CHAPTTER - VI

PRODUCT
BY
RAJU MANANDHAR
 PRODUCT

• Product is one of the major component of the

marketing mix.
• Product refers to all those things which can be
seen and touched and that has shape, size,
design, color, weight, etc.
• In the broad sense, product is anything that has
ability to satisfy customers’ needs and wants
such as commodity (like pen, chair, table, copy,
etc.), services, and events, people and so on.
 Levels of Product
The core product :
• The core product is the main thing what the buyer really want to buy.
• Lady buys lipstick with hope that she will look beautiful or
attractive by using that lipstick.
• The core product is the beauty.
The Basic product :
• The basic product is the actual product what buyer gets after
purchase.
• Here the basic product is lipstick with all attributes .
The Augmented product :
• It is the combination of the core product and the basic product
• That is combination of beauty and the lipstick.
The Augmented product :
• It is the combination of the core product and
the basic product.
• For example, a woman buys a lipstick with its
package , brand name and quality with the
hope of being beautiful.
• So the combination the beauty and the lipstick
are augmented product.
The core product :
• The core product is the fundamental level of product what the buyer really
want to buy.
• The core product is the beauty for that woman.
The Basic product :
• The basic product is the actual product what buyer gets after purchase.
• Here the basic product is lipstick .
Expected Product
• This is about all aspects that consumer expects to get when they purchase.
• That coat should be really warm and protect from the weather and the wind
and be comfortable when riding a bicycle.

The Augmented product :

• It is the combination of the core product and the basic product.
• Combination the beauty and the lipstick are augmented product.
Potential Product
• This is possible augmentations and transformations of product in the future.
 Classification of Product
On the basis of the product use , products are classified into two
categories :
1. Consumer product
2. Industrial product.
1. Consumer Product :
• Consumer product is purchased by individual for personal use or
household consumption.
• Usually , the consumer product is classified into three groups :

