Unit Code: UNIT TITLE: PRODUCT

Duration:
Location: SESSION1: MEANING AND IMPORTANCE OF PRODUCT
Classroom Learning Outcome Knowledge Evaluation Performance Teaching and
or Retail Evaluation Training Method
outlet or 1. Meaning, 1.Meaning of product 1.Explain meaning Interactive Lecture:
Company’s importance of 2.Components of of Product in Introduction of four
premises Product in Product marketing P’s of marketing
Marketing 3.Characteristics 2.To understand the mix with special
Product components of focus on Product.
4.Importance of Product Product. Discussion of the
to a firm 3.Provide various
5.Product Levels Information components and
regarding importance
importance of the associated with the
Product product, along with
4.Elucidate the the various product
various levels of levels.
product Activity:
Enlist the product
levels of goods in
consumer
products and
services.

SESSION 2: PRODUCT CLASSIFICATION

Knowledge of types 1. Discussion of the 1. Detail Interactive Lecture:
of consumer goods consumer goods their the Explanation of the
and industrial goods types and features. classification of types of consumer
2. Comprehension of consumer goods and industrial
types of industrial goods along with their goods.
and their features. features.
3. Understand Product Activity:
Mix, Product line 2. Explain various Identify and enlist
Types of industrial different types
goods and their of goods-
features. consumer and
industrial.
3. Comprehend the
concept of Product
Mix, Product line.
 SESSION 3: PRODUCT LIFE CYCLE
1. Discussion of 1. Enumerate different 1.Identify the Interactive Lecture:
Product Life stages of the product life various stages in a Clarification on
Cycle cycle. product life cycle the product life
cycle
A. Introduction 2. Understand the stages
Stage response of Activity: Prepare a
B. Growth Stage marketers in these list of products and
C. Maturity Stage stages. observe how they
D. Decline Stage have moved
through different
stages of product
life cycle.

SESSION 4: PACKAGING AND LABELLING

Understanding the 1. Discussion of the 1. Detail the Detailing the concept

role, importance of packaging concept and concept of of packaging, role,
packaging and its role in marketing. packaging along importance,
labeling 2. Comprehension of with the various functions and
importance and roles it plays in types. In
functions of marketing. addition,
Packing. understanding the
3. Understand the 2. Explain the concept of labeling.
essential qualities importance of
of packaging and the
good packaging and its functions of
types packaging.
4. Discussion of
concept of Labeling. 3. Comprehend the
important
features of
good
packaging
and the
types of
packaging.
4. Detail the
concept of labeling
in the current
context.

be the classroom for the theoretical interactions and the student will be required to visit
 field/retail outlet or the marketing department of an organization to observe and comprehend
the concepts related to pricing of goods and services.)
POINTS TO RECOLLECT

Meaning of market

The term market is derived from the Latin word ‘mercatus’ which means merchandise or a place
where business is conducted. Thus, market denotes the following -

 A place where buyers and sellers interact.

 The forces within which the buyers and the sellers make decisions.

 Transfer of title to goods and services.

 Flow of goods and services from the producer to the consumer.

 The organization that regulates the purchase and sale.

Definition of Market

According to Philip Kotler “A market consists of all the potential customers sharing a particular need
or want who might be willing and able to engage in exchange to satisfy that need or want.”

MARKETING

Meaning of Marketing:

 It is a sum total of several activities involved in the creation of utilities like place, time
possession and awareness.

 The marketing process begins with the recognition of consumer needs.

 The aim of marketing is to satisfy human wants.

 Marketing is successful only when it yields maximum profits in the long run.

Definition of Marketing:

According to Philip Kotler– ‘Marketing is a social managerial process by which individuals and
groups obtain what they need and want through creating and exchanging of products and value with
others.”

NATURE/ FEATURES OF MARKETI NG

 Marketing is consumer oriented.

 Marketing starts and ends with the consumer.

  Marketing is a Science as well as an Art.

 Marketing is goal oriented.

 Marketing is a process.

MARKETING MIX

Definition of Marketing Mix: According to Philip Kotler Marketing Mix is defined as “the set of
controllable variables that the firm can use to influence the buyer's response.”

How are all the elements of the Marketing Mix coordinated? (Q. Discuss how the elements of the
Marketing Mix coordinated)

The Marketing Mix or marketing programme for a given product or service is its arranging of
its Product, Price, Place and Promotion in such a way as to get the maximum market share, by giving
the targeted customer group/s the maximum satisfaction in comparison to the competitors’ offerings.

Hence Marketing mix for a product/service is positioning the product correctly, by giving need/want
satisfying product solutions (form utility), at the right price (possession utility), at the right time (time
utility), to the right consumers, at the right place (Place utility).

Hence the following considerations are to be kept in mind, when fashioning the 4 Ps for a
product/service: -

1) Product
- The product should be made of the right type to answer the need e.g. A screwdriver for the work it
was intended, food with the right taste, a salon treatment to solve the beauty issue etc.

- It should be made with high class materials and workmanship for the higher income group,
progressively reducing for the medium and lower income group.

- The sizes made available should suit the target customers viz. large/small family/travelers etc.

- Packaging should be as per the i) protection needs of the product e.g., Electronics in bubble-wrap,
milk in a tetra pack

ii) They should be attractive in comparison to the competitors

iii) if the product is of a giftable nature, it should be aesthetic packing.

- The label should hold all the i) necessary information to understand the product usage and
precautions in the language most used in the area. ii) it should have any current sales promotion
information, iii) and should mention the variety of the product pack e.g., Fragrance, color, flavor

2) Place
 - The Channels of distribution (wholesalers, retailers, agents) are chosen according to the
geographical scatter factor of the consumers and their density per location

- Their Physical distribution a) warehousing (breaking the bulk, sorting, grading, labelling,

protecting) b) transportation according to the distance and type of product is chosen.

3) Promotion
The Advertising media, Sales Promotion, Personal Selling requirements will be taken up according to
the

i) targeted consumer group, and their geographical distribution and education level,
mobility and expectations from the product/service,
ii)  the cost of the media
iii) Newness of the product features
iv) Competitors level
4) Price
- Keeping in mind the product qualities detailed above, a product meant for the higher-income
group consumers made with i) high quality materials and workmanship ii) Aesthetic packing,
iii) a specialized need as for industrial customers, iv) an invention or innovation or technology
should have a high price (skimming if an invention or innovation), (prestige pricing if a luxury
product). The price would be set lower for the middle and still lower for progressively lower
features. THIS IS THE RELATIONSHIP BETWEEN PRODUCT AND PRICE.

- A product sold far from the place of origin is sold at a higher price due to distribution
(wholesalers, retailers, agents commission) and Physical distribution (cost of warehousing
functions and transport as per the product). THIS IS THE RELATIONSHIP BETWEEN
PRICE AND PLACE.

- The price will also be added depending on the promotional costs as detailed above. THIS IS
THE RELATIONSHIP BETWEEN PRICE AND PROMOTION.

All the elements of the Marketing Mix must coordinate to give a positioned product offering
competitively beneficial to the consumers.

The marketing strategies worked for one situation, product, consumer group, will not suit another.

At the same time, it is to be noted, that once the marketing strategies are set, it is not a
lifetime decision, but is very dynamic and flexible, since it is made to function in the framework and
external environment of completion, government and political factors and consumers, which
themselves keep changing and are not controllable.
FACTORS DETERMINING MARKETING MIX

1. Nature of Product

Consumer goods require a different marketing mix as compared to industrial goods.

a) Product- Consumer goods need varieties depending on fashion, income, lifestyle, latest technology,
distribution of nationalities, urban vs. rural etc. In industrial goods, a more detailed and intricate variety of
machines, tools and raw materials are needed to cater to different product needs of their different customer
segments. E.g. Many varieties of printing paper, a greater array of tools in a tool kit, more heavy-duty sewing
machines of many different functional sewing machines to do different intricate stitching of several types for
bags, clothes or do embroidery

b) Place- a much wider distribution is needed for consumer goods as compared to industrial goods, due to the
number of households vs. industrial consumers. Indirect channels are preferred for consumer goods, and direct
channels are needed for industrial goods.

c) Price- Pricing for consumer goods depends on the demand for the goods, supply as well as price of substitute
and complimentary goods. Consumer goods prices also tend to change with the direct competitors’ brand prices.
New product prices are determined with cost in mind. Many promotional pricing schemes are also allowed for
consumer goods, as pricing has a psychological and impulsive effect on consumers. Globalization of brands
brings down prices. Industrial goods pricing is generally high (due to high quality machines and tools which
must last a long time.) and do bulk purchase of raw materials to reduce the price. Industrialists go for price
negotiations and sealed bids to reduce prices.

d) Promotion- Consumer goods Target customer depend on numbers (large), location (high geographical scatter
factor and high density per location) and types (based on education, income, age) to figure out communication
and advertising decisions. Consumer goods communication is therefore done through a variety of mass media.
Industrial goods on the other hand have far fewer consumers, and are highly technical, and are promoted
through trade shows, business magazines, yellow pages etc. Sales Promotion is more prevalent in consumer
goods as they depend on high level of competitors, options of rearranging lifestyle, and many economical
minded.

e) Luxury products command high PRICES, use exclusive outlets PLACE and limited distribution and
advertising in high end magazines or on the internet. FMCG goods have mass consumers and have low prices,
are in all locations and promoted through mass media. Technical, innovative products, and products with
monopoly distribution have high PRICES, exclusive limited outlets and distribution (PLACE)

2. Size- A business with finance can make an array of products for higher and lower end consumers (wide and
deep PRODUCT mix). A large business will have a wider market (PLACE) and can avail of economies of
Large-Scale Production which lowers PRICE, and also uses mass media and sales promotion (PROMOTION
MIX).
3. Market Research- Market research is a system by which one can analyze the market conditions. It helps a
marketer in formulating the policies by which the product reaches in an efficient way in the hands of the
consumers. It can bring about even a complete turnabout in the 4 P’s of the product or a modification in only the
price, or some of the product features.

