PRODUCT MIX STRATEGY

MODULE I
Contents

 Classification of products and strategies for

different types of consumer products
 New product development process
 Product Life Cycle and various strategies
 Product Line Decisions
 Branding: Concept and Challenges
 Packaging and labeling.
Product
 A good, idea, information or service that can be
offered to the market for attention, acquisition,
use or consumption 
 Serving as medium to fulfil a set of consumer
needs, wants and demands
 Combination of tangible/intangible attributes
 Lawfully produced, marketed and distributed.
Product Levels
PRODUCT CLASSIFICATION

 Product classifications help marketers focus

their efforts using consumers’ buying behaviour.
 Marketers can use these buying habits to design
marketing efforts for a clearly defined target
audience.
 Consumer products are often classified as
convenience goods, shopping goods, specialty
products or unsought goods.
Product Life Cycle-PLC
Product Life Cycle-PLC

A new product progresses through a
sequence of stages from introduction to
growth, maturity, and decline.
 This sequence is known as the product life
cycle and is associated with changes in
the marketing situation, thus impacting
the marketing strategy and the marketing
mix.
Product Life Cycle

 The introduction stage of the product life cycle is

where a new product is launched into a market. E.g.
Existing Brand, new car
 Some chances of innovation. E.g. Cadbury, Surf, All-
out (market based)
 Minimum chances of innovation. E.g. Coca-Cola
(Peak), Surf, All-out
 Product reaches its saturation point. E.g. Paper work-
receipts etc.
Introduction Features
After all research and development has be done it is time to launch
product and begin its life cycle.
 The marketing team emphasizes promotion and the product's
initial distribution.
 Often the product will have little or no competitors at this point.
 Nonetheless, sales may remain low because it takes time for the
market to accept the new product.
 At this stage of the life cycle, the company usually loses money
on the product.
 High Pricing strategy: Product launch initially has the
capacity to be sold at a higher price. E.g. Magnum
Introduction Stage Features
Growth Stage Features

The market has accepted the product and sales begin to

increase.

 The company may want to make improvements to the

product to stay competitive.

 At this point, there are still relatively few competitors.

Growth Stage Features
Maturity Stage Features

 In the maturity stage of the product life cycle,

sales will reach their peak.
 Other competitors enter the market with
alternative solutions, making competition in
the market fierce.
 The company that introduced the new product
may begin to find it difficult to compete in the
market.
Maturity Stage Features
Decline Stage
 Sales will begin to decline as the product
reaches its saturation point.
 Most products are phased out of the market at
this point
 Decrease in sales because of competitive
pressure
 The market will see the product as old and no
longer in demand.
Decline Stage
PLC stages characteristics
PLC Strategies
Product Extension

 Product extension is the strategy of placing an

established product's brand name on a new product
that is in the same category.
 The act of introducing a product with which the
company is familiar, but that has features that
consumers are not yet aware of.
 Extending a product line under an existing brand
can attract buyers who have different preferences,
lessen the cost of reaching buyers in the same
market category who are already familiar with the
brand, and ultimately boost profitability
Product Mix

 The Product Mix also called as Product

Assortment, refers to the complete range of
products that is offered for sale by the company.
 In other words, the number of product lines that
a company has for its customers is called as
product mix.
 The product mix has four
dimensions: Breadth, Length, Depth,
and Consistency.
Product Mix

 Product Line: associated items

that consumers tend to use together or think of
as similar products or services.
 Breadth/Width: The number of product lines
that are offered by the firm
 Length: Total number of products in a firm’s
product mix
 Depth: Number of variations within a product
line
 Consistency: Consistency refers to how closely
■ Width: No. of different product lines
■ Length: Total number of items in product line
■ Depth: Versions/Variations in product line
■ Consistency: Closely related product lines

