SLM-Unit-08-MB0046

Marketing Management Unit 8

Sikkim Manipal University Page No. 148

Unit 8 Product Management: Decisions,

Development and Lifecycle Strategies

Structure:

8.1 Introduction

Learning Objectives

8.2 Levels of Product

8.3 Classification of Products

8.3.1 Consumer products

8.3.2 Business products

8.4 Product Hierarchy

8.5 Product Line Strategies

8.6 Product Mix Strategies

8.7 Packaging and Labeling

8.8 New Product Development

8.9 Product Life Cycle (PLC)

8.10 Summary

8.11 Terminal Questions

8.12 Answers

8.1 Introduction

Product: A good, service, person, place, event or organization offered to

consumers to satisfy his need or want.

A good is a tangible product, which can be seen and touched. These

tangible items can be produced in bulk and inventoried. For example,

switches from Bajaj Electricals are goods.

A service is an intangible product, which requires simultaneous consumption

and production. These are also perishable in nature. For example, Wockhart

hospital offers heart surgery, which consumers cannot see but need to

undergo when there is a pain in the heart. Hence surgery a service, is

perishable in nature, needs to be produced and consumed simultaneously.



Differences between goods and services:

Table 8.1

Goods Services

1. Tangible Intangible.

2. Inventoried Simultaneous production and consumption

3. Non perishable Perishable

4. Homogeneous Heterogeneous

A product may be a person also. Here marketer tries to buy and sell the

celebrities or sports persons of a league or club etc… For, example, Board

of Cricket Control in India (BCCI) asks its Indian premier league (IPL) teams

to buy iconic players and foreign players for certain price.

An event is also considered as product. Many event management

companies earn their revenue by selling tickets and advertisement space at

the event. The following example explains how an event can be marketed.

Figure 8.1

An organization is also considered as a product. It can be bought and sold

on the basis of value of the firm. To make it more clear Tata’s bought Tetley

for £271mn on 27th February 2000.

Formatted: Font: (Default) Arial



Many state governments and central governments sell their places to get

the pie in the tourism market. Here governments provide advertisements of

a place to attract tourists from India and abroad. For example, Karnataka

Government under ‘one state many world’ campaign highlighted historical

places, wildlife, waterfalls etc... In the following advertisement it provides the

inputs on Hampi , a historical place in Karnataka to the tourists.

Figure 8.2

Learning Objectives

After studying this unit, you will be able to

Analyze how products are classified.

Discuss the product line and product mix strategies.

Describe the product life cycle.

Assess the stages involved in the new product development.

8.2 Levels of Product

1. Core product: This is the fundamental good or service offered to the

consumer. E.g. Hospital services

2. Generic product: This is the basic version of the product. E.g. Hospital

having doctors, nurses, beds and laboratories.

3. Expected product: The minimum attributes that consumer expects in the

product. E.g. Hospital should have qualified doctors, good service and

proper amenities.



4. Augmented product: Inclusion of value added services to the expected

product to distinguish it from competitors. E.g. Online or tele medicine

facilities, expert knowledge sharing, 24 hour ambulance service etc...

5. Potential product: These are the future products provided by the

company which customer didn’t anticipate. Ultimately consumer will be

delighted by this product. E.g. Medical insurance from the hospital, after

service care etc…

8.3 Classification of Products

Table 8.3

Products are classified into two broad categories. They are consumer

products and business products.

Consumer products are purchased by the consumer for his personal

consumption.

Business products: These products are purchased by business concerns for

further product development

8.3.1 Consumer Products

As these products are purchased by the final consumer for his own

consumption, the market is very big. The large market needs to serve

different needs of consumer. Therefore company should create different



types of products. Hence consumer products are classified into four different

categories. They are

a. Convenience goods.

b. Shopping goods

c. Specialty goods

d. Unsought goods.

a. Convenience goods: These are the fast moving consumer goods that

are purchased regularly with less amount of effort.

