Product Mix
Definition:
The number of products carried by a firm at a
given point of time is called Product mix.
Pack size
Price points
Promotion
Media spends
Productmix
Product line strategies:
Adding depth to an existing line by
introducing
new product in the same category.
Product extention:
The customer with more choice act as a
defence against the competitors
Productmix
Parent Brand:
Pepsi co
Slice
Pepsi
Miranda
Extention---Lays
Product mix strategies
Market penentration strategy
1-More purchase and usage from existing customer
2-Gain customer from competitor
3-Convert non users to users
Product development strategy
1-Product modification my new features
2-Different quality levels
3-New Product
Product mix strategies
New market:
1-New market segment
2-New distribution channels
3-New geographic area
Diversification Strategy:
1-Organize growth
2-Joint venture
3-Mergers
4-Acquition/Takeover
New product development
Why?
1-To satisfy the change in consumer demand.
2-To counter the move of competitors who have
launched a new product.
3-To remain aligned with the changes in technological
environment,which enable launch of new product
4-To increase sales and profit of the organization
5-Different product at different life cycle?
New product development
1-Idea generation
From whom? Company?&Public?
Tata motors
Intel
2-Screening stage
Ideas evaluated
Risks considered
Feasiblity
Nature of demand
Compatability-Corporate goal&existing product line
Resources-Money ,time technology
Competiotion-SWOT
New product development
3-Detailed value offering evaluation
Detail evaluation for latter stage
Product must be simple to use
Convenient to store
Touch & strong experience
Eg
1-Torches
2-Electrolux bijlee refrigerator can have babckup
for 12 hours.
New product development
3-Detailed value offering evaluation
Concept testing
Response in limited market and wider market
Test marketing
With existing market product
Entire market is tested
Size of sample
New product development
4-Commeralization/Launch
Celebrity is used for publicity
Promotion Strategy
Pricing strategy
Place strategy
Product life cycle[PLC]
1-Introduction
2-Growth
3-Maturity
4-Decline
Length in each stage depends on
A-Consumer acceptance
B-Innovativeness
C-Price proposition
D-Nature of product
Product life cycle
Most companies go for rural market and then to
urban market.
Now adays companies go straight to rural
market than to urban [Link] using a
different strategy.
Eg-Reengineering
VCR replaced by DVD
Product life cycle
Duration of Product Life cycle depends on
(a)Market condition
(b)Growth of particular market segment
(c)Trends in buyers spending capacity
(d)Technological development in the industry
(e)Company policy.
Product life cycle[PLC]
1-Introduction
*Growth is very slow
*sales volume is low
*Product awarness is limited
Hurdles
Existing use of the other brand influence to use
the brand.
Tactics/Strategy
1-Modification/value addition in the product design
2-Making product more relevant to the customers
3-launching medium packing
Product life cycle[PLC]
2-Growth Stage
Pricing strategy
Place strategy
Depending on the penentration
Promotion Strategy:
(a)Increase in promotional budget:
(b)Targeting the early majority
(c)Highlighting the quality/performance of the
product
Product life cycle[PLC]
3-Maturity Stage
*Product will remain in a stage for longer time
(a)Intense competition
(b)Similarity /Standardisation of product service
(c)Weaker or non serious player withdraw.
Focus
Defending the market share.
Maximising the profit
Elongate the maturity stage
Helps in not to fall in decline stage
Product life cycle[PLC]
3-Maturity Stage(cont)
Product Differentiation
Place strategy
Pricing strategy
Product life cycle
4-Decline stage:
(a)Sales starts dropping
(b)Demand diminishes
(c)Market for product category shrinks
(d)Inventories start piling up
(e)Overall profit starts to decline for the entire
industry
Product life cycle
4-Decline Stage(cont):
Eg-Toothpaste
Eg-Washing soap affected by washing
machine?
How to tackle:
1-Rejuvenate the product
2-Harvest the product-sell and gain profit
use Nichemarketing.
3-Tie in promotion-Link with other product
Product
concept&classification
Definition:
Formulating an offering to meet the need
&wants of the customer
Offering a product
Based on
1-The product feature &quality
2-The service mix & quality
3-The appropriateness of the offering price
Product
concept&classification
Example:
Whirlpool washing machine
TVS Bikes
HeroHonda
Goodday
Parle-G
Product
concept&classification
Perception of rural consumers
1-Don’t always perfer low priced products.
