UNIT 1- SESSION1: MEANING AND IMPORTANCE OF PRODUCT

 UNIT 1- SESSION1: MEANING AND IMPORTANCE OF PRODUCT

Notes By:- Nagraj Sir

  Product:- A product is any item or service you sell to serve a customer's need or want.they comprise of both tangible and intangible benefits. It may be anything that can be offered to satisfy a want or need and include physical goods, services, experiences, events, places, properties, organization, information and ideas

 According to Philip Kotler, “Product is anything that can be offered to someone to satisfy a need                     or a want”.

COMPONENTS OF A PRODUCT

1.The Core Product:- A core product or flagship product is a company's primary promotion, service or product that can be purchased by a consumer. It is the basic element of the product. 

2.The Associated Features:-The Product includes several associated features besides the core ingredient. In the example of Dove soap the fragrance of the soap, the moisturizing ability, the pristine white colour etc  which distinguishing the product from its competitors.

3.The Brand Name:-A brand is defined as a name, term, symbol, design or a combination of them which is intended to identify the goods and services of one seller and to differentiate them from those of competitors. 

4.The Logo:-It is the brand mark/symbol and an essential aspect of the product which ensure product/brand identification and recall with their importance being enhanced markets 

5.The Package:- The package performs three essential roles:

·       Ensures protection to the product

·       Provides information about the product

·       Increases aesthetics and sales appeal.

6.The Label:-It provides written information about the product helping the buyer to understand the nature of the product, its distinctive features, its composition, its performance.

 CHARACTERISTICS PRODUCT:

1.     Product is one of the core elements of marketing mix.

2.     The product includes both good and service.

3.     A marketer can realize their goals by manufacturing, selling, improving and modifying the product.

4.     It includes both tangible and non-tangible features and benefits offered.

5.     It offer benefits and satisfaction to consumers.

6.     Product includes total offers, including main qualities, features and services.

IMPORTANCE OF PRODUCT 

Product is the core of all marketing activities. Without a product, marketing cannot be expected. The importance of the product can be judged from the following facts:

1)     Product is the focal point and all the marketing activities revolve around it. Marketing activities like selling, purchasing, advertising, distribution, sales promotion

 2)     It is the starting point of planning. No marketing programme will commence if product does not exist because planning for all marketing activities is done on the basis of the nature, quality and the demand of the product.

3)     Product is an end. The main purpose of all marketing activities is to satisfy the customers.

 PRODUCT LEVELS

The product is enriched constantly by the marketer so as to create value, add more customer base and counter competition. it has been explained through a seven level approach:

 1.     Core Benefit (Product) : This is the basic level which focus on the purpose for which the product is intended. Eg. when you buy a raincoat, the core benefit is that you'll stay dry in the rain.

2.     Generic Product: It is the unbranded and undifferentiated commodity. Unbranded pulses, rice, wheat flour are some of the examples of generic product.

3.     Branded Product: The branded products get an identity through a name. It belongs to a specific company and the marketer separates this product from the rest.

4.     The differentiated product: Product differentiation is a process used by businesses to distinguish a product or service from other similar ones available in the market For example Knorr‟s Soups are tasty and healthy soups and can be prepared easily.

5.     The customized product: the process of modifying a product to meet a customer's specific needs and preferences.  Many companies manufacturing automobiles, computers, paints, shoes and garments have used this strategy to beat competition.

6.     The augmented product: it has been enhanced by its seller with added features or services to distinguish it from the same product offered by its competitors The needs of the customer are identified through market research surveys are used to add new features/functions to the product.

7.     The Potential Product: The future level of your product, which includes the innovations, improvements, and extensions that your customers can anticipate from you.

FACTORS INFLUENCING PRODUCT MIX

 1.   Market demand: The demand of the product determines whether the product should be manufactured or its production discontinued.

2.  Cost of product: The Company can develop products which are low in costs and produce those products. Nirma, washing powder, a low priced product was launched to counter Surf which was priced high.

 3.  Quantity of production: The Company can add more items on its product line in case the production of the new product is to be made on large scale.

 4.  Advertising and distribution factors: An organization does not incur any additional efforts to advertise or distribute when the company adds one or more products to its product line.

 5.    Use of residuals: In case the by-products can be developed or utilized; a company should produce such products. Sugar manufacturing companies can also use molasses. 

 5.     Competitor’s action: In order to meet the competition/market a firm may decide to include or eliminate a product.

6.  Full utilization of marketing capacity: The Company can start to produce another product to utilize the capacity completely if the existing marketing resources are not being utilized.

 7.  Goodwill of the company: When the company has good reputation in the market, new product can be launched without much difficulty.

 SOME PRODUCT TERMS / PRODUCT DECISIONS

**PRODUCT MIX is the list of all products offered by a company. It is defined as the composite of products offered for sale by a firm or a business. The product mix is three dimensional:

·        Breadth is measured by the number or variety of products manufactured by a single manufacturer.

·     Depth refers to the assortment of sizes, colors and models offered within each product line.

·     Consistency refers to the close relationship of various product lines or their end use to production requirements or to distribution channel

    **PRODUCT LINE is a group of products that are closely related, either because they function in a similar manner or are sold to the same customer groups or are marketed through the same types of outlets, or fall within given price ranges.

   **PRODUCT POSITIONING – It refers to the manner in which a product is offered to a particular customer of a particular segment for the aim to meet the customer's needs

 **PRODUCT REPOSITIONING – It refers to the manner in which a marketer changes the whole product in order to satisfy a particular segment or customer.

 **PRODUCT DIVERSIFICATION:Product Diversification refers to the product expansion either in the depth and/or in width.. It refers to adding a new product to the existing product line or mix

**PRODUCT MODIFICATION: Product modification may be defined as a deliberate alteration in the physical attributes of a product or its packaging to suit the changing demand on account of changes.

**PRODUCT STANDARDIZATION: Standardization implies a limitation of the number of varieties or the types of uniform quality that can be manufactured so as to reduce the unnecessary varieties. Eg. Ready-made Shirts and Trousers are manufactured in standard sizes

**PRODUCT ELIMINATION: Products which cannot be improved or modified to suit themarket needs need to be replaced by other profit generating products