M.

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MODULE:II
CH:1-Segmentation, Targeting & Positioning
CH:2-Dealing With Competition
CH:3- Developing Product Strategy
PRESENTED BY
MR. PREM SHARMA
ASST.PROFESSOR-SPCAM(MBA)
CH:1- Segmentation, Targeting & Positioning

Learning Objective
Segmentation:
• Bases of Segmenting Consumer Markets and Business
Markets

Targeting:
• Meaning, effective segmentation criteria, evaluating and
selecting the market segments

Positioning:
• Developing and establishing Brand Positioning
• Differentiation strategies
Bases for Segmenting Consumer Markets

Market segmentation divides a market into

well-defined slices.
A market segment consists of a group of
customers who share a similar set of needs and
wants. The marketer’s task is to identify the
appropriate number and nature of market
segments and decide which one(s) to target.
The major segmentation variables are —
geographic, demographic, psychographic, and
behavioral segmentation
Bases for Segmenting Consumers

Geographic

Demographic

Psychographic Behavioral
1. Geographic Segmentation: Geographic segmentation divides the market into
geographical units such as nations, states, regions, counties, cities, or neighborhoods.
The company can operate in one or a few areas, or it can operate in all but pay
attention to local variations.
2. Demographic Segmentation
 AGE AND LIFE-CYCLE STAGE Consumer wants and abilities change with age.
Toothpaste brands such as Crest and Colgate offer three main lines of products to
target kids, adults, and older consumers.
 LIFE STAGE People in the same part of the life cycle may still differ in their life
stage. Life stage defines a person’s major concern, such as going through a divorce,
going into a second marriage, taking care of an older parent, deciding to cohabit with
another person, deciding to buy a new home, and so on.
 GENDER Men and women have different attitudes and behave differently, based
partly on genetic makeup and partly on socialization.
 INCOME
 GENERATION Each generation or cohort is profoundly influenced by the times in
which it grows up—the music, movies, politics, and defining events of that period.
Members share the same major cultural, political, and economic experiences and
have similar outlooks and values. Marketers often advertise to a cohort by using the
icons and images prominent in its experiences. They also try to develop products and
services that uniquely meet the particular interests or needs of a generational target.
 RACE AND CULTURE Multicultural marketing is an approach recognizing that
different ethnic and cultural segments have sufficiently different needs and wants to
require targeted marketing activities, and that a mass market approach is not refined
enough for the diversity of the marketplace. (Hispanic American, African American,
Asian, LGBT group)
3. Psychographic Segmentation
 Psychographics is the science of using psychology and demographics to better
understand consumers. In psychographic segmentation, buyers are divided into
different groups on the basis of psychological/personality traits, lifestyle, or values.
People within the same demographic group can exhibit very different psychographic
profiles.
 The four groups with higher resources are:
 Innovators—Successful, sophisticated, active, “take-charge” people with high self-
esteem. Purchases often reflect cultivated tastes for relatively upscale, niche-oriented
products and services.
 Thinkers—Mature, satisfied, and reflective people motivated by ideals and who value
order, knowledge, and responsibility. They seek durability, functionality, and value in
products.
 Achievers—Successful, goal-oriented people who focus on career and family. They
favor premium products that demonstrate success to their peers.
 Experiences—Young, enthusiastic, impulsive people who seek variety and excitement.
They spend a comparatively high proportion of income on fashion, entertainment, and
 The four groups with lower resources are:
 Believers—Conservative, conventional, and traditional people with concrete
beliefs. They prefer familiar, country made products and are loyal to established
brands.
 Strivers—Trendy and fun-loving people who are resource-constrained. They favor
stylish products that emulate the purchases of those with greater material wealth.
 Makers—Practical, down-to-earth, self-sufficient people who like to work with
their hands. They seek own country products with a practical or functional
purpose.
 Survivors—Elderly, passive people concerned about change and loyal to their
favorite brands.
4. Behavioral Segmentation
 In behavioral segmentation, marketers divide buyers into groups on the basis of
their knowledge of, attitude toward, use of, or response to a product.
 NEEDS AND BENEFITS Not everyone who buys a product has the same needs or
wants the same benefits from it. Needs-based or benefit-based segmentation is a
widely used approach because it identifies distinct market segments with clear
marketing implications.
 USER AND USAGE Many marketers believe variables related to various aspects
of users or their usage—occasions, user status, usage rate, buyer-readiness stage,
and loyalty status—are good starting points for constructing market segments.
Bases for Segmenting B2B Markets