4. Consumer's Buying Behavior- Consumer's buying behavior is affected by buying habits, buying power,
motivation in buying, living standard, social environment, technological changes etc.
Trader's behavior: The behavior of intermediaries - wholesalers or retailers, and their motivations, practices,
attitudes etc. affect the marketing of the products and its volume.

5. Competitor's Behavior- New business firms come up which invites competition among the industrialists. The
competition may be of supply and demand of the product, choice offered by the consumers, technological
changes, new inventions etc. The marketing manager must be vigilant about the market trend.
6.
Governmental Behaviour- The marketing manager should consider the rules and regulations of the Government
in respect of products, pricing, competitive practices, advertising etc. Firms have no control over the laws

7. Other Environmental Factors- Changes in the Global economy, political unrest, free market conditions
inviting foreign investors, which threatens the survival of businesses, in turn their marketing strategies.

SESSION1: MEANING AND IMPORTANCE OF PRODUCT

The term Product is mostly used as a need-satisfying entity. It represents a solution to customers, problems.
In the words of Peter Drucker, the product remains mere raw material or at best an intermediate till it is not
bought or consumed. Hence mostly they include both tangible and intangible benefits. It may be anything
that can be offered to a market to satisfy a want or need and include physical goods, services, experiences,
events, places, properties, organization, information and ideas. In most cases products are made up of a
combination of physical elements and series.
It is seen that consumers buy products or services that they require to fulfill their needs. The products could
range from toothbrushes, chocolates, cars, movie tickets to life insurance at various stages of our life. The
decision to make a purchase is hence dependent not only on the tangible attributes of the product but also
on the psychological attributes like brand, package, warranty, image or service to name a few.

According to Philip Kotler, “Product is anything that can be offered to someone to satisfy a need or a want”.
William Stanton, “Product is a complex of tangible and intangible attributes, including packaging, color,
price, prestige and services that satisfy needs and wants of people”.
 It is defined as a good or service that most closely meets the requirements of a particular market and yields
enough profit to justify its continued existence.
MEANING OF PRODUCT FROM DIFFERENT POINT OF VIEW
◦ MANUFACTURER- Products are bought as raw materials, PROCESSED and sold as finished goods.
◦ WHOLESALERS- Purchases with an intension to resell. Calls it COMMODITY
◦ RETAILER - Called as MERCHANDISE. Makes available to final consumer a variety of goods at one
place.
◦ CONSUMERS- products are final goods purchased for CONSUMPTION as NEED SATISFIERS
◦ ECONOMY- Product consists of a bundle of utilities involving various product features and
accompanying features, anything that is potentially valued.
◦ MARKETER- Products are building blocks of a marketing mix. A marketer promotes displays product
as it is a cornerstone of marketing mix.

COMPONENTS OF A PRODUCT

Products have their own identity or personality. Most of the users associate meaning with products, they
obtain satisfaction by using them. The various features and functions built around them-the brand name, the
package and labeling, the quality associated with it, the guarantees, the price, the manufacturer’s name and
prestige-all contribute to the personality or the total product offering, a marketer's armory for satisfying the
customer. It has been often said that a customer

never just purchases the generic product but he gets something that exceeds his expectation depending on
for whom it is being bought.

The components of the product include core product, associated features, brand name, logo, package and
label.
 LOGO

BRAND NAME

LABEL

CORE PRODUCT

PACKAGE ASSOCIATED
FEATURES

The Core Product

It is the basic element of the product. For example, if we take Dove Soap, the fragrance of the soap, the
moisturizing ability, the pristine white color, the brand name, the price, the positioning as luxury soap all
have gone into the marketing of product personality. The core component is the soap, the generic
constituent, as in the case of any other bathing soap, the only difference being the other components are
superimposed on this basic component to develop the total personality of Dove.
The total product personality depends on the basic constituent of the product. If the product is substandard
the other elements associated like features, package, label, differentiation, positioning, branding will not be
of any use. Hence focusing on the core product is essential.

The Associated Features

The Product includes several associated features besides the core ingredient. In the example of Dove soap,
the fragrance of the soap, the moisturizing ability, the pristine white color etc. are its associated features.
The total product personality is mostly enhanced through the associated features. Further, these also aid
in distinguishing the product from its competitors.

The Brand Name

A brand is defined as a name, term, symbol, design or a combination of them which is intended to identify
the goods and services of one seller and to differentiate them from those of competitors. A trademark is a
brand with legal protection, thus ensuring its exclusive use by one seller. In the current age consumers
do not just pick products but they pick brands. The brand image is developed through advertising and
other promotional measures to remain etched in the consumers’ minds.

The Logo
It is the brand mark/symbol and an essential aspect of the product, extending its support to the brand
effectively. Symbols and pictures ensure product/brand identification and recall with their importance being
enhanced in rural markets where brands are mostly recognized by their picture in the logo.

The Package
It is another vital component of the total product personality, particularly in packaged consumer products.
The package performs three essential roles:
o Ensures protection to the product

o Provides information about the product

o Increases aesthetics and sales appeal.

Conventionally packaging was used to protect the product from damage and to facilitate handling at various
points of distribution. Later, it also became a major tool in the promotion of the product. Currently
packaging contributes to the total sales appeal of the product.

The Label
It is the part and parcel of a package. It provides written information about the product, helping the buyer
to understand the nature of the product, its distinctive features, its composition, its performance. The
components discussed above make a preliminary impact on the consumer. The other ‘P’ i.e., Price, Place
and Promotion also play an important role in shaping the total product personality.
CHARACTERISTICS OF PRODUCT:
1. Product is one of the core elements of marketing mix.

2. Various people view it differently as consumers; organizations and society have unique needs and
expectations.

3. The product includes both good and service.

4. A marketer can realize their goals by manufacturing, selling, improving and modifying the
product.

5. It includes both tangible and non-tangible features and benefits offered.

 6. It is a vehicle or medium to offer benefits and satisfaction to consumers.

7. The importance lies in services rendered by the product and not ownership of the product. People
buy services and not physical objects.

8. Product includes total offers, including main qualities, features and services.

9. Product Design.

10. Product package

11. Product quality

12. Product Branding

13. Product Labelling

14. After – Sales Service

IMPORTANCE OF PRODUCT
Product, therefore, is the core of all marketing activities. Without a product, marketing cannot be
expected. A product is a tool in the hands of the marketers which gives life to all marketing
programmes. So, the responsibility of the marketers to know its product well is pertinent. The
importance of the product can be judged from the following facts:

1) Product is the focal point, and all the marketing activities revolve around it. Marketing activities like
selling, purchasing, advertising, distribution, sales promotion a r e all meaningless unless there is a
product. It is a basic tool by which the profitability of the firm is measured.

2) It is the starting point of planning. No marketing programme will begin if the product does not exist
 because planning for all marketing activities distribution, price, sales promotion, advertising, etc. is done
based on the nature, quality and the demand of the product. Product policies thus decide the other
policies.

3) Product is an end. The main purpose of all marketing activities is to satisfy the customers. Thus, the
product is at an end (satisfaction of customers) and the producer, therefore, must insist on the
quality of the product so that it may satisfy the customer's needs. It has been observed that the life of
low-quality products in the market is limited.

PRODUCT LEVELS
The marketer must take into consideration the benefits the product can offer and present it to the
customer. Further he takes it to higher levels by introducing several inputs into the basic product with
inputs like advanced features, functions, unique brand name, attractive, convenient packaging, affordable
price points, convenient access, meaningful communication and exclusive service from salespeople.
The marketer constantly enriches the product to create value, add more customer base and counter
competition. According to Levitt a product offer can be conceived at four levels: the generic product,
expected product, augmented product and the potential product. Further it has been explained through a
seven-level approach:
The following diagram shows the original 5 level given by Kotler.

