Financial management services BBA education Module 1.pptx

Bba education

1. Product Mix Strategy

2. What is a Product? A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.

3. Five Product Levels

4. The Five Product Levels model was introduced by marketing expert Philip Kotler and provides a way to understand the different layers of a product. Each level represents a distinct aspect of the product offering. The five levels are: 1. Core Product This is the fundamental benefit or need that the customer is seeking. It represents what the customer is truly purchasing, rather than the physical product itself. Example : For a smartphone, the core product is communication and connectivity. 2. Basic Product The basic version of the product that delivers the core benefit. It includes all the essential features needed for the product to function. Example : A basic smartphone would include the ability to make calls, send messages, and access basic apps, without any extra features. 3. Expected Product This is the set of attributes or characteristics that buyers typically expect in a product within a specific category. It encompasses the minimum standards the customer expects. Example : For a smartphone, the expected product would include a good camera, decent battery life, and a reliable operating system.

5. 4. Augmented Product This level includes additional features, services, or benefits that differentiate the product from competitors. These are added to exceed customer expectations and provide extra value. Example : A smartphone with premium features such as wireless charging, enhanced camera quality, exclusive apps, or a superior warranty. 5. Potential Product This refers to all the possible augmentations or transformations the product could undergo in the future. It represents future improvements or developments that could make the product even more appealing or innovative. Example : A smartphone with potential product upgrades might include features like foldable screens, holographic displays, or fully integrated AI assistants. In summary, these five levels help marketers understand how to enhance the value of their product offering, starting with the basic function (core product) and adding layers of features and services to create differentiation and meet customer needs more effectively.

6. Product Classification

7. Consumer products are products and services for personal consumption Classified by how consumers buy them Convenience products Shopping products Specialty products Unsought products

8. Consumer Goods Classification Convenience Unsought Shopping Specialty

9. Convenience products Convenience products are consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort Newspapers Candy Fast food

10. Strategy : High Availability : Ensure products are widely distributed and easy to find, especially in locations like supermarkets, convenience stores, and online platforms. Brand Recognition : Invest in building strong brand awareness to influence purchase decisions at the point of sale. Pricing Strategy : Competitive pricing with discounts, bulk offers, or loyalty programs to encourage repeat purchases. Promotions : Use short-term promotions, in-store displays, and digital advertising to push impulse purchases. Subscription Services : Offer subscription models for recurring needs (e.g., toiletries, food) to create customer loyalty.

11. Shopping products Shopping products are consumer products and services that the customer compares carefully on suitability, quality, price, and style Furniture Cars Appliances

12. Strategy : Product Differentiation : Emphasize unique features, quality, and benefits to distinguish the product from competitors. Detailed Information : Provide comprehensive product descriptions, reviews, comparisons, and demonstrations to help consumers make informed decisions. Pricing Strategy : Offer value through promotions, bundles, or seasonal discounts, but maintain premium pricing for high-quality or brand-name items. Retail Partnerships : Collaborate with trusted retailers or ecommerce platforms for better distribution and customer service. Customer Experience : Ensure excellent pre- and post-purchase customer service, such as easy returns, warranties, or technical support. Omnichannel Strategy : Ensure the product is available both online and in physical stores, with consistent pricing and promotions.

13. Specialty products Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort Medical Designer clothes High‐end electronics

14. Strategy : Brand Prestige : Focus on building and maintaining a high-end brand image through exclusive marketing, events, and influencer partnerships. Scarcity and Exclusivity : Leverage the scarcity principle by creating limited-edition products or offering products through invitation-only or VIP access. Personalized Marketing : Provide tailored marketing messages and experiences to appeal to the individual tastes and desires of high-net-worth consumers. Premium Pricing : Maintain premium pricing strategies, justifying the high cost with quality, heritage, or uniqueness. Exceptional Customer Service : Provide a luxury buying experience, including personalized service, free shipping, and special packaging.

15. Unsought products Unsought products are consumer products that the consumer does not know about or knows about but does not normally think of buying Funeral services

16. Strategy : Aggressive Marketing : Use direct-response advertising, content marketing, and educational campaigns to raise awareness when the consumer needs it most. Urgency and Need-Based Appeals : Highlight the importance of the product in emergency situations or future planning to drive immediate action. Partnerships : Collaborate with industries or organizations that encounter these products frequently (e.g., auto dealerships for warranties, hospitals for health insurance). Customer Trust : Establish credibility with clear explanations of the product's importance, backed by testimonials, guarantees, or industry certifications. Easy Access : Make the purchasing process as easy as possible, such as simplifying contracts, offering online purchasing, and providing instant quotes.