2-Rural market is not a dumping ground.
3-Product must be Simple
4-Easy to use
5-Visually identifiable
6-Affordable
Product
concept&classification
Examples:
Packing of
Paints:
Fertilizers:
Torches:
Five levels of product
(1) Core Benefit product
(2) Basic product
(3) Expected product
(4) Augumented product
(5) Potential product
Five levels of product
1-Core Benefit product:
Same for rural and urban Eg-A movie,
A family package trip by volvo bus
[Link] &entertainment .
2-Basic product:
Same for rural &urban
Eg-Motorcycle,Television ,LPG stove,Steel
for
Construction,bricks,sand&cement.
Five levels of product(cnt)
3-Expected product:
Buyers expects a set of attributes & marketers
are ready to explain the product.
Eg-Rural people expects Tv easy operation,good
sound &clear picture.
Urban people expects flat TV,Digital sound,clear
picture,Child lock.
Rural-Bike-Economy,shockabsorber,low
maintenance cost.
Five levels of product(cnt)
4-Augumented Product:
“That meets the customer desires beyond
expection”
Rural-Battery operated Tv sets, Better picture
quality in weak signal conditions, on screen
display in local language ,solar radios,
calculators.
Urban-Built in DVD+Television,a setup box to
watch his/her favourite.
Classification of Products
“There is no such big classification of products
in rural and urban area”
But some rural products do in to some new
categories like
1-Fertilizers,2-Pesticides,3-Agri inputs&agri
implements
2-Resale plays important role
3-Ground level cooking in rural requires a
pressure cooker with handles on both sides so
that can be lifted easily.
Rural product categories
RURAL PRODUCT
FMCG CONSUMER DURABLES AGRI GOODS
SERVICES
MARKET SEGMENTATION
1-Segmentation
2-Targeting
3-Positioning
1-Segmentation
(a)Process of dividing heterogeneous market:
1-submarkets:
Eg-Districts-Cbe
2-Homogenous one:
Eg-Farmers,Daily wage labours,salaried
employees, micro entrepreneurs etc.
MARKET SEGMENTATION
2-Heterogeneity in Rural:
*Social cultural differences across regions
*Variation in population size & village density.
*Infrastructure development-Logistics.
*Media exposure levels-News paper,cinema,
*Literacy levels variations
Eg-Climate difference-Deodrants,chyanaprakash
Poor electricity aids sales of flash
lights,batteries&Mosquito coils
North indians culture to have large house holds
MARKET SEGMENTATION
Prerequisites for effective segmentation
Segmentation would have to fullfill the following
requirements:
1-Measurable
*Need proper ground work
*Nowadays rural customer began to change as
urban customer.
*Monthly income cant be accessed due to non
uniform income patterns &multiple source of
income.
MARKET SEGMENTATION
2-Accessible:
3-Differentiable:
4-Substantial:
(a)Homogenity
(b)Largness:
large number of small users,small number of
large users.
Degree of segmentation
(1) Mass Marketing
(2) Segment marketing
(3) Niche marketing
(4) Micro marketing
(5) Local marketing
(6) Individual marketing
Degree of segmentation
Basics of segmentation&approaches to rural
segmentation:
Rural customers are mostly agriculturists they
never pay income tax so how to predict their
economic status.
1-Geographic
2-Demographic
3-Psychographic
4-Behavioural
Degree of segmentation
User status
1-Ex-users
2-First time users
3-Regularusers
4-Potential users
TARGETING
Next step to segmentation is Targeting.
(1)Overall attractiveness:
(2)Company objectives &Resource competencies
(3)Selection of segments
(4)Coverage of segments
(a)Undifferentiated marketing
(b)Differentiated /targeted marketing
Concentrated strategy:
Is called niche marketing
TARGETING
Choosing a coverage strategy
Company resource
Product variability
Product life cycle
Market variability
POSITIONING
(1) Identifying the USP of the product
(2) Select the differences that have greater
competitive advantage
(3) Communicating such advantage to the Target
audience.
Positioning can be repositioning also
Lets see how to identify positioning concept
POSITIONING
POSITIONING CONCEPT
1-Product Differentation
2-Service Differentation
3-People
4-Image
5-Selecting the positioning concept
6-Developing the concept
7-Communicating the concept
8-Deciding which positioning to promote