1. Core Benefit (Product): This is the basic level that stands for the heart of the product with a focus
on the purpose for which the product is intended. For instance, a car is purchased for its
convenience, the ease at which one can go or the speed at which one can travel around relatively fast.
2. Generic Product: It is an unbranded and undifferentiated commodity. Unbranded pulses, rice,
wheat and flour are some examples of generic products.
3. Branded Product: The branded products get an identity through a name. It belongs to a specific
 company and the marketer separates this product from the rest.
4. The differentiated product: All the branded products are supposed to be differentiated products, but
in certain cases where the brand name alone has not earned enough distinction the case may be
different. Here the marketer tries to differentiate his product from the clutter created by competitor
products by highlighting some of the special attributes/features /qualities his brand is endowed with.
The difference could be tangible or psychological. For example, Knorr’s Soups are tasty and
healthy soups and can be prepared easily.
5. The customized product: When the product is modified to suit the requirements/specifications
of the individual customer, he/she is offered a customized product. Earlier it was limited to
industrial products but now the consumer goods are customized for the customers, and he/she gets
an opportunity to order and get a product/service as he/she desires and not just choose from
mass/standardized product/service available in the outlets. Many companies manufacturing
automobiles, computers, paints, shoes and garments have used this strategy to beat competition.
6. The augmented product: The augmented product aims to enhance the value of the product/offer
through voluntary improvements. These improvements may be neither

suggested by the customer nor expected by him. The manufacturer/marketer adds the
feature/benefit on his own. The needs of the customer are identified through market research
surveys and the insights thus obtained are used to add new features/functions to the product.
7. The Potential Product: The potential product is the ‘future’ product inclusive of the advancement
and refinement that is possible under the existing technological, economic, competitive conditions
prevailing in that category. Potential product is only limited by economic and technological
resources a firm can spare. Nevertheless, today’s potential products can be tomorrow’s real
product.

FACTORS INFLUENCING PRODUCT MIX

1. Market demand: The demand for the product decides whether the product should be
manufactured, or its production stopped. New products are introduced into the market after the
need for the product is shown.

2. Cost of product: The Company can develop products which are low in costs and produce
those products. Nirma, washing powder, a low-priced product was launched to counter Surf
which was priced high.
 3. Quantity of production: The Company can add more items on its product line in case the
production of the new product is to be made on large scale.

4. Advertising and distribution factors: An organization does not incur any additional efforts to
advertise or distribute when the company adds one or more products to its product line.

5. Use of residuals: In case the by-products can be developed or utilized; a company should
produce such products. Sugar manufacturing companies can also use molasses.

6. Competitor’s action: In order to meet the competition/market a firm may decide to

include or eliminate a product.

7. Full utilization of marketing capacity: The Company can start to produce another product
to utilize the capacity completely if the existing marketing resources are not being utilized.

8. Goodwill of the company: When the company has a good reputation in the market, new
products can be launched without much difficulty.

SOME PRODUCT TERMS / PRODUCT DECISIONS

1. PRODUCT MIX is the list of all products offered by a company. It is defined as the
composite of products offered for sale by a firm or a business. The product mix is three
dimensional:
a. Breadth is measured by the number or variety of products manufactured by a
single manufacturer. LG produces a variety of electrical gadgets such as
television sets, washing machines, refrigerators etc.

b. Depth refers to the assortment of sizes, colors and models offered within each
product line. E.g., LG manufactures different varieties or models of
refrigerators and washing machines, etc.
c. Consistency refers to the close relationship of various product lines or their end
use to production requirements or to distribution channels. E.g., LG produces
those goods which fall under the category of electrical appliances.
 1. PRODUCT LINE is a group of products that are closely related, either because they function in a
similar manner or are sold to the same customer groups or are marketed through the same types of
outlets or fall within given price ranges. Many businesses offer a range of product lines which may
be unique to a single organization or may be common across the industry.

2. PRODUCT POSITIONING –It refers to the way a product is offered to a particular customer of a
particular segment for the aim of meeting the customer's needs.

3. PRODUCT REPOSITIONING–It refers to the way a marketer changes the whole product to satisfy
a particular segment or customer. Mostly repositioning is done when a product is changed
physically.

4. PRODUCT DIFFERENTIATION: Product differentiation is the modification of a product to make

it more attractive to the target market. This involves differentiating it from competitors ‘product as
well as own product offerings. Three things that continuously change in product differentiation are
PRODUCT QUALITY, PRODUCT DESIGN, and PRODUCT SUPPORT SERVICES.

5. PRODUCT DIVERSIFICATION:
Product Diversification refers to the product expansion either in the depth and/or in width. Depth
of product-line implies the assortment of colors, sizes, designs, quality, stability, etc. It refers to
adding a new product to the existing product line or mix.

6. PRODUCT MODIFICATION: Product modification may be defined as a deliberate alteration in the

physical attributes of a product or its packaging. It is the process by which the existing products are
modified to suit the changing demand on account of changes.

7. PRODUCT STANDARDIZATION: Standardization implies a limitation of the number of varieties

or the types of uniform quality that can be manufactured to reduce the unnecessary varieties.

8. PRODUCT ELIMINATION: Products which cannot be improved or modified to suit the market
needs need to be replaced by other profit generating products, this process of withdrawal is known
as product elimination.

Q. What impact does the Product have on the other elements of the Marketing Mix?

Ans. The product is the most important element of the Marketing Mix, which is made up of Product, price,
Place and Promotion. This is so for the following reasons: -
1) It is the Product which is bought by the consumer, not the Price Place or Promotion

2) The Product is the only tangible aspect of the Marketing Mix.

3) The Price, Place and Promotion attach themselves to the Product and exist because of the Product, and
not the other way around. To put it another way,

4) It is for the Product that the consumer has to bear the Price, he must take the trouble to go to the Outlet,
and even pay attention to the Promotion- as only the Product satisfies his needs.

5) Product leads the other P’s. It is the one to whose tune the other three ' P's dance! And discounts aplenty
offered, they are but an empty shell, if the product is wrong for the consumer, or of low quality. E.g. A
vegetarian will never be induced by a very reasonably priced non-vegetarian restaurant, which may also be
attractively DECORATED AND WELL PROMOTED.

6) An Improved Product pulls up the Price higher, the quality of the ‘Place’ or outlet (including location)
and Promotion type in tune with the target consumer’s needs. The Price must be increased, and the Place
may also have to be made a better outlet or a changed location, depending on where and how the consumers
want it. The promotion will also change accordingly.

E.g. If well-to-do customers make it known that they need a more sophisticated menu, better rooms and more
additional facilities like gym , conference room and pool in the hotel in their area, the Product _ 'Hotel Services'
will all be accordingly upgraded _ and the said customers will be charged the higher price, will be given the
advanced ambience of the outlet of the 'hotel services', the hotel itself, and the advertisements will change in
tone and media from the local fliers to a very respectable looking hoarding .

Similarly, if schools required students to do their work using computers, lower r versions, easy-instalment
schemes for payment, student loans to purchase laptops may all suddenly come into being (PRICE); dealers
would be ready to open their brand's outlet branch in schools (PLACE); good brands would send their sales
representatives to schools bringing out the benefits of their brand and back-to-school promotions would be seen
in laptops (PROMOTION) . Thus, it proves the point that Product (E.g., Laptop) which is the kingpin in the
Marketing Mix.

SESSION 2 PRODUCT CLASSIFICATION

The product's nature is found to have a significant impact on the method of product positioning. Product
classification helps the marketers to put the products before the consumer better. They can be segmented,
targeted and positioned better. It can be undertaken based on three essential characteristics namely
durability, tangibility and user type. Durability implies the average life of the product available for
consumption, tangibility means the physical attributes of the product and user type provides information
regarding consumer products and industrial products. The following figures show a typical product
 classification:

Classification on the basis of Durability and Tangibility

Products can be classified based on durability and tangibility. On the basis of durability, they can be
classified as non-durable products. On the basis of tangibility, they can be classified as physical products
and services
 Non- durable goods: n o n - d u r a b l e goods are tangible goods normally consumed in either one or a
couple of uses. These are purchased regularly and consumed often. Smooth distribution and easy availability
at all possible locations make these products succeed in the market. The marketer must advertise heavily to
increase the purchase and build brand preference. Most of the fast-moving consumer goods category products
belong to this class. Examples include food items and toiletries.

 Durable goods: Durable goods are tangible goods that can normally be used for many years. These products
need more personal selling, after sales service, are often supported by guarantee and warranty programs.
Examples include LCD TVs, mobile phones, washing machines and microwaves.

 Services: Based on tangibility, products can also be classified as physical products and services. Services
are intangible, inseparable and inconsistent products. Service essentials include quality control, credibility of
the supplier and adaptability to changing c o n s u m p t i o n b e h a v i o r . Examples i n c l u d e
h o s p i t a l i t y s e r v i c e , a i r l i n e services, insurance and banking services.

DIFFERENCE BETWEEN DURABLE AND NON-DURABLE GOODS

DURABLE GOODS NON-DURABLE GOODS

1. Durable goods have a long-life span 1. Non-durable goods have a short life as
E.g., House, car, jewelry, cell phones they are perishable E.g., Fruits, battery

2. Durable goods are meant for repeated 2. non-durable goods get consumed away
use E.g., Furniture, utensils and are meant to be replenished E.g.,
Soap, or lose their usable nature E.g., Milk

3. Durable goods are of a high price and 3. non-durable goods are of a far lower
hence belong to the middle-income price and are also necessities and are
group onwards E.g., Home appliances, bought by all E.g., Food, pen, cleaning
furniture liquid

4. Hence, planning and saving go into its 4.non-durable goods are a usual, automatic
purchase and routine purchase

5. These are purchased once in a long time 5.These are bought usually with routine
'replenish the stock' regularity

6. Durable goods are chosen by comparing 6. Consumers buy branded, unbranded as

features of different brands as new types they usually can perceive the quality
 or technological advancement is a usual themselves technological advancement is
occurrence not seen in these often.

