4. Customer insight
• "Customers don't care about product features
or usability if a product fails to solve their
problem. It's not about the features
you want your product to have, it's about the
problems that customers need to solve. Solve
their problem better than anyone else and
you'll end up with a product your customers
can't live without.”
6. 3 P’s
• Physical evidence-The environment in which the
service is delivered and where the firm and
customer interact, and any tangible components
that facilitate performance or communication of
• People –In service sector people are the
differentiating factor between two organizations.
• Processes-Designed to add convenience to the
customer in a service setting.
7. Four C’s of marketing
• Product=customer needs and wants
• Price=cost to customer
9. What is a product
• Product supplies two utilities
1. Economic utility
2. Socio psychological benefits
Product may be anything that can be offered
to satisfy a want.
10. Product concept-3 dimensions
• Managerial dimension-Manager has to consider
product in terms of brand, packaging and product life
cycle & product mix(depth and width)
• Consumer dimension-for a consumer he is buying a
solution not a product. He looks at product as a set of
• Societal dimension-Society considers that marketing
contributes to well being of environment and does not
cause harm to consumers. Harmful products not to be
encouraged. Safety to users, resource utilisation,social
12. Product- 5 levels of a product
13. Product plan
Product plan-It is a plan or decision regarding
product mix. Below components of product plan
• Product line decisions
• Product mix decisions
• After sales service
• Product improvement and research.
15. Consumer goods classification based
on consumer shopping habits
A. Convenience goods-goods that customer
usually purchases frequently, immediately
and with minimum of
Three types of convenience goods
1. Staples-bought on regular basis
2. Impulse goods-perfumes
3. Emergency goods-umbrellas
16. Consumer goods classification based
on consumer shopping habits
B. Shopping goods-customer in process of
buying compares on suitability,quality,price
and style. Clothes and furniture.
C.Specialty goods-good with unique
characteristics or brand name for which the
buyer is willing to make a special buying
17. Product line
• It is a group of products which are closely
related because they perform a similar
function, are sold to same customer group,
marketed through the same channels or fall
within the given price ranges.
Example Hawkins has limited product line
because the customer group is the same-
19. Product mix
• Product mix(product assortments) is the set of
all products and items that a particular seller
offers for sale to buyers.
• Example-Nestle has four product lines
Chocolates-bar one &kitkat, Milk and milk
products,Beverages-nescafe & nestea,ready to
eat foods- maggi
22. Product mix
• Width is the number of product lines=4 for
• The product line length is the total number of
product items in each product line. Usually we
take the average product length.
• Depth of a product line-refers to the number
of product items offered under each product
23. Product mix
• Consistency-it is the extent to which a company’s
product lines are related with each other.
1. Are they marketed to the same/similar customer
2. Satisfy the same need of different customer
3. Do they have marketing, production or research
Example ITC low consistency
Example Hero group high consistency
24. Kotler’s social aspect of new products
1. Desirable products have both long term
welfare and provide immediate satisfaction.
2. Pleasing products give high immediate
satisfaction but low on long term welfare of
3. Salutary products give low immediate
satisfaction but long term consumer welfare.
4. Deficient products-do not provide both.
26. Product life cycle
1. Sales revenue rate of growth is slow.
2. Heavy advertisement and sales promotion
required to inform customers, induce trail and
secure distribution in retail stores.
3. Profit is low or negative as low sales volume as
customers buy on trial basis and also firm is still
learning techniques in production.
4. Basic product is offered.
28. Strategy for introductory phase
Skimming and penetration are two
1.Rapid skimming-high promotion and high
2.Slow skimming-high price and low promotion
3.Rapid penetration-low prices and high
4.Slow penetration-low prices and low
29. Product life cycle
1. Product is accepted by traders and early adopters of the
2. Rapid increase(acceleration) in sales followed by
3. New competitors enter the market.
4. Prices remain the same or fall slightly attracted by profits.
5. Profits increase as promotion costs are spread over higher
volumes and manufacturing costs per unit decrease.
6. Firm focuses on increasing volume of sales through
effective distribution and manufacturing.
30. Strategy for growth phase
1.Improves product quality.
