Product & Price

Product?
Product?
 Product

Defining Product
A product is any good, service, or idea that can be offered to a
market to satisfy a want or need.
In general, a product is defined as a “thing produced by labor or
effort” or the “result of an act or a process. ” The word “product”
stems from the verb “produce”, from the Latin prōdūce(re) “(to)
lead or bring forth. ” Since 1575, the word “product” has referred
to anything produced.
In marketing, a product is anything that can be offered to a market
that might satisfy a want or need. In retail, products are called
merchandise. In manufacturing, products are purchased as raw
materials and sold as finished goods. Commodities are usually raw
materials such as metals and agricultural products, but the term
can also refer to anything widely available in the open market. In
project management, products are the formal definition of the
project deliverables that form the objectives of the project.
 Definitions of Product:

1. Philip Kotler:
“Product is anything that can be offered to someone to satisfy a need or a
want.”
“A product is anything that can be offered to a market for attention,
acquisition, use or consumption; it includes physical objects, services,
personalities, place, organisations and ideas.” A product is much more
than a physical or tangible object.
2. William Stanton:
“Product is complex of tangible and intangible attributes, including
packaging, colour, price, prestige, and services, that satisfy needs and
wants of people.”
3. W. Alderson:
“Product is a bundle of utilities, consisting of various product features and
accompanying services.”
Product is a bundle of benefits-physical and psychological- that marketer
wants to offer, or a bundle of expectations that consumers want to fulfill.
Marketer can satisfy needs and wants of target consumers by products.
Product includes both good and service. Normally, product is taken as a
tangible object, such as a pen, television set, bread, book, vehicle, table,
 Goods, Services, or Ideas

Goods are a physical product capable of being

delivered to a purchaser and involve the transfer of
ownership from seller to customer.
A service is a non-material action resulting in a
measurable change of state for the purchaser caused by
the provider.
Ideas (intellectual property) are any creation of the
intellect that has commercial value, but is sold or traded
only as an idea, and not as a resulting service or good.
This includes copyrighted property such as literary or
artistic works, and ideational property, such as patents,
appellations of origin, business methods, and industrial
processes.
 Product includes:

1. Core Product:
Core product includes basic contents, benefits, qualities,
or utilities.
2. Product-related Features:
They include colour, branding, packing, labeling, and
varieties.
3. Product-related Services:
They include after-sales services, installation, guarantee
and warrantee, free home delivery, free repairing, and
so forth. As per the definition, anything which can
satisfy need and want of consumers is a product. Thus,
product may be in form of physical object, person, idea,
activity, or organisation that can provide any kind of
services that satisfy some customer needs or wants.
 Characteristics of Product:

Careful analysis of concept of product essentially reveals following

features:
1. Product is one of the elements of marketing mix or programme.
2. Different people perceive it differently. Management, society, and
consumers have different expectations.
3. Product includes both good and service.
4. Marketer can actualize its goals by producing, selling, improving, and
modifying the product.
5. Product is a base for entire marketing programme.
6. In marketing terminology, product means a complete product that can be
sold to consumers. That means branding, labeling, colour, services, etc.,
constitute the product.
7. Product includes total offers, including main qualities, features, and
services.
8. It includes tangible and non-tangible features or benefits.
9. It is a vehicle or medium to offer benefits and satisfaction to consumers.
10. Important lies in services rendered by the product, and not ownership of
product. People buy services, and not the physical object.
Product Classification
Product Classification
 Types of Product:

They can be classified into two groups, such as:

1. Consumer Product, and
2. Industrial Products

1. Consumer Products:
Consumer products are those items which are used by ultimate
consumers or households and they can be used without further
commercial and engineering processes.
Consumer products can be divided into four types as under:

i. Convenient Products:
Such products improve or enhance users’ convenience. They are
used in a day-to-day life. They are frequently required and can be
easily purchased. For example, soaps, biscuits, toothpaste, razors
and shaving creams, newspapers, etc. They are purchased
spontaneously, without much consideration, from nearby shops or
retail malls.
 Types of Product:

ii. Shopping Products:

These products require special time and shopping efforts. They are
purchased purposefully from special shops or markets. Quality, price,
brand, fashion, style, getup, colour, etc., are important criteria to be
considered. They are to be chosen among various alternatives or
varieties. Gold and jewelleries, footwear, clothes, and other durables
(including refrigerator, television, wrist washes, etc.).
iii. Durable Products:
Durable products can last for a longer period and can be repeatedly used
by one or more persons. Television, computer, refrigerator, fans,
electric irons, vehicles, etc., are examples of durable products. Brand,
company image, price, qualities (including safety, ease, economy,
convenience, durability, etc.), features (including size, colour, shape,
weight, etc.), and after-sales services (including free installation, home
delivery, repairing, guarantee and warrantee, etc.) are important
aspects the customers consider while buying these products.
 Types of Product:

iv. Non-durable Products:

