Marketing Mix Product 1

8/14/2019 Marketing Mix Product 1

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Marketing MixMarketing Mix



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The Marketing MixThe Marketing Mix(“The Four P’s of Marketing”)(“The Four P’s of Marketing”)

Define the Market

Segment

the Market,

Choose attractive

segments

Design a

Marketing Mixto Appeal to the

Target

Position our

offering

Marketing Mix

Price

Place

Product

Promotion





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At the heart of a great brand is aAt the heart of a great brand is a

great productgreat product



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ProductProduct

Anything that can be offered to a market to

satisfy a want or need.



Consumer ProductsConsumer Products …… end users.end users.

DurableDurable

goodsgoods

Non durableNon durable

goodsgoods

ServicesServices

Durable & Non Durable Consumer Products

Short Time of consumption



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CONSUMER PRODUCTS

Trans. 9-3

ConvenienceProducts

ShoppingProducts

UnsoughtProducts

SpecialtyProducts N E

W !

y o u r p h o t

o s o n

c o m p a c

t d i s c

frequentlyfrequently

purchasedpurchased, low cost,, low cost,

readilyreadily

availableavailable

•usuallyusually

comparedcomparedforfor

quality,quality,

price, andprice, and

stylestyle

•goodsgoods

specificallyspecifically

sought out--sought out--

usually lessusually less

available,available,more effortmore effort

required torequired to

find and buyfind and buy

•not oftennot often

thoughtthought

about;about;

requirerequire

moremorepersonalpersonal

sellingselling



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Layers of the Product Concept



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LAMPSLAMPS•TableTable•CeilingCeiling•TrackTrack

•DeskDesk

• Product Line - aa

group of closelygroup of closely

related productsrelated products

Product Mix - the total group of Product Mix - the total group of products offeredproducts offered

consistencyconsistency: relatedness of items: relatedness of items

in end use , productionin end use , production

requirements , Dist. Channelrequirements , Dist. Channel e.g.e.g. HUL in consumer goodsHUL in consumer goods

Product mix

Product line



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CONCEPTUALIZATION OFCONCEPTUALIZATION OF

PRODUCT MIXPRODUCT MIXWIDTH

D

E

P

TH

# of lines = 4= Width

# of items = 12=Length

A wide product mix facilitates one stop

shopping

How many product LinesHow many product Lines

Length =Length =

Total No. of Total No. of items in aitems in a

mixmix

VarianVarian

tsts

offeredoffered

of eachof each

productproductin a linein a line



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Product Mix & Product Line- HULProduct Mix & Product Line- HUL

Personal washPersonal wash : Lux , lifebuoy , Liril , Hamam ,: Lux , lifebuoy , Liril , Hamam ,Breeze , Dove , Pears , RexonaBreeze , Dove , Pears , Rexona

LaundryLaundry : Surf Excel , Rin , Wheel: Surf Excel , Rin , Wheel Skin CareSkin Care : Fair and Lovely , Ponds: Fair and Lovely , Ponds Hair CareHair Care: Sunsilk Naturals , Clinic: Sunsilk Naturals , Clinic Oral careOral care : Pepsodent , Close Up: Pepsodent , Close Up DeodorantsDeodorants : Axe , Rexona: Axe , Rexona Color CosmeticColor Cosmetic : Lakme: Lakme TeaTea : Broke Bond , Lipton: Broke Bond , Lipton CoffeeCoffee: Bru: Bru FoodsFoods: Kissan , Knorr Annapurna: Kissan , Knorr Annapurna IIce-Creamce-Cream : Quality Walls: Quality Walls



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Product Mix & Product Line- HULProduct Mix & Product Line- HUL

Width : How many product Lines ,Width : How many product Lines ,HLL= 11HLL= 11

Length : Total No. of items in a mix ,Length : Total No. of items in a mix ,

HUL = 25HUL = 25-- Average length of line = 25/11Average length of line = 25/11

Depth : Variants offered of eachDepth : Variants offered of each

product in a line , LUX comes in Fourproduct in a line , LUX comes in Fourscents in two sizes . Therefore Depthscents in two sizes . Therefore Depth=8=8