Demographic Industry, company size, location

Operating Variables Technology, user status, customer capabilities

Purchasing Approach Power structure, nature of existing relationship

Situational Factors Urgency, specific application, size of order

Personal Characteristics Buyer-seller similarity, loyalty, risk attitude

 Market Targeting
 Effective Segmentation Criteria
 Measurable. The size, purchasing power, and characteristics of the segments
can be measured.
 Substantial. The segments are large and profitable enough to serve. A segment
should be the largest possible homogeneous group worth going after with a
tailored marketing program. It would not pay, for example, for an automobile
manufacturer to develop cars for people who are less than four feet tall.
 Accessible. The segments can be effectively reached and served.
 Differentiable. The segments are conceptually distinguishable and respond
differently to different marketing-mix elements and programs. If married and
unmarried women respond similarly to a sale on perfume, they do not
constitute separate segments.
 Actionable. Effective programs can be formulated for attracting and serving
the segments.
Michael Porter five force model
 Michael Porter has identified five forces that determine the intrinsic long-run
attractiveness of a market or market segment as under:
1. Threat of intense segment rivalry—A segment is unattractive if it already
contains numerous, strong, or aggressive competitors. It’s even more
unattractive if it’s stable or declining. These conditions will lead to frequent price
wars, advertising battles, and new-product introductions and will make it
expensive to compete.
2. Threat of new entrants—The most attractive segment is one in which entry
barriers are high and exit barriers are low.54 Few new firms can enter the
industry, and poorly performing firms can easily exit. When both entry and exit
barriers are high, profit potential is high, but firms face more risk because poorer-
performing firms stay in and fight it out. When both entry and exit barriers are
low, firms easily enter and leave the industry, and returns are stable but low.
3. Threat of substitute products—A segment is unattractive when there are actual
or potential substitutes for the product.
4. Threat of buyers’ growing bargaining power—A segment is unattractive if
buyers possess strong or growing bargaining power.
5. Threat of suppliers’ growing bargaining power—A segment is unattractive if
Evaluating and Selecting Segments
 FULL MARKET COVERAGE With full market coverage, a firm attempts to
serve all customer groups with all the products they might need. Only very large
firms such as Microsoft (software market), General Motors (vehicle market),
and Coca-Cola (nonalcoholic beverage market) can undertake a full market
coverage strategy. Large firms can cover a whole market in two broad ways:
through differentiated or undifferentiated marketing.
 MULTIPLE SEGMENT SPECIALIZATION With selective specialization, a
firm selects a subset of all the possible segments, each objectively attractive and
appropriate. There may be little or no synergy among the segments, but each
promises to be a moneymaker.
 SINGLE-SEGMENT CONCENTRATION With single-segment concentration,
the firm markets to only one particular segment.
 INDIVIDUAL MARKETING The ultimate level of segmentation leads to
“segments of one,” “customized marketing,” or “one-to-one marketing.” Today,
customers are taking more individual initiative in determining what and how to
buy. They log onto the Internet; look up information and evaluations of product
or service offerings; conduct dialogue with suppliers, users, and product critics;
and in many cases design the product they want
 Developing Brand Positioning
 Positioning is the act of designing a company’s
offering and image to occupy a distinctive place in
the minds of the target market.
 The goal is to locate the brand in the minds of
consumers to maximize the potential benefit to the firm.
 A good brand positioning helps guide marketing strategy
by clarifying the brand’s essence, identifying the goals it
helps the consumer achieve, and showing how it does so
in a unique way.
 Everyone in the organization should understand the
brand positioning and use it as context for making
decisions.
 Determining a Competitive Frame of Reference
 The competitive frame of reference defines which other brands a brand
competes with and therefore which brands should be the focus of competitive
analysis.
 IDENTIFYING COMPETITORS
 A good starting point in defining a competitive frame of reference for brand
positioning is to determine category membership—the products or sets of
products with which a brand competes and which function as close substitutes.
 E.g. PepsiCo knows Coca-Cola’s Dasani is a major bottled-water competitor for
its Aquafina brand; Citigroup knows Bank of America is a major banking
competitor.
 ANALYZING COMPETITORS
 Once a company has identified its main competitors and their strategies, it must
ask: What is each competitor seeking in the marketplace? What drives each
competitor’s behavior? Many factors shape a competitor’s objectives, including
size, history, current management, and financial situation.
 If the competitor is a division of a larger company, it’s important to know
whether the parent company is running it for growth or for profits, or milking it.
 Finally, based on all this analysis, marketers must formally define the
competitive frame of reference to guide positioning.
 Identifying Optimal Points-of-Difference

