Product decisions

1. Product- Concept, Product Line and
Product Mix
Dr. Pooja
Assistant Professor
Dept. of Commerce
AMPGC, BHU
Product Decisions

2. What is Product
 An article or substance that is manufactured or refined for sale.
 Any tangible or intangible good or service that is a result of a process
and that is intended for delivery to a customer or end user.
 Product is everything that can be offered to market to satisfy a want or
need. Products that are marketed include physical goods, services,
experiences, events, persons, places, properties, organizations,
information and ideas.

3. Product
Philip Kotler: “A product is anything that can be offered to a market for
attention, acquisition, use or consumption. It includes physical objects,
services, personalities, place, organizations and ideas.”
Product is a bundle of physical, chemical and/ or intangible attributes that
have the potential to satisfy present and potential customer wants. In
addition, other elements include the warranty, installation, after sales
service accessories and package.

4. Levels of Product
Potential Product
Augmented
Product
Expected
Product
Basic
Product
Core
Product

5. Levels of Product
• Core Product- The actual service or benefit the customers are really buying
(Mobile- Calling & Text messages)
• Basic product- It turn the core benefit into a basic product (Mobile-Battery,
Charger, USB Cable)
• Expected product– A set of attributes and conditions buyers normally expect
when they purchase this product (Mobile- Alarm, Calendar, Camera, Calculator,
Gallery)
• Augmented product- It exceeds customer expectations (differentiation) (Mobile-
Colour, Size, Design- High resolution front camera instead of rear camera)
• Potential product – It encompasses all the possible augmentations and
transformations the product or the offering might undergo in the future (quad
camera, high quality pictures and videos, high speed gaming performance)

6. Classification of Products
Product
Consumer
Product
Products on the
basis of
Durability
Durable
Products
Non- Durable
Products
Products on the
basis of
Tangibility
Tangible
Products
Intangible
Products-
Services
Products on the
Basis of Use
Convenience
Products
Shopping
Products
Speciality
Products
Unsought
Products
Industrial
Product
Raw Materials
Parts and Inputs
Capital Goods &
Installation
Operating
Supplies

7. Durable and Non Durable Products
• The tangible goods that normally
survive many uses (refrigerators,
clothing).
• Appropriate strategy: it require
more personal selling and
services, command a higher
margin, and require more sells
guarantees.
Durable
Products
• The tangible goods normally
consumed in no or a few uses
(milk and vegetable). These
goods are consumed quickly and
purchased frequently.
Appropriate strategy: to make
them available in many locations,
charge only a small markup, and
advertise heavily to induce trial
and build preference.
Non-Durable
Products

8. Tangible and Intangible Products
• A physical item that can be perceived
by the sense of touch. Examples of a
tangible product include cars, food
items, computers, telephones, etc.
• Many businesses also need to provide
packaging for a tangible product to
provide protection during its
transportation to a retail location.
Tangible
Products
• An intangible product is a product that
can only be perceived indirectly such
as an insurance policy.
• An intangible good is a good that does
not have a physical nature, as
opposed to a physical good (an
object).
• Digital goods such as downloadable
music, mobile apps or virtual goods
used in virtual economies are all
examples of intangible goods.
Intangible
Products-
Services

9. Products by Use
•Product that takes little
thought, is routine, purchased
often, appeals to a large target
market, and the consumer
purchases with little planning
Convenience
Products
•Product that requires
consumer research and
comparison of brands.
•Consumers need time,
planning and efforts to take
the final decision whether to
buy the product or not.
Shopping
Products
•A product of which consumers
are unaware or are not
interested in purchasing.
•A high degree of marketing,
including advertising &
aggressive sales techniques,
necessary due to
unawareness of product
Unsought
Products
•Product that certain
consumers actively seek to
purchase because of unique
characteristics or loyalty to a
specific brand.
•Consumers know what they
want and will spend the time
and effort to get it.
Speciality
Products

10. Industrial Products
• Raw materials are materials
or substances used in the
primary production or
manufacturing of goods.
• Raw materials are
commodities that are bought
and sold on commodities
exchanges worldwide.
Raw
Materials
• These are all the grebe
products that that are
utilized in the process of
production as inputs.
• Good examples are raw
materials and purchased
inputs.
Materials &
Parts
• Supplies are the items that
are never used directly in
the process of production
but they are still needed if
the production is to take
place.
Operating
Supplies
• These are the products that
are never consumed in the
process of production but
they are repeatedly used in
the production process.
• These are the majorly
expensive and long-lived
assets (fixed assets) of an
organization.
Capital
Goods

11. Product Brands of Cadbury India

12. Product Mix
 A product is an item produced or procured to satisfy the needs of the customer. It
is the actual item which is held for sale in the market. A company usually sells
different types of products. These different product brands are also known as
product lines. Combination of all these product lines constitutes the product mix.
 Product mix is the product assortment i.e. the total number of product lines that a
company offers to its customers. The product lines may range from one to many
and the company may have many products under the same product line as well.
 Product mix of a company is made of all product lines and items. It includes the
total number of varieties or models offered by the company.

