Product Strategy with Indian Examples

Roll No. Name

04 Dhaval Bhoraniya

07 Rohan Brahmbhatt

30 Nidhish Kadia

53 Dhruv Patel

7480

Bhavesh TavethiyaPrakash Zala

Group Members

Objective of Presentation

• To understand

– What is a Product?

– Five Products levels with Suitable Example.

– Classification of Consumer and industrial Products.

– Product Differentiation with Suitable Examples.

– Service Differentiation with Suitable Examples.

– Product hierarchy with Suitable Example.

– Product system and Mix with example of AMUL.

– Product line decision with example of SUZUKI Cars.

– Product mix Pricing with Suitable Example.

What is a Product?• A product is anything that can be offered to a

market to satisfy a want or need, includingphysical goods, services, experiences, events,persons, places, properties, organizations,information, and ideas.

• Theordo Levitt: “Every product have servicecomponent and Every Service have productcomponent.”– Doctor: Medicine

– Car: Maintenance Service

Five Product Levels

Transportation from one place to another.

Brand of the car, looks and design of the car etc.

Decent mileage, proper engine, inflated tyre etc.

After-sale services, insurance policy etc.

Auto Driving, Interactive etc.

Product Classification

Base on

Durability, Tangibility,

and Use

Non- Durable Goods

Durable Goods Service

Consumer Goods Classification

Industrial Goods Classification

Industrial Products

Material & Parts

Raw Material

Farm Products

Natural Products

Manufactured Materials

Component Parts

Component Materials

Capital items

Installation Equipment

Supplies & Services

Maintenance and Repair

Operating Supplies

Product Differentiation• Actually differentiating the company’s market offering from

competitor so that it achieve desire position in consumer’smind to give more consumer value.

Bases of Product Differentiation

Form/ Size Features

Customization

Performance/

Quality

Durability

Reliability

Repairability & After sale service

Style

Services Differentiation

• When the physical product cannot easily be differentiated,the key to competitive success may lie in adding valuedservices and improving their quality.

Bases of Service Differentiation

Ordering Ease

Delivery

InstallationCustomer Training

Customer Consulting

Maintenance & Repair

Return

The Product Hierarchy

Item

Product Type

Product Line

Product Class

Product Family

Need Family

The product hierarchystretches from basicneeds to particular itemsthat satisfy those needs.We can identify six levelsof the product hierarchy,using Cooker as anexample

Cooking

Cooking Utensils

Boiling Utensils

Cooker

Nonstick Cooker

Prestige Omega

Product Systems and Mixes

• A product system is a group of diverse butrelated items that function in a compatiblemanner.– For example, the extensive Nokia Lumia 530 product

system includes headphones and headsets, cables,cases and car accessories it is Product System forNokia Lumia 530.

• A product mix (also called a product assortment)is the set of all products and items a particularseller offers for sale.– A company’s product mix has a certain width, length,

depth, and consistency. These concepts are illustratedProduct Mix of AMUL.

Product Mix of AMUL

MilkBread

SpreadsCheese Beverage Paneer Dahi Ghee Mithai

Amul gold Amulbutter

Processed Cheese

Amul koolFlavored

Milk

Amul malaiPaneer

AmulMasti Dahi

Amul GheeGulab

Jamoon

Amul Taaza Amul LiteAmul

Gouda Cheese

Amul koolCafé

Amul Fresh paneer

AmulProbiotic

DahiSagar Ghee

AmulBasundi

Amul Slim & Trim

Delicious Table

Margarine

Mozzarella Cheese

Amul KoolKoko

Amulflaavyo

AmulBrown

AvsarLadoo

Amul Tea-Specuial

Garlic Butter

Amul KoolMilk

Shaake

AmulYellow (Cow) Ghee

Shrikhand

AmulShakti

AmulStamina

Can

AmulDimond

AmulButtermilk

Amul Lassi

Product Mix Width

Pro

du

ct L

ine

Le

ngt

h

• Product Line: A group of Product offer by single seller, to

single target customer, to satisfy same kind of need,

through same supply chain, at relatively same price is called

product Line.

– Amul have Different Product line Like Milk, Paneer, Ghee, Dahi,

Mithai, Beverages etc.

• Product Mix Width: Number of Product line offer by seller.

– Amul have 8 Product line so, Product Width = 8

• Product line Length: Number of Item in each Product Line

– Amul have 6 Item For Milk category so, Product line Length of Amul

Milk = 6

• Product Mix Depth: refers to how many variants are offeredof each product in the line.

– Amul offer 4 Kind of Flavored Milk.

• consistency of the product mix: Describes how closelyrelated the various product lines are in end use, productionrequirements, distribution channels, or some other way.

• Product Mix Assortment: Total Number of Product inProduct Mix.

– Amul have totally 33 Product in it’s Product Mix.

Product line Decision• Line stretching: occurs when a company lengthens its product line beyond

its current range, whether down-market, up-market, both ways and Line Filling.

Alto K10

A- Star

Wagon R

Celerio

Ritz

Swift

A- Star

Wagon R

Celerio

Ritz

Swift

Ciaz

Alto K10

A- Star

Wagon R

Celerio

Ritz

Swift

Ciaz

Down-MarketStretching

Up-MarketStretching

Both WayStretching

A- Star

Wagon R

Celerio

Ritz

Swift

Initial ProductLine

A- Star

Wagon R

Celerio

Stingary

Ritz

Swift

LineFilling

• Line Modernization: In rapidly changingmarkets, modernization is continuous.

– Companies plan improvements to encouragecustomer migration to higher-valued, higher-priced items.

– It’s important to time improvements so they donot appear too early (damaging sales of thecurrent line) or too late (giving the competitiontime to establish a strong reputation)

– Samsung came up with new version of android,Processer in it’s smart phones over period of time.

Product Mix Pricing

• Product mix pricing is setting price of Product as Part of Product Mix.

• Objective is to set prices that maximizes profits on the total product mix.

• Difficulty arise because of demand and cost interrelationships and different degrees of competition of products.

Pricing Strategy

• Product line pricing: Price of whole line is set to establish perceived quality differences that justify the price differences.

Low Price –low Quality

Average Price – Average Quality

High Price – Superior Quality

• Optional-feature pricing: Many companies offer optional products, features, and services with their main product. Mostly seen in Automobile industry.

Maruti Suzuki Ritz Models

Price (Ex. New Delhi) [in Lakhs]

Lxi 4.39

Vxi 4.79

Zxi 5.03

vdi 5.79

Zdi 6.38

• Captive-product pricing: Base product price is lower where Captive Product price is High.

Printer is Base ProductCartridge is captive product for Printer so, it’s price is high relative to printer price.

• Two-part pricing: Service firms engage in two-part pricing, consisting of a fixed fee plus a variable usage fee.

– Eg. Hospital have Fix room charge and extra charge for Doctor’s Visit, medicine, Food etc.

• By-product pricing: in certain Production Process by Product is resulted from production of main product.

– Eg. Molasses By-Product of Sugar so, Price of Molasses is lower than price of Sugar.

• Product-bundling pricing: Sellers often bundle products and features. Pure bundling occurs when a firm offers its products only as a bundle.

– Eg. Multiplex provide bundle of Film Ticket + Coke + Popcorn at lower price than price of each products individually.