 
 Types of consumer products
Usually, consumer products are classified into
four types:
• a. Convenience goods
• b. Shopping goods
• c. Specialty goods
• d. Unsought goods
a. Convenience goods:
• Convenience goods are those goods, which are
relatively inexpensive, purchased on regular basis
with a minimum of time and effort.
• They are inexpensive and purchased without
planning and comparing with others.
• The consumers do not want to compare price and
quality because the price of these goods is usually
low.
Classification of Convenience goods
Staple:
• Staple goods are low-priced items that are routinely purchased
on a regular basis, such as milk, bread, flour, salt, soft drinks and
so on.
Impulse:
• Impulse goods are items that the customers buy on a specific trip
such as chewing gum, newspapers or magazines, ice-cream, etc.
Emergency:
• Emergency goods are items, which are suddenly purchased to
meet an unexpected need such as the purchase of an umbrella or
raincoat during rainstorm, aspirin for headache, etc.
• Staple – the goods which are regularly purchased
like milk , bread ,flour , soft drink ,etc. and have
low price.
• Impulse- the goods which are purchased at the
time of picnic such as saptahik , chewing gum, ice
cream , candy .
• Emergency– the goods which are purchased to
fulfil emergency needs such as umbrella , raincoat
during rainfall, medicine , electrical fuses, etc.
b. Shopping goods :
• The goods which are purchased infrequently with proper
planning and comparison such as bike , car , T.V. ,shoes ,
fashion items etc. are called shopping goods
• If a person is going to buy a bike Pulsar 220 , he would
compare it with the Duke, Shine, Apache, along with the
price and their mileage.
• Generally, the shopping goods market is located in a
particular location.
• The price of the goods are charged moderately because
the consumers are quite conscious about the price and the
quality.
c. Specialty products :
• The goods which are purchased only after
special effort with the planning but without
any comparison with others
• Customers are loyal in such products .
• These products are basically sold in
exclusive outlets
d. Unsought Product:
• Unsought goods are those that consumers do
not know or do not normally think for buying.
• The product which are not available at market.
• If it is seen ,the customer would not be
interested such as encyclopaedia , life
insurance etc.
• They have little product awareness and
knowledge.
 Features of Consumer Goods
Convenience Shopping Specialty Unsought
S.N Features Goods Goods Goods Goods
Purchase
1 Frequently Freq Less Freq Infrequantly Rarely
2 Purchase Quantity Few Very Few Very Few
3 Planning Minimal High Very High None
4 Comparison No Yes No
5 Availability Anywhere Selective Exclusive
6 Life Very Short Medium Medium
Information
7 Search Low High Low
8 Awareness High Low High
9 Brand Loyalty Low Low High None
10 Packaging Important Less Important Less Imp Varies
11 Pcice Low High High High ..
Intensive Selective Exclusive Show
Distribution
12 Many Retailers few Retailers Rooms
 Marketing Consideration
Convenience Shopping Spesialty Unsouth
S.N Particular Goods Goods Goods Goods
Product Modified Improve Maintain New
1 Features Product Feature Quality Product
2 Branding Awareness Image Loyalty Awareness
Not
3 Packaging Attractive Usefull important Appropriate
4 Pricing Low High High High
Long Short
5 Distribution Channel Channel Very S.C Direct
6 Promotion National Local Targeted Nat/loc
 2.Industrial Product
• The product which are purchased in huge quantity
for business purpose is called industrial product .
• In broad sense, the industrial product are
purchased either for institutional use, or
reproduction or resell.
• The industrial products are categorized into five
groups : raw materials, fabricating materials and
part, installation, accessory equipments, operating
suppliers .
Raw Materials:
• Raw materials are unprocessed primary materials.
• Raw materials are purchased in huge quantity and are
purchased very frequently.
• They originate either from natural state or from
agriculture.
• The cost coverage of raw material is generally above
40% and their unit prices are comparatively low.
• The durability of raw material is very short since they
get processed into finished goods in very short period.
• Raw materials are adjusted on finished goods and there
is no provision of after sales service.
Fabricating Material and Part:
• Fabricating materials are those which are adjusted on
finished products with changing its identity such as
cloth for shirt, flour for bread, etc.
• Fabricating parts are those parts which are adjusted on
finished product without changing its originality such
as battery, tire, bulb, etc.
• Fabricating materials and parts are purchased
frequently and generally purchased in large quantity .
• They are adjusted on finished goods.
Installation:
• Installation are the expensive, long-lived and
major equipment which are used for production
of goods and services such as plant, machine,
building boiler plant, etc.
• Installations are normally purchased in very
small quantity.
• They are not adjusted in the finished goods.
• The performance of finished goods surely
depend upon its quality.
Accessory equipments:
• Accessory equipments are those which are used for
unbroken operation but they are not used in the actual
manufacturing process such as hammer, screw driver,
crane, etc.
• Accessory equipments are normally purchased
infrequently.
• The quality of accessory equipment doesn’t affect much
on the performance of finished products.
• The cost coverage of accessory equipment is very
minimal and their prices are comparatively very low.
Operating Supplies:
• Operating supplies are facilitating goods that are used
in continuous production process but not adjusted on
finished products.
• Production suppliers are purchased with a minimum
time and efforts.
• It can be of two types; production supplies and
management supplies.
• Production supplies include electricity, fuel, coal, etc.
• Management supplies include stationery, computer,
desk, chair, etc.
 Features of Industrial Goods
S.N Features R/ Mat F /M/ P Installatio Ac Equip Prod Sup
Purchase In
1 Frequently Frequently Frequently V Infreq Low Freq Frequently
2 Purchase Quantity Large Large Very small Small Small
3 Planning L. T con High One T. con None None
4 Life Spam Very short Mediam Very long Long Short
5 Brand Loyalty Low Low High Gen low Low
6 Pcice Very low Low Very high medium Low
Standardization of
7 C. P. V imp V imp Little Little Much
 Marketing Consideration
S.N Features R. Materials F/ M /Part Insttalation Acc Equip Prod Supliers
1 Brand Pref None Gen low High H/ Mod Low
2 Post S. S. None Little Very much Little None
3 Price Low Low High Medium Low
Short Short Middle
4 Distribution Channel Channel Very S.C Middle
5 Promotion Very low Moderate Targeted not not
 Product Life Cycle
• The product life cycle refers to different stages that product
passes from introduction stage to decline stage at the
market.
• In other words, it refers to the different stages of product
that involves from launching of a new product to
disappearance of that product from the market.
• Product life cycle has four stages and they are as follows:
• 1. Introduction stage
• 2. Growth stage
• 3. Maturity Stage
• 4. Decline stage
 Introduction Stage

• It is the primary stage of product life cycle.