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Product Mix & Product Line

Product

Line

Length

Selected Procter and Gamble Products

Fabric Care Household Personal Deodorants

Care Cleaning

Ivory Snow Ivory Ivory Secret

Dryel Comet Camay Sure

Tide Mr. Clean Olay Old Spice

Joy Swiffer Coast

Cheer Zest

Oxydol Safeguard

Product Mix Width

Width =4Length=19



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Line ExtensionLine Extension

Meet changing buyer needsCombat competitive new offerings

Simply to improve product satisfaction

HLL Launched Surf ultra, Surf excel, Surf excel matic, International Surf excel

Lifebuoy personal , Lifebuoy plus , Lifebuoy Gold , Liquid Lifebuoy , LifebuoyActive



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Kellogg'sKellogg's

Line ExtensionsLine Extensions



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Stretching

Lengthen beyondcurrent range.

Can be:

Downward

Upward

Both Directions

Product Line LengthProduct Line LengthNumber of Items in the Product Line

FillingLengthen withincurrent range

Product Line DecisionsProduct Line Decisions



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Product Line DecisionsProduct Line Decisions

Stretching Lengthen beyond current range.

Downward – HLL from surf to Wheel , parkerwith lower priced models , Prestige – ‘Prestigepopular’ competing Hawkins , P&G ‘s Ariel toAriel super soaker and Ariel bars

Upward – Philips power range in 1991 (6000-

9000) then to (15000-25000). It contributed30% audio sales . Other entrants – Aiwa ,Sonyand Akai)

Both Directions



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Two-Way StretchTwo-Way Stretch

Marriott added the Renaissance Hotels line to serve the upper end of the market and the TownePlace Suites line to serve the moderateand lower ends.



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Firm introduces more items to line to plugFirm introduces more items to line to plugcertain gaps in its current range of offerscertain gaps in its current range of offers

The intension is to see that it is seen as ‘fullThe intension is to see that it is seen as ‘full

line’ company and customers do not go toline’ company and customers do not go tocompetitors for offers in particular price slotscompetitors for offers in particular price slots VideoconVideocon air-conditioners – 3 in split Ac’s , 2 inair-conditioners – 3 in split Ac’s , 2 in

window AC’s with rotary compressor and 6window AC’s with rotary compressor and 6

models in window AC’s with reciprocatorsmodels in window AC’s with reciprocatorscompressorscompressors Videocon CTV’sVideocon CTV’s – Bazooka-top end , Turbo– Bazooka-top end , Turbo

tough – middle, Budgetline-lower middle, withtough – middle, Budgetline-lower middle, with

11,14,20,21,25,29,32inch model11,14,20,21,25,29,32inch model

Filling

Lengthen within current range



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Line FillingLine Filling



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When companies find that their product lines have gotWhen companies find that their product lines have gotunduly ling and complicated, with too many brands ,unduly ling and complicated, with too many brands ,variants and sizesvariants and sizes

It is opposite to line stretching and line proliferationIt is opposite to line stretching and line proliferation Line is prunes ,trimmed to make it better organized lineLine is prunes ,trimmed to make it better organized line

.. Company here try to save cost and maximizeCompany here try to save cost and maximize

efficiencies in production, distribution and promotionefficiencies in production, distribution and promotion E.gE.g P&GP&G had 51 versioned of Head and Shoulderhad 51 versioned of Head and Shoulder

shampoo were reduced to 15 variantsshampoo were reduced to 15 variants In Japan – Max factor brand in cosmetic items fromIn Japan – Max factor brand in cosmetic items from

1,385 to 828 and sales went up by 6%1,385 to 828 and sales went up by 6% P&G also tried to market separate disposable diapersP&G also tried to market separate disposable diapers

for boys and girls but later thy claimed that suchfor boys and girls but later thy claimed that suchanatomical targeting was not necessaryanatomical targeting was not necessary

Pruning

Shorten within current range



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Product Line PricingProduct Line PricingSetting Price Steps Between Product Line Items

i.e. $299, $399

Optional-Product PricingOptional-Product PricingPricing Optional or Accessory Products

Sold With The Main Producti.e. Car Options

Captive-Product PricingCaptive-Product PricingPricing Products That Must Be Used

With The Main Producti.e. Razor Blades, Film, Software

By-Product PricingBy-Product PricingPricing Low-Value By-Products To Get Rid

of Themi.e. Production of Meat, Petroleum products , Chemicals , Zoos

Product-Bundle PricingProduct-Bundle PricingPricing Bundles Of Products Sold Together

i.e. Season Tickets, Computer Makers

ProductMix

PricingStrategies



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Brand: a name, term, sign, symbol, or design,or a combination of these, intended to identifythe goods or services of one seller or group of sellers and to differentiate them from those of

competitors.