3.Enters new market segments
4.Enters new distribution channels
5.Shift from product awareness to product
31. Product life cycle-maturity
1.Usually longest stage in PLC and has three phases. Growth
maturity(sales is still rising because of laggards entering
the market but rate is slow),stable maturity(sales is
stagnant as most customers have tried the product)and
decaying maturity(absolute sales falls and customers
switch to other products and substitutes)
2.Overcapacity drives out weaker competitors. Big 3 players
who serve the whole market and the rest focus on niches
like product specialization or market
specialization.example vespa is in lifestyle
3.Firms have to decide if they will a. Earn profits because of
high volumes or b. earn profit because of high
32. Strategy for maturity stage
Volume =no of users(A)*frequency of usage(B)
No of users(A) can be increased by
a. Converting non users to users.
b. Attracting competitor’s customers
c. Enter new markets
Frequency of usage(B) can be increased by
More frequent use-toothpaste twice a day morning &
More usage per occasion-shampoo wash twice per wash
New and varied uses-recipes on noodles etc.
33. Strategy for maturity
a. Quality improvement-introduction of MPFI
b.Feature improvement-auto start in Enfield
c.Style improvement-changing looks of Alto
34. Strategy for maturity
3.Marketing mix changes
a. Price reduction
b.To improve existing channels or add new channels
c.Should you increase the advertising or change the
d.Sales promotion-what should it use
e.Personal selling-more sales people,more
35. Product life cycle-decline
• All potential customers have purchased and
scope only for replacement sales.
• Consumption is constant and more intense
fight for market share with higher marketing
• Fall in selling prices and profit margins.
• Sales reaches the peak and about to decrease.
• Profit is highest on the border between the
maturity and saturation stage.
36. Product life cycle-decline stage
• Sales rapidly decline due to innovation, shift in
consumer tastes, competition.
• Firms reduce the number of products they
offer, remove them from weak channels of
distribution and cut the promotion budget.
37. Strategy for decline stages
1.Indentify the weak products and have a review
committee to drop it, leave it alone or change the
2.Increase the investment so that firm emerges as only
player and weak competitors quit.
3.Maintain firm’s investment till issues are solved.
4.Decreasing investments by exiting customer markets
and focusing on niches instead of whole market.
5.Harvesting-do not replace or do maintenance but focus
o recovering cash quickly.
6.Divest quickly before the valuation of company declines
38. Product life cycle
• It is not necessary that products will go
through all the stages. Some products
continue to be in maturity stage.
• The length and shape of lifecycle curve will be
different for different products depending on
the internal marketing efforts and external
39. Diffusion or adoption process
Developed by E.M Rogers. It is a normal distribution
or bell shaped curve.
1.Innovators-risk takers,young,educated,rich and
2.Early adopters-They are opinion leaders. High
exposure to all forms of media. well informed,
educated and more successful than average.
3.Average income,occupation,age and education.
They are bridge between old and new values of
40. Adoption -continued
4.late majority-older and less educated buyers,
limited purchasing power. They buy the
product only when it becomes a necessity.
Depend on word of mouth and reference and
less exposed to mass media.
5.Laggards-older less education, poorer and
traditional and highly price conscious.
Sometimes rural buyers are laggards.
42. Implications of adoption process
Companies usually develop two marketing mixes
1.one marketing mix for innovators and early
2.one marketing mix for early and late majority.
43. 5 step Adoption process
44. Methods of obtaining new products
2.Patent from other company
3.Acquisition-buying another company along
with its products.
45. Product planning for new products
• P.P is the act of managing and supervising the
search, screening, development and
commercialization of new products.
Modifications of existing lines and the
discontinuance of unprofitable items.
• Product planning has three growth strategies
1.Intensive growth-market penetration OR market
development OR product development.
2.Intergrative growth-forward and backward
3.Diversification growth-horizontal,concentric and
46. Product planning-I intensive growth
a. Market penetration-improving market share
with current products in their current
i. Increase frequency of usage.
ii. Attracting competitor’s customers
iii. Convert non users to users
47. Product planning-intensive growth
b.Product development-improve quality of
products example new alto(new product in
c.Market development-new customer groups for
existing products or introducing existing
products in new markets.
Example –existing product of fairness cream for
women can now target MEN for fairness
48. Product planning-Integrative growth
a. Backward Integration-the firm acquires a back
Example a sugar factory having it own sugarcane
b.Forward integration-firm makes a product
might enter into retailing of its own products.
c.Horizontal integration-company acquires
one/some of its competitors.
