MarketingManagement

Unit8

Unit8

ProductManagement:Decisions,DevelopmentAnd LifecycleStrategies

Structure

8.1. Introduction 8.2. Levelsofproduct 8.3. Classificationofproducts 8.4. 8.5. 8.6. 8.7. 8.8. 8.9. Producthierarchy Productlinestrategies Productmixstrategies Packagingandlabeling Newproductdevelopment Productlifecycle Terminalquestions AnswerstoSAQsandTQs

8.10. Summary

8.1. Introduction Product: Agood,service,person,place,eventsororganizationsofferedtoconsumerstosatisfyhis needorwant. Agoodisatangibleproduct,whichcanbeseenandtouch.Thesetangibleitemscanbeproducedin bulkandinventoried.ForExample,SwitchesfromBajajElectricalsaregoods. Aserviceisanintangibleproduct,whichrequiressimultaneousconsumptionandproduction.These are also perishable in nature. For example, A Wockhard hospital offers heart surgery, which consumers can not see but need to undergo when there is a pain in the heart. Hence surgery a service,isperishableinnature,needtobeproducedandconsumedsimultaneously.

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Differencesbetweengoodsandservices: Table8.1 Goods 1. Tangible 2. Inventoried 3. Nonperishable 4. Homogeneous Services Intangible. Simultaneousproductionandconsumption. Perishable Heterogeneous

Aproductmaybepersonalso.Heremarketertriestobuyandsellthecelebritiesorsportspersonsof aleagueorclubetcFor,example,BoardofcricketcontrolinIndia(BCCI)asksitsIndianpremier league(IPL)teamstobuyIconicplayersandforeignplayersforcertainprice. Aneventisalsoconsideredasproduct.Manyeventmanagementcompaniesearntheirrevenueby sellingticketsandadvertisementspaceattheevent.Thefollowingexampleexplainshowanevent canbemarketed. Figure8.1

Anorganizationisalsoconsideredasaproduct.Itcanbeboughtandsoldonthebasisofvalueof th thefirm.TomakeitmoreclearTatasboughtTetleyfor271mnon27 February2000

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Many state governments and central governments sell their places to get the pie in the tourism market. Here governments provides 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 Hampitotourists,ahistoricalplaceinKarnataka. Figure8.2

LearningObjectives Afterstudyingthisunit,youwillbeableto 1. Analyzehowproductsareclassified. 2. Discusstheproductlineandproductmixstrategies. 3. Describetheproductlifecycle. 4. Assessthestagesinvolvedinthenewproductdevelopment.

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8.2.LevelsOfProduct 1. Core product: This is the fundamental goods or service offered to the consumer. E.g. Hospital services 2. Genericproduct:Thisisthebasicversionoftheproduct.E.g.Hospitalhavingdoctors,nurses, bedsandlaboratories. 3. Expectedproduct:Theminimumattributesconsumerexpectsintheproduct.E.g.Hospitalshould havequalifieddoctors,goodserviceandproperamenities. 4. Augmented product: Inclusionof valueadded services to theexpectedproducttodistinguish it from competitors. E.g. Online or tele medicine facilities, expert knowledge sharing, 24 hour ambulanceserviceetc... 5. Potential product: these are future products provided by the company which customer didnt anticipate.Ultimatelyconsumerwillbedelightedbythisproduct.E.g.Medicalinsurancefromthe hospital,afterservicecareetc 8.3.ClassificationOfProducts Table8.2

Product ConsumerProducts Businessproducts Materialsandparts

Conveniencegoods

Shoppingproducts

Capitalitems

Specialtyproduct

Suppliesandservices

Unsoughtgoods

Products are classified into two broad categories. They are consumer products and business products.
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Consumerproductsarepurchasedbytheconsumerforhispersonalconsumption. Business products: These products are purchased by business concern for further product development 8.3.1.ConsumerProducts Astheseproductsarepurchasedbythefinalconsumerforhisownconsumption,themarketisvery big.Thelargemarketneedtoservedifferentneedsofconsumer.Thereforecompanyshouldcreate different types of products. Hence consumer products are classified into four different categories. Theyare a. Conveniencegoods. b. Shoppinggoods c. Specialtygoods d. Unsoughtgoods. a. Convenience goods: The fast moving consumer goods, which are purchased regularly with lessamountofeffort.