1. These are purchased frequently.

2. Customer involvement is very low.

3. Price of the product is very low.

4. Intensive distribution is used to reach the consumer.

5. The stock turnover is high.

6. Aggressive promotion is required

i. Example: soaps and detergents, groceries etc.

b. Shopping goods: These goods require high consumer involvement and

before buying such products consumer processes the information of

product suitability, quality and price.

Compared to convenience goods, shopping goods are purchased less

frequently. Consumer takes lot of time to search and evaluate the

information. These products are available in selected outlets. The price

of the product is very high. For example, a consumer who wants to

purchase the washing machine will collect the information on type of

washing machine, type of control, loading, wash method, pre wash,

delicate wash, cycle time, after sales service, sensors, water

consumption, etc.

c. Specialty goods: These are the products for which a consumer shows

high brand loyalty and is ready to wait, or spend time

i. Consumers are having strong brand loyalty.

ii. Usually companies adopt premium pricing strategy.

iii. Exclusive distribution and selective communication strategies are

adopted.

To illustrate, a consumer is willing to pay Rs 32000 for Bose Digital

Home Theater though competitors’ products are available at Rs 15,000

to Rs 25000.



d. Unsought goods: These products are called unsought because

consumer is usually unaware or ignorant about the products to purchase

it. Marketers need heavy promotion activities to educate and sell their

products.

For example, Insurance is the product which most of the consumers are

aware of but very few are willing to purchase. Life Insurance Corporation

trains its agents to promote and sell aggressively. These agents provide

lot of inputs regarding insurance to consumers.

Activity 1:

Find out the various types of products purchased in your house in the

last 3 months and classify them into the 4 consumer product categories.

8.3.2 Business or Industrial Products

Business products are purchased by the Organizational consumers who use

these products as a material, part, capital item or service in producing

his/her final product. For example, CET offers range of services to Birla

copper, Jindal Vijayanagar Steel and Mukund Limited. These services are

used to develop the final products of these companies.

Exhibit 1

Centre for Engineering & Technology

Center for Engineering & Technology (CET), an ISO: 9001 certified

organization is the design, engineering & consultancy unit of SAIL. It has

its Head Office at Ranchi, Sub Centers at Bhilai, Durgapur, Rourkela,

Bokaro, Burnpur & Bhadravati, Unit Offices at Bangalore, and New Delhi

for formulation of Interplant Standards for Steel Industry. As a solution

provider for all project needs, CET had been rendering complete range

of services not only to the Steel Plants under SAIL but also to various

clients other than SAIL – both within and outside the country. Some of

the important clients other than SAIL include EGITALEC (Egypt), Ashok

Steel (Nepal), Chittagong Steel Mills (Bangladesh), Birla Copper,

Mukand Ltd., Jindal Vijayanagar Steels Ltd., National Iron & Steel Co.,

Hindustan Zinc Ltd., National Mineral Development Corporation and

Romelt- SAIL (India) Ltd., CET is also the nodal agency for acquisition

and lateral transfer of technologies within SAIL plants.



The range of services includes conceptualization, project evaluation &

appraisal, project consultancy, design & engineering and project

management in the areas of iron and steel making. Apart from this, CET

has been providing its services in the related areas like mine planning

and development, infrastructure development, industrial piping, industrial

warehousing, material handling system, industrial pollution control and

environment management systems, water supply and sanitation, town

planning, power projects, etc

(Source: www.sail.co.in)

Business products are classified into three categories. They are:

a. Materials and parts.

b. Capital items

c. Supplies and services.

a. Materials and parts: These products are further classified as raw

materials and manufactured material and parts.

Materials and parts.

Raw materials

1. Natural products materials

2. Farm products

Manufactured Materials & parts

1.Component & parts

2. Componentmaterials

Materials are classified into raw materials and manufactured materials

and parts.

Raw materials are of two types namely, Natural products and secondly,

Farm products.

1. Natural products are extracted and used for further product

development. For example, Orex Minerals Private Limited supplies

iron ore to Adani exports limited, Nobel Resources and Trading

Private Limited and Sino Steel India Private Limited.

