Product: A good, service, or idea including all the tangibles and intangibles

provided in an exchange between buyer and seller. A product characteristics

include not only its physical aspects but also its function, brand name, image,
packaging, warranty, and price, as well as the provider’s reputation and customer
service policy.

Market generally divide products into two broad categories:

1. Consumer products.
2. Industrial products.
❖ Consumer products: A good or service used for personal or family
consumption.

Marketers classify consumer products according to customer’s buying behavior.

1. Convenience products: It involves inexpensive goods and services that
consumers buy often, without much thought or effort, are convenience
products. Example: Milk, Bread, Soft drinks etc..
2. Shopping products: It is a kind of product that consumers will spend time, effort
and energy to find and obtain it. For example: Furniture, TV, VCR etc..
Before purchasing these products consumers generally gather information about
different brands, style, visit different stores, read advertise, read reviews on online.
3. Specialty product: Goods and services that have specific attributes desired by a
particular group of consumers are known as Specialty product.
Buyers go considerable trouble to obtain a specialty product, no matter what the
price or location. Consumers of this kind of product do not want to accept other
similar products in stead of their preferable branded product. Specialty product can
be expensive and unique. For example : iPhone, BMW car etc..

❖ Industrial Products: A good or service used by an organization in producing

other goods or services or in carrying out its operation. For example different
parts of cars are industrial product which is used by car industry.
 Classification of Services:
1.Degree of Labor intensiveness: services such as hair styling , education, and
health care require a great amount of human labor. Labor- intense services are
especially difficult to standardize.
2. Degree of customer contact: High contact services such as real estate agencies,
involve frequent interactions with customers. The consumer must be present for
such services to performed.
3. Skill of the service provider: some services require professionals, such as lawyers
, physicians, or accountants, etc..
4. Goal of the service provider: Not all service organization are profit oriented.
Universities, charities, libraries, and some clinics are a few examples of nonprofit
service organization. Their goal is spreading knowledge which is different goal than
other service organization.
Product line: A group of related products that are considered a unit because of
marketing, technical , or use similarities . A product line is a group of related
products all marketed under a single brand name that is sold by the same
company..
For example, a cosmetic company that's already selling a high-priced product
line of makeup (that might include foundation, concealer, powder, blush, eyeliner,
eye shadow, mascara, and lipstick) under one of its well-known brands might
launch a product line under the same brand name but at a lower price point.

Another example is PRAN introduces different product like PRAN soft drink, PRAN
food, PRAN masala etc.. are PRAN’S product line.
Product Mix: The total group of products a firm offers for sale, or all the firms
product line. A firm may have several product line for example Unilever has
multiple product line under different name.
 Look at figure 14.3 from the book

Advantages of offering product line

They can use their know-how, resources, and experience to effectively produce
and market new similar products.
Similar product helps to promote each other.
Marketer’s can stretch their advertising Budget by emphasizing an entire
product line in an advertising campaign.
Advantages of offering Product Mix:
Firm’s with multiple product lines often find themselves in a better position to
adapt to changes in economic conditions, technology, or consumer needs.
Whether they offer a few similar products or many diverse one’s, firms face
numerous decisions in developing and managing their products. The managing
tasks include:
❖ They must determine which product to offer
❖ Must continue to develop new ones.
❖ Need to modify products in response to competition and changing consumer
preferences.
❖ Firm’s also must determine when to stop offering certain products.
 Developing new products

Developing new products with high growth potential is not simple task. Products
fail for many reason’s for example lack of research, design problems, poor timing in
the product introduction etc.. But firm’s can reduce this risks through a well
planned , thorough product development process.

Look at figure 14.4 from the book

1.Generating ideas: it is the road to a new product offering which begins with
finding ideas that fit with the organization goals and objectives. Ideas generally
comes from firm’s engineers and researchers or from outside sources such as
customers, competitors, or consultants.