1. Thesearepurchasedfrequently. 2. Customerinvolvementisverylow. 3. Priceoftheproductisverylow. 4. Intensivedistributionisusedtoreachtheconsumer. 5. Thestockturnoverishigh. 6. Aggressivepromotionisrequired

i. Example:soapsanddetergents. b. Shopping goods: High consumer involvement products in which consumer process the informationofproductsuitability,qualityandprice. Comparingwithconveniencegoods,shoppinggoodsarepurchasedlessfrequently.Consumertakes lotoftimetosearchandevaluatetheinformation.Theseproductsareavailableinselectedoutlets. Thepriceoftheproductisveryhigh.Forexample,aconsumerwanttopurchasewashingmachine willcollecttheinformationontypeofwashingmachine,typeofcontrol,loading,washmethod,pre wash,delicatewash,cycletime,aftersalesservice,sensorsandwaterconsumption.
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c. Specialtygoods:Atangibleproductforwhichaconsumerposseshighbrandloyaltyandready towait,orspendtime i. ii. iii. Consumersarehavingstrongbrandloyalty. Usuallycompaniesadoptpremiumpricingstrategy. Exclusivedistributionandselectivecommunicationstrategiesareadopted. To illustrate, a consumer is willing to pay Rs 32000 for Bose Digital home theater though competitorsproductsareavailableatRs15,000toRs25000. d. Unsought goods: These productsare called unsoughtbecause consumer usually unawareor ignorant to purchase. Marketers need heavy promotion activities to educate and sell their products. Insuranceistheproductwhichmostoftheconsumerareawarebutveryfewarewillingtopurchase. LifeInsuranceCorporationtrainsitsagentstopromoteandsellaggressively.Theseagentsprovide lotofinputsregardinginsurancetoconsumers. 8.3.2.BusinessProductsClassification Business products are purchased by the business consumer who uses this product 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 developthefinalproductsofthesecompanies. Table8.3 CentreforEngineering&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,UnitOfficesatBangalore,andNewDelhifor formulationofInterplantStandardsforSteelIndustry.Asasolutionproviderforallprojectneeds, CEThadbeenrenderingcompleterangeofservicesnotonlytotheSteelPlantsunderSAILbut alsotovariousclientsotherthanSAILbothwithinandoutsidethecountry.Someoftheimportant clients other than SAIL include EGITALEC (Egypt), Ashok Steel (Nepal), Chittagong Steel Mills (Bangladesh),BirlaCopper,MukandLtd.,JindalVijayanagarSteelsLtd.,NationalIron&SteelCo., Hindustan Zinc Ltd., National Mineral Development Corporation and Romelt SAIL (India) Ltd., CETisalsothenodalagencyforacquisitionandlateraltransferoftechnologieswithinSAILplants. The range of services includes conceptualization, project evaluation & appraisal, project consultancy,design&engineeringandprojectmanagementintheareasofironandsteelmaking. Apartfrom this, CET hasbeen providing its services in the related areas like mineplanningand development, infrastructure development, industrial piping, industrial warehousing, material
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handlingsystem,industrialpollutioncontrolandenvironmentmanagementsystems,watersupply andsanitation,townplanning,powerprojects,etc (Source:www.sail.co.in) Businessproductsareclassifiedintothreecategories.Theyare a. Materialsandparts. b. Capitalitems c. Suppliesandservices. a. Materialsandparts:Theseproductsarefurtherclassifiedasrawmaterialsandmanufactured materialandparts.