2. Farm products are also used in further product development. For

example, Parle agro division supplies required wheat for the

production of biscuits.

Manufactured materials are further classified into two types. They are

component parts and component materials.

1. Component parts. For example, Melco Precisions Private Limited

supplies heat resistant steel to Grasim, NTPC and NFL for further

product development.



2. Component materials These are also called original equipment

manufacturer products. These companies’ products are directly fitted

in the final product. For example, MRF tyres are directly fitted in

Maruti Udyog Limited cars.

b. Capital items include developing the building( for example, L & T and

Siemens developing Bangalore International Airport) Fixed equipments

(for example, Lenovo supplying computers to Manipal university)

Accessory equipments( for example, Hindustan Everest Tools Limited

sells its spanners and pliers to industrial customers) and office

equipments ( HP supplying fax machine to Shristi Automation Private

Limited)

c. Suppliers and services: Supplies includes operating supplies( Castrol

sells its lubricants to VRL limited) maintenance and repair services

(Eagle Securities Service to corporate clients)

8.4 Product Hierarchy

The different stages in the product and their attributes are listed below

Table 8.3

1. Need family : The core need that underlies the product family

2. Product family

All the product classes that can satisfy a core need with reasonable effectiveness.

3. Product class :

A group of products within the product family recognized as having a certain functional coherence

4. Product line :

A group of products within a product class that are closely related because they function in a similar manner or are sold to the same customer groups or are marketed through the same types of outlets or fall within given price ranges.

5. Product type :

Those items within a product line that share one of several possible forms of the products.

6. Brand : The name associated with one or more items in the product line that is used to identify the source or character of the item

7. Item :

A distinct unit within a brand or product line that is distinguishable by size, price, appearance, or some other attribute.

(Adapted from Kotler Philip, Marketing Management)



8.5 Product Line Strategies

Product line: The group of related products which uses same marketing

efforts to reach the consumer.

The product line identifies profitable and unprofitable products and helps in

allocation of resources according to that. The product line understanding

helps the marketer to take line extension, line pruning and line filling

strategies of the company.

Pidilite Industries, the adhesives and chemical company, have the following

group of related products (or product lines) in consumer and business

markets.

Consumer market.

1. Adhesives and sealants.

2. Art materials and stationeries.

3. Construction chemicals.

4. Automotive chemicals

5. Fabric care

Business market

1. Industrial adhesives.

2. Textile chemicals.

3. Organic pigment powders.

4. Industrial resins and

5. Leather chemicals.

Product Line Decisions:

The major product line decisions are

a. Product line length

b. Product line stretching

c. Product line filling

d. Product line pruning

a. Product line length: The number of items in the product line is called

the product line length. Company should decide whether it requires

longer chain or shorter length. The decision depends upon the objective

of the company, competitive environment and profitability. If the chain is

short company can add new products and if it is lengthy company can

reduce the number of products. For example, Pidilite’s adhesives and



sealants line has following 11 items in the product line. Hence the length

of product line is 11

1. White Glue 2. Paper Glue

3. Glue Stick 4. Instant Adhesive

5. Epoxy Putty 6. Epoxy Adhesive

7. PVC Insulation Tape 8. Silicone Sealants

9. Contact Glue 10. All Purpose Glue

11. Maintenance Spray

b. Product line stretching: Company lengthens its product line either by

stretching upwards or downwards or both ways. Line stretching decision

depends on three situations -

i. Company which operates in high end market may come up with

mid class or low class targeted products.

ii. The company which operates in lower end of market may come

up with high end market products.

iii. If the company operates in mid segment and comes out with low

end product as well as high end product then it is stretching both

ways.

For example, Maruti Suzuki Limited launched its first product, Maruti

800 in the year 1983 and in the year 1985 it launched Maruti Gypsy.

Gypsy is costlier than Maruti 800 and targeted for higher segment. This

shows that the company extended its product line upwards or in short,

upward stretch.

