1. Product decisions

2. • Product levels: The customer value heirarchy
i)Core benefit: rest and sleep
ii) Basic product: hotel room
iii)Expected product: room with clean bed, towels,
bath
iv)Augmented product: hotel with travel desk,
business centre,wi-fi,…..
v) Potential product: Future product….internet on
board aircraft?

3. • Product augmentation key to differentiation
• Each augmentation adds cost
• Augmented benefits soon become expected
benefits

4. Product differentiation
• To be branded, products must be differentiated
• Differentiation can be across multiple dimensions:
i) Form: shape, size, physical structure (Crocin tablet, syrup)
ii) Features: Passenger cars (Honda City 1.5 E MT, 1.5 S MT,
1.5 V MT,1.5 V MT Exclusive, 1.5 V AT…)
iii)Performance quality:Low , Average, High, Superior
iv)Conformance quality: consistency in quality
v) Durability
vi)Reliability
vii)Repairability
viii)Style

5. Services differentiation
i) Ease of ordering: online banking
ii) Delivery: Domino’s pizza
iii) Installation: Sun film, wallpaper
iv) Customer training
v) Maintenance and repair

6. The product hierarchy
• Need family- The core need that underlies the existence of
a product Eg: Security
• Product family-All product classes that can satisfy the core
need with reasonable effectiveness Eg: Savings and Income
• Product class-A group of products within the product family
which have functional coherence Eg: Financial instruments
• Product line- A group of products within a product class
that are closely related Eg: Life insurance
• Product type- A group of items within a product line that
share one of several possible forms of the product Eg:
Term life insurance
• Item

7. • Product mix- Width is determined by how
many different product lines the firm carries
• Product line length is the number of items in
the product mix
• Product line depth is the number of variants in
each product

8. Hindustan Unilever Ltd
Home and Perso Foods
nal
care
Person Laun Skin Hair Oral Deo Cosme Tea Coffee Foods Ice
al tics cream
wash
dry care care care
Lux Surf Sunsilk Pepso Axe
dent
Lifeb Excel Fair & Clinic Close Rexon Lakme BBL Bru Kissan Kwalit
Lovely a y
uoy up
Liril Rin Ponds Lipton Knorr
Ham Whe Annap Walls
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Bree
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Dove
Pear
s

9. Packaging and Labeling
• Packaging: All the activities of designing and
producing the container for a product
• Often referred to as the fifth ‘P’ of marketing
• Contributes significantly to branding
• Innovation opportunity

10. Labeling
• Performs several functions:
i) Identification
ii)Description
iii)Advertising and promotion
iv)Legal conformances

11. New products-Challenges
• New product development must to sustain
growth in revenue
• Through acquisition or development
• Acquire companies, brands, patents, licences,
franchises
• Incremental (sustaining) and disruptive
innovation

12. New Product Development
• Idea generation
• Idea screening
• Concept development and testing
• Marketing strategy
• Business analysis
• Product development
• Market testing
• Commercialization

13. Stages in new product adoption
process
• Awareness
• Interest
• Evaluation
• Trial
• Adoption

14. 5 adopter groups
• Innovators (2.5%)
• Early adopters (13.5%)
• Early majority (34%)
• Late majority (34%)
• Laggards (16%)