2. Screening ideas: firm’s generate many ideas in the initial step but every idea can
not be taken. The ideas need to screened before the firm will pursue it. For getting
passed in screening step an idea must be matched with firms goal and objectives,
idea has to be obtainable.

3.Business analysis: At this stage, the firm estimates the market potential of the
offering product. What are the expected costs, sales, and profits? If management
believes the product will make enough profit to justify the costs, the idea will
advance to the product development phase.
4. Product development: here firms develop a working model of the product. They
examine the feasibility of making and offering the product on a large scale. Some
ideas are rejected at this stage because the production costs are too high to bring
the product to market.

5. Test marketing: Before full scale introduction of a new product, a firm introduces
it in a selective areas to a part of the market that represent the entire market. It
generally done to see the reaction of the consumer’s to the product. Sometimes
test marketing uncovers a weakness of the product., price, promotion or
distribution that can be adjusted before introduction to the entire market.

6. Commercialization: when a product performs well in test marketing stage, the

firm generally begins the process of production and distribution to the entire
market.
 The product life cycle
Like living things, product go through several stages of life which is known as the
product life cycle theory. it is the theoretical life of a product, consisting of four
stages: Introduction, growth, maturity, and decline.

Look at the figure 14.5 from the book

1. Introduction: It is the first stage of a product life cycle. In this stage a firm
▪Makes the new product available to customers.
▪Customer become aware of the product.
▪Sales rise slowly.
▪Profits are low in this stage as the firm must recover the costs of developing and
marketing the product.
Challenges that manager faces:
▪ They must develop and carry out promotional programs to inform potential
customers about the product’s availability and features.
▪ Marketing manager must monitor sales, which may be slow in this stage.
▪ Marketing manager needs to make early adjustments in the product or
promotional effort if needed.
▪ Many product don’t survive in this stage.
2. Growth: In this stage
▪ sales grow rapidly.
▪ The product begins to generate profit.
▪ Competitor’s, seeing an opportunity, are likely to enter the market with similar
products during this stage.
▪ Firm may reduce the price of the product in this stage because of this
competition and decrease production costs.

Challenges that manager faces:

▪ A product in growth stage usually face intense competition from similar
offerings.
▪ Firms must rely heavily on repeat purchases for continued sales growth.
3.Maturity: in this stage
▪ Sales peak, as profits continue to decline.
▪ As other products are introduced with new features and improvements, the
product may become somewhat outdated.
▪ Example: color television, video recorders etc..
Challenges that manager faces:
▪ Intense competition from many different firms forces some product out of the
market.
▪ Company may cut prices further and increase their promotion budget to
compete for customers.
▪ They also may try product improvements, new package design, and changes in
style to encourage consumer to keep buying the product.
4. Decline: In this stage
▪ Sales falls rapidly
▪ Profits also continue to fall.
▪ Additional price cutting leads to loss.
▪ Consumer often start to prefer new products in earlier stages of their life cycle
that provide greater satisfaction or meet different needs or wants.
▪ For example : electric typewriter are in declining stage.
Challenges that manager faces:
▪ Managers must decide at which point to eliminate a product nearing the end of
its life cycle.
▪ Sometimes firm generate a profit from decline- stage by reducing promotional
costs and selling to the most profitable customers.
 Extending the product life cycle

Ideally firms would like their products to remain forever in the growth stage, when
profits are highest. Firms can extend the life cycle of a product in several ways.

1. Increasing the frequency of use: Marketers commonly try to keep their product
sales growing by encouraging consumers to use their goods and services more.
For example in some markets, Coca-Cola has promoted Coke as a morning
drink to replace coffee or tea.

2. Identifying new users: Another way to extend a product’s growth stage is to

identify new target markets and promote the product to them. For example
Oreo cookies and Frosted Flakes cereal, usually kids’ fare, have been targeted
to adults.
3. Finding new uses: Marketer's sometimes maintain and increase sales by
showing consumers other ways to use the product. For example: with the
popularity of microwave ovens, Campbell soup is promoting several of its soups as
toppings for baked potatoes.