49. Product planning-diversification
a) Horizontal-company adding new products
unrelated to its existing products to existing
b) Conglomerate diversification-launching new
products not similar to existing products and at
new set of customers.
a) Concentric-new products similar to existing
products which appeal to different set of
50. Other Product planning
1.Product standardization conveys a commonly accepted
measure of physical attributes of a product. Example-
Standardization also means pruning the product line by
removing the slow moving products.
2.Product customization-designing the products to suit
the needs of the end customer. Idea is to give customer
benefit of mass production while still delivering a
3.Product elimination-remove products which are
dragging down the profits and have no scope for
51. New product development
1. Idea generation
2. Idea screening
3. Concept development and testing
4. Marketing strategy development
5. Business analysis
6. Product development
7. Market testing
52. Idea generation
Idea generation techniques
Attribute listing-listing attributes of existing product
and improving on them.
Need problem identification-consumers are asked
about needs, problems and ideas.
Brain storming-Alex Osborn -unlimited idea
generation of 10-12 people no criticizing ideas
forced relationship-different products are combined
example-fax cum copier machine.
53. Idea screening
Idea chairman and ideas to be reviewed and three buckets-
promising ideas, marginal ideas and rejects.
Drop error is dropping an idea which is promising or good.
Go error is selecting an poor idea and moving into
development and commercialization.
Three types of failures
Total product failure-product fails to recover even its variable
Partial product failure-covers all its variable cost and some
part of fixed cost
Relative product failure yield a profit less than the company’s
desired target rate of return.
54. Idea screening
1.Product idea rating device-statistically
calculation chances of product success.
Overall probability of success=probability of
technical completion*probability of
commercialization subject to clearing
technical *probability of commercial success.
Example-Elon musk-tesla has assured that by H2
in 2016 will launch.
55. Concept development and testing
A company’s research team has developed a
technology to tap solar power
Based on that technology we can have three
Solar lamps for residential use.
Solar water heater for residential use
Solar street lamps
56. Concept development and testing
Product idea is possible product might offer to
Product concept is a elaborated version of the
product expressed in meaning consumer
Product image is consumer’s picture of potential
57. Concept development and testing
The product concepts are tested with appropriate
group of target customers. They can be tested
physically or symbolically.
They can use virtual reality or pictures or word
Concept testing tests the need-gap level and purchase
intention of the different concepts.
Using statistics the above data is collected and the
concept chosen depending on company resources etc.
58. MSD-three time
• First year-product’s planned price, distribution
strategy and marketing budget for 1st year.
• First few years-Target market size, structure and
behaviour, planned product positioning(are you
communicating as premium or value for
money)and the sales, market share and profit
goals for first few years.
• Long term-long run sales and profit goals and
59. Business analysis
Measuring the business attractiveness by
1.Estimate of total sales=first time sales+
replacement sales or repeat sale.
2.Estimating cost and profits
3.Break even analysis.
60. Product development programme
The idea, concept is converted to a
PROTOTYPE(sample)which is closest to real
Then we have
1.Functional tests in the lab(bike is positioned as
economy bike so conduct mileage test)
2.Consumer tests by simple ranking(rank A<B and
C), paired comparison(A compared with B,B
compared with C,C compared with A) and
monadic rating(rate each product on 5/7 point
61. Market testing or pre testing
Once management is satisfied with functional and
consumer tests the company wants to test the
products in a real market setting.
How many test cities?
How long should test be carried out?
What information will be gathered from the test?
1. When to launch?
First entry-first launch
Parallel entry-simultaneous with competitor
2.Where to launch?
Which city-depends on company resources and
Early adopters, Heavy users, opinion leaders, cost
effective to reach.
69. Reason for failure of new products
1.Inadequate market analysis
2.Insuffecient and ineffective marketing support
3.Bad timing of introduction
4.Failure to recognize changing environment
5.Technical or production problems
6.Product problems and defects
7.Product not perceived as new by customers
8.Failure to estimate strength of competiton
• It is a name, term(trademark or logo),sign, symbol or
design or a combination of them intended to identify
the goods or services of one seller from those of
• Six levels of meaning
71. Features of a good brand
• Benefits-should suggest benefits-timex,sleepwell
• Easy to pronounce,spell,remember.-TATA
• Quality-should convey product quality-Royale
paint(highest quality from Asian paint)
• Should not carry poor meaning in other
• Legal protection-Trademark protection
72. Types of brands or brand name
1.Individual brand name-each product of a company has a
separate and different brand name.
