Product Decision

Chapter-6
 Presentation Outline
.
Concept and Classification of Products
Types and Features of Consumer Products
Types and Features of Industrial Products
Service Product: Concept, Features and Strategies
Product Life Cycle: Concept, Stages and Implications of Marketing Strategies
New Product Development : Concept and Development Process
Branding Decision: Meaning, Requirement and Strategies
Packaging: Meaning, Requirement and Strategies
Labeling Decision: Meaning, Types and Requirements.
 Meaning of Product
A product is a set of tangible and intangible attributes, including packaging, color,
price, quality, brand etc. plus the service and reputation of seller. A product may be
a tangible goods, services, place, information etc.
Those tangible and intangible things which provide satisfaction to consumer are
called product in marketing.
A product is anything that can be offered to market for attention,
acquisition, use or consumption and that might satisfy wants or needs.
Prof. Philip Kotler
 Concept of Product
.
1. Physical and tangible concept(touched and ownership transfer): This is
traditional concept. According to this concept, things having physical
existence are called product. Physical goods have the physical features like
color, name, size, weight etc.
2. Service intangible concept: According to concept, products can't be touched
but it can be felt. It can't be separated from the service provider and
ownership cannot be transferred like tangible product.
3. Augmented product concept (additional benefits): Total benefit received by
buyer while buying actual product is known as augmented product. Services
like warranty, free repair and maintenance are the example of this kind.
4. Total product concept: It combines all the tangible, intangible and
augmented product.
 Levels of Product

1. Core product(benefit):
2. Basic product (actual product):
3. Expected product:
4. Augmented product (extra offer):
5. Potential product:
 Levels of Product

1. Core product(benefit): The fundamental service or benefit that the

customer is really buying is called core benefit. Women buying lipstick is
buying beauty. A night hotel guest is buying sleep and rest.
2. Basic product (actual product): In addition to core benefit, the marketer
turns to the basic version of the product as well. The goods which provides
primary service is called basic product. For example, if a guest of hotel
hires a room, it needs mattress, table, towel etc. which should be available.
3. Expected product: At the third level, the marketer prepares an expected
product, namely a set of attributes that buyers normally expects and agree
to when they purchase this product. For example, a guest of a hotel expects
clean towel, peaceful environment etc. In the less developed competition
takes place mostly at the expected product level.
 Levels of Product

4. Augmented product (extra offer): At the fourth level, the marketer

prepares an augmented product, namely one that includes additional
services and benefits that distinguish the companies offer from
competitors offer. A hotel, for example, can augmented its product
by including television set, shampoo, rapid check-in, express check
out etc. In the same way, product delivery, warranty, guarantee, credit
terms, advice and instructions are also the examples of augmented
product.
5. Potential product: It indicates the possible augmentation and
transformation in future. The potential product points to its possible
evolution. The companies search aggressively for new ways to
satisfy customers and distinguish their offer.
 Product Classification (Types of Product)

Types of Product

Consumer Product Industrial Product

1. Raw materials
1. Convenience product
2. Fabricating materials and parts
2. Shopping product
3. Installations
3. Specialty product
4. Accessories equipment
4. Unsought product
5. Operating supplies
 A. Consumer Goods
1. Convenience product: Convenience products are generally low priced item that
consumer buy frequently. They are mostly low involvement product. Soap, tooth
pest, fruit, vegetable etc. are some of the examples of this kind.

Convenience products are consumer products and services that the

customer usually buys frequently, immediately, and with a minimum
comparison and buying effort.
Newspapers
Candy
Fast food
 A. Consumer Goods
Features of Convenience product
I. They have short life and less durable
II. No extra effort need to buy these product
III. Per unit cost of consumer product becomes very low
IV. Consumer doesnt plan to purchase the convenience product in advance.
V. Regular and continuous demand
 A. Consumer Goods
Marketing considerations of convenience goods
1. Arrangement should be made to sell through retailer
2. Long distribution channel should be selected.
3. Responsibility of advertising of such goods should be taken by producers
4. Goods should be set in attractive order in shops.
5. Such goods should be given certain brand.
6. Low price margin strategy should be taken.
 2. Shopping product
.

