UNIT 2: CONSUMER

MARKETS & PRODUCT

DECISIONS
AKHIL RAJ, ASSIST. PROF, DEPT. OF MANAGEMENT STUDIES
 DEFINING PRODUCT
◦"Product" refers to the goods or services that a company offers to its
customers.
◦Anything that can be offered to a market to satisfy a want or need.
◦From the customer’s point of view, a product is a bundle of utilities, which is
purchased because of its capability to provide satisfaction of certain need.
◦There can be three types of benefits a customer may seek to satisfy from the
purchase of a product, viz., (i) functional benefits, (ii) psychological benefits,
and (iii) social benefits.
◦For example: Purchase of a Motorbike/Car.
CLASSIFICATION OF
PRODUCTS
 BROAD CLASSIFICATION OF
PRODUCTS
◦ Consumer Products: Products, which are purchased by the ultimate consumers or users for
satisfying their personal needs and desires are referred to as consumer products.
◦ For example, soap, edible oil, eatables, textiles, toothpaste, fans, etc. which we use for our
personal and nonbusiness use are consumer goods.

◦ Industrial Products: Industrial products are those products, which are used as inputs in
producing other products. The examples of such products are raw materials, engines,
lubricants, machines, tools, etc.
◦ In other words, industrial products are meant for non-personal and business use for producing
other products.
 CLASSIFICATION OF CONSUMER
PRODUCTS
◦ On the Basis of Durability
◦ Non- Durable: The consumer products which are normally consumed in one or few uses are called non-
durable products. For example, we purchase products like toothpaste, detergents, bathing soap and
stationary products etc.

◦ Durable: Those tangible consumer products which normally survive many uses, for example,
refrigerator, radio, bicycle, sewing machine and kitchen gadgets are referred to as durable products.
These goods are generally used for a longer period.

◦ Services: Services are intangible in form. By services we mean those activities, benefits or satisfactions,
which are offered for sale, e.g., dry cleaning, watch repairs, hair cutting, postal services, services offered
by a doctor, an architect and a lawyer.
CLASSIFICATION OF CONSUMER
PRODUCTS
◦ On the Basis of Shopping Efforts Involved:

◦ Convenience Products: Those consumer products, which are purchased frequently,

immediately and with least time and efforts are referred to as convenience goods.
◦ Shopping Products: Shopping products are those consumer goods, in the purchase of which
buyers devote considerable time, to compare the quality, price, style, suitability, etc., at several
stores, before making final purchase.
◦ Speciality Products: Speciality products are those consumer goods which have certain special
features because of which people make special efforts in their purchase. The buyers are willing
to spend a lot of time and efforts on the purchase of such products.
IDENTIFY THE PRODUCTS
IDENTIFY THE PRODUCTS
 CHARACTERISTICS OF
INDUSTRIAL PRODUCTS
◦ 1. Number of Buyers: As compared to the consumer products, the numbers of buyers of
industrial products are limited. For example, sugarcane is purchased by few producers of
sugar, but sugar, which is a consumer product, is purchased by crores of people in our country.
◦ 2. Channel Levels: Because of limited number of buyers, the sale of industrial products is
generally made with the help of shorter channels of distribution.
◦ 3. Geographic Concentration: Because of location of industries at certain points or regions,
industrial markets are highly concentrated, geographically.
◦ 4. Derived Demand: The demand for industrial products is derived from the demand for
consumer products. For example, the demand for leather will be derived from demand for
shoes and other leather products in the market.
 PRODUCT DECISIONS
◦ 1. Classification of Products.
◦ 2. Branding
◦ -Brand Name
◦ -Brand Mark.
◦ 3. Packaging.
◦ 4. Labelling.
 BRANDING
◦ The major decision to be taken under branding is- generic name Vs. brand name.
◦ Most marketers give a name to their product, which helps in identifying and distinguishing
their products from the competitors’ products. This process of giving a name or a sign or a
symbol etc., to a product is called branding.
◦ Various terms related to Branding are as follows:
◦ 1. Brand: A brand is a name, term, sign, symbol, design or some combination of them, used
to identify the products—goods or services.
◦ 2. Brand Name: That part of a brand, which can be spoken, is called a brand name.
◦ 3. Brand Mark: That part of a brand which can be recognized but in the form of a symbol,
design, distinct colour scheme.
 OTHER BRANDING
DECISIONS
◦To decide on brand positioning.

◦To decide on branding strategies.

ADVANTAGES OF BRANDING TO
MARKETERS

◦Helps in Product Differentiation.

◦Helps in Advertising & Promotion efforts.
◦Helps in Differential Pricing.
◦Ease in Introduction of new products.
ADVANTAGES OF BRANDING TO
CUSTOMERS

◦Helps in Product Identification.