Materialsandparts. Rawmaterials manufacturedmaterials& parts 1.componentmaterials 2.Componentparts

1.Naturalproducts 2.Farmproducts

Materialsareclassifiedintorawmaterialsandmanufacturedmaterialsandparts. Rawmaterialsareoftwotypesfirstly,Naturalproductsandsecondly,Farmproducts. 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 privatelimitedandSinosteelIndiaprivatelimited. Farm products are also used in further product development. For example, Parle agro division suppliesrequiredwheatfortheproductionofbiscuits. Manufactured materials are further classified into two types. They are component parts and componentmaterials. Component parts. For example, Melco Precisions private limited supplies Heat resistant steel to Grasim,NTPCandNFLforfurtherproductdevelopment.

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Component materials These are also called as original equipment manufacturer products. These companiesproductsaredirectlyfittedinthefinalproduct.Forexample,MRFtyresaredirectlyfitted inMarutiUdyogLimitedcars. b. Capital items includes developing the building( for example, L & T and Siemens developing BangaloreInternationalAirport)Fixedequipments(forexample,Lenovosupplyingcomputersto Manipaluniversity)Accessoryequipments(forexample,HindustanEveresttoolslimitedsellsits spannersandplierstoindustrialcustomers)andofficeequipments(HPsupplyingfaxmachineto Shristiautomationprivatelimited) c. Suppliersandservices:Suppliesincludesoperatingsupplies(CastrolsellsitslubricantstoVRL limited)maintenanceandrepairservices(Eaglesecuritiesservicetocorporateclients)

1.4. ProductHierarchy
Thedifferentstagesintheproductandtheirattributesarelistedbelow Table8,3 1.Needfamily : 2.Productfamily : Thecoreneedthatunderliestheproductfamily All the product classes that can satisfy a core need with reasonable effectiveness. Agroupofproductswithintheproductfamilyrecognizedashavinga certainfunctionalcoherence 4.Productline : 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 customergroupsoraremarketedthroughthesametypesofoutletsor fallwithingivenpriceranges. 5.Producttype : Those items within a product line that share one of several possible formsoftheproducts. 6.Brand : Thenameassociatedwithoneormoreitemsintheproductlinethatis usedtoidentifythesourceorcharacteroftheitem 7.Item : A distinct unit within a brand or product linethat is distinguishable by size,price,appearance,orsomeotherattribute.

3.Productclass

(AdoptedfromKotlerPhilip,MarketingManagement)
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8.5.Productlinestrategies Product line: The group of related products which uses same marketing effort to reach the consumer. Theproduct line identifiesprofitable and unprofitableproducts andhelps inallocation of resources according to that. The product line understanding helps the marketer to take line extension, line pruningandlinefillingstrategiesofthecompany. Pidiliteindustries,theadhesivesandchemicalcompanyhavefollowinggroupofrelatedproducts(or productlines)inconsumerandbusinessmarkets. Consumermarket.

1. Adhesivesandsealants. 2. Artmaterialsandstationeries. 3. Constructionchemicals. 4. Automotivechemicals 5. Fabriccare

Businessmarket.

1. Industrialadhesives. 2. Textilechemicals. 3. Organicpigmentpowders. 4. Industrialresinsand 5. Leatherchemicals.

PRODUCTLINEDECISIONS: Themajorproductlinedecisionsare a. b. c. Productlinelength: Productlinestretching Productlinefilling 131

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d.

Productlinepruning.

a. Product line length: The number of items in the product line is called the product line length. Companyshoulddecidewhetheritrequireslongerchainorshorterlength.Thedecisiondepends upontheobjectiveofthecompany,competitiveenvironmentandprofitability.Ifthechainisshort companycanaddnewproductsandifitislengthycompanycanreducethenumberofproducts. For example, Pidilites adhesives and sealants line has following 11 items in the product line. Hencethelengthofproductlineis11