Classification of consumer goods

Consumer products can be divided based on the time and effort the buyer is willing to take out for the
purchase of the product. They can be divided into two parts:

(i) Convenience Products:

They are goods that a customer purchases often, with minimum effort and time to make a buying
decision. Example being soft drinks, soaps, bread, milk etc. These can be further classified into three
categories:

(a) Staple Goods: The products which are purchased on a regular basis. The decision to buy the
product is programmed once the customer puts the item on his list of regular purchases. Example
bread, milk, eggs
(b) Impulse Goods: The consumer purchases these without any planning or search efforts. The
desire to buy impulse is a result of the shopping trip. This is why

impulse products are located where they can be easily noticed. Example chocolates, magazines.

(c) Emergency Goods: They are purchased to fulfill urgent needs. The consumer ends up paying
more. Examples of consumer shopping for toothbrushes or shaving blades at tourist destinations.
Main Features:

i. They are easily available and require minimum time and effort. ii.
They are obtainable at low prices.
iii. There is a continuous and regular demand for such products. iv. Both
demand and competition for these products is high.
v. Products are easily substitutable.
vi. Heavy advertising and sales promotion schemes help in the marketing of these products.

MARKETING STRATEGY OF CONVENIENCE GOODS:

(a) Price: These products are typically low priced and widely available.
(b) Promotion: The producer does mass promotion.
 (c) Place: These products are widely distributed and at c o n v e n i e n t locations .
Made available through vending machines in schools, offices etc., also kept in
Check-out stands etc.

(ii) Shopping Products:

These are the goods where the customer, while selecting the product for purchase, makes due
comparisons on the bases of quality, price, style and suitability. Shopping products can be homogenous or
heterogeneous.
1. Homogeneous Products: They are products which are alike, with the sellers engaging in a price war.
Manufacturers end up distinguishing based on design, services offered or other freebies.

2. Heterogeneous Shopping Products: They are products that are unlike or non-standardized. The
consumers always shop for the best quality buy. Price becomes secondary in case the focus is on style or
quality.
Main Features:
i. They are durable in nature.
ii. They have a high unit price and profit margin.
iii. The customer spends adequate time and compares products before making the final purchase.
iv. Purchase of such products is planned prior.
v. Significant role played by the retailer in the sale of shopping goods

MARKETING STRATEGY OF SHOPPING GOODS:

(a) Price: These goods are available at moderate prices. The seller must apprise the buyer with the
price.
(b) Promotion: Heavy advertising and personal selling by both producers and resellers.
(c) Place: As consumers will spend time shopping for these goods, stores that specialize in them are
located near similar stores in active shopping areas.
(d) Products: Furniture, clothes, used cars, etc.

(iii) Specialty Products:

These are goods with unique characteristics or brand identification for which a sufficient number of buyers
are willing to make a special purchasing effort. Consumers have strong convictions towards the brand,
style, or type. For example, Cars, High end Watches, Diamond jewelry etc.

Main Features:

i. The demand for such products is relatively infrequent. ii.

 Products are high priced.
iii. Sales of such products are limited to a few places.
iv. Aggressive promotion is needed for such products. v. After-
sales service is required for these products.

MARKETING STRATEGY OF SPECIALTY GOODS:

a. Price: They are usually marked at high prices. As demand for these goods are low
and Supply is also low

b. Promotion: Targeted promotion by both producer and reseller. High level of advertising

c. Place: Exclusive selling in only one or few selected outlets per market. Exclusively sold
and are exclusively distributed. The consistency of image between the product and the store
is also a factor in selecting outlets.
d. Product: Jewlery, Rolex watches, fine crystals, etc.

(iv) Unsought Products

These are products that are available in the market, but the potential buyers do not know about their
existence or do not want to purchase them. There are two types of such products:

Regularly Unsought Products: The products which exist but the consumers do not want to purchase
them as of now but might eventually purchase them. Example: Life Insurance Products or Doctor’s
services.
New Unsought Products: The marketer’s task is to inform target consumers of the existence of the
product, stimulate demand and persuade them to buy the product. Example: Oral Polio Vaccine was
unsought initially, but heavy promotion and persuasion by the government has led to eradication of polio.
MARKETING STRATEGY OF UNSOUGHT GOODS:

(a) Price: It varies from product to product.

(b) Promotion: Personal selling and aggressive advertising by producer and seller.

(c) Place: It depends upon the product.

(d) Product: Life insurance, Red Cross Blood Donations, etc.

Q. Which marketing strategy is the most important for each of the several types of consumer goods
classification?

A. Convenience Goods-Perishable products need speedy distribution (PLACE MIX) Relatively durable goods
E.g., Toothpaste, need Intensive distribution to fight competition.

Shopping goods- are goods bought infrequently and require personal selling (PROMOTION MIX)

Specialty Goods are luxury goods and are priced highly (PRICE MIX). These generally must be of exceptional
quality (PRODUCT)
Unsought Goods are Innovative new products. Personal selling and wide advertising are required for unsought
goods. Direct Selling (PLACE) is only recommended to explain, demonstrate and persuade the consumer.

Industrial Products:
The Products used as inputs to produce consumer products are known as industrial products.
They are used for non-personal and business purposes. Examples being raw materials, tools,
machinery, lubricants etc.

Feature of Industrial products:

 Limited number of buyers in comparison to consumer goods.
  Length of Channel for distribution is short.

 Demand for the product is concentrated in certain geographical locations and is derived from the
demand of consumer goods.

 Product purchase is based on fulfillment of technical considerations.

 Reciprocal buying is involved is a company may purchase the raw material from a company
and may sell the finished product to the same company.

 In certain cases the companies may lease out the products rather than purchasing them due to
high costs.

Types of Industrial Products:

(i) Materials and Parts: These are goods that are used for manufacturing the product.
These are further divided into two types:

(a) Raw Material: The raw materials could be either agri based products like sugar cane,
rubber. Wheat etc. or they can natural products like iron ore, crude petroleum etc.
Farm products are renewable as they involve agricultural production. The natural products
are very often limited and often available in great bulk and low unit value. There are a
few but large producers and marketers supplying natural products. Long term supply
contracts are a common phenomenon in these categories, as the industry needs an
uninterrupted supply of products and services for running their business process.

(b) Manufactured Materials and Parts: These include component materials like glass,
iron, plastic or components like battery, bulbs or steering etc. The component
materials are further fabricated from aluminum, pig iron to steel and cloth from yarn.
Components enter the final product without being changed or modified. In this case price,
quality and services are important factors while making a decision.
(ii) Capital Items: They are the goods used in producing the finished goods. They include
tools, machines, computers etc. They can be categorized into 1) installations like lifts,
mainframe computers etc. and 2) equipment’s like fax machines, EPBX machines. Installations
are major purchase for the organization. AND 3) Tools or accessory equipment include hand
tools and office equipment’s l i k e personal c o m p u t e r s , laptops. These equipment’s
are not everlasting and they need to be refilled at different periods of time.
 (iii) Supplies and Business Services: They are goods which are required for developing or
managing the finished products. Business Supplies can be of two kinds namely 1)
maintenance and repair items and 2) operating supplies. Maintenance supplies include
painting, nailing and operating supplies include writing papers, consumables for computer,
lubricants and coal.

Business services can be classified as 1) M a i n t e n a n c e service like copier repair, window and
glass cleaning and 2) Business Advisory services include consultancy, advertising and legal
services.

Differences between Industrial Goods and Consumer Goods

BASIS CONSUMER GOODS INDUSTRIAL GOODS

1 MEANING Meant for final consumption Bought by the consumer to be

by final consumer used in production of goods
and services

2 DEMAND Direct demand Derived demand

3 MARKET SIZE Market size is large and Market size is small as buyers
spread across the globe are limited and concentrated
in few areas

4 ELASTICITY OF DEMAND Mainly Elastic Relatively Inelastic

5 TYPE OF BUYERS Individuals and households Business houses and Industrial

users

6 DISTRIBUTIONAL Long channel – many Short or Direct Channel

CHANNEL middlemen

7 TRANSACTIONAL VALUE Per transaction Cost is lower. Per transaction cost is often
AND QUANTITY Consumers purchase in small high. Businesses purchase in
lots bulk
 SESSION 3: MANAGING PRODUCT LIFE CYCLE