Tata Motors launched their Rs 1 lakh car NANO in the year 2008. The

company which was targeting upper class and middle class with their

products SUMO and Indica respectively, has stretched downwards to

reach the lower level segment. This illustrates the downward stretch.

Toyota Kirloskar Limited which extended their line from Qualis and

Corolla to Innova and Camry is planning to come out with small car in

India. This clearly illustrates the two way stretch of the product line.

c. Product line filling: Adding more items in the present product line. For

example, in the year 2000 Maruti Suzuki launched Alto. This product

was between Maruti 800 and Maruti Zen. Here company was trying to fill

the gap existing in the segment by introducing ALTO, i.e. line filling.



d. Product line pruning: Removing the unprofitable products form the

product line. Toyota Kirloskar phased out their well known brand Qualis

when they thought the brand was not adding value to the product line.

8.6 Product Mix

Product mix: The number of product lines and items offered by marketer to

the consumers

A company’s product mix has four different dimensions. They are product

mix width, product mix length, product mix depth and product mix

consistency.

The following (Table 8.4) shows the product mix of Jyothy Laboratories.

Table 8.5

Fabric care House hold

insecticide

Utensil

cleaners

Fragrances Personal

care

Allied

business

Ujala

supreme

(9ml, 30ml,

75ml,

125ml,250ml)

Maxo

cyclothrin

coil

(8hr, 10hr,

12hr)

Exo dish

wash bar

(100g,

200g

380g)

Maya

(8, 15, 20,

40 and 100

sticks.)

Jeeva

Natural

(Coconut

Milk with

Milk Protein,

Coconut

Milk with

Jasmine and

Coconut

Milk with

Kasturi

Manjal, and

is presented

in 75gm

packs. )

Continental

special

Ujala

washing

powder

(25g, 500g,

1Kg)

Max vaporizer

(30ml, 45ml)

Exo dish

wash

liquid

(500ml,

125ml)

Marketing

of godrej

Tea

Stiff & shine

(20gm

sachets,

100ml and

200ml

bottles)

Max aerosol

(150ml,300ml)

Marketing

of Ekta

dhoop



Product mix width: The total number of product lines that company offers to

the consumers.

For example, Jyothy Laboratories’ product mix has six lines. Hence the

width is 6

Fabric care House hold

insecticide

Utensil

cleaners

Fragrances Personal

care

Allied

business

Product mix length: The total number of items that company carries within

its product line.

For example, Jyothy Laboratories fabric care division has three items

Product line depth: The number of versions offered of each product in the

line.

For example, Jyothy Laboratories’ Jeeva Natural is offered in three versions

i.e. Coconut Milk with Milk Protein, Coconut Milk with Jasmine and Coconut

Milk with Kasturi Manjal, and is presented in 75gm packs.

Product mix consistency: If company’s product lines usage, production and

marketing are related, then product mix is consistent, else it is unrelated.



In the case of Jyothy Laboratories, all six product lines are FMCGs. Hence it

is having consistent product mix. But ITC Company’s cigarette and cloth

product lines are totally unrelated.

8.7 Packaging and Labeling

Packaging: The process of designing and producing the container or

wrapper for a product.

Packaging plays a vital role in marketing a product. Some rural consumers

identify with the design or cover of the product and then they buy it.

Packaging has other benefits to the consumers also. They are

1. It gives proper protection to the product.

2. It helps in bulk breaking.

3. It entices the customer to buy the product.

Companies not giving much importance to packaging face severe problems

in the market.