Brand Decisions

http://www.nike.com/main.html

http://www.icrc.org/fre

http://www.thetube.com/content/pressreleases/



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Brand-Name DecisionBrand-Name Decision

Some desirable qualities of a brand name:Some desirable qualities of a brand name:

• It should suggest something about the product’sIt should suggest something about the product’s

benefits.benefits.

• It should suggest product qualities.It should suggest product qualities.• It should be easy to pronounce, recognize, andIt should be easy to pronounce, recognize, and

remember.remember.

• It should be distinctive.It should be distinctive.

• It should not carry poor meaning in other countries andIt should not carry poor meaning in other countries and

languages.languages.



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Individual Name sIndividual Name s : e.g P&G - Vicks ( health: e.g P&G - Vicks ( healthCare ) , Ariel and Tide (Fabric care ) Pentene ,Care ) , Ariel and Tide (Fabric care ) Pentene ,Head and Shoulders , Rejoice ( Shampoo) , andHead and Shoulders , Rejoice ( Shampoo) , andPampers ( Baby care )Pampers ( Baby care )

Blanket Family namesBlanket Family names : Policy followed by Tata: Policy followed by Tata– Salt , Tea , Automobile ,and Steel– Salt , Tea , Automobile ,and Steel

Separate Family names for all productsSeparate Family names for all products ––Aditya Birla group follows this policy to a greatAditya Birla group follows this policy to a greatextent like Hinadlco Aluminium , Ultra Techextent like Hinadlco Aluminium , Ultra TechCement , Grasim Suiting and Graviera suitingCement , Grasim Suiting and Graviera suiting

Corporate names combines with IndividualCorporate names combines with Individualproduct namesproduct names : by Kellog’s – Keloog’s Rice: by Kellog’s – Keloog’s RiceKris[pies , Kelogg’s Raisin Bran , and Kelogg’sKris[pies , Kelogg’s Raisin Bran , and Kelogg’sCornflakesCornflakes

B d E t iB d E t i



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Brand ExtensionsBrand Extensions

Car Motor Cycle

EnginesMarine

Acquire competitor’s customers

Stimulate demand among current non-users.

Related Brand extension/Category extension - Maggi Noodles to Maggi Ketchup ,Maggi soup etc.

Dettol soap -----antiseptic soap , Dettol plaster-------Antiseptic bandage , Dettol Hand wash…..antiseptic washPond’s Dreamflower Talc , Pond’s Dreamflower Talc Magic , Sandal Talc , Pond’ Dreamflower soap, Pond’s cold soap ,Pond’s face wash , Pond’s cold cream ,Pond’s complexion defense moisturizer , Pond’s Moisturizing lotion

Unrelated Brand extension or Category extension Anchor electrical switches to Toothpaste (Gut

feeling of CEO Atul Shah)

“Line Extension trap”

http://www.hondaredriders.com/motocross/landing.asp

http://www.hondaredriders.com/motocross/landing.asp

http://www.diamond.com/detail.asp?Sn=111388046&nc=ID3C&pf_id=17203&kit_id=R1&md_id=2&ln1=11&lno=14





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Multi BrandingMulti Branding

Seiko

Seiko LasalleSeiko Pulsar

Two or more brands in same product category.




http://www.masseysjewelers.com/store/product87.html



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New BrandsNew Brands

National-Household

Panasonic-Audio

New Category

New Brands

http://www.panasonic.com/consumer_electronics/caraudio/casreceivers.asp

http://catalog2.panasonic.com/webapp/wcs/stores/servlet/ModelDetail?storeId=11251&catalogId=11005&modelNo=BH-941P

http://www.panasonic.com/consumer_electronics/kitchen_appliances/toaster_oven.asp

http://www.panasonic.com/consumer_electronics/caraudio/casreceivers.asp

http://www.panasonic.com/consumer_electronics/caraudio/sp_default.asp

http://www.panasonic.com/consumer_electronics/kitchen_appliances/rice_cookers.asp

http://www.panasonic.com/consumer_electronics/caraudio/mv_default.asp



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Brand DecisionsBrand Decisions