and Points-of-Parity
POINTS-OF-DIFFERENCE
 Points-of-difference (PODs) are attributes or benefits that consumers strongly
associate with a brand, positively evaluate, and believe they could not find to the
same extent with a competitive brand. Some examples are Apple (design, ease-of-use,
and irreverent attitude), Nike (performance, innovative technology, and winning).
 Three criteria determine whether a brand association can truly function as a point-of-
difference—
1. Desirable to consumer. Consumers must see the brand association as personally
relevant to them. The Westin Stamford hotel in Singapore advertised that it was the
world’s tallest hotel, but a hotel’s height is not important to many tourists. Consumers
must also be given a compelling reason to believe and an understandable rationale for
why the brand can deliver the desired benefit.
2. Deliverable by the company. The company must have the internal resources and
commitment to feasibly and profitably create and maintain the brand association in
the minds of consumers. The product design and marketing offering must support the
desired association.
3. Differentiating from competitors. Finally, consumers must see the brand association as
distinctive and superior to relevant competitors
POINTS-OF-PARITY
Points-of-parity (POPs), on the other hand,
are attribute or benefit associations that are
not necessarily unique to the brand but may in
fact be shared with other brands. These types of
associations come in two basic forms: category
and competitive
Differentiation Strategies
 To build a strong brand and avoid the commodity trap, marketers must start with the
belief that you can differentiate anything.
 Competitive advantage is a company’s ability to perform in one or more ways that
competitors cannot or will not match.
 MEANS OF DIFFERENTIATION
 Employee differentiation. Companies can have better-trained employees who
provide superior customer service
 Channel differentiation. Companies can more effectively and efficiently design
their distribution channels’ coverage, expertise, and performance to make buying
the product easier and more enjoyable and rewarding
 Image differentiation. Companies can craft powerful, compelling images that
appeal to consumers’ social and psychological needs
 Services differentiation. A service company can differentiate itself by designing a
better and faster delivery system that provides more effective and efficient solutions
to consumers. There are three levels of differentiation.29 The first is reliability:
Some suppliers are more reliable in their on-time delivery, order completeness, and
order-cycle time. The second is resilience: Some suppliers are better at handling
emergencies, product recalls, and inquiries. The third is innovativeness: Some
suppliers create better information systems, introduce bar coding and mixed pallets,
and in other ways help the customer.
CH-2: Dealing with Competition

Learning Objective
Competitive Strategies – Leaders,
Challengers, Followers, Niche
Product Life Cycle (PLC) Strategies
Hypothetical Market Structure
How can market leaders expand the total market and defend market share

 Expanding total market demand

 New Customers (market penetration, new market
segment, geographical-expansion)
 More Usage (Additional Opportunities to Use the
Brand ,New Ways to Use the brand )
 Protecting Market share
 Proactive Marketing: In satisfying customer needs,
A responsive marketer finds a stated need and fill it,
an anticipative marketer looks ahead to needs
customer may have in future and a creative marketer
discovers solutions customer did not ask for.
1. Position Defender
 The position defense is the simplest defensive strategy
 It simply involves trying to hold your current position in the
market.
 To do this, you simply continue to invest in your current markets
and attempt to build your brand name and customer loyalty.
 Only negative aspect of this strategy is that it can make you a
target for new entrants to the market.
 Example – Rin soap by HUL V/S Tide by P&G