As against durable products, the non-durable products have short life. They
must be consumed within short time after they are manufactured. Fruits,
vegetables, flowers, cheese, milk, and other provisions are non-durable in
nature. They are used for once. They are also known as consumables. Mostly,
many of them are non-branded. They are frequently purchased products and
can be easily bought from nearby outlets. Freshness, packing, purity, and
price are important criteria to purchase these products.
v. Services:
Services are different than tangible objects. Intangibility, variability,
inseparability, perishability, etc., are main features of services. Services make
our life safe and comfortable. Trust, reliability, costs, regularity, and timing
are important issues.
The police, the post office, the hospital, the banks and insurance companies,
the cinema, the utility services by local body, the transportation facilities,
and other helpers (like barber, cobbler, doctor, mechanic, etc.,) can be
included in services. All marketing fundamental are equally applicable to
services. ‘Marketing of services’ is the emerging facet of modern marketing.
 Types of Product:

2. Industrial Products:
Industrial products are used as the inputs by manufacturing firms for further
processes on the products, or manufacturing other products. Some products
are both industrial as well as consumer products. Machinery, components,
certain chemicals, supplies and services, etc., are some industrial products.
Again, strict classification in term of industrial consumer and consumer
products is also not possible, For example, electricity, petroleum products,
sugar, cloth, wheat, computer, vehicles, etc., are used by industry as the
inputs while the same products are used by consumers for their daily use as
well.
Some companies, for example, electricity, cements, petrol and coals, etc., sell
their products to industrial units as well as to consumers. As against
consumer products, the marketing of industrial products differs in many
ways.
Industrial products include:
1. Machines and components
2. Raw-materials and supplies
3. Services and consultancies
4. Electricity and Fuels, etc.
 A product should possess:

(a) Utility
(b) Brand package and label,
(c) Attractive colour, beauty shape, finishing,
(d) Qualities,
(e) Reputation,
(f) Price,
(g) Service etc.
 Product Mix

 Meaning of Product Mix

 Product mix or product assortment refers to the number
of product lines that an organisation offers to its
customers. Product line is a group of related products
manufactured or marketed by a single company. Such
products function in similar manner, sold to the same
customer group, sold through the same type of outlets, and
fall within a same price range .

 Definition: 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.
 Product Mix

 The product mix has four

dimensions: Breadth, Length, Depth, and Consistency.
The Breadth of a product mix shows the different kinds of
product lines that firm carries. Simply, it shows the number of
items in the product line. This dimension of the product mix
represents the extent to which the activities of the firm are
diversified.
 In the example below, there are 4 product lines that show
the width of the ITC.
Product Mix
 Width of a Product mix

The width is all about the number of different

product lines the company carries. As
mentioned in the previous example, Colgate
has 3 product lines. Thus, it has a rather
limited width.
 Length of a Product mix

The Length of a Product mix refers to the

number of items in the product mix. In the
example below the length is 11. As in the
foods line, the number of items is 3, in
cigarettes is 3 and so on.. On adding all the
items, we get the length of a product.
 Depth of a product mix

The Depth of a product mix refers to the

variants of each product in the product line.
For example, in the example below, curry,
pastes, biryanis, conserves, etc. shows the
depth of the foods product line.
 Consistency of a product mix

 The Consistency of a product mix shows the extent to

which the product lines are closely related to each other in
terms of their end-use, distribution requirements, production
requirements, price ranges, advertising media, etc. In the
above example, it is clear that ITC’s product lines are less
consistent as these perform different functions for the buyers.
 Product Line

What is a product line?

A product line is a group of products that a
company creates under a single brand. The
products are similar and focus on the same
market sector. Maybe their function or
channel distribution are the same or similar.
Perhaps their physical attributes, prices,
quality, or type of customers are the
same. We call the activity product lining.
Product Line
 Product Line

Philip Kotler:
“Product line is a group of products that are closely related because
they function in a similar way, are sold to same customer groups,
are marketed through the same type of outlets, or fall within
given price range.” Thus, product line is the group of similar
products. The similarity may be seen in one or more ways.
Product line consists of product items belonging to same class.

 The definition suggests following five ways the items are

closely related:
i. They function in similar manner.
ii. They offer similar benefits, or meet similar expectations.
iii. They are sold to similar customer groups.
iv. They are marketed by similar outlets.
v. They fall within same price range.
The definition suggests following five ways
the items are closely related:

i. They function in similar manner.

ii. They offer similar benefits, or meet similar
expectations.
iii. They are sold to similar customer groups.
iv. They are marketed by similar outlets.
v. They fall within same price range.
 Characteristics of Product Line:

Main characteristics of product line can be listed as:

