,
are marketed through the same types of outlets,
or fall within given price ranges.
Product line length is the number of items in
the product line
• Line stretching
• Line filling

42. Product line stretching
Product line stretching is when a company
lengthens its product line beyond its current
range
• Downward
• Upward
• Combination
of both

43. Downward product line stretching is used by
companies at the upper end of the market to
plug a market hole or respond to a competitor’s
Attack
Upward product line stretching is by companies
at the lower end of the market to add prestige
to their current products

44. Product line filling
Product line filling occurs when companies add
more items within the present range of the
line
• More profits
• Satisfying dealers
• Excess capacity

45. PRODUCT MIX AND PRICING
• Price-setting logic must be modified when, the
product is part of a product mix.
• The firm searches for a set of prices that
maximizes profits on the total mix.
• Pricing is difficult because the various
products have demand and cost
interrelationships and are subject to different
degrees of competition

47. STRATEGIES
• Product Line Pricing
– Setting price steps between product line items.
• When firms offer consumers a choice of price-
quality levels – the “good-better-best” choice
– a challenge for managers is how to set price
differentials

48. EXAMPLE-TOYOTA

49. Optional-product pricing
• Optional-Product Pricing
– Pricing optional or accessory products sold with
the main product. Automobile company advertise
entery level model at very low prices to pull
people into their showrooms.
– EXAMPLE
– RESTAURANTS

50. OPTIONAL PRODUCT
PRICING
In Restaurants Customers
can often order liquor in
addition to the meal. Many
restaurants price their
liquor high and their food
low. The food revenue
covers costs, and the liquor
produces the profit. This
explains why servers often
press hard to get
customers to order drinks.
Other restaurants price
their liquor low and food
high to draw in a drinking
crowd.

51. Captive –product pricing
• Captive-Product Pricing
– Pricing products that must be used with the main
product
– High margins are often set for supplies
• EXAMPLE
• Cellular service operators

52. Captive-product pricing
A cellular service
operator may give a
cellular phone free if
the person commits to
buying two years of
phone service.

53. Two- Part Pricing
Service:- two-part pricing strategy
• Fixed fee plus a variable usage rate
EXAMPLES
• Amusement parks
• Telecom operators
• The service firm faces a problem similar to
captive -product pricing-namely, how much to
charge for the basic service and how much for
the variable usage

54. two-part pricing
strategy
Telephone users pay a
minimum monthly fee plus
charges for calls beyond
the minimum number.
Amusement parks charge
an admission fee plus fees
for rides over a certain
minimum.

55. By- product pricing
• By-Product Pricing
– Pricing low-value by-products to get rid Of them or to
earn extra margin in profit.
• If the by-products have value to a customer
group, they should be priced on their value. Any
income earned on the by-products will make it
easier for the company to charge a lower price on
its main product if competition forces it to do so.
• EXAMPLE
• In the timber industry

56. By-Product pricing
In the timber industry, for
example, by-products
include sawdust, small
offcuts and bark.

57. Product- Bundling Pricing
• Product Bundle Pricing
– Pricing bundles of products sold together
• When offering a mixed bundle, the seller
normally charges less for the bundle than if
the items were purchased separately.
• Good way to test market for a new product or
to clear the stock.
• EXAMPLES
• Resorts,Airfare deals etc.

58. Product Bundle Pricing
A theatre company will price a
season subscription at less
than the cost of buying all the
performances separately or
some combo offers in movies.
Because customers may not
have planned to buy all the
components, the savings on
the price bundle must be
substantial enough to induce
them to buy the bundle.

59. PRODUCT DESIGN
• Design is the totality of features that effect
how a product looks, feels and function to a
consumer.
• Design offers functional and aesthetic benefits
and appeals to both rational and emotional
sides.
• A well design product is pleasant to look at
and easy to open, install, use, repair and
dispose of.

60. Cntd...
• Holistic marketers recognize the emotional
power of design.
• Design can shift consumer perception to make
brand experiences more rewarding.
• A bad design can ruin a product prospects.
• Well design features can help differentiate a
product from others in the market.

61. PACKAGING
Packaging includes all the activities of
Designing and Producing the container for a
Product.

62. PACKAGING
 Packaging means any product after being in its
original form packed and gets ready to be served
in the market.
Well-designed products can build brand equity
and drive sales.
Packaging is the buyer’s first encounter with the
product and can influence the buyer’s behavior to
buy the product or not.
Some marketers call “p” of packaging as fifth “p”
of product-mix with product, price, place &
promotion.

63. Cntd...
 Various factors have contributed to the growing
use of packaging as a marketing tool :-
1) Self- service :- In supermarkets most number of
products are sold on the self-service basis. The
effective package must perform many of the
sales tasks : attract attention, describe the
product’s features.
2) Consumer affluence :- Consumer affluence
means consumers are willing to pay a little more
for the convenience, appearance, dependability
& better packages.

64. 3) Company & brand image :- Packages
contribute to instant recognition of company or
brand.
4) Innovation opportunity :- Innovative and
new style of packaging can bring large benefits
to consumers and profits to customers.

65. Packaging Objectives
• Identify the Brand.
• Convey descriptive and persuasive
information.
• Facilitate product Transportation and
Protection.
• Assist at-home storage.
• Aid product consumption.

66. LABELLING
A simple tag attached to the product which
carries brand name & different deals of
information.
It is a part of package.
It performs several functions.
It identifies the product.
It grades the product.
Where the product is made, by whom, what it
contains, how it is to be used safely.

67. WARRANTIES
• All sellers are legally responsible for
fulfilling a buyer’s normal or reasonable
expectations.
• Warranties are formal statements of expected
product performance by the manufacturer.
• Products under warranty can be returned to
the manufacturer or designated repair center
for repair, replacement and refund.

68. Cntd..
For manufacturers it is reasonable to provide
warranties.
It helps the customer to trust the brand.
It is beneficial for the company also, as
customers start taking interest & trust the
product due to the warrantee provided.

69. GUARANTEES
Many sellers either give general or specific
guarantee.
For eg: Procter & gamble promises general
guarantee to the customers.
Guarantees reduce the buyer’s risk.
Guarantees suggest that the product is of high
quality.

70. Cntd..
Guarantees can be especially helpful
when the company or product is not well
known in the market.
When the product’s quality is superior to
competitors.
Company’s service performance can be
measured by the kind of guarantees they
provide.

71. THANK YOU