Brand RejuvenationBrand Rejuvenation –– Adding valueAdding value

to existing brand by improving productto existing brand by improving product

attributes and enhancing its overallattributes and enhancing its overall

appeal. New lifebuoy , New Horlicks ,appeal. New lifebuoy , New Horlicks ,

Nestle’s New Nescafe , New Bournvita ,Nestle’s New Nescafe , New Bournvita ,P&G’s New Vicks VaporubP&G’s New Vicks Vaporub

Brand relaunchBrand relaunch –– Wipro’s Santoor ,Wipro’s Santoor ,

Godrej’s Marvel , Close-up , P&G’sGodrej’s Marvel , Close-up , P&G’sAction 500 (brand leader with 30%Action 500 (brand leader with 30%

market share) , Dabur Chyawanprashmarket share) , Dabur Chyawanprash



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Santoor Santoor

Wipro Consumer Care and LightingWipro Consumer Care and Lighting

(WCCL), the FMCG arm of Wipro Ltd,(WCCL), the FMCG arm of Wipro Ltd,

said that it was re-launching itssaid that it was re-launching its

flagship brand Santoor. The companyflagship brand Santoor. The companyhas signed up celebrities Saif Alihas signed up celebrities Saif Ali

Khan and Madhavan as brandKhan and Madhavan as brand

ambassadors to promote Santoor inambassadors to promote Santoor inNorth and South regions respectivelyNorth and South regions respectively

and is unleashing a new campaign.and is unleashing a new campaign.



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Brand ProliferationBrand Proliferation ––when onewhen one

company introduce newcompany introduce new brandsbrands inin

the same product lines and hence trythe same product lines and hence try

to cover each and every marketto cover each and every market

segment for that product .segment for that product .

It helps expand the market share butIt helps expand the market share but

leads toleads to Brand CannibalizationBrand Cannibalization



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Brand Development throughBrand Development through

Acquisition/TakeoverAcquisition/Takeover

PepsiPepsi acquire Dukeacquire Duke

GodrejGodrej acquire Good Knightacquire Good Knight



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Co-brandingCo-branding



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Co- Branding /Dual Branding- two or more wellCo- Branding /Dual Branding- two or more well

known brands are combined for a offer known brands are combined for a offer

• Examples:

Volvo Advertises That it uses

Michelin Tires

• PC manufacturers - IBM, Dell,

Compaq –purchase their chips from

Intel at a premium price

C b di C t thC b di C t th



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Co-branding: Count theCo-branding: Count the

BrandsBrandsNotice all the brands:Notice all the brands:

2.2. Ingredient co-branding – Maruti car using JK tyres ,Ingredient co-branding – Maruti car using JK tyres ,Compaq’s PC using Intel chipsCompaq’s PC using Intel chips

3.3. Same company co branding – Cosmetic companiesSame company co branding – Cosmetic companieslinking their product brands with each other e.glinking their product brands with each other e.gGillette Mach 3 Turbo shaving system and GilletteGillette Mach 3 Turbo shaving system and GilletteShaving Gel, Acquaguard water purifier and VacuumShaving Gel, Acquaguard water purifier and VacuumCleaner EurocleanCleaner Euroclean

4.4. Joint venture/post-merger co branding – HP, CompaqJoint venture/post-merger co branding – HP, Compaq5.5. Multiple sponsor co-branding- When the product hasMultiple sponsor co-branding- When the product has

more than one sponsor e.g Jet airway citibank cardmore than one sponsor e.g Jet airway citibank card

6.6. McDonald's India is entering into a co-brandedMcDonald's India is entering into a co-brandedstrategic tie-up with Multi Vision - releasing Teenagestrategic tie-up with Multi Vision - releasing Teenage

Mutant Ninja Turtles (TMNT) movie in India this April,Mutant Ninja Turtles (TMNT) movie in India this April,



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Packaging: The 5Packaging: The 5thth PP

All the activities of designing and producingthe container for a product.