• In this stage, a new idea is being introduced to a market.
• No competitors exist in the market.
• Involves high marketing and production cost
• Slow increase in sale and profits
• High prices of the products due to limited production
• Company sales starts from zero level and increase at
slow pace since most of the customers are unknown
about the product.
 Growth stage
• In this stage, many customers will come to
know about the product as such the number of
customers will go on increasing.
• This will lead to increase in sales rapidly and
marketer will be able to earn adequate profits in
this stage
• Increase in the number of competitors because
of increasing opportunities.
• Sales and profits increase at an increasing rate
• Demand for products increase continuously
 Maturity stage

• In this stage, many firms enter into the market

with a broad range of products.
• Sales and profits generally be stable and profit
starts to decrease at end of this stage.
• Keen competition of desperation exist.
• Market segmentation increases at a faster pace
 Declining stage

• In this stage, it becomes very difficult for the firms to

survive in the market.
• Sales decline permanently due to technological advances,
fierce competition, changes in consumer tastes, etc.
• Number of firms decline during the period as they quit
market for new opportunities.
• Products offering become narrow, as there is no scope
for business in the market.
• Profits decline at the beginning; but when many
competing firms quit the market, the situation of the
existing firms may go on improving.
 New product

• In marketing, new product refers to the product which

may be either an innovative product, an imitating, and
modified product.
Innovative product
• Innovative products are those which are developed
and introduced in the market for the first time, not
previously sold by any firm such as the first home
computer etc.
• Development of innovative products involves high cost,
risk and time required for profitability of the company.
Imitating product
• Imitating product are those products which may
be new to a particular firm but not new the
market because they are already been offered to
the market by other firm.
• These products are copy product for example
introduction of wai-wai noodle is originally
Thai taste etc.
Modified product
• Modified products are those products, in which a
particular product feature is changed to capture the
existing market.
• For example, change in the shape and design of the
mobile phones; change the packages and containers of
Horlicks etc.
• These are not imitating product, it requires minor
innovations to change or replace the product attributes.
 New product development process

