AMITY SCHOOL OF BUSINESS BBA II Sem PRINCIPLES

AMITY SCHOOL OF BUSINESS BBA, II Sem PRINCIPLES OF MARKETING II Ruchika Jeswal

PRODUCT AMITY SCHOOL OF BUSINESS 2 • Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. • A bundle of attributes, offering for use/ consumption by the final consumer.

3 Products that can be marketed include: § § § § § Physical goods Services Experiences Events Persons Places Properties Organization Information Ideas

Levels of Product AMITY SCHOOL OF BUSINESS 4 Three levels of Product: • Core Customer value • Actual Product • Augmented Product

Levels of product 5

AMITY SCHOOL OF BUSINESS 6 Core Customer Value - What is the buyer really buying? - Marketer must define the core, problemsolving benefits or services that consumers seek. - E. g. Revlon lipstick, smart phone.

Actual Product -turn the core benefits into an actual product. -develop product and service features, design, a quality level, a brand name, and packaging. 7

Augmented Products • Build around core benefits and actual product by offering additional consumer services and benefits. • Intangible component of the product along with formal and core components. 8

Product and service classification • Two broad classes based on the types of consumers who use them: • - Consumer products • - Industrial products 9

10 • Consumer products – are products and services bought by final consumer for personal consumption. Further classified as: - Convenience - Shopping - Specialty - Unsought

Convenience Product 11

Shopping Products • are less frequently purchased. • Customer compare carefully on suitability, quality, price, and style. • Spend much time and effort in gathering information. • E. g. furniture, clothing, used cars, jewelery etc. 12

Specialty Products • Are products with unique characteristics or brand identification. • Willing to make a special purchase effort. • Less frequent purchase. • E. g. designer clothes, TVs , refrigerator, services of medical and legal professional. 13

Unsought products • Consumer does not know about or knows but does not think of buying. • E. g. life-insurance policies, blood donations, charity donations. 14

Industrial Products • Are those purchased for further processing or for use in conducting a business. e. g. lown mover. • Three groups of Industrial Products: I) Materials and parts II) Capital items III) Supplies and services. 15

16 I) Materials and parts i) Raw materials and parts: -Farm products (wheat, cotton, livestock) - Natural Products ( fish, crude petroleum, iron ore. ii) Manufactured materials and parts: - Components materials ( iron, yarn, cement, wires) - Component parts ( small motors, tires, castings)

17 II) Capital Items Aid in buyer’s production or operations. i) Installations -buildings ( factories, offices) - Fixed equipment's ( generators, drill presses, elevators, computer systems. ii) Accessory equipment - Portable factory equipment and tools( hand tools , lift trucks) - Office equipment ( computers, fax machines, desks)

18 • III) Supplies and Services are convenience products i) Operating supplies(lubricants, coal, paper, pencils) ii) Repair and maintenance items ( paints, nails, brooms) Business services include maintenance and repair services and business advisory services.

Product and service decisions. • Marketers make product and service decisions at three levels: ü Individual product decisions, ü Product line decisions and ü Product Mix Decisions 19

Individual Product and Service Decisions • • • Product Attributes. Branding Packaging Labeling Product support services 20

Individual Product and Service Decisions 21

22 • Product and service attributes: ü Quality-”freedom from defects” ü Featuresü Style and design.

BRANDING • Brand: a name, term, sign, symbol, design, or a combination of these that identifies the products or services of one seller or groups of sellers and differentiates them from the competitors. • Brand helps consumers: • Identify products • Product quality and consistency • Brand helps sellers: • Trademark provides legal protection • Helps to segment the market. 23

PACKAGING • It involves designing and producing the container or wrapper for a product. • It performs many sales tasks- from attracting attention, to describing the product, to making the sale. • Cos are using environmentally responsible packaging. 24

LABELING • Labels range from simple tags attached to complex graphics that are a part of the pack. • Functions: • • Describes things Promotion Positioning Connect with the customers. 25

