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Product Mix

The document discusses product levels, classification, mix, and life cycle. It defines a product and explains product mix in terms of width, length, depth, and consistency. Finally, it outlines the typical stages of a product life cycle as introduction, growth, maturity, and decline, and how marketing strategies should be adapted for each stage.

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Jeet Kahar
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171 views37 pages

Product Mix

The document discusses product levels, classification, mix, and life cycle. It defines a product and explains product mix in terms of width, length, depth, and consistency. Finally, it outlines the typical stages of a product life cycle as introduction, growth, maturity, and decline, and how marketing strategies should be adapted for each stage.

Uploaded by

Jeet Kahar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Product

Objective of the session

⚫ Levels of product
⚫ Classification of product
⚫ Product mix
⚫ Product life cycle
What is a product?

⚫ Anything that can be offered to a market for


attention, acquisition, use, or consumption that
might satisfy a want or need.
Levels of product
Classification of products
What is product-mix ?

⚫ Set of all product offered for sale by a company.


⚫ It consist of various product line.
⚫ Any company’s product mix has four dimension :
1. Width
2. Length
3. Depth
4. Consistency
Product Mix

⚫ Width : Number of different product lines carries by


the company.
⚫ Length : Total number of items in the product mix
of the company.
⚫ Depth : Assortment of size, colour and models
offered in each item of a product line.
⚫ Consistency : It refers to the relationship of various
product line either in their end use, production
requirement, distribution channel or other way.
⚫ Bru Coffee has been launched with several variants like
1. Bru Exotica- It is a premium-freeze-dried-coffee
2. Bru Cappuccino- Hard flavour for actual coffee lovers
3. Bru Gold – Is purely granulated with superior taste and
uplifting aroma Bru Gold Coffee
4. Bru Roast & Ground- Is aromatic filter coffee
5. Bru Instant – Made from robust beans it ensures best
and instant coffee with fresh aroma
6. Bru Select- Filter coffee at its best that is roasted slowly
with patience to guarantee perfection
Product life cycle
Product life cycle

⚫ The term product life cycle refers to the length of time a


product is introduced to consumers into the market until
it's removed from the shelves.
⚫ The life cycle of a product is broken into four
stages—introduction, growth, maturity, and decline.
This concept is used by management and by marketing
professionals as a factor in deciding when it is
appropriate to increase advertising, reduce prices,
expand to new markets, or redesign packaging.
⚫ The process of strategizing ways to continuously support
and maintain a product is called product life cycle
management.
Figure 10-2:
Sales and Profits
Over A Product’s Life
Product Life-Cycle Strategies

⚫ The Typical Product Life Cycle (PLC)


Has Five Stages
⚪ Product Development, Introduction,
Growth, Maturity, Decline
⚪ Not all products follow this cycle:
Fads
Styles
Fashions

10- 18
Figure 10-3:
Styles, Fashions, and Fads
Companies
want their
products to
enjoy a
long life
cycle.
Hershey’s
actively
promotes
the fact that
it has been
“unchanged
since 1899”
Product Life-Cycle Strategies

⚫ Additional marketing
investments can move a
product back into the
growth stage, as in the
case of Cracker Jack.

10- 21
Product Life-Cycle Strategies

⚫ The product life cycle concept can be


applied to a:
⚪ Product class (soft drinks)
⚪ Product form (diet colas)
⚪ Brand (Diet Dr. Pepper)
Using the PLC to forecast brand
performance or to develop marketing
strategies is problematic
10- 22
Product Life-Cycle Strategies

⚫ Begins when the


PLC Stages
company develops
⚫ Product a new-product idea
development ⚫ Sales are zero
⚫ Investment costs
⚫ Introduction
are high
⚫ Growth ⚫ Profits are negative
⚫ Maturity
⚫ Decline
10- 23
Product Life-Cycle Strategies

PLC Stages ⚫ Low sales


⚫ High cost per
⚫ Product customer acquired
development ⚫ Negative profits
⚫ Introduction ⚫ Innovators are
⚫ Growth targeted
⚫ Maturity ⚫ Little competition
⚫ Decline
10- 24
Marketing Strategies: Introduction Stage