Each product goes through a life cycle which includes the following stages of growth, maturity and decline.
The product life cycle shows the sales and profit of the product over a period.
Most of the products follow the ‘S’ shaped curve with certain products deviating showing a sharp growth
followed by a sharp decline or remain in the maturity phase for a long time and may not face a decline.
Trends and Fashion can be grouped in the first category; products in closed economies or in a
monopolistic market represent the second type.
In this category one may also have commodities like steel, cement, and food products, where the
demand remains inelastic, compared to other manufactured products.
In India, cars, refrigerators, and television sets etc. did not experience a decline until 1991 as there were
operating in the pre-liberalization era with less competition. But things started to change after 1991 with the
opening of the markets and an increase in competition.
In the current scenario the product life cycles are also shortening with high competition and changing
demands.
As we move through the product life cycle, it is observed that profits are rarely a part of the introduction
stage; the growth stage brings profits with an onset in decline in profits being seen in the maturity stages
 “The product life cycle (PLC) depicts a products sales history through 4 stages:
1) Introduction
2) Growth
3) Maturity and
4) Decline
Adjustments and modifications need to be made in the product’s marketing mix as the product moves
through its life cycle because of changes in the environment, buyer behavior, and the composition of the
market.
The PLC concept can be applied to a product category (soaps), to a particular product form (soap bars,
liquid soaps) or to a particular brand (Lux). The life cycle of the product category is the longest and that
of the brand is shortest usually.
It is useful most directly to product forms. Product forms like soaps, gel pens and televisions and
mobile phones go through a sales history of introduction, growth, maturity and decline. Product
categories often tend to stay in the maturity stage for longer duration, while the life cycles of individual
brands can be extremely inconsistent depending on the effectiveness of their marketing programs. Eg.
Godrej’s ‘Jumping Mango’ juice vanished from the market though other product categories exist in Maturity
stage.
Q. Explain the concept of PLC. Also explain its importance.
A. Each product goes through a life cycle which includes the following stages of growth, maturity and
decline.
The product life cycle indicates the sales and profit of the product over a period of time.
The PLC concept can be applied to a product category (soaps), to a particular product form (soap bars, liquid
soaps) or to a particular brand (Lux). The life cycle of the product category is the longest and that of the
brand is shortest usually.
Adjustment and modifications need to be made in the product’s marketing mix as the product moves through
its life cycle because of changes in the environment, buyer behavior, and the composition of the market.
There are four main stages in a PLC, but some products many have a 5 th stage. This comes in prior to
Introduction Stage.
Research and development stage
 The Product is under development.

 During the R&D stage the product has cleared its ‘test-run in the market.

 No Sales and
  Profits are non-existent.

The four stages include:

1. Introduction Stage

In this stage a new product (from brand or category) is introduced, and it is called the introductory stage.
Introducing a new product is always a risky proposition, even for a skillful marketer. A new product
category requires a long introductory period because primary demand i.e., demand for the product
category must be aroused. Ex. When “All-out” in 1990 introduced liquid vaporizers as mosquito
repellent, it was a pioneer in the product category as till 1990 mosquito coils were prevalent. This is
true for those brands which have achieved acceptance in other markets and require ‘INTRODUCTION’ in
new markets. This is followed by the selective demand ie a demand for a specific brand within a product
category. Ex. Once the product category was tapped competition followed. The other brands within the
same product category include Mortein, Good night which were competitors for Allout. This phase marks
the launch of the product in the market.
It is characterized by

 Inducing acceptance and attaining initial distribution.

 High operational costs, arising out of i) inefficient production levels or bottlenecks, i i ) high
learning time, iii)unwillingness of the trade to deal in the product, iv)demand of higher margins or
v)extended credit terms.

 High promotion costs on the expectation of future profits.

 Customers have low awareness and those who are willing to try the product do so in small
quantities called trial purchase.

 Competition is limited to few firms, and is from indirect or substitute products.

 Negative profits on account of low sales volume,

 Distribution is limited and promotional expenses are high.

MARKETING STRATEGIES IN INTRODUCTION STAGE

 1. Products are promoted to create awareness and also develop market for the product. Only one, or a few
product varieties.

2. Pricing of the product may be low.

PENETRATION PRICE-Normally used for convenience goods to ensure large market share. Market unaware of
product. Buyers are price sensitive. Strong product competition to increase penetration and expand the market
share for rapid product acceptance OR if it is for a new product high price to recover the development costs
(SKIMMING PRICE). Recover max profits.

3. Distribution can be selective till consumers show acceptance of the product.

4. Promotion: Marketing communication seeks to educate (INFORMATIVE ADVERTISING) and

enhance the product awareness

Growth Stage
The growth stage is the second stage where the product has been launched successfully with the sales
beginning to increase rapidly in this stage, as new customers enter the market and old customers make
repeat purchases. This stage is characterized by
 Reduced costs because of economies of scale.

 Increase in competition with the customer having greater choices in form of different types of
product, packaging and prices.

 Market expansion with new customers being added.

 Dominant position created by focusing on increasing selective demand

 Increase in profits.

 Costs incurred on identifying i) new uses, ii) developing the product, iii) promotion, and iv) distribution.

 The mobile handsets are in the growth stage, with new models being continuously launched.
Apple launched its iPhone 10s recently.

MARKETING STRATEGIES IN GROWTH STAGE

There is an increase in competitors who offer similar in the market features. In this stage, the firm seeks
to build brand preference and increase market share.

1. Product quality is maintained and additional features Eg.: Car Models with higher capacity, Combo
meals in restaurants and support services Eg. Acer does ‘pick up and drop’ repair services may be added.
 2. Pricing may remain same as the firm enjoys increasing demand with a little competition (But Skimming
Price may drop a level whereas Penetration Price may lift a level.

3. Distribution channels are added as demand rises and customers accept the product.

4. Promotion is aimed at a broader audience. Sales Promotion, Better Salesmanship, Persuasive

Advertising

THE EARLIER PART OF GROWTH STAGE IS CALLED DEVELOPMENTAL STAGE AND THE LATER
PART OF GROWTH STAGE IS CALLED EXPLOITATION STAGE.

Maturity Stage
The third stage is the maturity stage. The products that withstand the heat of competition and customers’
approval enter the maturity stage. Rivals copy product features of successful brands and become more
alike. Industry sales peak and decline as the size of potential markets begins to shrink and wholesaler and
retailer support decreases because of declining profit margins. Middlemen also introduce their own
brands. E.g. Super Bazaar Brand toilet cleaners which makes the competition even tougher further
lowering profits in industry. During this stage the marketers are focusing effort on extending the lives of
their existing brands. The characteristics of this stage are:
 Costs would be decreased because of increase in production volumes

 The Sales volumes peak, and market saturation is visible.

 Competitors entering the market increases

 There is drop in prices due to entry of competing products

 Advertising spends incurred on brand differentiation

 Product feature diversification is emphasized to maintain or enhance market share.

  The industrial profits decreased during this period.

MARKETING STRATEGIES IN MATURITY STAGE

PRODUCT: Product managers have to play a very important role for carving a niche within a specific
market segment through increase in service, image marketing and by creating new value image. This is
Product modification. E.g. Customization of a Construction company. Or through Product repositioning
E.g. Horlicks bring Kids Horlicks. They should also consider Market modification. Modifying the market
E.g. Tourism agency creating school children trip plans.
Number of brand users can be expanded by:

◦ Quality improvement. E.g. “Glucose biscuit with Real milk in every bite”

◦ Feature improvements. E.g. “Rin with biolites”

◦ Style improvements. E.g. New look to Preethi mixer

PRICE: Prices are heavily slashed to take on the onslaught of competing products so as to attract the
consumers.

DISTRIBUTION

Number of outlets may be increased.

New distribution channels may be used. E.g. Chocolate bars in vending machines, pickles in sachets for airlines

PROMOTION: Number of brand users can be expanded by:

Converting non users: E.g.: Courier services may try to increase number of users.
Entering new mkt segments: E.g. promoting Horlicks as needed by the whole family against a convalescing
food.
More frequent use: Advt. aiming at promoting drinking fruit juice for breakfast/before meals/ after meals.

More usage per occasion: To use shampoo twice during hair wash for extra results

THE EARLIER PART OF MATURITY STAGE IS KNOWN AS MARKET MATURATION AND THE
LATER PART OF MATURITY STAGE IS CALLED MARKET SATURATION

Decline Stage
This is the phase where sales decline as the customer’s preferences have changed in favour of more efficient
and better products, which have technically advanced.
Product forms and brands enter into decline stages E.g. Share ‘phatphatis’ to combat expensive autos,
M N C b r a n d s while product categories last longer. The number of competing firms also gets reduced
and generally the industry has limited product versions (like outgoing product like desktop computers)
available to the customer. Sales and profits decline rapidly and competitors become more cost conscious
E.g. Stores do not store products for immigrant types who are not given visas any longer. Brands with strong
loyalty by some customer segments may continue to produce profits. There are hidden costs in terms of
management time, sales force attention, frequent stock re-adjustments and advertising changes. For these
reasons, companies need to pay attention to their dying products. At t i m e s management may
decide to maintain its brand without changes in the hope that some competitors will leave the market or it
may decide to re-position the product in the hope of moving it back to the growth phase in a new image or
eventually prune the product from the line.

MARKETING STRATEGIES IN DECLINE STAGE

1. PRODUCT: The product can be maintained by either by adding new features.

New uses can be found.

Minimal varieties and quantity kept for loyal customers.

Product can be discontinued.

Product can be sold to another firm that is willing to continue the product.

2. PRICE: The price can be reduced. The purpose of price reduction is also to liquidate stocks.

3. PLACE: Distribution network is reduced to the minimum. This at least shows the product to
concentrate on a concentrated area. This is called selective distribution.
4. PROMOTION: Advertising being the most expensive of the promotional elements, is severely
reduced.
Only minimal advertising and sales promotion is done to retain the last of the loyal customers.
Examples: Colgate was the first toothpaste in tube in 1896, it went to capture the market world over and
became the highest selling brand in the world in 1999, has diversified into oral care range and still a
force to reckon with.
Prospects and Problems of PLC concepts.
The Tool of PLC is very useful to marketers in market forecasting, planning and control and framing
competitive marketing strategies.
PROSPECTS
1) Sales Forecasting- As the PLC shows the sales history of the Product/ Brand, it can be used for sales
forecasting

2) Product planning- Decision regarding at what stage product needs to be modified, changed, improved
or discarded

3) Product pricing- Pricing is done at the very beginning, but if the strategy works or doesn’t can be seen
in the PLC and changes can be made accordingly.