“Nike Inc. has product lines for various sports, such

as track and field, basketball, and soccer. The company's
product lines include footwear, clothing and equipment.
Starbucks Corporation's product lines include coffee, ice
cream and drinkware.”
Product Line Decisions
 Product Line Length
 The primary one of the product line decisions is the
product line length.
 The number of items in a product line.
 Each item in the product line should be assessed on a
regular basis in terms of sales and profits to understand
how each item contributes to the product line’s overall
performance and make the right product line decisions.
 The product line length can be influenced by company
objectives and resources. For instance, a company might
want to maintain longer product lines to protect against
economic swings.
Product Line Decisions
 Expanding the product line
 Involve adding items to the line. A company can expand
its product line in two ways:
Line Filling: Adding more items within the present
range of the line. (Adding similar product.)
Line Stretching: lengthening the product line beyond
the current range. Vertical, Horizontal. (E.g. Flavour
addition
 Contracting the product line
 Fine tune the market performance
 Eliminating poor performance product
 Uplifting a product with more potential
New Product Development

New product development is a process of

taking a product or service from conception to
market. The process sets out a series of stages
that new products typically go through,
beginning with ideation and concept
generation, and ending with the product's
introduction to the market. Occasionally, some
of the stages overlap or vary depending on the
nature of the business.
Stages in New Product Development

STAGE I: Idea Generation

Internal sources
SWOT analysis
Market research
Customers
Competition
II Stage- IDEA SCREENING
nd

 Idea Screening: Factors like –

 Company’s strength
 Company’s weakness
 Customer needs
 Ongoing trends
 Expected ROI
 Affordability
III-Concept Development & Testing

 A product concept is a detailed version of the new-

product idea stated in meaningful consumer terms.

 You should distinguish:

 A product idea: an idea for a possible product
 A product concept: a detailed version of the idea
stated in meaningful consumer terms
 A product image: the way consumers perceive an
actual or potential product.
III- Concept development and Testing

 Concept development involves coming up with a detailed

description of an idea, explained from the perspective of your
customer.
 A concept typically highlights the best features of the proposed
solutions in terms of:
 convenience
 usability
 quality
 functionality
 performance
 price
 values
 experience
III- Concept testing

Concept testing is a process that helps you

assess the customer reaction to your
proposed product or service prior to
introducing it to the market.
It typically involves conducting surveys
with a group of potential users rating one
or more of the statements relating to the
concept.
IV-Market Strategy Development

 The marketing strategy statement consists of

following three aspects:
 A description of the target market, the planned
value proposition, and the sales, market share and
profit goals for the first few years
 An outline of the product’s planned price,
distribution and marketing budget for the first year
 The planned long-term sales, profit goals and the
marketing mix strategy.
V- Business Analysis
 The fifth step in the new product development process involves a
review of the sales, costs and profit projections for the new
product to find out whether these factors satisfy the company’s
objectives. 
 The testing results help the business in coming up with the final
concept to be developed into a product.
 Estimated product profitability is estimated, marketing mix, and
branding strategies are decided for the product.
 Other important analytics include:
 Competition of the product
 Costs involved
 Pricing strategies
 Breakeven point, etc.
VI- Product Development

This is when a prototype or a limited

production model will be created
It gives something tangible for
consumer testing, for feedback on
specifics like look, feel and packaging
for example.
VII- Test Marketing

 Test marketing (or market testing) is different

to concept or consumer testing, in that it
introduces the prototype product following
the proposed marketing plan as whole rather
than individual elements.
 This process is required to validate the whole
concept and is used for further refinement of
all elements, from product to marketing
message.
VIII- Commercialization

 This stage involves briefing different departments

about the duties and targets.
 Pricing and marketing plans need to be finalized
and the sales teams and distribution briefed, so
that the product and company is ready for the final
stage.
 Some factors should be considered before the product
is commercialized:
 Introduction timing
 Introduction Place
Brand

 The idea or image people have in mind when thinking about specific
products of a company, both in a practical (e.g. “the shoe is light-
weight”) and emotional way (e.g. “the shoe makes me feel
powerful”).
 This combination of physical and emotional cues is triggered when
exposed to the name, the logo, the visual identity, or even the
message communicated.
 Brand will always be unique. For example, Pepsi and Coca-Cola

“A brand is a name, term, design, symbol, or any other feature

that identifies one seller’s good or service as distinct from those of
other sellers.”
-- American Marketing Association
Checklist to Evaluate Your
Brand
 Does your brand relate to your target audience? Will
they instantly "get it" without too much thought? 
 Does your brand share the uniqueness of what you offer
and why it's important?  
 Does it reflect the brand promise that you are making to
who you are targeting as well as to your internal
audience?  
 Does your brand reflect the values that you want to
represent as a customer?  
What Should a Brand Do?

