Modern Marketing - Unit II - Product Mix : product planning - classification of products,

Factors influencing the product mix - product lifecycle - management of product lifecycle - price mix

1. II B.Com. BPS
III Semester
Unit –II
Modern Marketing
Dept. of B.Com. BPS -Marketing Management
Dr.D. Moorthy
Head & Associate Professor
Dept. of Commerce –BPS
Sri Ramakrishna College of Arts & Science,
(Autonomous)
Coimbatore –641 006.
Tamil Nadu

2. Unit –II
Dept. of B.Com. BPS -Marketing Management
Product Mix : Product Planning –Classification of Products –
Product Policies –Factors influencing the product mix –
Product Lifestyle –Management of Product lifecycle –
Development of new products.
Price mix : Pricing Objectives –Factors affecting pricing
Decision –Procedure for price determination –kinds of
Pricing. Branding –Labelling –Packaging. Case study

3. Product mix
“A product mix (also called product assortment) is
the set of all product lines and items that a particular
seller offers for sale to buyers”.
• An Organization with several products lines has a product
mix.
• Product mix need not consist of related products.
In other words, product mix is “the composite of products offered
for sale by a firm”.
It is a collection of products manufactured or distributed by a
firm. It is the full list of all products offered by a firm.
Dept. of B.Com. BPS -Marketing Management

4. Classification of Products or Goods
1.Industrial Goods
2.Consumer Goods
i. Convenience Goods
ii. Shopping goods
iii. Speciality goods.
Dept. of B.Com. BPS -Marketing Management

5. ProductPlanning
Anything that possesses utility is described as goods. A
product is both what a seller has to sell and what a buyer
has to buy. Thus, any enterprise that has something to
sell, as tangible good or not, is selling a product.
According to Philip Kotler, “A Product is anything that can
be offered to a market for attention, acquisition use or
consumption that might satisfy a want or need. It include
physical objects, services, persons, places, organization
and ideas.
Dept. of B.Com. BPS -Marketing Management

6. Product Policies
Product policies are the general rules set up by the
management itself in making product decisions.
Product policy is concerned with defining the type,
volume and timing of the products, a company offers for
sale.
Dept. of B.Com. BPS -Marketing Management

7. A Product Policies, generally covers the following
1.Product planning and development
2. Product line
3. Product mix
4. Product branding (Identification)
5. Product style
6. Product Positioning
7. Product packaging
Dept. of B.Com. BPS -Marketing Management

8. Factors influencing change in Product Mix
Generally it is very difficult for a concern to take a decision about
the number of product it should produce at a given time because
the number of products or product mix is affected by several
factors.
1.Change in demand of a product due to population changes.
2. Changes in purchasing power or behavior of the customers
3. Change in company desire
4. Development of by-products by using residuals, at low cost,
5. The competitor’s action and reactions
6. To utilize the available marketing capacity fully.
7. Financial influence of the firm.
8. Advertising and distribution factors
9. Goodwill of the firm
10. possibility of adding new product to its product line at less costDept. of B.Com. BPS -Marketing Management

9. Dept. of B.Com. BPS -Marketing Management

10. Product Life Cycle
A product has its life, Industrial goods may have a
longer life than consumer goods. When product
idea is commercialized, the product enters into
the market and competes with the rivals, for
making sales and earing profits.
The product life cycle is generally termed as
product market life cycle, because it is related to
a particular market.
Dept. of B.Com. BPS -Marketing Management

11. Product Life Cycle
Introduction
Product is new, awareness in market is low, cost
of marketing is high, profits are low.
Growth
The product has given satisfaction to the first
buyers. Others follow, sales increase rapidly and
product starts generate profits. Competitors
notice the success and start planning competitive
offering.
Dept. of B.Com. BPS -Marketing Management

12. Product Life Cycle
Maturity
The product reaching its maturity and sales are good. But
battle for market share is about to begin.
Saturation
Total sales are not growing any more. The battle for
market share is difficult, try for strong brand loyalty and
reduce price.
Decline
Sales and profits are starting to fall and future of the
product does not look healthy, remedial strategy –
modifying, repositioning or even deleting the product, is
needed.
Dept. of B.Com. BPS -Marketing Management

