Product Decisions

Factors determining scope of product

lines
• Scope for introducing new product is 
related to existing market conditions under
which firm functions.
1. Common Production Process
2. Jointly demanded
3. Horizontal brand extension
4. Low products under quality products
 Production of different brands of
goods by same manufacturer
• Merger or amalgamation
• Know consumers may have preferences for
different varieties
• To target choosy customers
• To retain dealer loyalty
 Need for market research for product
addition
• Nirma’s beauty soap launch
• Kellog’s Cornflakes failure:
– General preference for fresh food
– Easy availability of fresh food
– High retail prices
– Widely spread out market segments, posing
distribution problems
– Diversified food tastes in India
Need for market research for product
addition
• By making a small change in packaging or
composition, one cam launch a premium
product.
• Thorough research is needed to avoid
unnecessary expenditure
• Nestle changed composition of Maggi noodles
and spent a lot in advertising: SUB KUCH
PEHLE JAISA
• Same case with Coke in US in 1985
 Improve, Buy or Drop decisions for
Products
• Improve products:
Redesigning or producing it at lower cost
Product improvement is very important in durable
goods.
Many FMCG products bring changes to attract
customers
Example: HUL launched Lifebuoy in liquid form
Colgate launched toothpaste with herbal
and mint formula
 Improve, Buy or Drop decisions for
Products
• Adapt Products:
Its necessary to adapt according to Indian tastes
Tailormade products are needed
Example : McDonald’s
Pillsbury Chakki fresh atta illustrates desi
bug
LG launched no-frills television for rural
markets
National launched batteries according to
different weather conditions
 Improve, Buy or Drop decisions for
Products
• Buy products:
It is possible only if supplying firm is ready to
provide in sufficient amount and low cost.
Dependency increases
Example: ITC bought Savlon and Shower to
Shower talcum powder
 Improve, Buy or Drop decisions for
• Drop products:
Products
Sentiments
Deletion of product = Introduction of product
A systematic approach is required for eliminating marginal and unprofitable
products:
1. Reduction in product effectiveness
2. Emergence of a superior substitute
3. Use of disproportionate executive time
4. Declining trends in sales and price
5. Downward profit trend from the product
Example: Medicines
Electronics corporation of India Limited decided for Microwaves
 Consumer Diffusion Process
• Adoption Process
• Diffusion Process
Diffusion is a process by which an innovation
spreads through marketing and social
communication within a social system.
 Elements of diffusion process
• Key elements include
– Degree of innovativeness of product
– Channels of communication
– The social system
– Time required for innovation
• New product can be categorized as
– Continuous innovations : when an innovation does not
significantly alter the consumption pattern: Colour T.V.
– Dynamically continuous innovation: substantially alters, modifies
consumption pattern: Mobile phone
– Discontinuous innovation: when innovation establishes new
consumption pattern: Internet and e-commerce
• Innovation spread faster in which Society?
1. Modern and Open societies
2. Religious and conservative
 Consumer Adoption Process

part of regular purchase Adoption

Trial
use on limited
basis
Evaluation
mental trial
Interest Search for Information
Awareness