UNIT –I �INTERPRETATIONS OF PRODUCT

Contents to be Covered

• Meaning of Product
• Product market fit analysis
• Product Levels
• Product Mix
• Product Pruning
• Product Cannibalization
• Types of Product Classification

• 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.

Characteristics of a Product

There are some important characteristics which separates products from services

-Tangibility : Products are tangible , we can touch them.

-Durability: Total useful life of the product.( durable , semi durable)

-Storability : we can store the products according to its expiry date

-Separability : we can separate products from the manufacturer

-Reliability :the consistency of the product performance

Some of the characteristic attributes of a product are

Tangible attributes : size, color, weight, shape, package & etc.

Intangible attributes : quality , brand image , customer service & etc..

Levels/ Layers of products�

• Core Benefit : - The service or benefit the customer is really buying.

Ex:- A hotel guest is buying rest and sleep.

• Basic Product: - The marketer must turn the core benefit into a basic product.

Ex:- A Hotel room includes a bed, bathroom, towels, desk, dresser, and closet.

• Expected Product :- A set of attributes and conditions buyers normally expect when they purchase the product.

Ex:- Hotel guests minimally expect a clean bed, fresh towels, working lamps, etc.

• Augmented Product :- Which exceeds customer expectations.

Ex:- Complementary Break fast

• Potential Product:- Which encompasses all the possible augmentations and transformations the product or offering might undergo in the future.

Ex:- High speed internet access, Fully equipped fitness center

• Product Mix is the set of all products and items a particular seller offers for sale.
• A product mix consists of various product lines.

Ex 1 :- Godrej Agrovet Ltd., has a wide product mix for different markets, Consisting of animal feeds, Agricultural inputs, Palm Oil, Tissue-Culture Planting material

- Under retail brands such as Real Good Chicken and Yummiez.

Ex 2 :- The consumer product portfolio of Nirma Ltd., consists of Fabric care products, Personal care products, Food products and Scouring products

• A Company product mix has certain width, length, depth and consistency.
• The “width” of a product mix refers to how many different product lines the company carries.

Ex:- HUL - Product Mix Width of 11 lines.

Nirma - Product Mix Width of 5 lines

• The “length” of product mix refers to the total number of items in the mix.

Ex:- HUL - 42 items

Nirma – 24 items

- We can also talk about the average length of a line.

- Dividing the total length by the number of lines

Ex:- HUL (42/11= 3.8)

Nirma ( 24/5= 4.8)

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• The “depth” of a product mix refers to how many variants are offered of each product in the line.

Ex:- If Lux comes in four variants (Strawberry & Cream, Peach & Cream, Purple Lotus & Cream, and Lux International) in two sizes, then Lux has a depth of eight (4*2=8)

• 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.

Ex:- HUL’s product lines are consistent in that they are consumer goods that go through the same distribution channels.

• These four product mix dimensions(Width, Length, Depth & Consistency) permit the company to expand its business in four ways.

- It can add new product lines

- It can lengthen each product line.

- It can add more product variants to each product.

- A company can pursue more product line consistency.

Ex:- Wipro

Product Pruning

When to Prune a Product from a Line?�

• When evaluating your product line, whether a product is profitable is not the only reason to consider keeping or dropping it.
• How the product contributes to your growth strategy, brand management and production efforts determine whether you should discontinue it.
• Knowing what to look for in your product mix helps you decide when it’s time to prune your line.

What is Product Cannibalization

• Product cannibalization is the process in which a new product eats away the cash flows earned by an already existing product. That means, when a new product is launched, it may take the cash flow away from an already running product.
• Business decisions must include the cannibalization effect into consideration because ignoring this may lead to huge losses sometimes.