⚫ Product – Offer a basic product


⚫ Price – Use cost-plus basis to set, Rapid
skimming price, slow Skimming price, Rapid
Market Penetration, slow Market penetration.
⚫ Distribution – Build selective distribution
⚫ Advertising – Build awareness among early
adopters and dealers/resellers
⚫ Sales Promotion – Heavy expenditures to
create trial
10- 25
Product Life-Cycle Strategies

⚫ Rapidly rising sales


PLC Stages
⚫ Average cost per
⚫ Product customer
development ⚫ Rising profits
⚫ Introduction ⚫ Early adopters are
targeted
⚫ Growth
⚫ Growing
⚫ Maturity competition
⚫ Decline
10- 26
Marketing Strategies:
Growth Stage

⚫ Product – Offer product extensions, service,


warranty, improve product quality, enter new
market segment
⚫ Price – Penetration pricing ( lowering the price)
⚫ Distribution – Build intensive distribution
⚫ Advertising – shifting from Build awareness to
product preference in the mass market
⚫ Sales Promotion – Reduce expenditures to take
advantage of consumer demand

10- 27
Product Life-Cycle Strategies

PLC Stages
⚫ Sales peak
⚫ Low cost per
⚫ Product customer
development ⚫ High profits
⚫ Introduction ⚫ Middle majority
⚫ Growth are targeted
⚫ Maturity ⚫ Competition begins
⚫ Decline to decline
10- 28
Marketing Strategies:
Maturity Stage

⚫ Product – Diversify brand and models


⚫ Price – Set to match or beat competition
⚫ Distribution – Build more intensive
distribution
⚫ Advertising – Stress brand differences and
benefits
⚫ Sales Promotion – Increase to encourage
brand switching
10- 29
Marketing Strategies:
Maturity Stage

⚫ Maturity stage can be subdivided into three


phases:
1. Growth Maturity
2. Stable maturity
3. Declining maturity

10- 30
Marketing Strategies:
Maturity Stage
⚫ Strategies by marketers
⚫ Market modification
1) The company can try to expand the number
of brand users in 3 ways
i. convert nonusers:
ii. Enter new market segments
iii. Win competitors customers
2) Volume can be increased by
i. More frequent use
ii. More usage per occasion
iii. New and more varied uses
10- 31
Marketing Strategies:
Maturity Stage
⚫ Strategies by marketers
Product modification:
i. Quality improvement
ii. Feature improvement
iii. Style improvement
Marketing –Mix Modification
i. Prices
ii. Distribution
iii. Advertising
iv. Sales promotion
v. Personal selling
vi. Services
10- 32
Product Life-Cycle Strategies

PLC Stages ⚫ Declining sales


⚫ Low cost per
⚫ Product customer
development ⚫ Declining profits
⚫ Introduction ⚫ Laggards are
⚫ Growth targeted
⚫ Maturity ⚫ Declining
⚫ Decline competition
10- 33
Marketing Strategies: Decline Stage

⚫ Product – Phase out weak items


⚫ Price – Cut price
⚫ Distribution – Use selective distribution:
phase out unprofitable outlets
⚫ Advertising – Reduce to level needed to
retain hard-core loyalists
⚫ Sales Promotion – Reduce to minimal level
⚫ Drop decisions
10- 34
Benefits of PLC

⚫ An explanatory model
⚫ Planning in long term
⚫ Overcoming burden of organisation
Limitation of PLC
⚫ It is difficult to forecast change in PLC stages.
⚫ Products, Companies and markets are different, so not all
products or services go through every stage of PLC.
⚫ There have been many cases where products have gone
straight from introduction to decline, usually because of
bad marketing, misconceived features, lack of need of the
product.
⚫ Even if products would go through every stage of the PLC,
not all products/services spend the same length of time at
each stage.
⚫ PLC model is inefficient when dealing with brands or
services.

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