◦Ensures Quality.
◦Become status symbols.
 CHARACTERISTICS OF A GOOD
BRAND NAME
◦ The brand name should be short, easy to pronounce, spell, recognise and remember e.g., Ponds, VIP,
Rin, Vim, etc.
◦ A brand should suggest the product’s benefits and qualities. Eg- Boost, Dantkaanti.
◦ A brand name should be distinctive. Eg- Liril, Olay.
◦ The brand name should be adaptable to packing or labelling requirements, to different advertising media
and to different languages.
◦ The brand name should be sufficiently versatile to accommodate new products, which are added to the
product line e.g., Maggie, Colgate.
◦ It should be capable of being registered and protected legally.
◦ Chosen name should have staying power i.e., it should not get out of date.
BRAND BUILDING PROCESS
 PACKAGING

◦Packaging is one of the most important component of marketing.

◦Packaging helps in protection of products while transporting it from the place
of manufacturing to the place of consumption.
◦An attractive package can help in getting much more customer attention. At
times, the customer will be inclined towards purchasing the product purely
because of the packaging style.
LEVELS OF PACKAGING
 LEVELS OF PACKAGING
◦ Primary Packaging: It refers to the product’s immediate container.
◦ In some cases, the primary package is kept till the consumer is ready to use the product (e.g., plastic
packet for socks); whereas in other cases, it is kept throughout the entire life of the product (e.g., a
toothpaste tube, a match box, etc.).
◦ Secondary Packaging: It refers to additional layers of protection that are kept till the product is ready
for use.
◦ e.g., a tube of shaving cream usually comes in a card board box. When consumers start using the shaving
cream, they will dispose off the box but retain the primary tube.
◦ Transportation Packaging: It refers to further packaging components necessary for storage or
transportation.
◦ For example a toothpaste manufacturer may send the goods to retailers in large boxes containing 10, 20,
or 100 units.
 IMPORTANCE OF
PACKAGING

◦1. Rising Standards of Health and Sanitation.

◦2. Product Differentiation.
◦3. Helps in safe storage of products.
◦4. Flexibility of usage to consumers.
LIMITATIONS OF PACKAGING

◦Packaging can be expensive and adds to cost of the

product.
◦Deceptive Packaging.
◦Disposal of used packages.
 LABELLING
Labelling refers to creating and putting labels on the products.
Labels are useful in providing detailed information about the product, its contents, method of use, etc.
KINDS OF LABELS
 KINDS OF LABELS
◦ Brand Labels- These labels are used just with a sole objective of popularizing the brand. Here marketers
extensively use logo/sign to create brand loyalty. Eg- garments.

◦ Grade Labels: These labels classify product on the basis of certain quality or size. It indicates the
quality or grade of the product. For eg- Tea Flavours.

◦ Descriptive Labels: These labels carry descriptive information such as ingredients, composition,
nutritional value etc.

◦ Informative Labels: These labels carry information such as instructions, precautions, manufacturing and
expiry dates and warnings etc.
IMPORTANCE OF LABELLING

◦1.Helps in Product Identification.

◦2.Helps in Product Differentiation.
◦3.Provides information- instructions for use, nutritional information,
ingredients and safety warnings.
◦4.Helps in brand positioning.
◦5.Helps in Promotion.
 LIMITATIONS OF LABELLING

◦It is of no use for the illiterate population.

◦It increases cost of the product.
◦It enables the customer to compare and then select one product and
forego other ones.
 PRODUCT LIFE CYCLE
◦The product has a life cycle just as human beings have. From its
birth, a product passes through various stages, until it is finally
abandoned i.e discontinued from the market.
◦Stages of PLC
◦- Introduction.
◦-Growth.
◦-Maturity.
◦-Decline.
 PLC MARKETING
STRATEGIES
◦ It simply refers to the actions that any marketer should undertake on the basis of their product’s current
state in the PLC.