Exhibit 2

Worm turns for Cadbury

Hyderabad: The worms in the chocolate bars controversy has hit

Cadbury India where it hurts most and that is in sales. The company

today faces tough times ahead as the business environment for its

chocolates becomes increasingly negative with rising raw material prices

and low consumer sentiments, post the worms controversy in October

this year. While the sales of chocolates (institutional and retail) fell by 3

to 4 per cent last month and are predicted to be down by 10 per cent in

November by the trade, Cadbury India has had to incur additional costs

in upgrading packaging and damage control promotional efforts. To add

to all this, prices of milk and cocoa have been on the upward path in

recent months, adding further to the costs. The largest impact on sales

has been in Maharashtra, and specifically in Mumbai, which is where the

whole controversy arose as worms were found in Cadbury chocolates in

allegedly eight outlets across the state. If it weren't bad enough that the

controversy blew up at the festival season when the chocolates sales are

at their peak, the company may also just have to shelve plans of

becoming a major sourcing hub for British chocolates and beverages



giant Cadbury Schweppes. As part of a global realignment of its supply

chain management, the company was giving finishing touches to a plan

that might have seen Cadbury India emerge as a major supplier of

chocolates to the Asia-Pacific region and the Middle East. The

outsourcing model could have resulted in significant revenue generation

for Cadbury India. Initially the company blamed retailers for not storing

the products properly but is now engaged in putting in place a regular

monitoring and checking system of the storage of the chocolates.

Cadbury India managing director Bharat Puri says the company has

made substantial investments in packaging in order to maintain product

quality from the manufacturer to the customer. And now it is making all

attempts to reassure the consumer and win back their confidence and

interest in the category. It has initiated Project Vishwas, a three-step

programme involving wholesalers and retailers in which the company

partners with the traders on a war-footing to build awareness about

storage requirements for Cadbury products. In Maharashtra where the

maximum damage has been done the company has involved a team of

quality-control managers along with 300 salespeople to carry out checks

of over 50,000 retail outlets which retail Cadbury products. The products

in upgraded packaging are expected to hit retail stores early next year.

Analysts say in the past couple of years in the face of increasing

competition from Swiss chocolates major Nestle India and the home-

grown Amul, Cadbury has been pushing its products aggressively and

targeting the adult audience especially to expand the market.

(Source: www.domain_b.com; Author Mohini Bhatnagar)

Packaging strategies:

1. Adopting the same package for entire product line.

2. Multiple packs for multiple products

3. Changing the packages continuously.

Labeling:

Labeling: it carries the information about the product and the seller and this

information is presented on the package as well as on the product..

Types of labels:

a. Brand label: Only brand name is mentioned on the packaging. For

example, on Dharawad mangoes pack, only brand name is highlighted.

http://www.domain_b.com/



b. Grade label: Identifies the products judged quality with a letter, number

or word. For example, fertilizers 19-19-0-19, 17-19-19-19 etc…

c. A descriptive label: Gives the entire information about the product, use,

and care. For example, Vasemol hair dye packet contains brochure in

which it tells how to use product, what are the precautions one should

take etc…

Activity 2:

Take any 2 similar kinds of products like for example 2 different brands of

toothpaste or soaps and then identify the differences in their packaging

and labeling.

Self Assessment Questions

1. A place can also be marketed as a product

a. True b. False

2. Insurance is __________________ type of consumer good

3. Phasing out of the brand from the product line is called as ___________

4. The number of versions offered of each product in the line is known

as ________________

5. ____________ are called as original equipment manufacturer products.

8.8 New Product Development

New products are essential for existing firms to keep the momentum and for

new firms they provide the differentiation. New product doesn’t mean that it

is absolutely new to the world. It may be a modification, or offered in a new

market, or differentiated from existing products. Therefore it is necessary to

understand the concept of new products.

Meaning of New Products:

a. They are really innovative. For example, Google’s Orkut, a networking

site which revolutionized social networking. In this site people can meet

like minded people; they can form their own groups, share photos,

comments and many more.

b. They are very different from the others: Haier launches path-breaking 4-

Door Refrigerators first time in India



c. They are imitative; these products are not new to the market but new to

the company. For example, Cavin Kare launched Ruchi pickles. This

product is new to Cavin Kare but not to the market.