1. WhiteGlue 3. GlueStick 5. EpoxyPutty 7. PVCInsulationTape 9. ContactGlue 11. MaintenanceSpray

2. PaperGlue 4. InstantAdhesive 6. EpoxyAdhesive 8. SiliconeSealants 10. AllPurposeGlue

b. Productlinestretching:Companylengthensitsproductslineeitherbystretchingupwardsor downwardsorbothways.Linestretchingdecisiondependsonthreesituation i. Company which operates in high end market may come up with mid class or low class targetedproducts. ii. The company which operates in lower end of market may come up with high end market products. iii. Ifthecompanyoperatesinmidsegmentandcomesoutwithlowendproductaswellashigh endproductthenitisstretchingbothways. To explain let me take an example of Maruti Suzuki limited. Company launched its first product Maruti800intheyear1983andintheyear1985itlaunchedMarutiGypsy.Gypsyiscostlierthan Maruti 800 and targeted for higher segment. This shows that company extended its product line upwardsorinshort,upwardstretch. ATatamotorisplanningtolaunchtheirRs1LakhcarNANOintheyear2008.Thecompanywhich was targeting upper class and middle class with their products SUMO and Indica respectively has stretcheddownwardstoreachanothersegment.Thisillustratesthedownwardstretch.
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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 illustrate the two way stretchoftheproductline. c. Product line filling: Adding more items in the present line. For example, in the year 2000 Maruti Suzuki launched Alto. This product was between Maruti 800 and Maruti Zen. Here companywastryingtofillthegapexistedinthesegmentbyintroducingALTOi.e.linefilling. d. Product line pruning: removing the unprofitable products form the product line. Toyota KirloskarphasedouttheirwellknownbrandQualiswhenitthoughtthebrandisnotadding valuetotheproductline. 8.6.Productmixstrategies Productmix:Thenumberofproductlineanditemsofferedbymarketertotheconsumer Acompanysproductmixhasfourdifferentdimensions.Theyareproductmixwidth,productmix length,andproductmixdepthandproductmixconsistency. Table8.4 Fabriccare House hold Utensil insecticide cleaners Maxo cyclothrin coil Fragrances Personal care Allied business

Ujala supreme

(9ml, 30ml, 75ml, (8hr, 125ml,250ml) 12hr)

Exo dish Maya washbar (8, 15, 20, 40 (100g, 200g and 100 10hr, 380g) sticks.)

JeevaNatural Continental special (Coconut Milk with Milk Protein, Coconut Milk with Jasmine and Coconut Milk with Kasturi Manjal,andis presented in 75gm packs. ) Marketing of godrejTea

Ujala washing powder (25g, 500g,

Max vaporizer (30ml,45ml)

Exo dish washliquid (500ml,

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1Kg) Stiff&shine Maxaerosol

125ml) Marketing of Ektadhoop

(20gm (150ml,300ml) sachets, 100ml and 200ml bottles)

Productmixwidth:Thetotalnumberofproductlinethatcompanyofferstotheconsumers. Forexample,Jyothylaboratoriesproductmixhassixlines.Hencewidthis6

Fabriccare

House hold Utensil insecticide cleaners

Fragrances

Personal care

Allied business

Productmixlength:Thetotalnumberofitemsthatcompanycarrieswithinitsproductline. Forexample,Jyothylaboratoriesfabriccaredivisionhasthreeitems