1. Product line consists of closely related product items. Difference is only found in
terms of colour, size, shape, model, performance, weight, and capacity.
2. It is a compose of various similar items.
3. Product items are complementary to one another. For example, tube, tyre, and
related materials.
4. There is difference in price. For example, Hero Honda charges different price for
different models.
5. The purpose of offering similar items in each of the product line may be to attract
customers by offering more varieties, and to create a good image or reputation.
6. Different items of a product line can be manufactured using same technology
and/or inputs.
7. Product items in each of the product lines are distributed in same distribution
channel. That is, similar outlets market them.
8. Product items in each product line function in same manner. They need same
technical skills to use them.
9. They are sold to similar customer groups. They satisfy needs of the same groups.
10. They have more or less same use or utility. They are used for the same purpose.
 Concept of Product Item:
Product items are various varieties offered within product line, which
are similar in one or other ways. Such varieties are based on quality,
size, colour, capacity, price, model, performance, and so on.
Level of Product
 The Five Product Levels Model

Definition of Kotler’s Five Product Levels

The Five Product Levels model was developed by economist
Philip Kotler in the 1960s. His book, Marketing Management,
was voted one of the 50 best business books of all time in the
mid-1990s by the Financial Times. Kotler changed the way
marketing was viewed by contending that it was not a singular
department, separated from all the others, but that marketing
as an activity was an organization-wide responsibility.
He asserts that the definition of a product goes far beyond being
a physical object or a service. He defines a product as
anything that can meet a need or a want, and his Five
Product Levels Model provides a way to show the different
levels of need customers have for a product, such as: Core
benefit, Generic Product, Expected Product, Augmented
Product and Potential Product.
Description of Kotler’s Five Product Levels
The model considers that products are a means to an end to
meet the various needs of customers, and asserts that there
are three ways in which customers attach value to a product:

Customer Need: the lack of a basic requirement.

Customer Want:a specific requirement for a product or
service to meet a need.
Customer Demand:a set of wants plus the desire and ability
to pay to have them satisfied.

Customers will choose a product based on their perceived

value of it and are only satisfied if the product’s value to
them meets or exceeds expectations. If the product’s actual
value falls below expectations, they will be dissatisfied.
 The Five Product Levels

The five product levels are:

Core benefit:
The fundamental need or want that consumers satisfy by consuming the product or service.
For example, the need to process digital images.
Generic product:
A version of the product containing only those attributes or characteristics absolutely
necessary for it to function. For example, the need to process digital images could be satisfied
by a generic, low-end, personal computer using free image processing software or a processing
laboratory.
Expected product:
The set of attributes or characteristics that buyers normally expect and agree to when they
purchase a product. For example, the computer is specified to deliver fast image processing
and has a high-resolution, accurate colour screen.
Augmented product:
The inclusion of additional features, benefits, attributes or related services that serve to
differentiate the product from its competitors. For example, the computer comes pre-loaded
with a high-end image processing software for no extra cost or at a deeply discounted,
incremental cost.
Potential product:
This includes all the augmentations and transformations a product might undergo in the
future. To ensure future customer loyalty, a business must aim to surprise and delight
customers in the future by continuing to augment products. For example, the customer receives
ongoing image processing software upgrades with new and useful features.
Product Life Cycle (PLC)
Product life Cycle (PLC)
 Product life Cycle (PLC)

Definition: Product life cycle (PLC) is

the cycle through which every product goes
through from introduction to withdrawal or
eventual demise.
The Product Life Cycle means the sequence
of stages that every product progresses
through until it reaches the stage where it is
finally abandoned or discontinued from the
market.
Introduction Stage (PLC)
Growth Stage (PLC)
Maturity Stage (PLC)
Decline Stage (PLC)
PLC of Maruthi Suzuki 800
 New Product Development

New Product Development refers to

the complete process of bringing a new
product to market. This can apply to
developing an entirely new product,
improving an existing one to keep it
attractive and competitive, or introducing an
old product to a new market.
 Classification of New Product Development

1. New-to-the-World Products
2. New Product Lines
3. Additions to Existing Product Lines
4. Improvements & Revisions of Existing
Products
5. Repositioning
6. Cost Reductions
The stages of new product development
 Classification of New Product Development

Classification of New Product Development

1. New-to-the-World Products
2. New Product Lines
3. Additions to Existing Product Lines
4. Improvements & Revisions of Existing
Products
5. Repositioning
6. Cost Reductions
 What is Labelling?

Labelling is the display of label in a product. A label

contains information about a product on its container,
packaging, or the product itself. It also has warnings in it.
For e.g. in some products, it is written that the products
contain traces of nuts and shouldn’t be consumed by a
person who’s allergic to nuts. The type and extent of
information that must be imparted by a label are
governed by the relevant safety and shipping laws.
Labeling is also an important part of the brand of the
product and the company. It helps the product stand out
in the market, and identifies it as a part of a particular
brand. This is important in the era of high and intense
competition.
 Objectives of labelling

A label is a carrier of information about the product. The

attached label provides customers with information to aid
their purchase decision or help improve the experience of
using the product. Labels can include:

 Care and use of the product

 Recipes or suggestions
 Ingredients or nutritional information
 Product guarantees
 Manufacturer name and address
 Weight statements
 Sell by date and expiration dates
 Warnings
What is Labelling?
Importance of Labelling
Importance of Labelling
Types of Labelling