2. Flank
 Defending the market share by entering new market and
diversification.
 If you lose your market share in the existing market you can
make up for it in these new markets.
 Negative aspect is that there are chances of losing main focus.
 Example – FOGG deodorants
3. Preemptive Defense
 This strategy involves attacking a competitor before you
can get attacked by it.
 For instance, many successful private banks in India are
yet to surpass State Bank of India’s huge market
share.SBI has commanded market leadership for several
decades, and it keeps thumping its footprint time and
again with new products or services, or by increasing its
branches and ATMs – wherever and whenever possible.
4. Counteroffensive Defense
 This strategy involves attacking your competitor at its
weakest point when you are attacked.
 An ideal example of counteroffensive defense is the
launch of Lexus by Toyota to challenge Mercedes’
challenge.
5. Mobile defense
 Mobile defense is a diversification or defensive
strategy embraced by companies when current
segment operations are likely to take a hit in the
near future.
 Companies take a “prevention is better than cure”
approach and create a buffer for possible losses
going forward.
 For example, a car tyre manufacturer may start
manufacturing car batteries if the company senses
saturation and dwindling sales in the tyre industry.
This is expanding business into related territories.
6. Contraction Defense
 Established companies, over a period, realize they cannot remain
market leaders in every market segment they enter or have
enjoyed presence in. As a result, they abandon unprofitable market
segments or territories, for financial and branding reasons. This
defensive strategy is called contraction defense
 A firm would typically withdraw its resources from its weaker
footholds and channelize the saved energy into its stronger or
profitable market segments.
 For example, Samsung dominates the mobile phone and television
industry, but not the camera and laptop computers segment. This
could be due to huge competition from Nikon and Canon (camera)
and Apple, Asus, Lenovo, etc. (laptops). Samsung, under these
scenarios, may choose to focus more on its stronger markets by
taking a voluntary exit from its not-so-profitable domains
 Another example TATA’s sold Hamam & Mira brand Soap and
Lakme to HUL.
How should market challengers Attack Market Leaders

Define the strategic objective and

opponents
It can attack the Market Leader
It can attack firms its own size that are not
doing the job and are underfinanced
 It can attack small local and regional firms
 Choose a general attack strategy/Offensive strategy
1. Frontal Attack
 Attacking a competitor head-on
 Attacking with similar products, price, quality, promotion
& distribution.
 Highly risky unless attacker has a clear advantage
 Focused on competitors strength rather than weakness
 For Example, Goodnight v/s other mosquito repellent

2. Flank Attack
 It is a marketing strategy employed by firm to capture the
market which is not well served by established players. Flank
attack targets competitor’s weak spots.
 E.g In 1980s, Canon took over Xerox’s copier market by
focusing on small size copier market that could not afford
Xerox’s large copiers.
3. Encirclement Attack
Combination of frontal & flank attack.
Attacker must have superior resources.
 Surrounding with various brands so as to
make competitor difficult to defend
Defender’s attention gets spread across
various products making him harder to
defend
Example – Maruti Suzuki
 4. Bypass Attack
 Bypassing the enemy altogether to attack easiar market instead offers
three lines of apparoach
i. Diversifying into unrelated products
ii. Diversifying into new geographical market
iii. Leapfrogging into new technologies.
 E.g Pepsi has used bypass strategy over Coke by;
i. Rolling Aquafina before coke launch Dasani
ii. Purchasing Tropicana over Coke’s Minute maid
iii. Purchasing Quaker oats
5. Guerrilla Attack
 It consists of small, intermittent attacks and occasional legal action to
harass the opponent and eventually secure permanent footholds.
 The market challenger uses a variety of tactics in its attack including
price discounts, cheaper goods, prestige goods, product innovation,
variety in products (a larger range), and improved services.
How can market followers compete effectively

 Theodore Levitt argues that a strategy of Product imitation

might be as profitable as a strategy of product innovation.
 Strategies of Market Follower:
1. Counterfeiter: Duplicate the leader’s products and packages
and sell it on black market. E.g. Music firm, Apple, Rolex etc
2. Cloner: It emulates the leader’s products, name and
packaging with slight variation.
3. Imitator: It copies some things from the leader but
differentiate on packaging, advertising, pricing or location.
4. Adaptor: They takes the leader’s products and adapts or
improve them.
Market-Niche Strategies
 Companies in market niches intend to dominate
specific segments. These are generally smaller
companies that can’t effectively compete
against market leaders for a variety of reasons,
but can reach their business goals through
focusing on differentiating factors that speak to
highly specific and targeted consumer groups.
 Such companies tend to offer high value,
charge a premium price, achieve lower
manufacturing cost, and shape a strong
corporate culture and vision.
 PLC marketing strategies
 A company’s positioning and differentiation strategy
must change as the product, market, and competitors
change over the product life cycle(PLC) When we say
that a product has a life cycle we assert four things:
i. Products have a limited life.
ii. Products sales pass through distinct stages, each
posing different challenges, opportunities and
problems to the seller.
iii. Profits rise and fall at different stages of the product
life cycle.
iv. Products require different marketing, financial,
manufacturing, purchasing, and human resource
strategies in each life – cycle stages.
CH-3: Developing Product Strategy