Fabriccare Ujala supreme Ujala washing powder

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Stiff&shine

Productlinedepth:Thenumberofversionsofferedofeachproductintheline. For example, Jyothy laboratories Jeeva Natural is offered in three versions i.e. Coconut Milk with MilkProtein,CoconutMilkwithJasmineandCoconutMilkwithKasturiManjal,andispresentedin 75gmpacks. Product mix consistency: If companys product lines usage, production and marketing are related thenproductmixisconsistentelseitisunrelated. IncaseofJyothylaboratories,allsixproductlinesareFMCGs.Henceitishavingconsistentproduct mix.ButITCCompanyscigaretteandclothproductlinearetotallyunrelated. 8.7.Packagingandlabeling. Packaging:Theprocessofdesigningandproducingthecontainerorwrapperforaproduct. Packagingplaysvitalroleinmarketingaproduct.Someruralconsumersidentifyandbuytheproduct onthedesignorcoveroftheproduct.Packaginghasotherbenefitstotheconsumersalso.Theyare 1. Itgivesproperprotectiontotheproduct. 2. Ithelpsinbulkbreaking. 3. Enticesthecustomertobuytheproduct. Companiesthosenotgivemuchimportancefacessevereproblemsinthemarket. Table8.5 WormturnsforCadbury(www.domain_b.com) MohiniBhatnagar 28November2003 Hyderabad:ThewormsinthechocolatebarscontroversyhashitCadburyIndiawhereithurtsmost andthatisinsales.Thecompanytodayfacestoughtimesaheadasthebusinessenvironmentforits 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 (institutionalandretail)fellby3to4percentlastmonthandarepredictedtobedownby10percent in November by the trade, Cadbury Indiahas had to incuradditional costs in upgradingpackaging anddamagecontrolpromotionalefforts.Toaddtoallthis,pricesofmilkandcocoahavebeenonthe
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upwardpathinrecentmonths,addingfurthertothecosts.Thelargestimpactonsaleshasbeenin Maharashtra,andspecificallyinMumbai,whichiswherethewholecontroversyaroseaswormswere foundinCadburychocolatesinallegedlyeightoutletsacrossthestate.Ifitweren'tbadenoughthat the controversy blew up at the festival season when the chocolates sales are at their peak, the companymayalsojusthavetoshelveplansofbecomingamajorsourcinghubforBritishchocolates 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 IndiaemergeasamajorsupplierofchocolatestotheAsiaPacificregionandtheMiddleEast.The outsourcing model couldhave resulted in significant revenue generationfor Cadbury India. Initially thecompanyblamedretailersfornotstoringtheproductsproperlybutisnowengagedinputtingin placearegularmonitoringandcheckingsystemofthestorageofthechocolates. CadburyIndiamanagingdirectorBharatPurisaysthecompanyhasmadesubstantialinvestmentsin packaginginordertomaintainproductqualityfromthemanufacturertothecustomer.Andnowitis making all attempts to reassure the consumer and win back their confidence and interest in the category.IthasinitiatedProjectVishwas,athreestepprogrammeinvolvingwholesalersandretailers in which the company partners with the tradersona warfooting to buildawareness about storage requirementsforCadburyproducts.InMaharashtrawherethemaximumdamagehasbeendonethe companyhas involveda teamofqualitycontrolmanagersalong with 300 salespeople to carryout checks of over 50,000 retail outlets which retail Cadbury products. The products in upgraded packagingareexpectedtohitretailstoresearlynextyear.Analystssayinthepastcoupleofyearsin the face of increasing competition from Swiss chocolates major Nestle India and the homegrown Amul, Cadbury has been pushing its products aggressively and targeting the adult audience especiallytoexpandthemarket. Packagingstrategies: 1. Adoptingasamepackageforentireproductline. 2. Multiplepacksformultipleproducts 3. Changingthepackagescontinuously. Labeling: Labeling:itcarriestheinformationabouttheproductandtheseller. Typesoflabel: a. Brandlabel:onlybrandnameismentionedonthepackaging.Forexample,Dharawadmangoes pack,onlybrandnameishighlighted. b. Grade label: Identifies the products judged quality with a letter, number or word. For example, fertilizers1919019,17191919etc
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c. Adescriptivelabel:givestheentireinformationabouttheproduct,use,andcare.Forexample, vasemol hair dye packet contains brochure in which it tells how to use product, what are the precautionsoneshouldtakeetc SelfAssessmentQuestions1: 1. Aplaceisaproduct a. true b.False 2. Insuranceistypeofconsumergood 3. Phasingoutofthebrandformtheproductlineiscalledas 4. Thenumberofversionsofferedofeachproductinthelineisknownas 5. arecalledasoriginalequipmentmanufacturerproducts.