13. Product Mix- Definitions
• Philip Kotler: “A product mix is the set of all product lines and items that a
particular seller offers forthe sale to buyers.”
• William Stanton: “The product mix is the full list of all products offered for
the sale by the company.”
• Thus, product mix means total number of products items offered by the
company. For example, HMT Company produces watches, machines,
tractors, plants, tools, and equipment’s, and many other products. In each
product group, a number of varieties are offered. The set of all these
products (main range) and product varieties in each range can be said as
product mix.

14. Product Mix
Product Mix- All the Products offered
in Product Lines
Product Width-
Total number of
different product
line (Number of
Product Lines)
Product Length-Total
number of Items within
the product line (Various
brand of each product
i.e., Total Products)
Product Depth-
Number of
variations in each
product in each
product line(Size,
shape, design,
quality, quantity)
Consistency: How
closely products
are linked to each
other. Less the
variation among
products more is
the consistency

15. 1. Product Mix Length
• It refers to the total number of items (in all the product lines) in product
mix.
• For example product mix of Bajaj Company has more than 100 items in
various product lines, such as fans, bulbs and tubes, heaters, motorbikes,
shooters, rich-show, processing machines, and many other ranges.

16. 2. Product Mix Width or Breadth:
• It indicates the total number of product lines a company carries.
• For example, two-wheelers (including various models) constitutes one of
the product lines of Bajaj Company.

17. 3. Product Mix Depth:
• It refers to a number of varieties in forms of sizes, colours, and models
offered within each product line.
• It can be said as the average number of product items offered by the firm
in each product line.

18. 4. Product Mix Consistency:
• It refers to degree to which different product lines are related in one or
other ways. It indicates how closely various product lines are related.
The consistency can be judged on the basis of production requirements,
uses of products, distribution channels, or some other ways.
• For example, product lines of Philips India Ltd., include radios, bulbs and
tubes, different television sets, VCR, CD-DVD player, tape recorders,
etc., can have higher consistency.

19. Product Line
• Product line is a group of product items that can satisfy the same needs
and wants, they have more or less similar features. For example, Cadbury
has four product lines, chocolates, biscuits, candies and beverages.
• A product line is a group of related products all marketed under a single
brand name that is sold by the same company. Companies sell multiple
product lines under their various brand names, seeking to distinguish them
from each other for better usability for consumers.

20. Product Line- Definitions
• Philip Kotler: “Product line is a group of products that are closely related because they
function in similar way, are sold to same customer groups, are marketed through the same type of
outlets, or fall within given price range.” Thus, product line is the group of similar products. The
similarity may be seen in one or more ways. Product line consists of product items belonging to
same class. The definition suggests following five ways the items are closely related:
• They function in similar manner.
• They offer similar benefits, or meet similar expectations.
• They are sold to similar customer groups.
• They are marketed by similar outlets.
• They fall within same price range.

21. Cadbury
Product Mix
Chocolates
Product Line
Cadbury Dairy Milk
Cadbury Dairy Milk Silk
Cadbury Fuse
Cadbury
5 Star
Cadbury Perk
Cadbury Celebrations
Cadbury
Bournville
Biscuits
Product Line
Cadbury Oreo
Cadbury Bournvita
Beverages
Product Line
Cadbury Bournvita
malted drink
Tang-Fruit Flavored
Drink
Candies
Product Line
Cadbury Gems
Cadbury Chocolairs
Cadbury Halls

22. Characteristics of Product Line
1. Product line consists of closely related product items. Difference is only found in terms of colour, size,
shape, model, performance, weight, and capacity.
2. It is a compose of various similar items.
3. Product items are complementary to one another. For example, tube, tyre, and related materials.
4. There is difference in price. For example, Hero Honda charges different price for different models.
5. The purpose of offering similar items in each of the product line may be to attract customers by offering
more varieties, and to create a good image or reputation.
6. Different items of a product line can be manufactured using same technology and/or inputs.
7. Product items in each of the product lines are distributed in same distribution channel. That is, similar
outlets market them.
8. Product items in each product line function in same manner. They need same technical skills to use them.
9. They are sold to similar customer groups. They satisfy needs of the same groups.
10. They have more or less same use or utility. They are used for the same purpose.

23. Cadbury Product Line – Chocolates

24. Cadbury Product Line – Biscuits

25. Cadbury Product Line – Beverages

26. Cadbury Product Line – Candies