◦ -Introduction Stage.
◦ -Growth Stage.
◦ -Maturity Stage.
◦ -Decline Stage.
 PLC MARKETING
STRATEGIES
◦ I. INTRODUCTION STAGE
◦ Objective: Build awareness and generate interest.
◦ 1. Market Research and Analysis- Identifying Target Customers & Understanding Competitor’s Strategies.
◦ 2. Educate the Market
◦ 3. Product Launch Strategy- Focus on promotional efforts.
◦ 4. Build Early Adoption- Offering Introductory offers or engage with early adopters.
◦ II. GROWTH STAGE
◦ Objective: Increase market share and maximize sales.
◦ 1. Enhance marketing efforts- can use holistic marketing.
◦ 2. Can improve product features.
◦ 3. Expand distribution partners.
 PLC MARKETING
STRATEGIES
◦ III. MATURITY STAGE:
◦ Objective: Maintain market share and maximize profitability.
◦ 1. Relationship Marketing- offer loyalty programs, special discounts etc.
◦ 2.Diversify product lines.
◦ 3. Competitive pricing.
◦ IV. DECLINE STAGE:
◦ Objective: Manage decline and decide on the future of the product.
◦ 1. Analyze the reason for decline.
◦ 2. Reposition or Revise.
◦ 3.Gradually reduce the production & explore new opportunities.
 PRODUCT LINE DECISIONS
◦ A group of related products that a company sells under a single brand. Example: LG
◦ Decisions to be considered:
◦ 1. Product Line Length
◦ Lengthening: Adding new products to the line, which can be either through line filling (adding more
items within the current range) or line stretching (expanding the range by adding items at higher or lower
price points). Line stretching is further divided into three.
◦ Shortening: Removing underperforming products to streamline the line, reduce costs, or focus on more
profitable items. It is also known as Line Pruning.
◦ 2. Product Line Depth
◦ Refers to the number of variations of a particular product in the line (e.g., different sizes, colors, or
features). Increasing depth can appeal to a broader audience, while reducing depth can simplify
production.
 PRODUCT LINE DECISIONS
◦ 3. Product Line Consistency
◦ Consistency relates to how closely related the products are in terms of use, production, and distribution.
A consistent product line can strengthen brand identity, but diversifying can help capture new markets.
Example: Amul.

◦ 4. Product Line Modernization

◦ Periodic updates to products as and when required. This might involve redesigns, introducing new
features, or improving quality.
 PRODUCT MIX
Product Mix is the set of all products offered for sale by a company.
It consists of various products lines. Example: LG.
There are four magnitude for product mix:
1.Width of the Product Mix- Ex: LG
2.Length of Product Mix.
3.Depth of Product Mix.
4.Consistency of Product Mix.

Product mix decisions refers to addition, removal or modification of product in product mix. The goal of
product mix decisions is to increase profitability and expand the business.
MARKETING CONCEPTS
 STP’s in MARKETING
◦STP’s help businesses effectively reach and serve their customers.

◦SEGMENTATION:
◦To divide the broad market into parts or segments based on similar
needs, preferences, or characteristics.

◦Segmentation is done on certain basis.

 TYPES OF SEGMENTATION
◦ Geographic Segmentation- Based on location such as country, region, state, city.
◦ Example: Food & Culture.
◦ Demographic Segmentation: Based on demographic factors like age, gender, income,
education, or family size.
◦ Example: Cosmetics Products, Toys, Luxury Watches, Family Pack Noodles.
◦ Psychographic Segmentation: Based on lifestyle, values, interests, or personality traits.
◦ Example: Mercedes, Apple, home decor, eco-friendly products.
◦ Behavioral Segmentation: Based on consumer behavior such as how they buy, what they
buy, frequency of purchase, interactions with brand.
 TARGETING
◦It evaluates the attractiveness of each market
segment and select one or more segments to
enter.

◦Example: Snapchat/Instagram
◦Segmentation- Targeting
 TARGETING STRATEGIES
◦ Undifferentiated Marketing (Mass Marketing): Offering a single product to the entire market.
Example: Basic household products like salt or sugar.

◦ Differentiated Marketing: Targeting multiple segments with different products or marketing strategies.
Example: A car manufacturer offering different models for luxury, economy, and sports car segments.

◦ Concentrated Marketing (Niche Marketing): Focusing on a single market segment with a tailored
product. Example: Lamborghini, Porsche.

◦ Micromarketing (Personalized Marketing): Targeting very specific segments or individuals, often

using data analytics to tailor marketing efforts. Example: Customizing marketing messages based on
individual purchase history.
 POSITIONING
◦Positioning refers to the place that a brand occupies in the
minds of the target customers and how it is
distinguished from the products of the competitors.
 POSITIONING STRATEGIES
◦1. Differentiation: Create a unique offering that stands out from competitors.
Example: A smartphone brand that emphasizes superior camera quality.
◦2. Strategic Pricing: Position the product as the most cost-effective option in
the market. Example: A budget airline offering low-cost flights.
◦3. Quality Leadership: Emphasize the high quality or premium nature of the
product. Example: Ads of luxury bathing soaps or beauty products.
◦4. Niche Positioning: Focus on a specific niche or segment. Example: A
skincare brand specializing in products for dry and oily skin type.
THANK YOU !