4) Product Control – It is essential for every company which is dealing in multiple products to constantly
monitor the sales, so that the decision to keep or discard can be taken in time.

5) Promotion – The aim of promotion is to inform, persuade and remind. So PLC helps in understanding
the right time to implement the right strategy

PROBLEMS OF PLC

1) Absence of absolute conformity- It is generally believed that most products conform to the life
cycle pattern, but there are many factors that affect the product’s demand and sales and so
variations to the traditional PLC may be there. Example Gold, Cement etc. are influenced by
economic conditions.

2) Stage span fluctuates – It is not necessary that all products go through all the 4 stages one after the
other. Some products may go from introduction to decline. This can happen due to wrong time of
introduction. The pattern adopted varies from product to product.

BRANDING

Branding comprises of decisions that offers an identity for a product in order to differentiate it from
competing products. In the current age of increased competition branding helps to position the product to
the target audience. The popularity of building branding strategies has increased in t h e r e c e n t years
b e c a u s e o f i n c r e a s e d n e e d f o r p r o d u c t d i f f e r e n t i a t i o n . The b r a n d communicates
through colors, logos, slogans and tag lines. For example Haier, a Chinese home appliances brand has the
slogan of ‘Inspired Living’. Similarly, Infosys has the slogan, ‘Powered by Intellect Driven by Values’.
Branding becomes an essential element in marketing.
 DEFINITIONS:

Brand is defined as “A name, term, design, symbol, or any other feature that identifies one seller’s
good or service as distinct from those of other sellers.” American Marketing Association

Brand is defined as a "name, term, sign, symbol or a design or a combination of them,

intended to identify the goods and services of one seller or group of sellers and to
differentiate them from those of the competitor”.- Philip Kotler

Elements of Branding

Brand includes various elements like - brand names, trade names, brand marks, trademarks, and trade characters.
The combination of these elements form a firm's corporate symbol or name.

 Brand Name - It is also called Product Brand. It can be a word, a group of words, letters, or numbers to
represent a product or service. For example - Pepsi, iPhone 5, and etc. 
 Trade Name - It is also called Corporate Brand. It identifies and promotes a company or a division of a
particular corporation. For example - Dell, Nike, Google, and etc.

(i) Brand Mark - It is a unique symbol, colouring, lettering, or other design element. It is visually
recognisable, not necessary to be pronounced. For example - Apple's apple, or Coca-

Cola’s cursive typeface. (Symbols (Eg. The Nike ‘Tick’ , Toyota Logo )

Trade Mark - It is a word, name, symbol, or combination of these elements. Trade mark is
legally protected by government. For example - NBC colorful peacock, or McDonald's golden
arches. No other organization can use these symbols.
When a brand name is registered under the Trade & Merchandise Act and legalized it becomes a trade mark.

Thus registered brands are trade- marks. So all trade- marks are brand names, but all brand names do not
represent trade- marks.

Definition of Trade Mark _ “a brand or part of a brand that is given legal protection because it is capable of
exclusive appropriation”.

Patents_ The patent is the registered Intelligence that a business concern uses in its materials or process of
production or packing technology, which is exclusive to themselves, and cannot be copied by any other
business. It is denoted by a a circled capital letter' P' as

Patents give the right of exclusive use, for different lengths of periods, depending on the extent to which it is a
totally new finding. Any duplication of the patented technology by other competitors gives the right to sue them
to the business, and even to demand that the profits made by using their technology be returned to them.

Copyright_ is a form of protection given to the authors or creators of

Literary, dramatic, musical, artistic and other intellectual works. The copyrighted work gives exclusive right of
ownership in selling or performing to the author for his entire lifetime and for a further period of 50 years
after his death. ‘Copyright’ is denoted through a symbol © .

The exception to the rule of copyright is the use of the artistic work for the purpose of teaching and research.

DIFFERENCE BETWEEN BRAND NAME AND BRAND MARK

Brand name (WORD/LETTER) Brand Mark (PICTURE/SYMBOL)

1. The Brand name is a word /letter or set 1. The brand mark is a mark or picture or
of letters by which the manufacturer's letter which acts as a symbol representing
product is called similar to a person's the brand name.
name.

2. The brand name is meant to be 2. The brand mark is for visual recognition of
vocalized the maker.

 Difference between Brand name, brand mark and trade mark. 2009 board quest
To bring out the difference between the brand and trade mark it should be clear that all the trademarks are
brands whereas all the brands are not trademarks.

The difference between brand name and trademark can be mentioned as follows:

1. Registration - Any name, word, letter, symbol, design or any sign composed by combining them is called
brand. If the same sign is legally registered in the concerned government office, it called trademark.

2. Legal Protection -Trademark is provided legal protection, from other businesses using it. A brand that is not
registered can be used by competing companies and no legal action can be taken
3. Scope - All trademark include in brand but all brands may not be trademarks. So, all trademarks are brands,
but all brands are not trademarks.

Types of brand
Brands can be classified based on ownership, market area and number of products.

1. Ownership
a) Manufacturer’s brand: When the ow ne rs hi p lies w ith the m a n u f a c t u r e r and the
producer provides the brand name to the products, it is called manufacture’s brand. The
manufacturer is responsible for its marketing and enhance customer loyalty by building the brand
name. Examples include Apple, GE, Intel and McDonald’s.
b) Middleman’s brand/ Store brand/Private label: In certain cases, the manufacturers do not
undertake branding by themselves, instead they leave their products to the
Wholesalers or retail chains for the branding, these brands are named as Middleman’s brands/
Store brand/ Private Labels. Example include Reliance Select a brand of
Reliance Retail.

c) Descriptive Brand Name .These names describe what is the product or service. Eg. Whole Foods

d) Suggestive Brand Name: Suggestive brand names indicate what a product or service delivers. Eg. Twitter, for
instance, is a communication platform that’s like a flock of birds tweeting at each other.

e) Arbitrary Brand Name: Arbitrary brand names, like Apple, consist of real words applied to irrelevant
contexts. It’s a bit of a misnomer to call them completely arbitrary.
f) Coined Names Allow customers to approach your business without preconceived notions about your service
or style. They do not convey a specific feeling or association rather than a direct, literal meaning of the product. 
Since these names are invented, you have the power to define your brand and present it in a particular light. E.g.
Starbucks

2. Market area
a) Local Brand: When the product is available at the local area and the brand is
restricted to local markets or region, it is called local brand.
b) National Brand: When a brand name is owned by the producer or distributor and is
distributed all over the nation, it is called a National Brand. The examples include
AMUL Parle-G etc.

3. Number of Products
a) Family Brand: When multiple products of the manufacturer are marketed under the
similar brand name, it is called a Family brand. Videocon, Nestle, Johnson & Johnson
use this strategy. The term umbrella branding is also a substitute for Family brand.
3. Individual Brand: When diverse products belonging to same category are manufactured by a
company but have different brand names, they are called Individual brands. In most of the
cases the new brand names are not generally connected with the names of existing brands of the
organization. P& G offers an array of individual brands in each product category, some of them
 being Whisper(Sanitary Napkins), Ariel & Tide(Detergents), Olay(Personal & Beauty products), Oral-
B(Dental hygiene)

CHARACTERISTICS OF A GOOD BRAND NAME

(a) The brand name should be easy to pronounce, spell and remember. It should be short also. Eg.
Bata, Vim,

(b) The brand mark or design should be attractive to the vision. Air India Maharaja

(c) If possible, the brand name should be able to suggest the benefits, uses and characteristics of the
product Eg. Bandaid (bandage), Vanish (stain remover), Pampers (nappies)

(d) The brand name should be capable of being registered. This will protect the brand name from
being imitated by the rivals, and duplicate brands from coming out. Eg. Colgate has a ℗symbol ®™
to show that he name is registered and not available to others to take. If it is not registered, they
cannot sue a company for copying their name.

(e) The brand name should be suitable for the product unlike some like Cycle brand Agarbathi
(incense sticks)Eg. De Beers Diamonds , Kalyan Silks have the tone to suit its products.