2.Family brand name-One brand name for a particular product
line.example-kissan brand under HUL for sauce and Jam
3.Umbrella brand or blanket family name-for all products of
same company we will have company name.
4.Combination device-Company name with product name.
TATA company name
Ace product name
5.Private brands or middle man’s brand.
73. Test for choosing brand name
Eventually the proposed brand name will be tested by a
market research agency(find below test details) with few
customers before final decision.
1.Association test-what image comes to mind to the
2.Learning test-how easily consumer can pronounce the
3.Memory test-how easily the name is remembered.
4.Preference test-which names are preferred by test
consumers from the given choices.
74. Brand strategy decisions
1. Line extensions-company adds additional items in the same product
category under existing brand name. Example- for new
flavours,sizes.junior horlicks,women horlicks,mothers’s horlicks.usually
used for new sizes,flavours
2. Brand extensions-using existing brand name for new product category.
Example Reliance -same brand name used for telecommunications.
3. Multi brand-a company will introduce additional brands in the same
product category. This is done on basis of customer segmentation.
Example Sonata is TITAN product for low end while Raga is for
women(two different segments)
4. New brand-company launches new product using a new brand name.
5. Co brand-Two or more well known brands are combined in the offer
assuming that each brand will support the other.Example-jh TATA and
75. Advantages of branding
1.Lower marketing costs brand has it own PULL.
2.Helps in getting price premium with customers
3.Enables more control over the distribution and
4.Can easily launch brand extensions since
brand name has high credibility.
5.Offers defense to competition.
76. Advantages of branding
• Less marketing costs as brand speaks for itself.
• Can get price premium
• Stronger control over trade
• Strong corporate image enables easy
introduction of new products
• Legal protection
• Helps to segment the market
77. Packaging(silent salesman)
• Defined as activities of designing and
producing the container or wrapper for a
old spice bottle(primary packing)
Cardboard box(secondary packing)
Shipping package(tertiary package)-each
package contains 6 units meant for
transporting to retailers.
78. Difference between packing and
Packing is a physical activity which is aimed at
protection, prevention of damage, pilferage or
Packaging is over and above physical aspects of
the product. It concerns with the marketing
aspect. It serves as a promotional and
79. Importance of packing
• Self service-growing impulse purchase
• Conveys company and brand image
• Creates Innovation-making soft drinks in op top
• Consumer affluence-customers are willing to pay
more for convenience of easyportability/carrying.
Also prefer fashionable packing.
• Packing creates unique identity for a brand.
• Protection from physical damage and spoilage.
80. Functions of packaging
From marketing view
1. Advertisement and sales promotion
2. Identifies/distinguishes the brand from
3. Informs consumers about usage and
4. Act as USP-unique selling proposition
5. Communicates benefits.
81. Attributes of a good package
1Protect the content from damage or spoiling
2.Easy to open and dispense.
3.Available in proper size and shape.
4.Packing should be recyclable or bio degradable
6.Be safe-no longer glass jars are being used.
82. Packing innovation
• Squeezy sauce - wash-new way of product
• Dettol hand wash-new way of product
• Kinderjoy-marketing tool
• Tetra pack and pop up cans for soft drinks and
fruit juices. Allows customers to consume
when they want.
83. Functions of labeling
1.Identifies the product
2.Grading the product(A grade or B grade)
3.Describes the product-who made it,
manufacturing date, where it was made,
4.Promotion of product.
• Price is the only element in the marketing mix
that creates sales revenue the other elements
are costs-Philip Kotler
85. Objective of pricing-three objectives
1.Profit centered objectives
a.Maximisation of profit
2.Sales oriented objectives
a. Growth in sales
b.Growth in market share objectives
c.Maintaining market share
a. Avoiding or meeting competition
b.Non –price competition.