Clearly, delivers the message 

Confirms your credibility  
Emotionally connects your target
prospects with your product and or
service. 
Motivates the buyer to buy 
Creates User Loyalty
Branding

 Branding is the process of giving a meaning to specific products by

creating and shaping a brand in consumers’ minds.
 Strategy designed by companies to help people to quickly identify
their products and organization giving them a reason to choose their
products over the competitors
 It is the sum total of their experiences and perceptions, some of
which you can influence, and some that you cannot.  
 Branding aims to establish a significant and differentiated presence
in the market that attracts and retains loyal customers.

“Branding is endowing products and services with the power of a

brand.”
-- Kotler & Keller, 2015
Importance of Branding

 If a brand could speak it would say: 

 I am  ________________. 
 I exist because ________________. 
 If you relate to who I am and why I exist you might like me,
you can buy me, and you can tell others about me.  
 As consumers begin to identify with you, your brand will
live within the hearts and minds of customers, clients, and
prospects. It is the sum total of their experiences and
perceptions, some of which you can influence, and some that
you cannot.  
 Branding is strategic and marketing is tactical and what you
use to get your brand in front of consumers. 
Packaging

 All those activities related to designing, evaluating and producing

the container for a product.
 A container, wherein the product is stored to protect it from any
physical damage and at the same time attracting the customer
through its appeal is called as packaging.
 Marketing tool for building the brand equity and boosting
sales.
 Capable of influencing a buyer to initiate sales since the
buyer comes in contact with the package first and then after
with the product.
Functions of Packaging

 Self-Service: Specifically in the case of purchases done in the

supermarkets.
 Consumer affluence: Customers are willing to pay even more for the
convenience, appearance, dependability of the better packages.
 Brand Recognition: As soon as the customers see the package, they can
instantly relate it to the company or brand. For example, the Brooke
Bond’s Taj Mahal Tea comes in the blue pack with an image of a Taj Mahal
on its box; this gives an identity to the brand.
 Innovative Packaging: Unique design to its product package with the
intent to grab customer’s attention. For example, the calcium Sandoz
bottles targeted at children and women have been designed to make
them attractive to the target segment (A dog shaped bottle for kids,
while a lady-shaped bottle for women).
Labelling
 Product Labeling is a key feature in marketing.
 Marketers use labeling to their products to bring identification.
 It helps to market the product allowing customers to know about the
item and give necessary messages including ingredients, instructions,
and uses.
 Product labeling can be done in a variety of sizes, materials, and
shapes.
 Plays a key role as a point of sale display in the market shelves.
 They can also communicate information about how to handle a product
on
how to dispose of it.
 Can be used for security reasons so that a product should not be
misused.
 It is for these purposes the labeling having the logo or the trademark of
the company.
Types of labeling
 Branded Product Labels: Products need to be branded to help
with identification and play a key role in company brand
building programs
 Removable
 Non-Removable labels
 Eco or Information Label:
 Information Labels or Eco-Labels are used on consumer products such
as foodstuff and fast moving consumer goods.
 They are used to impart information to the consumer about the
product.
 Often these types are made out of eco-friendly substances so that they
do not interfere with the products they are associated with.
Importance of Labeling and
Packaging
 The role of packaging and labeling has become
quite significant as it helps to grab the attention of
the audience.
 Labelling and packaging can be used by marketers
to encourage potential buyers to purchase the
product.
 Packaging is also used for convenience and
information transmission. Packages and labels
communicate how to use, transport, recycle or
dispose of the package or product.