Product and Brand Policy

Product Policy decisions Line and

Mix decisions
 4 Types of Product policy decision
One of the important elements of marketing mix is Product.
Any firm is known by the product it is offering. The other
elements of marketing mix are based on it. So it is very
important that the firm must have a sound product policy. It is
a competitive tool in the hands of the marketer. It involves four
types of product policy decisions. These are:
 I) Individual product decision:-

a) Product attribute: it consists of the quality, feature, style and design of the
product. Quality of the product assures the customer that the manufacturer is giving
the customer a good quality product. Feature helps the consumer in differentiating
the product from other products in the market. Style and design of the product helps
in bringing the attention of the customers towards the product.

b) Product branding: the product must have its own unique brand name. Only then
the customer will be able to differentiate the product from the other products. Brand
name also helps the marketers in promoting the product and making consumer
brand conscious.

c) Product packaging: packaging means the outer cover which contains the product.
Like a tooth paste has two covers first in shape of tube and another cardboard cover
put the tube in it. It is generally said that Packaging act as a silent salesman because
product packaging helps the customer to get the knowledge about the product
 II) Product line decision:
product line means group of product which are closely related to
each other. In product line decision the marketer makes the
decision regarding the product line length, means the number of
products in the product line. The product line may be short which
means the marketer can increase the profit by adding a new
product or there may be long product line. There are two ways of
adding the product.
a) Product line stretching: it means adding a new product by
stretching the product line by upward, downward or both ways.
b) Product line filling: it means when the company add a new
product within existing range of products.
 III) Product mix decision:-
it means total products produced and sold by the company. Like
amul produces, milk, milk powder, ghee, butter, cheese spread etc.
product mix includes:
a) Product mix width: it means how many products the company is
offering. Like tea, butter, cheese etc.
b) Product mix length: it means no. of items in each product
line. Like 5 kind of shampoo, 7 kind of washing powder etc.
c) Product depth: it refers to different items in each product
line. Like a company is offering different kind of soap eg. X, y, z. etc.
d) Product consistency: refers to how closely related the various
products in end use.
 IV) Product positioning decision:-
it the way by which the marketer
communicate the information of the product
to the prospective buyer. It can be done on
the bases of price or size or usage of the
product.
 Why a product life cycle?
A companys positioning and differentiation strategy must
change as the product, market, and competitors change
over the product life cycle(PLC)
When we say that a product has a life cycle we assert four
things:
i. Products have a limited life.
ii. Products sales pass through distinct stages, each posing
different challenges, opportunities and problems to the
seller.
iii. Profits rise and fall at different stages of the product life
cycle.
iv. Products require different marketing, financial,
manufacturing, purchasing, and human resource
strategies in each life cycle stages.
 Product Life Cycle
product life cycle is the course of a products
sales and profits over time.
product life cycle(PLC) deals with the life of
a product in the market with respect to
business or commercial costs and sales
measures.
The five stages of each product lifecycle are
product development, introduction, growth,
maturity and decline.
WHAT IS PLC?
 Product Life Cycle
Sales and
Profits Sales

Profits

Time
Product Introduction Growth Maturity Decline
Develop-
ment

Sales and Profits Over the Products Lifetime

 Introduction Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales Low

Costs High cost per customer

Profits Negative

Marketing Objectives Create product awareness and trial

Product Offer a basic product

Price Use cost-plus formula

Distribution Build selective distribution

Promotion Heavy to entice product trial

 Growth Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales Rapidly rising

Costs Average cost per customer

Profits Rising

Marketing Objectives Maximize market share

Product Offer extension, service, warranty

Price Penetration strategy

Distribution Build intensive distribution

Promotion Reduce to take advantage of demand

 Maturity Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales Peak

Costs Low cost per customer

Profits High

Marketing Objectives Maximize profits while defending market share

Product Diversify brand and models

Price Match or best competitors

Distribution Build more intensive distribution

Promotion Increase to encourage brand switching

 Decline Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales Declining

Costs Low cost per customer

Profits Declining

Marketing Objectives Reduce expenditures and milk the brand

Product Phase out weak items

Price Cut price

Distribution Selective: phase out unprofitable outlets

Promotion Reduce to minimum level

Three special categories of PLC
 Continued
A Style is a basic and distinctive mode of expression
appearing in a field of human endeavor. Styles
appear in homes, clothing, art etc.
A Fashion is a currently accepted or popular style in
a given field. Fashion pass through four stages:
Distinctiveness, emulation, mass fashion, decline.
Fads are fashions that comes quickly into public
view , are adopted with great zeal, peak early, and
decline very fast.
 Four Introductory
Marketing Strategies
Promotion
High Low

Rapid- Slow-
High skimming skimming
strategy strategy
Price
Rapid- Slow-
Low penetration penetration
strategy strategy
Marketing strategies for Growth stage
During the growth stage, the firm uses several strategies to
sustain rapid market growth.
Improves product quality and adds new features and
improved styling.
Adds new models and flanker products(i.e., products of
different sizes, flavors, and so forth that protect the main
product).
It enters new market segments
It increases its distribution coverage and enters new
distribution channels.
It shifts from product- awareness advertising to product-
preference advertising.
It lowers price to attract the next layer of price sensitive
buyers.
 Marketing strategies for Maturity
stage
Three potentially useful ways to change the course
for a brand are market, product, and marketing
program modification.
Market Modification
Sales volume = no. of brand users * usage rate per
user.
Expand the no. of brand users
Convert nonusers
Enter new market segments
Attract competitors customers
 Continued..
Increase the usage rate among users
Have consumers use the product on more
occasions.
Have consumers use more of the product on each
occasion
Have consumers use the product in new ways.
Product modification
Trying to stimulate sales by modifying the
products characteristics through
 Continued..
Quality improvement:
Aims at increasing the products functional performance.
Eg: Aashirvaad, Annapoorna, Pillsbury, Naturefresh
Feature improvement
Aims at adding new features, such as size, weight, materials,
additives, and accessories, that expand the products
performance, versatility, safety, or convenience.
Style improvement
Aims at increasing the products esthetics appeal.
Eg; New car models, New Coke
 Decline Stage
Increase investment
Resolve uncertainties - stable investment
Selective niches
Harvesting
Divesting
To establish a system for identifying weak products.
Some firms abandon declining markets earlier than others.
 Why Product Life Cycle is Useful
According to Osuagwu and Eniola (1998: 104), the product life cycle has three
major reasons to management of organizations. These include:
(a) Forecasting sales: It helps to forecast sales at different stages of the product
life cycle.
(b) It suggests different marketing strategies at different stages of the product
life cycle. Precisely, the marketing programme should contain all appropriate
mix in product quality, price, distribution, promotion, and mega-marketing
strategies.
(c) It shows the importance of planning for the totality of a new product or
service from its introductory stage to the decline or disappearance of the
product in the market.
Since products and services have limited life cycle, it is important for
marketing managers to plan the replacement of their expired brands. This
leads us to brand management, which is concerned with profitably extending
the life cycle of the brand.