13. Dept. of B.Com. BPS -Marketing Management

14. Dept. of B.Com. BPS -Marketing Management

15. New Product Development
Most definitions of new product have a common
feature that new product offer innovative
benefits.
The development and introduction of new
products have traditionally been seen to be a
costly and risky activity.
For an organization intent on either maintaining
or improving its position in the market place,
there are however, few alternatives to new
product activity of one sort or another. Dept. of B.Com. BPS -Marketing Management

16. Managing New Product Development
1. Product Managers
2. New Product Managers
3. New Product Committee
4. New Product Department
5. New Product Venture Team
Dept. of B.Com. BPS -Marketing Management

17. New Product Planning Process
1. Idea generation
2. Screening of ideas
3. Concept testing
4. Business analysis
5. Product development
6. Test marketing
7. Commercialisation (Market introduction)
Dept. of B.Com. BPS -Marketing Management

18. Managing New Product Development
1. Product Managers
2. New Product Managers
3. New Product Committee
4. New Product Department
5. New Product Venture team
Dept. of B.Com. BPS -Marketing Management

19. Product Mix
A Product mix is the set of all product
lines and items that a particular seller offers
for sale to buyers.
Product mix need not consist of related
products.
“the composite of products offered for sale
by a firm”.
Dept. of B.Com. BPS -Marketing Management

20. Price
Price may be defined as the exchange of
goods or services in terms of money. Without
price there is no marketing in the society. If
money is not there, exchange of goods can
be undertaken, but without price; i.e. there
is no exchange value of a product or service
agreed upon in a market transaction, is the
key factor which affects the sales
operations.
Dept. of B.Com. BPS -Marketing Management

21. Pricing Objectives
1.Pricing for target returns
2. Market share
3. To meet or prevent competition
4. Profit maximisation
5. Stabilise Price
6. customers’ ability to pay
7. Resource mobilisation
Dept. of B.Com. BPS -Marketing Management

22. 1.Factor Affecting Pricing Decisions
a. Internal factors
(i) Pricing Objectives
(ii) Cost of Production
(iii) Product life cycle
(iv) Marketing Mix
(v) Pricing Policies
(vi) Product differentiation
Dept. of B.Com. BPS -Marketing Management

23. Pricing Objectives
Factor Affecting Pricing Decisions
II.External Factors
(i) Competition
(ii) Economic conditions
(iii) Government regulations
(iv) Distribution Channel
(v) Image of the company
(vi) Consumer behaviour
(vii) Composition and strength of buyers
(viii) Suppliers
(ix) Elasticity of demand
Dept. of B.Com. BPS -Marketing Management

24. Procedure for price determination
1. Determine demand for the product.
2. Anticipate and analyse the competitive
reaction
3. Establish expected share of the market
4. Select pricing strategy
5. Consider company’s marketing policies
6. Set the price
Dept. of B.Com. BPS -Marketing Management

25. Kinds of Pricing
1. Psychological price
2. Customary Pricing
3. Skimming price
4. Penetration pricing
5. Geographical pricing
i. FOB pricing
ii. Zone Pricing
iii. Base point pricing
Dept. of B.Com. BPS -Marketing Management

26. Kinds of Pricing
6. Administrated price
7. Dual price
8. Mark up pricing
9. Price lining
10. Negotiated price
11. Competitive Bidding
12. Monopoly Pricing
13. Oligopolistic pricing
i. Trade discount
ii. Quantity Discount
iii. Cash discount
iv. Seasonal discount
Dept. of B.Com. BPS -Marketing Management

27. Brand
A Brand is a “name, term, symbol or design to
identify the goods or services and to differentiate
them from those of the competitors”.
American Marketing Association defines a brand as
“the use of a name, term, symbol or design, or
some combination of these, to identify the
product of a certain seller from those of
competitors”.
Dept. of B.Com. BPS -Marketing Management

28. Labelling
Label is part of the product, which carries verbal
information about the product or the seller. It may
be a part of package, or it may be a tag attached
directly to the product”.
Label may be a small slip or a printed statement,
it may be a part of a package or it may be
attached to the product.
It conveys verbal information about the product
and seller. The producer gives necessary
information to the consumers through the label.
Dept. of B.Com. BPS -Marketing Management

29. Packaging
The package of a consumer product is an
important part of the marketing plan. There are
may factors to be considered while designing a
package. A good number of companies adopt
square packages in place of round packages which
save space.
Packing means wrapping of goods before they are
transported or stored OR delivered to a consumer.
Dept. of B.Com. BPS -Marketing Management