New product development process:

Stage 1 - Idea generation: New product idea can be generated either from

the internal sources or external sources. The internal sources include

employees of the organization and data collected from the market. The

external source includes customers, competitors and supply chain

members. For example, Ingersoll Rand welcomes new ideas from the

General public

.

Stage 2-Idea screening: Organization may have various ideas but it should

find out which of these ideas can be translated into concepts. In an interview

to Times of India, Mr. Ratan Tata, chairman TATA group discussed how his

idea saw many changes from the basic version. He told that he wanted to

develop car with scooter engine, plastic doors etc... But when he unveiled

the car, there were many changes in the product. This shows that initial

idea will be changed on the basis of market requirements.

Stage 3 - Concept development: the main feature or the specific desire

that it caters to or the basic appeal of the product is created or designed in

the concept development.

Concepts used for Tata Nano car are -

Concept I: Low-end 'rural car,' probably without doors or windows and

with plastic curtains that rolled down, a four-wheel version of the auto-

rickshaw



Concept II: A car made by engineering plastics and new materials, and

using new technology like aerospace adhesives instead of welding.

Concept III: Indigenous, in-house car which meets all the environment

standards

Stage 4 - Concept testing: At this stage concept is tested with the group of

target customers. If any changes are required in the concept or the

message it will be done during this stage. Also the effectiveness is tested on

a minor scale. If the concept meets the specific requirements, then it will be

accepted.

Stage 5 Marketing strategy development: The marketing strategy

development involves three parts. The first part focuses on target market,

sales, market share and profit goals. TATA’s initial business plan consisted

sales of 2 lakhs cars per annum. The second part involves product price,

distribution and marketing budget strategies. TATA’s fixed Rs 1 lakhs as the

car price, and finding self employed persons who work like agent to

distribute the cars. The final part contains marketing mix strategy and profit

goals.

Stage 6 - Business analysis: it is the analysis of sales, costs and profits

estimated for a new product and to find out whether these align with the

company mission and objectives.

Stage 7 - Product development: during this stage, product is made to

undergo further improvements, new features or improvised versions are

added to the product. There is also scope for innovation and using the latest

technology into the product.

TATA Nano car development (Source: business world nanolution)

– Tried to outsource the product from all over the world.

– Development of ‘mule’ or prototype with 20bhp.

– Designing the small engine

– Thermodynamic simulations and final engine

– Development of MPFI with help of Bosch.

– Cost reduction and negotiating with vendors.

– Sona Koyo and Rane Group came up with hollow steering shafts, saving

cost and cutting weight. Sharda Motors and Emcon designed the

exhaust system and MRF tweaked the tyres to bear extra weight on rear

wheels.



Stage 8 - Test marketing: is the most crucial stage for the testing product’s

performance and its future in the market. There are certain cases where

product has failed in the test marketing and had to be withdrawn.

– The product is introduced into the realistic market

– The 4P’s of marketing are tested.

– The cost of test marketing varies with the type of product.

Stage 9 - Commercialization: In this stage product is completely placed in

the open market and aggressive communication program accompanied with

promotion activities is carried out to support it.

8.9 Product Life Cycle (PLC)

Meaning of Product Life Cycle: It means a product has to go through the

various stages since its inception and till it completely fades out from the

market.

The following graph represents the PLC curve and the 5 stages that it has to

undergo

The product which is introduced into the market will undergo some

modifications over the period. Its sales also fluctuate. Therefore a marketer

will be interested in finding out how sales changes over a period and what

strategies are best suited at that point. A product life cycle can be graphed

by plotting aggregate sales volume for a product category over time.

Generally the curve resembles a bell shaped curve. We can obtain style,

fashion or fad style of product life cycles also.



Product life cycle (bell shaped curve)

According to PLC, a product passes through five stages which are as

follows:

1. Product development stage: In this stage company identifies the viable

idea and develops it. Even if sales in this stage are nil it requires huge

research and development budget. Therefore company incurs losses at

this stage. For example, TATA Docomo before entering the cellular

services market had done research and found that calls were charged

for minutes rather than seconds.