Learning Objective
Product characteristics and Classification
 Product hierarchy
Product system and mix
 Product Line and Length decisions
 Packaging, Labeling and Warranties
Product Characteristics and Classifications

Many people think a product is tangible, but a

product is anything that can be offered to a
market to satisfy a want or need, including
physical goods, services, experiences, events,
persons, places, properties, organizations,
information, and ideas.
Product Levels: The Customer-Value
Hierarchy In planning its market offering, the
marketer need to address five product levels.
Each level adds more customer value, and the
five constitute a customer-value hierarchy.
 The fundamental level is the core benefit: the service or benefit the
customer is really buying. A hotel guest is buying rest and sleep. The
purchaser of a drill is buying holes. Marketers must see themselves as
benefit providers.
 At the second level, the marketer must turn the core benefit into a
basic product. Thus a hotel room includes a bed, bathroom, towels,
desk, dresser, and closet.
 At the third level, the marketer prepares an expected product, a set
of attributes and conditions buyers normally expect when they
purchase this product. Hotel guests minimally expect a clean bed, fresh
towels, working lamps, and a relative degree of quiet.
 At the fourth level, the marketer prepares an augmented product
that exceeds customer expectations. In developed countries, brand
positioning and competition take place at this level. In developing and
emerging markets such as India and Brazil, however, competition takes
place mostly at the expected product level.
 At the fifth level stands the potential product, which encompasses
all the possible augmentations and transformations the product or
offering might undergo in the future. Here is where companies search
for new ways to satisfy customers and distinguish their offering.
Product Classifications