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Packaging has been influenced by…Packaging has been influenced by…

Self-service

Consumer affluence

Company/brand image

Innovation opportunity



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Innovations in PackagingInnovations in Packaging

http://www.webpackaging.com/



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Packaging FunctionsPackaging Functions

Three functions of packaging:Three functions of packaging:

• Contain and protect the productContain and protect the product Physical protectionPhysical protection

• Promote the productPromote the product Identify the brand, list the ingredients, specifyIdentify the brand, list the ingredients, specify

features, give directions, differentiate fromfeatures, give directions, differentiate from

competition, influence consumer perceptions andcompetition, influence consumer perceptions and

buying behavior.buying behavior.

• Facilitate storage, use, and convenienceFacilitate storage, use, and convenience Easy to ship, store, and stock, prevent spoilage orEasy to ship, store, and stock, prevent spoilage or

breakage, extend a product’s shelf life.breakage, extend a product’s shelf life.

Easy to handle, open and reclose,Easy to handle, open and reclose,

tamperproof/childproof, reusable, disposable.tamperproof/childproof, reusable, disposable.



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Package LabelingPackage Labeling

Persuasive Labeling:Persuasive Labeling: A type of A type of

package labeling that focuses on thepackage labeling that focuses on the

promotional theme or logo andpromotional theme or logo and

consumer information is secondary.consumer information is secondary. Informative Labeling:Informative Labeling: A type of A type of

package labeling designed to helppackage labeling designed to help

consumers make proper productconsumers make proper productselections and lower their cognitiveselections and lower their cognitive

dissonance after the purchase.dissonance after the purchase.



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Functions of LabelsFunctions of Labels

Identifies

Grades

Describes

Promotes



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Product WarrantiesProduct Warranties

Warranty:Warranty: A confirmation of theA confirmation of the

quality or performance of a good or aquality or performance of a good or a

service.service.

Express Warranty:Express Warranty: A writtenA written

guarantee. (100 percent cotton)guarantee. (100 percent cotton)

Implied Warranty:Implied Warranty: An unwrittenAn unwritten

guarantee that the good or service isguarantee that the good or service isfit for the purpose for which it wasfit for the purpose for which it was

sold.sold.



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Warranties and GuaranteesWarranties and Guarantees



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TrademarksTrademarks

TrademarkTrademark: The exclusive right to: The exclusive right to

use a brand or part of a brand.use a brand or part of a brand.

• Shapes (Coca-Cola’s bottle), ornamentalShapes (Coca-Cola’s bottle), ornamental

color or design (Levi’s tag), catchycolor or design (Levi’s tag), catchyphrases (This Bud’s for You),phrases (This Bud’s for You),

abbreviations (Bud), sounds (MGM’sabbreviations (Bud), sounds (MGM’s

lion)lion)

Servicemark:Servicemark: A trademark for aA trademark for a

service.service.



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By the end of 1990’s in part asSingapore Airlines introduced StefanFloridian Waters , a patented aromaspecially designed as an element of the company’s trademark

It was blended in the hot towelsserved before take-off



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The classic example is of Coke,when the coke bottle wasdesigned in 1915, the brief wassimple. The bottle should bedistinctive enough to berecognized by touch- even inthe dark, and if broken, its

pieces should be recognizable asapart of the whole.

The outcome the classic curvedcoke bottle-is still used in the

markets the world over, and hasbeen posing the smash test foralmost 90 years now



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Product Life Cycle StrategiesProduct Life Cycle Strategies



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CompetitionLow Price

Cut PriceMatchPenetrationCost-PlusPrice

Nonperformers

Intensive

Phase outMoreIntensiveSelectiveDistribution

Weak ItemBrandExtensionsProduct

Phase outDiversifyProductOffer BasicProduct

LoyalsBenefitsAwarenessAwareness

RetainUniqueMassSelectiveAdvertising

DeclineMaturityGrowthIntroMarketing

Mix

SwitchingTrial

MinimalInduceNoneInduceSales

Promotions

Product Life-Cycle StrategiesProduct Life-Cycle Strategies



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Marketing ManagementMarketing Management

Session 4bSession 4bDistributionDistribution



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ProductVariety

Design

Features

Brand name

Packaging

PromotionAdvertising

Personal Selling

Sales PromotionPublic relations

Targetcustomers

PlaceChannels

Retailing

E-tailing

PriceCost-plus pricing

Target-return pricing

Value pricing

Going-rate pricing

Psychological pricing

Marketing Strategy



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Make desired products available when, where, andMake desired products available when, where, andin the sizes and quantities that consumers wantin the sizes and quantities that consumers wantthemthem