• Ideas generation
• Ideas screening
• Business analysis
• Product development
• Test marketing
• Commercialization
Ideas generating:
• Idea generation reveals the creation of new ideas about
the products to be produced in future.
• For this purpose, marketers have to collect new ideas
about the product from various sources such as
consumers’ complaints, investors, competitors and
inventors.
• Similarly, companies also rely on their sales
representatives, middlemen, engineers, scientist,
employees, etc.
Ideas screening:
• The purpose of idea screening is to reduce the number of
ideas collected to an attractive practicable few.
• It is an act of decreasing the generated ideas and
classifying them into promoting ideas, marginal ideas and
rejected ideas.
a. Promoting Ideas: Those ideas which can be used to
convert the idea into new product immediately. It is also
called promising ideas.
b. Marginal Ideas: Those ideas that can be used in future to
be converted into new product.
c. Rejected Ideas: Ideas which are neither used now nor in
future to convert into product.
Business analysis:
• It is an act of analyzing all the promoting ideas
on the basis of cost benefits, organizational
objectives, availability of resources, etc.
• Once the product is filtered through the initial
screening stage, a thorough study of the
various marketing opportunities must take
place and data quantified with a view to
preparing projections.
Product development:
• After the analysis of business opportunities and
risk is over, the actual product development
activity takes place.
• It is an act of converting ideas into products. In
this step, the main tasks of the marketer should
be to translate product ideas into a technically
and commercially feasible physical product.
• It is an actual step of product developing.
Test marketing:
• Test marketing refers to marketing developed
product into particular market so that organization
may be able to have responses from customers in
order to improve on product before marketing it
into all target market.
• It is done in order to find out whether the
consumers accept the product or whether the
product is market-friendly and whether the
product is viable for sales purpose in the long run.
Commercialization:
• Once the purpose of test marketing is over, the
company is ready to produce products in mass scale
for commercial purpose.
• Commercialization refers to the introducing or
launching of the new product in the market for
commercial purpose.
• In this step, the marketer launch the new product to
target market where the company desires to enter and
with suitable distribution and promotional strategies.
 Branding
• Brand refers to a name, symbol, sign, color, letter, shape,
size, or a special design or the combination of these
elements.
• ‘Brand name’ consists of words, letter and/or numbers that
can be vocalized.
• ‘Brand mark’ is the part of the brand that appears in the
form of a symbol, design, or distinctive coloring or
lettering which cannot be vocalized.
• ‘Trademark’ refers to either brand name or brand mark
which is registered under government and are given legal
protection rights.
• Branding is an act of giving name to products in order to
identify or distinguish those products in the market.
• Brand :Simply , brand is a name of the product. In
broad sense , brand is a name , term , symbol , or
special design , or some combination of these
elements ,that is mentioned to identify the goods or
services of one seller or a group of sellers .
• A brand name consists of words , letters, colours
symbol , design , and numbers that can be vocalized.
• A brand mark is the part of the brand that appears in
the form of a symbol , design or distinctive
colouring or lettering .
• The trade mark is a brand that is given legal
protection under the law
 Objectives of Branding:
• Identification: Branding helps to identify products in the market from
other competitors’ products.
• Differentiation: Brand helps to differentiate firm's products from
competitors' products..
• Promotion: The other objective of branding is to help in conducting
promotional activities..
• Prestige and Status: Branding helps to increase prestige, personality
and status of producers, distributors, customers etc.
• Product quality: One of the main objectives of branding is to pay
attention to maintain quality of the products with brand name.
• Brand loyalty: The other objective of branding is to increase customer's
loyalty to brand or branded product.
• Legally protect the firm: The other objective of branding a product is
to protect the business firm from any legal obstacles.
• Build values for customers: To build consumer value and benefit of the
products or value building of products is the other objective of branding
 Types of Brand
• a. Manufacturer Brand:
• When manufacturer’s name is given such as a
brand is called manufacturer’s brand.
• Typically , manufacturer’s brand is used when
they have dominant role in the market ( strong
image ).
• Examples are Hulas Bata , Jenson Nicolson ,
Procter & Gamble , Surya cigarette , Trisara,
Gobi-Krishna Hall , etc.
• b. Distributor brand: When distributor’s name
is given such as a brand is called distributor’s
brand.
• When the products are distributed in the naming
of or dealer such as wholesaler , and retailer ,
then such brand is called distributor brand.
• When the role of distributor is very strong than
manufacturer , the distributor brand is used.
• Example are A & P , K mart , Volkswagen ,
Blue bird , Hulas , Sears , etc.
• Individual Brand: When separate brand
names are used for each product of the
manufacturer’s product –line , such
brand are called as individual brand.
• Examples are Laliguras, Yak, Gaindu from
a single factory called Janakpur Cigarette
factory.
• Adoption individual brand helps
marketer to identify tastes and
preferences of consumers effectivel.
• Family Brand : When single brand is used for all
products is called family brand.
• Adoption family brand facilitates for low cost in
advertising and promotion.
• Ex: Godrej, Star, General Electric, Levi Strauss etc.

 
 Brand Equity
• Brand equity is a marketing term that
describes a brand’s value.
• Its added value on product.
• Its a set of assets that adds value on product.
• That value is determined by consumer
perception of and experiences with the brand.
• If people think highly valued on brand, it has
positive brand equity.
Packaging Decision
• Simply, packaging is the act of designing or
producing the package for product .
• In other word, packaging is the process of developing
the container for a product .
• It includes all the activities required for designing and
producing the container or wrapper for a product .
Levels of Package
• Primary package
• Secondary package
• Shipping package or territory package
• It is the first envelop of the product.
• Primary package is the immediate package used immediately after
produced to protect value of product .
• A fruity, the aluminium wrapper inside the container of the
fruity is the primary package. 
• That is disposed only after total urges.
• Secondary packaging is the additional layer that protects the
primary package, and is removed when the product arrives at home,
or is ready to use.
• For example, a tube of toothpaste is contained into a cardboard box.
• Shipping package is the tertiary package which is the external layer
necessary for store, bulky handling and so on. 
 Essentials of Good Packaging
• It should be economical i.e. it should involve least cost to
manufacture, to fill and to remove or to handle, so that it
does not adequately affect the sales price of the product.
• It should be convenience i.e. it should perform all those
functions easily what it is supposed to do.
• It should be informative i.e. it should disseminate all
information to the customers and other parties concerned
regarding brand, use and features of products, place and date
of manufacture, name of manufacturer, etc.
• It should be attractive i.e. a package should be quite
attractive since one of the main objectives of packaging is to
attract customers.
• It should be eco-friendly i.e. it should be environmentally
friendly and reusable.
 Product-Line Strategy