 Marketers classify products on the basis of durability, tangibility, and use

(consumer or industrial). Each type has an appropriate marketing-mix
strategy.
 DURABILITY AND TANGIBILITY Products fall into three groups
according to durability and tangibility:
1. Nondurable goods are tangible goods normally consumed in one or a
few uses, such as beer and shampoo. Because these goods are purchased
frequently, the appropriate strategy is to make them available in many
locations, charge only a small markup, and advertise heavily to induce
trial and build preference.
2. Durable goods are tangible goods that normally survive many uses:
refrigerators, machine tools, and clothing. Durable products normally
require more personal selling and service, command a higher margin, and
require more seller guarantees.
3. Services are intangible, inseparable, variable, and perishable products
that normally require more quality control, supplier credibility, and
adaptability. Examples include haircuts, legal advice, and appliance
repairs.
 CONSUMER-GOODS CLASSIFICATION When we classify the vast array of
consumer goods on the basis of shopping habits, we distinguish among
convenience, shopping, specialty, and unsought goods.
I. The consumer usually purchases convenience goods frequently, immediately,
and with minimal effort. Examples include soft drinks, soaps, and
newspapers.
 Staples are convenience goods consumers purchase on a regular basis. A buyer
might routinely purchase Heinz ketchup, Crest toothpaste, and Ritz crackers.
 Impulse goods are purchased without any planning or search effort, like
candy bars and magazines.
 Emergency goods are purchased when a need is urgent—umbrellas during a
rainstorm, boots and shovels during the first winter snow. Manufacturers of
impulse and emergency goods will place them where consumers are likely to
experience an urge or compelling need to purchase.
II. Shopping goods are those the consumer characteristically compares on such
bases as suitability, quality, price, and style. Examples include furniture,
clothing, and major appliances. Homogeneous shopping goods are similar in
quality but different enough in price to justify shopping comparisons.
Heterogeneous shopping goods differ in product features and services that may be
more important than price. The seller of heterogeneous shopping goods carries a
wide assortment to satisfy individual tastes and trains salespeople to inform and
III. Specialty goods have unique characteristics or
brand identification for which enough buyers are
willing to make a special purchasing effort. Examples
include cars, stereo components, and men’s suits. A
Mercedes is a specialty good because interested buyers
will travel far to buy one. Specialty goods don’t require
comparisons; buyers invest time only to reach dealers
carrying the wanted products. Dealers don’t need
convenient locations, although they must let prospective
buyers know where to find them.
IV. Unsought goods are those the consumer does not
know about or normally think of buying, such as
smoke detectors. Classic examples of known but
unsought goods are life insurance, cemetery plots, and
gravestones. Unsought goods require advertising and
personal-selling support.
 INDUSTRIAL-GOODS CLASSIFICATION We classify industrial goods in
terms of their relative cost and how they enter the production process: materials
and parts capital items, and supplies and business services.
I. Materials and parts are goods that enter the manufacturer’s product
completely. They fall into two classes: raw materials, and manufactured materials
and parts.
 Raw materials fall into two major groups: farm products (wheat, cotton,
livestock, fruits, and vegetables) and natural products (fish, lumber, crude
petroleum, iron ore). Farm products are supplied by many producers, who turn
them over to marketing intermediaries, who provide assembly, grading, storage,
transportation, and selling services.
 Manufactured materials and parts fall into two categories: component materials
(iron, yarn, cement, wires) and component parts (small motors, tires, castings).
Component parts enter the finished product with no further change in form, as
when small motors are put into vacuum cleaners, and tires are put on
automobiles.
II. Capital items are long-lasting goods that facilitate developing or managing
the finished product. They include two groups: installations and equipment.
 Installations consist of buildings (factories, offices) and heavy equipment
(generators, drill presses, mainframe computers, elevators).
 Equipment includes portable factory equipment and tools (hand tools, lift trucks)
and office equipment (personal computers, desks). These types of equipment
III. Supplies and business services are
short-term goods and services that
facilitate developing or managing the
finished product. Supplies are of two kinds:
maintenance and repair items (paint, nails,
brooms) and operating supplies (lubricants,
coal, writing paper, pencils).
Business services include maintenance and
repair services (window cleaning, copier
repair) and business advisory services
(legal, management consulting, advertising).
The Product Hierarchy
 The product hierarchy stretches from basic needs to particular items that satisfy
those needs. We can identify six levels of the product hierarchy, using life
insurance as an example:
 1. Need family—The core need that underlies the existence of a product family.
Example: security.
 2. Product family—All the product classes that can satisfy a core need with
reasonable effectiveness. Example: savings and income.
 3. Product class—A group of products within the product family recognized as
having a certain functional coherence, also known as a product category. Example:
financial instruments.
 4. Product line—A group of products within a product class that are closely related
because they perform a similar function, are sold to the same customer groups, are
marketed through the same outlets or channels, or fall within given price ranges. A
product line may consist of different brands, or a single family brand, or individual
brand that has been line extended. Example: life insurance.
 5. Product type—A group of items within a product line that share one of several
possible forms of the product. Example: term life insurance.
 6. Item (also called stock-keeping unit or product variant)—A distinct unit within a
brand or product line distinguishable by size, price, appearance, or some other
attribute. Example: Prudential renewable term life insurance.
Product Systems and Mixes
 A product system is a group of diverse but related
items that function in a compatible manner. For
example, the extensive iPod product system
includes headphones and headsets, cables and
docks, armbands, cases, power and car
accessories, and speakers.
 A product mix (also called a product assortment)
is the set of all products and items a particular
seller offers for sale.
A company’s product mix has a certain width,
length, depth, and consistency. These concepts
are illustrated in Table for selected HUL
consumer products.
Product Mix: Hindustan Unilever Limited

Food Brands Home Care Personal Care Water

Purifier
Magnum Magic – (water Tresemme for hair care Pure-it
Modern bread saver) Vaseline lotions, jelly for skin
Kwality Wall Vim dishwash Sure anti-perspirant
Knorr soups Surf Excel Sunsilk shampoo, Rexona
Lipton tea washing powder soap
Kissan jams, sauce Sunlight washing Pond’s cream and talc
Brooke Bond tea powder Pepsodent toothpaste, Pears
Bru coffee Rin detergent soap
Annapurna atta Domex Lux body wash, soap
and salt Comfort Liril soap
Cif Lifebuoy handwash and soap
Wheel detergent Lakme beauty merchandises
Hamam soap, Fair& Lovely
Dove hair-care range
Close-up toothpaste
Clinic Plus oil and shampoo
Axe soap, deodorant and after-
shaving lotion
 The width of a product mix refers to how many different
product lines the company carries. Table shows a product mix
width of four lines.
 The length of a product mix refers to the total number of items
in the mix. In Table, it is 35.
 The depth of a product mix refers to how many variants are
offered of each product in the line. Ex. Vim dish wash came
in two scents (Lemon & neem) two formulations (liquid and
soap).
 The consistency of the product mix describes how closely
related the various product lines are in end use, production
requirements, distribution channels, or some other way.
HUL’s product lines are consistent in that they are consumer
goods that go through the same distribution channels. The
lines are less consistent in the functions they perform for
buyers.
Packaging, Labeling, Warranties,
and Guarantees