Increase the efficiency of the flow of productsIncrease the efficiency of the flow of productsfrom producer to customerfrom producer to customer

Make the purchase process easier for customersMake the purchase process easier for customers

and manufacturersand manufacturers

Make global marketing easierMake global marketing easier

Functions of Distribution ChannelsFunctions of Distribution Channels



Distributor - Economy of effortDistributor - Economy of effort



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Channel SelectionChannel SelectionTarget Market CoverageTarget Market Coverage

Exclusive IntensiveSelective

Levi’s

Sony

Rolex

Faberge

Wrigley’s

Coke



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Channel Levels

Channel levels• Direct (zero-level) and indirect (one- or two-level)

channels

Manufacturer Wholesaler Retailer Consumer

Manufacturer Retailer Consumer

Manufacturer Consumer



01/08/0901/08/09 5656

Channel Levels: Examples

LizClaiborne

Clothing SalesAgent

HoltRenfrew

Consumer

GE Sears Consumer

McGillStrawberry

Consumer



01/08/0901/08/09 5757

Distribution ProcessDistribution Process

Manufacturer

Channel

Members

End Users

Product/ service Flow

Information…Sales data

Payments

Information…Customer data



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Distributor’s FunctionsDistributor’s Functions

Division of labor – divide tasks by specialtyDivision of labor – divide tasks by specialty

Specialization – do what you’re good atSpecialization – do what you’re good at

Distribution improves efficiency through:Distribution improves efficiency through:

StandardizationProviding Proper Product Assortment

Minimizing uncertainty

Sharing Financial Risk

Improved contact with customers



01/08/0901/08/09 5959

Improved Customer ContactImproved Customer Contact

Distributor’s job:Distributor’s job:

Improving contact frequencyImproving contact frequency

Reducing the cost of contactReducing the cost of contact

Better leverage in negotiatingBetter leverage in negotiating



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Standardization…Experience CurveStandardization…Experience Curve

Standardizing transactions to improve theStandardizing transactions to improve the

flow of goods and servicesflow of goods and services

Institutionalizes expectations—noInstitutionalizes expectations—nosurprisessurprises

Allows focus on own specialtyAllows focus on own specialty



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Proper Assortment of ProductsProper Assortment of Products

MerchandizingMerchandizing

PackagingPackaging

GradingGrading



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Minimizing UncertaintyMinimizing Uncertainty

Reducing Need uncertaintyReducing Need uncertainty

• Accurate forecastsAccurate forecasts

• Better inventory managementBetter inventory management



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Sharing Financial RisksSharing Financial Risks

Provides much needed cashProvides much needed cash

Reduces manufacturer’s exposureReduces manufacturer’s exposure



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Channel Power... Manufacturer Channel Power... Manufacturer

Strong brand loyaltyStrong brand loyalty

• Builds customer trafficBuilds customer traffic

Coercive PowerCoercive Power

• large brand portfolio with few closelarge brand portfolio with few closesubstitutessubstitutes

Contractual relationshipsContractual relationships

Market expertise…consumer researchMarket expertise…consumer research



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Channel Power... Retailer/Distributor Channel Power... Retailer/Distributor

Control of shelf spaceControl of shelf space

Private label brandsPrivate label brands

Concentration…selling significantConcentration…selling significant

volume of manufacturer’s productsvolume of manufacturer’s products



Lesson in DistributionLesson in Distribution

1.1. Set definite marketing objectives for all member.Set definite marketing objectives for all member.2.2. Cost vs Coverage and Position vs Channel type trade-Cost vs Coverage and Position vs Channel type trade-

off off

3.3. Determine the division of tasks between Suppliers andDetermine the division of tasks between Suppliers andMiddlemanMiddleman

4.4. Understand how your partner makes profitUnderstand how your partner makes profit5.5. Be realistic about the balance of power in the channelBe realistic about the balance of power in the channel

6.6. Make Sure your distributor remains viableMake Sure your distributor remains viable

7.7. Predict and contain conflictsPredict and contain conflicts

8.8. Look out for new and emerging channelsLook out for new and emerging channels

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Marketing Mix Product 1

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