8.8.NewProductDevelopment Newproductsareessentialforexistingfirmstokeepthemomentumandfornewfirmstheyprovide the differentiation. New product doesnt mean that absolutely new to the world. It may be modification, or offered in the new market, or differentiate from existing products. Therefore it is necessarytounderstandwhatarenewproducts? NewProductsare a. They are really innovative: Googles Orkut a networking site which revolutionized social networking.Inthissitepeoplecanmeetlikemindedpeopletheycanformtheirowngroupsand manymore. b. They are very different from the others: Haierlaunchespathbreaking4DoorRefrigeratorsFirsttimein India c. They are imitative these products are not new to the market but new to the company. For example, cavin Kare launched ruche pickles. This product is new to cavin kare but not to the market. Newproductdevelopmentprocess: Stage 1: Idea generation: new product idea can be generated either from the internal sources or externalsources.Theinternalsourcesincludeemployeesoftheorganizationanddatacollectedfrom the market. The external source includes customers, competitors and supply chain members. For example,IngersollrandwelcomesnewideasfromtheGeneralpublic

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. Stage2:Ideascreening:Organizationmayhavevariousideasbutitshouldfindoutwhichofthese ideas canbe translated into concepts. In an interview to Timesof India, Mr. Ratan Tata, chairman TATA group discussed how his idea saw many changes from the basic version. He told that he wantedtodevelopcarwithscooterengine,plasticdoorsetc...Butwhenheunveiledthecarsomany changewerethereintheproduct.Thisshowsthatinitialideawillbechangedonthebasisofmarket requirements. Stage3:conceptdevelopment: ConceptsusedforTataNanocarare Concept1:lowend'ruralcar,'probablywithoutdoorsorwindowsandwithplasticcurtainsthatrolled down,afourwheelversionoftheautorickshaw Concept 2: a car made by engineering plastics and new materials, and using new technology like aerospaceadhesivesinsteadofwelding. Concept3:Indigenous,inhousecarwhichmeetsalltheenvironmentstandards Stage4concepttesting:atthisstageconceptwastestedwiththegroupoftargetcustomers. Stage5:Marketingstrategydevelopment:Themarketingstrategydevelopmentinvolvesthreeparts. Thefirstpartfocusesontargetmarket,sales,marketshareandprofitgoals.TATAsinitialbusiness planconsistedsalesof2Lakhcarsperannum.Thesecondpartinvolvesproductprice,distribution andmarketingbudgetstrategies.TATAsfixedRs1Lakhasthecarprice,andfindingselfemployed personwhoworkslikeagenttodistributethecars.Thefinalpartcontainsmarketingmixstrategyand profitgoals. Stage6:businessanalysis:itistheanalysisofsales,costsandprofitestimatedforanewproductto findoutwhetherthesealignwithcompanymissionandobjectives.
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Stage7:Productdevelopment: TATAnanocardevelopment(sourcebusinessworldnanolution) 1. Triedtooutsourcetheproductfromallovertheworld. 2. Developmentofmuleorprototypewith20bhp. 3. Designingthesmallengine 4. Thermodynamicsimulationsandfinalengine 5. DevelopmentofMPFIwithhelpofBosch. 6. Costreductionandnegotiatingwithvendors. 7. SonaKoyoandRaneGroupcameupwithhollowsteeringshafts,savingcostandcuttingweight. Sharda Motors and Emcon designed the exhaust system and MRF tweaked the tyres to bear extraweightonrearwheels. Stage8:testmarketing: 1. Theproductisintroducedintotherealisticmarket 2. The4Psofmarketingaretested. 3. Thecostoftestmarketingvarieswiththetypeofproduct. Stage9:commercialization:Inthisstageproductiscompletelyplacedinthemarketandaggressive communicationprogramiscarriedouttosupportit.

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8.9.Productlifecyclemanagement:

Theproductwhichisintroducedintothemarketwillundergosomemodificationsovertheperiod.Its salesalsofluctuate.ThereforemarketerisinterestedinfindingoutHowsaleschangesoverperiod? And what strategies best suits at that point? A product life cycle can be graphed by plotting aggregatesalesvolumeforaproductcategoryovertime.Generallythecurveresemblesbellshaped curvebutitisnottheonlyonetypeofcurve.Wecanobtainstyle,fashionorfadstyleofproductlife cyclesalso.