FUNCTIONS OF BRANDING/ ADVANTAGES OF BRANDING/ROLE OF BRANDING

1. Product Differentiation - Branding helps to distinguish a product from other similar products in the market.
2. Publicity - It is the basis of enabling products to be advertised. If the brand name of a business attains a
name and fame in the market ( goodwill)→popularized products are remembered for a longer time
3. Distinctive Impression- Create individual existence and creates distinct market segments Eg. Scissors
cigarettes of The Indian Tobacco Company is a brand for the lower income group , whereas Gold Flakes by
the same company is positioned with all its marketing strategies for the higher income group)
4. Widens Market- As brands can be advertised and thus popularized, they are demanded everywhere and
enjoy a wider market.
5. Brings down Cost per Unit of Product- Provided the quality is good, Branding enables Advertising which
increases Market Share and this brings about economies of large scale production leading to reduces cost
borne per unit of production. This widens the gap between Price and Cost per unit and increases Profit per
unit of product.
6. Protection against Imitation - A registered brand name and mark offer protection from imitation of the
product by other manufacturers.
7. Better Quality of Goods - Branded goods can be sold on the basis of description alone. A brand is
indicative of the products’ characteristics, quality, price etc. The price of the branded good can be compared
 with others on the basis of the level it represents on the quality scale.
8. Introduction of New Products - An already well-known and respected brand can easily introduce new
products in the market as these will be easily accepted by the consumers to be as successful as the other
products of that brand.
9. Consumer Protection -Prices of the branded goods are printed on the package. The price of the branded
goods will remain the same in different locations and are not changed often _ so as to gain consumer
confidence.
10. Massive Asset- Brand is a massive tangible asset, which cannot be duplicated like the physical assets like
building, machinery, inventory etc. (Which in Accounting Terminology becomes the basis of ‘Goodwill’
11. Permits Repeat Purchase- Once a customer has liked a brand he does not go for any other brand Eg. A
housewife who is satisfied with Vim powder to wash utensils will not ever go for Biz or Odopic etc. Without
branding, repeat purchases will come to a standstill.
12. Helps Distributors Survival- Only well-known branded goods are taken up by middlemen to ensure that
they will get sold away. In fact, the very survival of middlemen rests on their ability to sell powerful branded
products.
13. Most Important to Services_ In the case of services, where there is no physical or visual checking of
quality of the product, but only the evidence of the satisfaction derived, a brand name for the satisfying
service provider is a must to recognize them and go for repeat purchases. Eg. Emirates airlines has been
proven for the best set of flight services.

ARGUMENTS AGAINST BRANDING - limitation

1) Builds unhealthy brand loyalty in the customers’ minds and hence BRAND MONOPOLY.
2) Brand names do not always assure quality.
3) Involves huge advertising costs in the initial stages.
 INTRODUCTION
SESSION 4: PACKAGING AND LABELLING

Packaging can be defined as an art, science and technology of preparing goods for transport and
sale. Packaging as an industry has two sectors – those who prepare the packaging material and
those who convert these materials into packages. New packaging materials are fast replacing the
old ones. A good packaging conveys the quality of the product: which is distinct from the value
of the product. Attractive packaging is an also an efficient point of purchase (POP), and
stimulates publicity for sales. It has been observed that packaging is an important advertising
means helping in carrying messages from the marketer to the consumer. Packaging as a
function has two separate dimensions – the physical aspects related to the science and
technology and the behavioral aspect related to the art of product design associated with buyer
behavior.
Meaning of Package  -Package is a ‘covering’, ‘wrapping’ or ‘crating’  of  goods, i.e. A package
basically contains or ‘seals in’, encases or houses  the product into an enclosure.

Meaning of Packing-- Packing is the act/ process  of' covering' of or 'wrapping' in or crating of
goods into a package.
Meaning of Packaging: -    Packaging is the art of deriving and designing the suitable package for
an article according to the product perishability, prestige, convenience etc.

PACKAGING CONCEPT

In most cases, marketers define packaging as the fifth ‘P’ of marketing. It provides an
enhanced value to the product and there are three levels of material for package:

A. A primary package
B. A secondary package
C. The transportation package

1st Level of Packing or Primary Packaging refers to the product’s immediate container, such as
the PET bottle, tetra pack, can or a box .Usually, the customer uses the product in its
primary packaging. E.g. the tube holding toothpaste, the aluminum foil in which the chocolate
piece is wrapped; wafers in oil paper.
 Protects the product from breaking or losing its essence.
 It protects the product from decaying or getting spoilt.
 It is to this that the special dispenser nozzles may be fitted, E.g. The pump fixed on the
plastic bottle of hand soap, the dropper nozzle on a bottle of ear-drops, the flip-top on a
cigarette pack etc.
 Some of the information of the label can be found on the Primary or 1 st level package. E.g.
In a ‘Ready Mix’ Gulab Jamun pack, each inserted packet is marked with instructions
2nd Level of Packing or Secondary Package refers to additional layers of protection that are
removed once the product is ready for use, such as the tube of shaving cream, which is covered in
a card board box or a glass bottle covered in card board box.

 It is this very package that sits on the store shelf.

 This is the packaging that the product is seen in by the consumer in the store, as It is the
package exposed to the customer.

 It provides additional protection to the product, where the primary pack gives the 1st level of
protection.

 It is the one on which the Label is affixed, on which is found the attributes conveying
important information to consumer).E.g.  In cereal, only the outer box provides information
on nutrition, ingredients etc.

 Gives additional protection

 The secondary level of pack is the one that enable proper stacking on the supermarket shelf
e.g. a box of cereal will fit better on a shelf than a plastic bag full of cereal (and has
storability and stack ability.)

 Aesthetic packing for competitiveness, gift ability is entirely secondary packing .

3rd Level of Packing or Shipping Package or Transportation Pack

Products that are sold in bulk by wholesalers and manufacturers have third level package. E.g. 50
cereal box packed in a larger carton box to be transported in bulk from manufacturers to wholesalers
and then to retail outlets.

 It allows the district wide/nation-wide/international distribution.

 Very little product information and much of handling information will be found on its label.

 It is the one handled by distributors

 It is always more sturdy than the other two levels of packing. E.g. Wood, card-board carton

 As it is the one due to which wide distribution is enabled, shipping package is an indirect
cause of increase in standard of living by usage of better products world wide

The different levels of packaging, type and importance would vary with the

1) Nature of product, whether FMCG, durable consumables, industrial and liquid product.

2) It would also differ on the distance over which it has to be transported.

3) The quality control o f a product would be meaningless if the package designed to carry the
 product from the factory to the ultimate consumer is not adequate.

ROLE OF PACKAGING

Packaging is an important element in the formulation of the marketing plan as it aids with
promotion & performs the role of passive salesman, in addition to protecting the product. In the
absence of salesman, the package should be able to grab the eyeballs of the buyers. Good
packaging may lead to improved consumer acceptance.

The product package has an important promotional function, establishing meaningful

communication with the consumer. Designing the product package according to changing
customer preferences and attitudes will enable the marketers to push the product.

Consumer packaging is also intended to offer better convenience to the consumer and protect
the product from pilferage and damage. It has been estimated that unit value realization can
increase with good packaging.

IMPORTANCE OF PACKAGING

Initially Packaging was considered a production-related function and activity. While in the
current context packaging has completely changed due to competition. New developments
in packaging, have forced marketing managers to focus on packaging design. The following
aspects highlight significance of packaging in marketing:

1. It provides information about the product

2. It helps in identifying brand name

3. It assists in protecting the product

4. It helps in product handling

5. It aids in promoting the product

6. It helps in offering customer convenience and satisfaction

7. It helps increase in the sales of the product.

8. It adds to the use of a product.

9. It contributes to the safety of a product.

10. It helps in storage of the product

11. It helps in product differentiation

PACKAGING DECISIONS

Packaging is an important component of a product as an attractive pack is the most important

factor in impulse purchases. The basic functions of a pack are to attract the potential customer’s
attention, protect the product that is packed and reveal its identity. It is an essential tool for
two categories of people – first, end-users of a product: and second, retailers. The material used
may vary from metal to paper to plastic etc. The useful packaging decisions include:

1. Packaging design: It is not easy to design a package for various items. For example, all
‘Hand wash’ come in bottles, but different brands of hand wash differ in their packaging.
The high costs of packaging lead to bringing out refill packs too.

2. Attractive Color: Colour plays an important role for determining customer acceptance
or rejection of a product. The use of right colours in packaging also assists marketers,
reap huge advantage. Packaging colour should be attractive so that it may aid in
promoting sales.

3. Packaging the product line. A company must decide whether to develop a family or
similar kind of the packaging of its several products. It involves the use of identical
packages for all products or the use of packages with some common feature.

FUNCTIONS OF PACKAGING

Packaging should perform the following basic

functions:

1. Protection
The basic function is to protect the products from the vagaries of weather the product
can be exposed to, in transit from the manufacturer’s plant to the retailer’s shelves and
issues related to handling the product while on display on the shelves.

The reasons for protection for products through packaging

are:
 Control pilferage during transit or storage

 Prevent the absorption of moisture

 Avoid breakage/damage due to rough mechanical or manual

handling during transit.
 Protect liquid from evaporation.

2. Appeal
 The emergences of self-service outlets have forced manufacturers to have attractive
packaging. The following characteristics have been identified to help a package
perform the self-selling tasks:
 It helps in attracting attention of the customer

 It helps to enhance the product image

 It helps in the product looking and hygienic

3. Performance
This is the third function of a package. It should perform the task for which it is
designed. Bottled water has been introduced in 500 ml to 20 litres bottles. The purpose
and place of use is the deciding factor in the purchase of various packs. A package must
be made to consistent and rigid quality standards as the consumer demands uniformity
each time he purchases a product.

4. Packaging for convenience

It provides convenience to distribution channel members, such as wholesalers,
retailers and consumers. The convenience will relate to handling and stocking of
packages. It helps in the following ways:
 The package must be convenient to stock

 The package must be convenient to display

 The package must not waste shelf-space.