17. Industrial products are products purchased for further processing or for use in conducting a business Classified by the purpose for which the product is purchased Materials and parts Capital Raw materials

18. Capital items are  industrial products that aid in the buyer’s production or operations , including installations and accessory equipment. Installations consist of major purchases such as buildings (factories, offices) and fixed equipment (generators, drill presses, large computer systems, elevators). Materials and parts include raw materials and manufactured materials and parts usually sold directly to industrial users Supplies and services include operating supplies, repair and maintenance items, and business services

19. New Product Development Development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts

20. New-Product Development Reasons for new product failure

21. Major Stages in New-Product Development

22. New Product Development Process Stage 1: Idea Generation Internal idea sources: R & D External idea sources: Customers, competitors, distributors, suppliers Stage 2: Idea Screening Product development costs increase substantially in later stages so poor ideas must be dropped Ideas are evaluated against criteria; most are eliminated

23. Stage 3: Concept Development and Testing Concept development creates a detailed version of the idea stated in meaningful consumer terms. Concept testing asks target consumers to evaluate product concepts. Stage 4: Marketing Strategy Development The marketing strategy helps in deciding pricing, positioning, and promoting the product. A  marketing strategy  statement  includes three parts: The first part of the statement describes the target market, the firm’s planned value proposition, and its sales, market share and profit goals for the first few years.  The second part of the statement includes the product’s planned price, its distribution, and marketing budget for the first year. The last part of the statement consists of the planned long-run sales, marketing mix strategy, and profit goals.

24. Stage 5: Business Analysis Once the marketing strategy has been developed it is important to assess the worth of the product from a business point of view. An assessment of the sales projections, estimated expenses, and anticipated profits are included in the  business analysis .  Stage 6: Product Development In this stage, the R&D or engineering department converts a product concept into a physical product. This step involves a huge jump in investment as it shows whether or not the product idea can be turned into a workable product.  Stage 7: Test Marketing Test Marketing refers to the process of testing the product and marketing program in realistic market settings. Eg . a cosmetics company might launch a new skincare product in a particular area and collect information on consumer reaction, usage trends, and sales. Stage 8: Product Launch

25. The Product Life Cycle (PLC) The Product Life Cycle (PLC) refers to the stages a product goes through from its initial development and introduction to its eventual decline and removal from the market. It provides a framework for understanding the typical progression of sales, profits, and marketing strategies that a product undergoes over time. The goal of studying the PLC is to help businesses plan and manage their products more effectively, anticipate challenges, and apply the right strategies at each stage.

26. Introduction Stage Characteristics : The product is launched into the market, and the focus is on creating awareness and establishing a market presence. Sales : Low and growing, but often slow. Profit : Negative or low due to high development and marketing costs. Marketing Strategy : Promotion : Heavy promotion and advertising to educate customers. Pricing : Can be high (skimming strategy) or low (penetration strategy) depending on market conditions. Distribution : Limited distribution channels, as the focus is on getting the product into the hands of early adopters.

27. Growth Stage Characteristics : The product gains acceptance, sales grow rapidly, and competitors begin to enter the market. Sales : Rapidly increasing. Profit : Increasing as the company begins to recover its initial costs. Marketing Strategy : Promotion : Continue to build brand awareness and differentiation from competitors. Pricing : May start to adjust to be more competitive, depending on market demand. Distribution : Expanded distribution to reach a broader audience.

28. Maturity Stage Characteristics : The product’s growth slows as it reaches market saturation. Most potential customers have purchased the product, and competition is intense. Sales : Peak, but growth slows and eventually stabilizes. Profit : High but starts to decline due to increased competition and price reductions. Marketing Strategy : Promotion : Focus on brand loyalty and maintaining market share. Promotions might include discounts or loyalty programs. Pricing : Competitive pricing to maintain a competitive edge. Distribution : Extensive distribution through various channels, often globally.

29. Decline Stage Characteristics : Sales and profits start to decline as the product becomes obsolete or less desirable. New technologies, changing tastes, or market saturation can cause this. Sales : Declining. Profit : Declining, potentially leading to losses. Marketing Strategy : Promotion : Cut back on advertising and promotion, focusing only on loyal customers or niche markets. Pricing : Discounted prices to clear inventory. Distribution : May reduce distribution channels as demand decreases. Product : Option to discontinue the product or rejuvenate it through modifications or repositioning.

30. Extension (Optional) Sometimes, a product can enter an extension stage before it enters decline, where businesses use strategies to prolong its life, such as: Product Modification : Updating the product features, design, or technology. Repositioning : Shifting the product's target market or use. New Marketing Campaigns : Renewed advertising efforts to attract new customers.