• Product line refers to set of all closely related

product items that organization offers customers for
related activities.
• In other words, a product line can be defined as a
group of interrelated products fulfilling customers
needs and wants.
• Here, product item means specific or distinct item
under a product line.
• In order to expand or improve the product line, a
marketer may adopt any one or more of the
following alternative strategies:
1. Product-line length:
• Product line length refers to the total number of
interrelated items that the company deals in.
• The general thinking is that the number of items
should be optimal or manageable.
• However, the company’s product line length
decision is affected by company objectives.
• Product lines usually tend to lengthen over time.
A. line expansion
• i. Trading up
• Ii. Trading down
• Iii. Stretching both ways
B. line filling
 2.Line contracting or pruning decision:

• Removing one or more items from the

product line causes loss.
• Some items in the line may remove cause loss
or headache to the company.
• When a company thinks that featuring or
modernizing them cannot solve this problem,
the company may drop from the line.
 3.Line modernization decision:

• Although the product line length is optimal, all

the items under the product line may not be
equally effective.
• Some items may be weaker in generating
adequate sales and profits to the company.
• Under such circumstance, company has to
modernize such weak items by maintaining or
improving their quality using modern technology,
or other steps determined by the company.
 4. Line featuring decision:

• Sometimes marketer may select one or few

times in the line to develop them as the
promotional or leader items, because it may
not be possible to modernize all items in the
line.
• By featuring few times, a company can build up
its image in the market.
• This image will be helpful to boost up the sales
of other times to generate adequate profits.
 Product Mix Strategy

• A product mix is the set of all product lines

and items that particular seller offers for the
sale to buyers.
• It is the entire collection of product lines and
items offered by an organization.
• In simple words, product mix indicates a set of
interrelated as well as diverse products offered
by an organization.
• A product mix may have four dimensions: width,
length, depth and consistency.
• 1. Product width refers to total number of product
lines under the product mix the company offers.
• 2. Product length refers to the sum total of all
items in its product mix.
• 3. Product depth refers to sum total of product
items in the particular product line.
• 4. Product consistency refers to how closely relate
the various product lines are in end use, production
requirements, distribution channels, or some other
way.
 Service Product
• Which can not be seen or touched and it does
not have any shape, size color, weight.
• It is also called non-physical product.
• It does not have physical existence.
• For example repair and maintenance, medical
and health service, banking, insurance,
transportation, communication, etc.
 Characteristics of services

• Perishable
• Services are perishable in nature and it doesn’t
have store value.
• For example: - if you do not watch the movie
now, you won’t get a refund of the ticket.
• Intangible
• Products are tangible and services are intangible
in nature. It cannot be seen, feel, taste, hear, or
smell.
• Variability refers to the changes in the quality of
the same service provided by different company.
• For example, an airline does not provide the
same quality service on each trip.
• Inseparable
• Services are inseparable from the point where it
is consumed, and form the provider of the
services.
• Non-measurability
• Like physical items, services do not have
shape, weight, color, design, length, breadth,
etc. therefore, service items cannot be
measured like physical items.
Management of People, Physical Evidences
and Processes
People 
• Excellent customer service personnel who can
provide support with clearly known
expectations to maintaining a high level of
customer satisfaction.  
Process
• procedures and policies that are in place, which
pertains to the company’s service, is an extremely
valuable element to the marketing strategy. 
Physical Evidence
• This refers to reflection of service, and everything
about company, appears from the outside.  
• This should be seen and updated when needed.
THANK YOU