4.Product Modification: It is the changing of one or more of a product’s features as

a strategy to extend it’s life cycle. For example with the microcomputer
technology Toshiba enabled it’s microwave oven to select a power level for
cooking based on the weight and density of the food.
 Creating Product Identification

Brand: Brand is a name, sign, symbol, or design a company uses to distinguish its
product from other’s.

Brand Name: The part of a product’s brand that can be spoken is called a brand
name. For example AT&T brand includes the brand name design, its stylized globe.
 Brand Loyalty: Consumers frequently buy only their favorite brands of certain
products. They will not switch brands even if an alternative is offered at a lower
price . So brand loyalty is the extent to which a consumer prefers a particular
brand.
Marketers measure consumers’ brand loyalty at three stages:
1. Brand recognition: Means consumer are familiar with a manufacturer’s
product. Buyers are more likely to choose a brand they recognize than an
unfamiliar one.
2. Brand preference: consumers will buy the product if it is available.
3. Brand insistence: Buyers will not accept a substitute for their favorite brand.
Packaging: It is the development of a container and a graphic design for a product.
It is important to both consumer and manufacturers.
Originally, packages were designed mostly for their functional value which is to
protect products from damage or spoilage. But today packaging also has
significance as a marketing tool. To develop an appealing package that will catch
the buyer’s eye, marketers consider not only functional but also shape, color, size,
and graphic design.

Labeling: Labeling is the display of important information on a product package. It

provides information regarding contents, size, weight, quantity, ingredients,
direction for use, shelf life and any health hazards or dangers of improper use.
 Pricing

Price: the value that buyers exchange for a product in the marketing transaction.
Pricing objectives
Before establishing prices, marketing managers must decide their pricing
objectives.
1. Market Share: A firm’s market share is its percentage of the total industry sales
in graphical area where it sells its products. Maintaining or increasing market
share is common pricing policy. An increase in sales may help a company
reduce its production costs and achieve higher profits.

2. Profit: The objective of many companies is to maximize profit. But in practical

defining maximum profit is difficult. No matter how profitable a firm becomes , it
still may not have reached a point of maximum profit.
3. Return on Investment: it is the total amount of profit earned. It is expressed as a
percentage of total investment. ROI sometimes more desirable as a pricing
objectives than profit maximization.

4. Status Quo: many firms wish to maintain their present situation in the industry.
So they set their price according to maintain their status quo.
 Pricing Strategies

1. Pioneer Pricing: A firm setting a price for a new product may use Pioneer
pricing. There are two pioneer pricing strategies:
▪ Price skimming : firm using price skimming charge the highest price possible
during the introduction stage of the product life cycle. The purpose of this
strategy to “skim” the best buyers ( those willing to pay a high price)from the
top of the market.
▪ Penetration Pricing: Some firms prefer to set process low when offering a
product for the first time. Penetration pricing, used to generate a large sales
volume and gain a substantial market share quickly, establishes prices for new
products below what competitors charge.
2.Psychological pricing: A policy that encourages purchase decision based on
emotion rather than reason. Such as
▪ Odd-even pricing: Marketers sometimes try to influence buyers perception of
price by using certain numbers. In odd pricing, prices end with odd numbers,
such as 98.99 tk. This strategy assume that buyers will perceive the product as a
bargain- less than 100.
▪ Customary pricing: when firms price products based on tradition, they use
customary pricing. Products such as candy, bars, gum etc are priced according
to this strategy.
▪ Prestige pricing: an organization that sets an unusually high price to provide a
quality image for a product used prestige pricing. This strategy is most useful
when buyers perceive there is a relationship between price and product quality.
▪ Price lining: in price lining, sellers set a limited number of prices for selected
lines od merchandise.
3. Professional pricing: A policy that is practiced by sectors, lawyers, and others
with skills or experience in a particular field, charge a standard fee for a particular
service.

4. Price discounting: A policy of offering buyers deductions from the price of a

product. For example a seller may specify a cash discount of “2/10net30”