Shopping products are consumer products and services that the

customer compares carefully on suitability, quality, price, and
style
Furniture
Cars
Appliances
 2. Shopping product
Features of shopping product
1. More time and effort need to buy shopping goods
2. Such goods become more durable than others
3. Customers may not have full knowledge about such goods
4. Per unit cost is more than others.
 2. Shopping product
Marketing considerations for shopping product
1. Packaging need not be given importance.
2. Producers and seller should make joint effort for the advertisement of such
goods
3. More profit margin should be adopted
4. Brand has special role in selling such goods
5. Shorter distribution channel should be selected.
 3. Specialty Goods
.
The goods having special nature are called specialty goods. The
buyers buy such goods only after long effort and time. These goods
become compulsorily given brand name. Expensive cars,
ornaments, photographic equipment etc. are the example of this
kind.
 3. Specialty Goods
Features of specialty goods
1. Specialty goods generally bought on special occasion.
2. Special efforts are made and time is given to buy such goods.
3. While taking decision to buy such goods, their price and quality are not
compared with others.
4. Brand name is very important.
 3. Specialty Goods
Marketing considerations
1. Producers and sellers should make joint efforts for the advertisement of such
goods.
2. A strategy to fix or more price per unit and more profit margins should be
selected.
3. Brand name has special role in selling such product.
4. Shorter supply channel should be selected.
 4. Unsought product
.

If the consumers do not seek goods due to ignorance or even

knowing about them, such goods are called unsought product.
Consumer do not realize the necessity of such goods. Life
insurance, valuable stones, new invented goods etc. are the example
of this kind.
 4. Unsought product
Features of unsought goods
1. No buying plan is made for such goods
2. Generally brand or trade mark has no role to sell such product.
3. Consumer may or may not have knowledge about such goods.

.Marketing considerations
1. Buyers may not have the information about such goods. So, information should
be provided.
2. A strategy of personal selling should be adopted.
3. Price of such goods can be fixed relatively more.
 B. Industrial Product
The goods purchased for industrial purpose but not for domestic use are called
industrial goods. Such goods are purchased for manufacturing/making other
goods. Machineries, equipment, operational supply, parts etc are the example of
industrial goods. The buyers of industrial goods are business organization,
organizational institutional, private and government offices and producers. Such
industrial goods can be classified into five categories.
 B. Industrial Product
1. Raw materials: The materials used to create new goods are called raw material. Finish
goods are made by changing quality, shape and form of such raw materials. The raw
materials are also divided into two categories-i) Agricultural product- like rice, tobacco,
vegetables, milk, meat etc. and ii) Natural materials- like gold, silver, petroleum etc.
Features
I. Industries purchase raw material regularly.
II. Per unit value of raw materials becomes low.
III. The life of agricultural product becomes very short.
IV. Only big business or producers deal in natural goods.
Marketing considerations
V. Attention should be given to the quality of raw material than to the brand.
VI. Shortest channel should be used.
VII.No pre or post sales services are needed.
 B. Industrial Product
2. Fabricating parts: The goods which are used as part of readymade goods are called
fabricating parts. After including such parts or materials in main product, new type
product becomes ready. Motor tyres, buttons, batteries, machinery parts.
Features
I. Per unit value of such products becomes relatively low
II. These type of parts or materials should be purchased in large amount
III. The fabricating parts or materials are used without changing their quality, form and
nature to prepare a third product.
Marketing considerations
IV. Supply or distribution channel of such goods should be short and direct as far as
possible.
V. Post sales service should be compulsorily provided
VI. Promotional activities should be conducted.
 B. Industrial Product
3. Installation: Installations are generally high priced capital product that have
longer life span longer life. Installation directly affects the scale of operations in a
manufacturing.
Futures
I. Per unit price of big machine becomes high.
II. These goods are not bought every time.
Marketing considerations
III. Distribution channel of such equipment be short as far as possible.
IV. Assurance to buyer for post sale services
V. Personal selling should be given preference
 B. Industrial Product
4. Accessory equipment: The equipment which helps in business activities are
called accessory equipment. Such equipment are not directly used in production
function. Hand tools, table, chair etc. are the examples of this kind.
Features
I. Life of accessory equipment becomes short
II. Price of such equipment becomes average
III. The accessory equipment helps to make production easier.
Market considerations
IV. It should be sold through intermediaries
V. After sales services should be provided in buyers need.
VI. Promotional activities should be conducted.
 B. Industrial Product
5. Operating suppliers: Operating supplies help to conduct business activities
continuously. Stationery, fuel, oil chemical etc are the examples of this kind.
Features
I. Per unit value of such goods becomes very low.
II. Such goods have relatively short life.
III. No much time and effort is needed to buy.
Market considerations
IV. Indirect channel should be used.
V. After sales service is rarely provided
VI. Promotional activities are not important for such goods.