31. Product Line Decisions A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges

32. Key Aspects of a Product Line: Product Line Length : The length of a product line is determined by how many different products or variations are included in it. Companies may decide to expand (add more products) or contract (remove underperforming products) the length of their product line based on market demand, profitability, or competitive pressures. Examples : A soft drink company may offer a line that includes soda, diet soda, and flavored water. A tech company may have a product line of smartphones with different models (entry-level, mid-range, premium).

33. 2. Product Line Depth : The depth of a product line refers to the number of variations within each product offering. These variations can be in terms of size, color, design, or features. Examples : A cosmetics company might offer multiple shades of lipstick, each a different variation within the lipstick product line. A footwear company may offer different sizes and styles (sneakers, boots, sandals) in the same product category.

34. 3. Product Line Filling : Product line filling is the process of adding new products to an existing line to fill gaps or offer more options within the same price range or feature set. This can prevent competitors from filling those gaps and help meet customer demand for variety. Example : A car manufacturer may add a new mid-range model between two existing models to cater to customers who want more features than the entry-level model but don't need the luxury features of the high-end model.

35. Brand Brand represents the consumer’s perceptions and feelings about a product and its performance. It is the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers

36. Branding Branding refers to the process of creating and managing a unique identity for a company, product, or service. It involves crafting a distinct name, logo, design, and messaging that differentiate a company or product from its competitors and establish a lasting emotional connection with customers. Effective branding helps build recognition, loyalty, and trust in the marketplace.

37. Key components of branding include: Brand Name : The verbal identity of the brand, often a memorable and meaningful name that resonates with the target audience. Logo : A graphical symbol or design that represents the brand, often used for recognition and association. Brand Values and Personality : The core principles, values, and personality traits that the brand embodies (e.g., innovation, reliability, luxury). Tagline or Slogan : A short, memorable phrase that communicates the brand’s essence or promise. Brand Voice : The tone and style of communication the brand uses across all customer touchpoints (e.g., friendly, professional, authoritative).

38. Challenges in Branding Brand Differentiation : In crowded markets, it can be difficult for a brand to stand out from competitors. Companies must develop a clear and unique value proposition to differentiate themselves. Brand Consistency : Maintaining consistency across all brand touchpoints (e.g., advertising, social media, packaging) is challenging, especially for global brands. Inconsistent messaging can confuse consumers and damage brand perception. Evolving Consumer Preferences : Consumer tastes, values, and expectations change over time. Brands must be adaptable and relevant to avoid losing customer interest. Brand Equity Maintenance : Over time, brands can lose their value if they do not invest in staying fresh, relevant, and aligned with customer needs. Global Branding : When brands operate in multiple countries, adapting the brand to local cultures while maintaining a global identity can be complex. What works in one market may not be suitable for another.

39. Packaging Concept Packaging refers to the design and materials used to contain, protect, and promote a product. It is a critical part of a brand’s identity, as it communicates product information, attracts attention, and contributes to the overall customer experience. Good packaging also serves a functional role in preserving the product’s quality and ensuring ease of use.

40. Key Functions of Packaging Protection : Packaging safeguards products from damage, contamination, and environmental factors like moisture or light. Convenience : Packaging is designed for easy storage, handling, and transportation. Some packaging designs offer convenience features like resealable closures or easy-pour spouts. Marketing and Branding : Packaging communicates key brand elements (logo, colors, fonts) and often conveys the product's value proposition and benefits. Eye-catching packaging can influence buying decisions and attract attention on store shelves. Information : Packaging provides essential product details such as ingredients, usage instructions, safety warnings, expiration dates, and nutritional facts. Labeling is often a critical part of packaging for this function. Sustainability : With growing environmental concerns, packaging is increasingly being designed to be more eco-friendly, using recyclable or biodegradable materials.

41. Labeling Concept Labeling refers to the information presented on a product’s packaging that communicates important details about the product. Labels can include product names, ingredients, usage instructions, safety warnings, and promotional messages. Labels also provide essential information for legal compliance, particularly in regulated industries like food and pharmaceuticals.

42. Functions of Labeling Identification : Labels help consumers easily identify the product and distinguish it from other offerings in the market. Consumer Education : Labels inform consumers about the product’s features, ingredients, benefits, and usage. This is especially important for products like food, cosmetics, and medications. Legal Compliance : Many products, especially in the food, health, and pharmaceutical industries, require specific labeling to meet regulatory requirements, including product safety and ingredient disclosure. Branding : The label plays a critical role in reinforcing the brand’s image and values. The design, colors, and typography can all communicate the brand’s personality and appeal to the target audience. Sustainability Information : Increasingly, consumers are looking for labels that communicate a product’s environmental impact, including certifications for organic, fair trade, or recyclable packaging.

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