2. Introduction stage: Company introduces the product into the market. As

the product is new to the market, consumer awareness is usually very

low. Here company adopts heavy sales promotion and product

awareness programs. The cost of product is very high and sales are

very low. At this juncture the company charges high price to the

customers. For example, TATA Docomo has entered into cellular

services initially through the Billboards.

3. Growth stage: Company gets experience over the period and now tries

to get the maximum market share (takes ‘first mover’ advantage). Sales

will grow rapidly, resulting in lesser cost and better profit. Company

reduces the price of the product and offers varieties and values in it. It

focuses on building better distribution network and pushes the product

through it. Therefore company needs less sales promotion. There will be

increase in Competition and the company is forced to keep a tab on its

competitors. For example, TATA Docomo has entered into the growth

stage by aggressively advertising on Television and other mediums and

at the same time giving competition to the existing players.



4. Maturity stage: In this stage, the product has already established itself in

the market. These are the characteristics of this stage -

a. Peak sales.

b. Low cost per customer.

c. High profits.

d. Competition based pricing

e. Communicating the product differentiation (or USP) to consumers.

f. Improving supply chain efficiency.

g. Defend the market share

h. Industry experiences consolidation.

For example, Airtel in its advertising is clearly stating its subscriber base

as 1, 10,000 indicating that it has entered into a mature stage.

5. Decline stage: In this stage, product sales and profit decline. Company

should phase out weak items from their product mix and may even lower

the prices of the existing products. The advertisement budget of the

company also comes down and the company may struggle to meet its

costs. For example, VCR’s have been replaced with DVD players and so

VCR entered into the decline stage and is almost out of the market.

Activity 3:

Find out the life cycle stage about a product that you recently bought and

suggest some techniques on how it can do better in that particular stage.

Other product life cycles:

1. Style: A style is a basic and distinctive mode of expression that appears

in the study of human behavior. For example, style is evident in homes,

art, accessories and clothing. Once the style is invented it will be there

for a longer period.

2. Fashion: Currently accepted or popular style in a given field. For

example, cargo jeans are now the fashion with college going students.

Fashion changes with time.

3. Fad: A fashion that enters quickly is adopted with great zeal, peaks

early, and declines very fast. For example, when pager was introduced,

everybody wanted to have the product. But when people found mobiles

as alternative, the demand for pager went down drastically.



Self Assessment Questions

6. In _____________ life cycle, product sales reach peak very quickly

and decline very quickly.

7. Maximizing the market share is the objective of company in

______________stage of product life cycle.

8. In product development stage of product life cycle sales

are_________

9. Imitative products are also considered as a new product

a. True b. False.

10. In _____________ stage, a product is well established in the market.

8.10 Summary

Product: A good, service, person, place, event or organization that are

offered to consumers to satisfy his/her needs or wants.

A product has five levels, i.e. core product, generic product, expected

product, augmented product, and potential product.

A product can be classified as consumer products and industrial

products.

Product line length: The number of items in the product line is called the

product line length.

Product mix width: The total number of product lines that company offers

to the consumers.

New products may be really innovative, different from others or imitative

one.

In the growth stage of PLC, sales and profits of the company increase

because product is recognized and accepted in the market.

List of Key terms

Core product

Consumer products

Product mix

Product hierarchy

Product life cycle

New product development



8.11 Terminal Questions

1. How do you classify consumer products?

2. Bring out the difference between goods and services.

3. Describe the new product development process.

4. Discuss the different strategies adopted by marketer in product life

cycle.

5. Write a note on product mix strategies.

8.12 Answers

Answers to Self Assessment Questions:

1. True

2. Unsought

3. Line pruning

4. Product line depth.

5. Component material

6. Fad

7. Growth

8. Zero

9. True

10. Maturity

Answer to Terminal Questions:

1. Refer 8.3.1

2. Refer 8.1

3. Refer 8.8

4. Refer 8.9

5. Refer 8.6

Date post:	24-Oct-2014
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