1. Module III
Concept of Product- Classification of products-
Goods Vs Services- Major product
decisions-Product line and Product mix- An
overview of Brand Management- Packaging
and Labeling- Product life cycle- New product
development- Pricing- Factors affecting
Price Determination- Pricing Policies and
Strategies

2. CONCEPT OF PRODUCT

10. PRODUCT CLASSIFICATION
SHOPPING HABITS
• Convenience
goods:
purchased frequently ,
immediately , and with a
minimum of effort
E g :soft drinks, news papers

11. Convenience goods:
• Staples :
• Goods which come under the basic demands of human
beings
• consumer purchase on regular basis
• Eg : tooth paste, milk ,sugar ,rice
• Impulse goods: purchased without any planning or
search effort
• Eg : chocolates , potato chips,ice creams, magzines
• Emergency goods : purchased when a need is urgent
• Eg : umbrella ,sweaters

12. Shopping goods
• Customer characteristically compares on such basis
as suitability , quality , price and style
• EG : furniture , clothing ,Telelevisions,
jewelleries
• Homogeneous shopping goods: similar in quality
but differ enough in price, style etc
• Heterogeneous shopping goods: differ in product
features that may be more important than price

13. Specialty goods
• Unique characteristics or brand identification for
which a sufficient number of buyers are willing to
make a special purchasing effort.
• Eg : photographic equipment, antiques, jewellery,
wedding dresses

14. Unsought goods
• The customer does not know about or does not
normally think of buying
• Require advertising and personal- selling support
• Eg : life insurance , reference books

15. Industrial goods
classification-in terms of cost and
how they enter production process

16. Materials and parts
• Raw materials
–Farm products e g : wheat ,fruits
–Natural products e g : fish ,iron ore
• Manufactured materials and parts
–Component materials e g :pig- iron, cement ,
yarn
–Component parts e g : small motors , tyres

18. Capital items
• Long lasting good that facilitate
developing or managing the finished
product.
• Installations: Buildings and heavy
equipments
• Equipments: portable factory equipment
and tools and office equipments

19. Supplies and business services
• Short term goods and services that facilitate
developing or managing the finished product.
• Supplies (MRO goods)
–Maintenance and Repair items: paint, nails
–Operating supplies: writing paper , lubricants
• Business services
–Maintenance and repair services: maintenance of
air conditioner
–Business advisory services: legal, advertising

30. PRODUCT DECISIONS

31. PRODUCT DECISIONS
Decisions about the
intangible/augmented
product
Decisions about the
tangible/physical
product
Decisions about
the
product types
Decisions
about
functional
features
Decisions
about
quality
Decisions
about
branding
Decisions
about
style
Decisions
about
product
services
Decisions
about
packaging
Decisions
about
product
mix level
Decisions
about
product
ine level

32. Product mix/ product assortment
• Philip Kotler :
“The set of all products and items a particular
seller offers for sale”.

33. Four dimensions to product mix
Width : The width of the product mix consists of all
the product lines that the company has to offer to
its customers
Length : Length of the product mix includes the total
number of products offered to the customers
Depth :Depth of a product mix pertains to the
number of variants that are offered in each product
in the line
Consistency : Consistency of a product mix refers to
the relationship of the various product lines in
terms of end use, product requirements,
distribution channels, or some other way.

35. 4 product mix dimensions permit the
company to expand business
• Add new product lines
• Lengthen each product line
• Deepen its product mix
• Pursue more product line consistency

36. Product Line Analysis
• Product Line managers need to know the sales and
profit of each item in their line in order to
determine which item to build , maintain , harvest
or divest. Provide information for two key decision
areas :
• Product Line length
• Product mix pricing

37. Product Line length
• Line stretching: lenghten product line beyond its
current range
– Down market stretch : positioned in the middle market
– Up - market stretch: positioned in the high end of the
market
– Two –way stretch: positioned in the up market and down
market
• Line filling: lenghten product line by adding more
items within the present range

38. Product mix pricing
• Set of price that maximises profits on the total mix.
• Product line pricing
• Optional feature pricing
• Captive product pricing
• Two part pricing
• By –product pricing
• Product bundling pricing

39. Product line pricing
• Develop product lines and introduce price steps
• Seller establish perceived quality differences that justify the
price differences
• The process used by retailers of
separating goods into cost categories in order
to create various quality levels in the minds of consumers

40. Optional feature pricing
• Offer to sell optional products , features and
services along with their main product

41. Captive product pricing
• pricing the accessories, or captive products,
sold separately to work with those products
can be just as difficult, and may even affect
sales of the core product itself.

42. Two part pricing
• Consist of a fixed fee plus a variable usage fee
• Fixed fee should be low enough to induce purchase
of the service; profit can come from the usage fee

43. By –product pricing
• Pricing of products that are derived out of main
product.
• By product have value to a customer group ,they
should be priced on their value

44. Product bundling pricing
• several products are offered for sale in one
combined unit that is often marked at a
reduced price compared to the sum of their
separate purchase prices.

46. PACKAGING
• All the activities of designing and producing the
container
• Buyers first encounter with the product
• Build brand equity
• Drive sales

47. PACKAGING
Science, art and technology of enclosing or protecting
products for distribution, storage, sale, and use.
Packaging contains, protects, preserves, transports,
informs, and sells.
A pack is the economical means of providing for a
product
• Presentation
• Protection
• Identification/information
• Convenience/containment/compliance
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51. CALCIUM SANDOZ BOTTLES

53. PACKAGE DESIGNS
• ENGINEERING TESTS
• VISUAL TESTS
• DEALER TESTS
• CONSUMER TESTS

54. Labelling
• A simple tag attached to the product or an
elaborately designed graphic that is a part of
the package

55. Labelling
Labels applied to containers, equipment or premises should be clear. It
contains :
(a) the name of the product
(b) a list of the active ingredients
(c) the batch number assigned by the manufacturer
(d) the expiry date
(e) special storage condition.
(f) directions for use, and warnings and precautions that may be
necessary
(g) the name and address of the manufacturer or the company .
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