86. Internal Factors influencing pricing
1.Cost of production
2.Pricing objectives of organization
a. Maintaining ROI
b.Stability in prices
c.Increasing market share
3.Status of seller
4.Stage in PLC
5.Level of production
6.Ability to differentiate the product
87. External factors influencing pricing
1.Economic conditions(inflation )
2.Ethical conditions (essential medical drugs)
4.Availability and pricing of substitutes.
88. Physical distribution-HOP W ITC
The P(place)has two parts-PD and channels.
Elements of Physical distribution
a. Order processing
b.Handling of goods
89. Channels of distribution
Definition-Marketing channels- refers to sets
of independent organizations involved in
making of a product or service available for
use or consumption.
An organization can have a mix of different
types of marketing channels based on number
and nature of product lines(width),
organizational objectives(value or volume),
90. Factors affecting choice of channels
a. Customer-spread and population of customers
b. Competition-usually sold through same channels
c. Channels existing
a.Perishability of product
b.Nature or product-FMCG (hair oil,
toothpaste)requires wide coverage as compared
to consumer durables.
91. Factors affecting choice of channel
c.Technicality of product-highly technical will have
limited/short channel whereas commodity and
non technical products will have long channels)
d.seasonality-aerated drinks/ac/coolers have high
e.variety-more the variety longer the channel
f.Unit value-higher unit value products require short
channel where face to face persuasive selling is
critical. Low value products have longer channels.
92. Factors affecting choice of channels
a. Financial strength
a. Financial strength of channel partners(to keep
stock, transport and support staff)
b.After sales service(ability to provide after sales
94. Types of marketing channels
1.zero/direct channel-COCO stores-company owned
company operated(also known as exclusive
stores) or Phillips CT scanners sold directly to
2.One level/one tier(manufacturer-retailer-
95. channels functions-PPROFIN
1.Information-collecting and disseminating
information from producer to customer.
3.Negotiation-the channel does the negotiation
with customer so that final agreement on
price and other terms can be effected.
4.Ordering-channel communicates the desired
quantity to manufacturer.
Advertisement gives ‘reason to buy ’whereas
PROMOTION gives ‘incentive to buy’.
The change in demand (through promotion)is
secured by information, persuasion and
1.Cognitive response-awareness and knowledge
2.Affective response-changes attitudes from liking
3.Motivational response-purchase decision
98. Components of promotion
Promotion has 4 components
1.Advertising-paid & impersonal
2.Personal selling-sales force-personal and paid
3.Direct selling/marketing-paid and impersonal
4.Publicity or public relations-unpaid &
99. Nature and meaning of promotion
• Results in short term increase in sales
• Persuasive communication.
The 5 favorable opportunities to promote
1.Favourable trend in demand(for automatic cars)
2.Strong product differentiation
3.Latent product qualities
4.Emotional buying motives(buying a life insurance
after a child’s birth )
102. Functions of sales person(personal
1.Prospecting-searching for leads
2.Targeting-deciding time to be alloted for prospects and
3.communicating-information about product
4.Selling-approaching,presenting,objection handling and
5.Servicing-consulting,technical assistance, arranging
finance, coordinating delivery.
6.Information gathering-market research and intelligence
7.Allocating-the scarce goods to customers
103. Personal selling process
2.Pre approach-learn more about customer
3.Approach-meeting the customer
4.Presentation and demonstration
• AIDA-attention ,interest ,desire and action.
7.Followup and maintenance
Definition-it is a paid form of impersonal
presentation and promotion of ideas goods or
services by an identified sponsor.
Three objectives of advertising
1.To inform-informative advertising
3.To remind-reminder advertising
105. Creation of advertisement.
Two parts of a advertising copy
1.Advertisement theme. It is creative part.
106. 5 M’s of advertising
1.Mission-what are the advertising objectives?
2.Money-how much money needed
3.Message-what message should be sent?
4.Media-which media should be used?
5.Measurement.how will results be measured?
107. Essentials of a good advt copy
1.Should increase awareness
2.Should be able to solve customers be seen by
customer’s as solving their problem/needs
3.Should have high recall value
4.Should be sincere
5.KISS-keep it short and simple.
108. Media selection
1.Reach(R )-no of different persons who are
exposed to the advt in a specified time period.
2.Frequency(F)-no of times an an average
household/person is exposed to the message
in the specified time period.
3.Impact-qualitative value of a message given
through a medium.
Total number of exposures(E)=R*F.This is called
GRP-gross rating points.