Marketing: Product Mix

Strategy

What is a Product?Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

– Physical objects– Services– Events– Persons– Places– Organizations– Ideas– Mixes of these

What is a Service?

A form of a product – any activity or benefit thatone party can offer to another that is essentiallyintangible and does not result in the ownership ofAnything.

Spectrum

• Pure Tangible Goods : Ex. Toothpaste, Television Set

• Tangible good with accompanying services (car + repair services)

• Hybrid offer – equal parts of good and service(restaurants)

• Service with accompanying minor good (flight + snacks)

• Pure service (doctor's exam)

Experiences

Experiences – are memorable– take place in the minds of individual consumers

Companies need to think not about goods and services,

but what the goods and services do for the customer,hence orientation towards experiences.

Levels of Product

Product Classification

The Product Hierarchy

The Product Hierarchy Explained

The Product Mix

The Product Mix continues …

1. Add new product lines2. Lengthen existing product lines3. Add more versions of each product4. Pursue more product line consistency

Line StretchingLine stretching occurs when a company lengthens itsproduct line beyond the current range.

Down-Market StretchA company positioned in the middle market may want to introducea lower-priced line for any of the three reasons:

• The company may notice strong growth opportunities as massretailers such as Wal-Mart, Best Buy, and others attract agrowing number of shoppers who want value-priced goods.

• The company may wish to tie up lower-end competitors who might otherwise try to move up-market. If the company has been attacked by a low-end competitor, it often decides tocounterattack by entering the low end of the market.

• The company may find that the middle market is stagnating ordeclining. Ex: Tata Nano

Up-Market StretchCompanies may wish to enter the high end of the market for moregrowth, higher margins, or simply to position themselves as full-line manufacturers. Ex: Suzuki Kizashi, Sony Bravia X-Series

Two-way Stretch Companies serving the middle market might decide to

stretch

their line in both directions.

Swift LXI Dezire ZXI

Line Filling

Line Filling is a strategy where the company introduces newproducts within the same( existing) price range or with just anoticeable difference.

Firms adopt this strategy for:

• Incremental Profits• Satisfy Dealers who complain about lost sales because of

missing items in the line• Utilize existing capacity• Try to become a full-line company• Try to plug holes to keep the competitors away

An Example of Line-Filling

Maruti Estilo - Rs 3,17,000 - Rs 3,98,000Maruti Wagon R - Rs 3,18,000 - Rs 4,32,000Maruti A Star - Rs 3,40,000 - Rs 4,12,000Maruti Ritz - Rs 3,89,000 - Rs 5,10,000Maruti Swift - Rs 4,06,000 - Rs 5,20,000

Thank You :)