Some product packages—such as the Coke bottle

and Red Bull can—are world famous.
 Many marketers have called packaging a fifth P,
along with price, product, place, and promotion.
Most, however, treat packaging and labeling as
an element of product strategy.
 Warranties and guarantees can also be an
important part of the product strategy and often
appear on the package
Packaging
 Packaging includes all the activities of designing and producing the
container for a product.
 Packages might have up to three layers. Cool Water cologne comes in a bottle
(primary package) in a cardboard box (secondary package) in a corrugated
box (shipping package) containing six dozen bottles in cardboard boxes.
 The package is the buyer’s first encounter with the product. A good package
draws the consumer in and encourages product choice. In effect, they can act
as “five-second commercials” for the product.
 Various factors contribute to the growing use of packaging as a marketing tool:
 Self-service. An increasing number of products are sold on a self-serve basis.
 Consumer affluence. Rising affluence means consumers are willing to pay a
little more for the convenience, appearance, dependability, and prestige of
better packages.
 Company and brand image. Packages contribute to instant recognition of the
company or brand. In the store, they can create a billboard effect, such as
Garnier Fructis with its bright green packaging in the hair care aisle.
 Innovation opportunity. Unique or innovative packaging such as resealable
spouts can bring big benefits to consumers and profits to producers.
 Packaging must achieve a number of objectives:
1. Identify the brand.
2. Convey descriptive and persuasive information.
3. Facilitate product transportation and protection.
4. Assist at-home storage.
5. Aid product consumption.
 To achieve these objectives and satisfy consumers’ desires, marketers must
choose the aesthetic and functional components of packaging correctly.
 Aesthetic considerations relate to a package’s size and shape, material,
color, text, and graphics. There are a number of factors and criteria in each
area.
 Color is a particularly important aspect of packaging and carries different
meanings in different cultures and market segments
 Packaging updates or redesigns can occur frequently to make the brand
more contemporary, relevant, or practical.
 After the company designs its packaging, it must test it. Engineering tests
ensure that the package stands up under normal conditions; visual tests,
that the script is legible and the colors harmonious; dealer tests, that
dealers find the packages attractive and easy to handle; and consumer
tests, that buyers will respond favorably. Eye tracking by hidden cameras
Labeling
 The label can be a simple attached tag or an elaborately designed graphic that is part of
the package. It might carry a great deal of information, or only the brand name. Even if
the seller prefers a simple label, the law may require more.
 A label performs several functions.
 First, it identifies the product or brand—
 The label might describe the product: who made it, where and when, what it contains,
how it is to be used, and how to use it safely.
 Finally, the label might promote the product through attractive graphics. Advanced
technology allows 360-degree shrink-wrapped labels to surround containers with bright
graphics and accommodate more product information, replacing glued-on paper labels.
 A long history of legal concerns surrounds labels, as well as packaging. In 1914, the
Federal Trade Commission Act held that false, misleading, or deceptive labels or
packages constitute unfair competition.
 The Fair Packaging and Labeling Act, passed by Congress in 1967, set mandatory
labeling requirements, encouraged voluntary industry packaging standards, and allowed
federal agencies to set packaging regulations in specific industries.
 The Food and Drug Administration (FDA) has required processed-food producers to
include nutritional labeling that clearly states the amounts of protein, fat, carbohydrates,
and calories contained in products, as well as vitamin and mineral content as a
percentage of the recommended daily allowance. The FDA has also taken action against
potentially misleading uses of such descriptions as “light,” “high fiber,” and “low fat.”
Warranties and Guarantees
 Warranties are formal statements of expected
product performance by the manufacturer. Products
under warranty can be returned to the manufacturer
or designated repair center for repair, replacement,
or refund. Whether expressed or implied, warranties
are legally enforceable.
 Many sellers offer either general or specific
guarantees. A company such as Procter & Gamble
promises general or complete satisfaction without
being more specific—”If you are not satisfied for
any reason, return for replacement, exchange, or
refund.”
THANK YOU