 The package can be easily carried.

 It should be easy to dispose off.

5. Cost-effectiveness
The package finally must be cost-effective. Packaging cost as a percentage of product
cost differs from one industry to another. It is essential to understand that while
analyzing packaging costs, the other costs like handling, storage, insurance and transit
costs are also added.

QUALITIES OF GOOD PACKAGING

1. Attractive appearance
 2. Convenient for storage and display

3. Shield against damage or pilferage

4. Product description displayed on the package

5. Package should be as per the specifications

Types of Packages

There are four types of packages: (i) A consumer package (ii) a bulk package, (iii) an industrial,
and (iv) a dual usage package. They are as discussed.

(1) A consumer package is one which holds the required volume of a product for ultimate
consumption is economical and can be easily purchased by the consumer. He has the option to
purchase the pack size which he considers adequate for the consumption for his family over a
length of time and does not involve additional investment during that period.
(2) A bulk package is either for the consumer whose consumption is large or is bought to save
cost. Example: oil cans etc. The consumer package itself very often requires an outside package
in which it is transported and which is sometimes referred to as transit package or an out
container.

(3) An industrial package can be a bulk package for durable consumer goods. These are the
basic package types although many sub-divisions can be listed, e.g., strip package, multiple
package, etc., which can all be broadly listed under these basic headings.

(4) A dual use package is one which possesses a secondary usefulness after its contents have
been consumed. Drinking glasses, boxes of jewellery or cigarettes, plastic containers,
refrigerator dishes, bags from flour and feed sacks are the examples.
DEMERITS OF PACKING

1. Packing increases the cost of the product

2. Aesthetically packed goods attract the customers to sometimes make wasteful purchases
3. It may lead to unhealthy competition based on the consumer deciding on certain products like
food items in supermarkets based on the brightest labelled or most sophisticated packages. It
gives a sophisticated impression to the unwary customer, that anything in a box with a label is
believable and that which is not contained in a pack is not.

4. One cannot visibly check the product when it is encased in the packing. E.g. Customer cannot
check the mobile phone you are actually getting, as it is pre-packed. You can only check its
showcase model.
5. It makes the product heavier and occupies more space to store.
6. Packing is a costly and a highly specialized & technical procedure needing expert knowledge.
7. Creates one of the biggest problem of the modern age, i.e. disposal of packing material.

All said and done, one cannot deny the utility of packing, as it is very essential in

 protection,
 lengthening the life,
 wider distribution and
 trust accorded based on the brand printed on the label.
 Much is being done to solve the disposal problem of packages, like popularizing
recycling and re-using packing materials and
 use of bio-degradable materials
 The customer should be an informed buyer and not blindly be taken in by good
looking product packages.
 The cost of packages should be reduced by use of innovative and intelligent alternative
material.

LABELLING

LABELLING Labeling is regarded as part of marketing as packaging decisions involve the

labeling requirements. It provides the customers with the requisite information about the
product. The buyers also have complete information about the quality, features, standards,
grade, price quantity etc. This helps them in making better and informed decisions. It is also
helpful to the sellers as they can differentiate their products from their competitors.
Attractive labeling also assists in encouraging the customers to pick the products off the shelf.
In most countries across the globe, labeling is mandatory and they have specifications for
labeling. For example in India, all the prepackaged foods sold in the country are required to
comply with the Food and Safety Standards (Packaging and Labeling ) Regulations 2011 issued
by the Food Safety and Standards Authority of India functioning under the Ministry of Health
and Family Welfare. The important ones i n c l u d e i n f o r m a t i o n regarding t h e
n u t r i t i o n a l values , v e g e t a r i a n and n o n -vegetarian symbols, information related to
food additives or flavors, name and complete address of the manufacturer, net quantity, lot
identification of batch identification, date of manufacture or packing, instructions for use,
country of origin for imported products apart from the general labeling requirements. The
CE marking or the estimated sign used in European Union weights and measures accuracy
regulations. The Green Dot is the example of environmental symbol. According to the
regulations labeling of food items should disclose information about a number of aspects like
date of manufacturing, expiry date or optimum storage period for the product which do not
have an indefinite storage period, composition, storage conditions, necessary method of use, if
necessary, precautions to be taken, contra-indications etc. Labels are part of the printed material
on the package. The label is a strong sales tool and an integral part of purchase advertising.

Products may be adequately identified by giving the name of the product and the producer; most
require somewhat more extensive descriptions of their nature and use. For example, processed
foods, patent drugs, some cosmetics, etc. legally are bound to carry a fairly complete detail
about their ingredients. Several products must give instructions for their use, as in the case of
commercial plant food. Safety warnings should also be mentioned on labels of all
potentially hazardous products or packages. For example “To be used under the direction of a
medical practitioner” or keep out of reach of children “or Cigarette smoking is injurious to
health”.

Environmental awareness among the consumers has promoted the introduction of ‘eco-
label’
awarded on the basis of a product’s environment
friendliness.
A good label is one which helps a potential buyer to help him take make decision with relevant
and correct information. Apart from the information which must be given, the label should
provide:

i. Picture of the product accurate as to size, colour and appearance.

ii. Description of ingredients used along with methods of
processing. iii. Directions for use, including cautions against
misuse.
iv. Brand names
v. Dates of manufacture and expiry
vi. Statutory warning, if any.
vii. Contra-indications and adverse effects, if
any.
In all packaging is an important component of marketing and manufacturers are coming with
innovative packaging to attract the customer and labeling enables them to comprehend the
materials used in the product.
Role of Labeling
(i) Provides description of the product and specifies its content: The label provides
detailed information of the products, its ingredients, usage, care to be administered,

caution, batch number, manufacturing place, helpline number in certain cases, date of
manufacturing and expiry etc.
 (ii) Identifies the product or brand: Labeling enables to identify the product amongst
the multiple brands. SUNFEAST brand of biscuits can be easily identified from the
other brands on the basis of their labeling.
(iii) Aids in product grading: If a company manufactures different qualities of product,
labeling aids in finding which pack contains what type of quality. The variants of
tea manufactured by Hindustan Unilever Ltd are differentiated by the company
through green, red and yellow colored labels.
(iv) Facilitates in the promotion of products: It also helps in sales promotion.
Consumers are to drawn towards buying products on account of their attractive
labels. (v) Helps in providing information required as per the law: The labels
provides statutory warnings as required by the law in case of products like cigarettes,
pan masalas. They are required to carry the picture and the warnings too. In the case of
hazardous or poisonous products too necessary statutory warnings are to be put on the
label.

William J. Stanton classifies the labels into four:

a) Brand labels: They are majorly meant to popularize the brand name of the product.
Cosmetics manufacturers prefer to use this kind. E.g: Perfumes, Lipsticks etc

b) Grade labels: They emphasize on standards or grades used for product

identification. E.g.: Fabric, Tea Leaf, etc.

c) Descriptive labels: They are descriptive in nature; state product features and explains
the various uses of the products. The consumables items like milk etc have descriptive labels.

d) Informative labels: The main object of these labels is to provide maximum possible
information. In case of the medicines, detailed labels are attached which even specify the side
effects in using them.

QUESTIONS
Q. What are the different types of Packages that are used for different products'?

Q. What is Packaging, Package and Packing. Clearly bring out the meaning of these.

Q. What is Packaging and how does it add value to present –day modern living?

Q How do Labels enable Promotion?

Ans. Hint: Labels that can now be pasted on packages can advertise the sales promotional gift,
or contest, or discount with dates etc.

Q. How is Packing a competitive tool?

Q. How does Packing bring in more types of target consumer groups to a business? Illustrate with
examples

Ans: Hint; By different 'User Sizes', Differently 'Aesthetic ' Packing, Shipping Package enabling
wider distribution, Sachet Packing, Better Labeling information, Better Dispenser Nozzles,
Hygienic Packing.

Q.1. Define a product. What are the various viewpoints to explain the concept of a product?

Q.2. Discuss the core tangible and augmented product for your favorite brand of bathing

soap. Q.3. Distinguish between generic market and product market.

Q.4. Packaging is considered as the 5th P of Marketing Mix. What are its implications on the
PLC? Discuss.

Q.5. Discuss the importance of packaging as a tool for foe product differentiation and market
cultivation.

Q.6. “Packaging has been criticized as being expensive, giving no additional value and
often deceptive.” How would you justify marketers’ use of packaging?

Q.7. What is packaging concept? Explain various packaging decisions in brief.

Q.8. What are the functions of packaging? Explain various packaging

strategies.
REFERENCES
 Kotler.P, Keller. K.L, Koshy.A, Jha.M, “Marketing Management- A South
Asian
Perspective”, 14th Editon, Pearson
 Ramaswamy&Namakumari , “Marketing Management- Global Perspective
Indian
Context”, 5th Edition, McGraw Hill Education(India) Pvt. Ltd.
th
 Saxena. R, “Marketing Management”, 5 Edition, Tata McGraw Hill
 http://www.businessmanagement ideas.com/
 http://www.thehindubusinessline.co m/news/variety/battle-of-the-
oats/article3324566.ece
 https://en.wikipedia.org/wiki/Packaging_and_labeling#Packaging_types