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Productlifecycle(bellshapedcurve) Accordingtothistypeofcycleaproductpassesthroughfivestages: 1. Productdevelopmentstage:Inthisstagecompanyidentifiestheviableideaanddevelopsit. Sales in this stage are zerobut require huge researchand developmentbudget. Therefore companyincurslossesatthisstage. 2. Introductionstage:Companyintroducestheproductintothemarket.Astheproductisnewto themarket,awarenessisusuallyverylow.Herecompanyadoptsheavysalespromotionand productawarenessprograms.Thecostofproductisveryhighandasaleisverylow.Atthis juncturecompanychargeshighpricetothecustomer. 3. Growthstage:Companygetsexperienceovertheperiodandnowtriestogetthemaximum marketshare(takefirstmoveradvantage).Saleswillgrowrapidlyresultinginlessercostand betterprofit.Companyreducesthepriceoftheproductandoffersvarietiesandvaluesinit.It focusesonbuildingbetterdistributionnetworkandpushestheproductthroughit.Therefore companyneedslesssalespromotion.Numberofcompetitorswillgrowanditforcescompany tokeeptabonthem. 4. Maturitystage: a. b. c. d. e. f. g. h. Peaksales. Lowcostpercustomer. Highprofits. Competitionbasedpricing Communicatingtheproductdifferentiationtoconsumer. Improvingsupplychainefficiency. Defendthemarketshare Industryexperiencestheconsolidation.

5. Decline stage: In this stage, product sales and profit declines. Company should phase out weak items from their product mix. The advertisement budget of the company also comes down. Otherproductlifecycles: 1. Style: a style is a basic and distinctive mode of expression appears in thefield of human behavior.Forexample,styleappearsinhomes,art,andclothing.Oncethestyleisinventedit willlostforlongerperiod. 2. Fashion:currentlyacceptedorpopularstyleinagivenfieldforexample,cargojeansarenow fashionwithcollegegoingstudents. 3. Fad:afashionthatentersquickly,adoptedwithgreatzeal,peaksearly,anddeclineveryfast for example, when the pager is introduced, every body would like to have the product. But whenpeoplefoundmobileasalternativesthedemandfortheproductwentdowndrastically.

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SelfAssessmentQuestions2 1. Inlifecycleproductsalesreachpeakveryquicklyanddeclinesveryquickly. 2. Maximizingthemarketshareistheobjectiveofcompanyinstageofproductlifecycle. 3. Inproductdevelopmentstageofproductlifecyclesalesare 4. Imitativeproductsarealsoconsideredasanewproduct a. True b.false. 5. Marketingmixstrategyofthecompanydecidedin stageofnewproductdevelopment. 8.10 Summary

1. Product:Agood,service,person,place,eventsororganizationsthatareofferedtoconsumersto
satisfyhisneedorwant.

2. Aproductishavingfivelevelsi.e.Coreproduct,genericproduct,expectedproduct,augmented
product,andpotentialproduct.

3. Aproductcanbeclassifiedasconsumerproductsandindustrialproducts. 4. Productlinelength:Thenumberofitemsintheproductlineiscalledtheproductlinelength. 5. Productmixwidth:Thetotalnumberofproductlinethatcompanyofferstotheconsumers. 6. Newproductsmaybereallyinnovative,differentformothersorimitativeone. 7. Inthegrowthstagesalesandprofitofthecompanyincreases.

Terminalquestions: 1. Howdoyouclassifyconsumerproducts? 2. Bringoutthedifferencebetweengoodsandservices. 3. Describethenewproductdevelopmentprocess. 4. Discussthedifferentstrategiesadoptedbymarketerinproductlifecycle. 5. Writeanoteonproductmixstrategies. AnswerstoSelfAssessmentQuestions SelfAssessmentQuestions1 1. True. 2. Unsought.
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3. Linepruning. 4. Productlinedepth. 5. Componentmaterial SelfAssessmentQuestions2 1. Fad 2. Growth. 3. Zero 4. True 5. Marketstrategydevelopment. AnswertoTerminalQuestions 1. Refer8.3.1. 2. Refer8.1. 3. Refer8.8. 4. Refer8.9. 5. Refer8.6.

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