Product Support Services • Support services which can be a minor or a major part of the total offering. • Services would be able to delight customers and add more profits. • Mixture of phone, email, fax, internet and interactive voice and data technologies are now used. 26

PRODUCT LINE DECISIONS • 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 range. • Major Product line decisions are: • Product line length ü Line filling ü Line stretching 27

28 • Product line filling – involves adding more items within the present range of the line. • Product line stretching- occurs when a company lengthens its product line beyond its current range. ü Downward stretching ü Upward stretching ü Both ways

Product Mix Decisions • The set of all product lines and items that a particular seller offers for sale. ü Four important dimensions: ü Width ü Length ü Depth ü Consistency 29

PRODUCT LIFE CYCLE STAGES 30

31 • PLC- The course that a product’s sales and profits take over a life time. • Not all products follow this PLC. • Some products are introduced and die quickly, others stay in the mature stage for a long time. • Some enter decline stage and are cycled back into the growth stage.

Four Stages • • • Product Development Introduction Growth Maturity Decline 32

Introduction A period of slow sales growth as the product is introduced in the market. • New product is first launched. • Sale growth is slow. • Profits are negative or low because of low sales and high distribution and promotion expenses. • Promotion spending high. • Few basic versions are introduced. 33

GROWTH A period of rapid market acceptance and substantial profit improvement. • Sales start climbing. • Early adopters continue buying, later buyers follow. • New competitors enter. • Market expands as new features are introduced. • Profits increase as promotion costs are spread over a large volume. 34

MATURITY A period of slow down in sales growth because the product has achieved acceptance by most potential buyers. • Sales growth slows down or levels off. • Greater competition. • Competitors mark down the prices, increasing advertising and sales promotions, product development increases to find better versions of the product. 35

36 Marketers can do any of the following : • Modifying the market. e. g. Moov • Modifying the product. e. g. cars • Modifying the market mix. changes in any Ps.

DECLINE • PLC stage in which a product’s sales decline. e. g. cassette , VHS tapes. • Many reasons: ü Technological advances ü Shifts in consumer tastes. ü Increased competition. 37

New Product Development • The development of original products, product improvements, product modifications, and new brands through the firm’s own product development efforts. 90% of new products fail why? • Poorly designed • Incorrectly positioned • Launched at a wrong time. • Priced too high. • Poorly advertised. 38

Steps of New Product Development Lay Future Plans yes 1. Idea Generation yes 2. Idea Screening yes 3. Concept Development & Testing yes 4. Marketing Strategy Development 5. Business Analysis yes 6. Product Development y e s yes 7. Market Testing No No Drop No No 8. Commercial ization y e s No Send the idea Back for Pdt. Devt. No yes No Modify the Product or marketing program? No

Idea Generation - The systematic search of new product ideas. - Internal sources: formal R&D, employees. - External sources: Distributors and suppliers, Competitors, customers. 40

Idea Screening 41 Screening new product ideas in order to spot good ideas and drop poor ones as soon as possible. -company wants only those ideas which will turn into profitable products.

Concept Development and Testing • A product idea must be developed into a product concept. • Product concept – A detailed version of the new-product idea stated in meaningful consumer terms. e. g. battery powered all-electric car • Concept Testing – It calls for testing-new product concepts with groups of target consumer. 42

Marketing Strategy Development • Designing an initial marketing strategy for a new product based on the product concept. • Three parts: - Target market - Planned value proposition. - Sales, market share and profit goals. 43

Business Analysis • A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives. - Look at the sales history of similar products. - Conduct market surveys. 44

Product Development • Developing the product concept into a physical product in order to ensure that the product idea can be turned into a viable option. 45

Test Marketing • The stage of new-product development in which the product and marketing program are tested in realistic market settings. - Three approaches: 1) Standard Test Markets 2) Controlled Test Markets 3) Simulated Test Markets. 46

Commercialization • - Introducing a new product in the market. Introduction timing Where to launch the product? Planned market roll out. 47