Marketing Mix - Product and Pricing Strategy

AGENDA
INTRODUCTION
3
FEATURES OF PRODUCT
6
PRODUCT
9
PRODUCT LEVELS
14
PRODUCT PLANNING
18
PACKAGING AND LABELLING
22
PRICING
26

UNIT 2 4
2023
MEANING
A product may be defined as a set of
tangible, intangible and associate
attributes capable of being
exchanged for a value with the
ability to satisfy consumers and
business needs. It is anything that
can be offered to a market to satisfy
the needs or wants of the customer.
The products that are marketed
include physical goods, services,
experiences, events, person,
place, properties, organization,
information and ideas

UNIT 2 5
2023
DEFINITION
Philip Kotler: “A product is anything that can be offered to a
market for attention, acquisition, use or consumption. It
includes physical objects, services, personalities, place,
organizations and ideas.”
Alderson: “A product is a bundle of utilities consisting of
various features and accompanying services.”
Schwartz: “A product is something a firm markets that will
satisfy a personal want or fill a business or commercial need
and includes all the peripheral factors that may contribute
to consumer’s satisfaction.”

UNIT 2 7
FLOW CHART
2023
FEATURES OF
PRODUCT
ASSOCIATED
ATTRIBUTES
EXCHANGE
VALUE
CUSTOMER
SATISFACTIO
N
TANGIBILITY
INTANGIBLE
ATTRIBUTES

UNIT 2 8
ESSENTIAL FEATURES
1) Tangible attributes:To be called a product, an item should be tangible, i.e. it may be
touched, 2 seen its presence felt. It has precise specifications and is offered under a
given description or model number. It denotes color, style, size, weight, durability,
quality, and price features Ex: TV, scooter, mobile, toothpaste, pressure cooker.
2) Intangible attributes: Intangible attributes in a product are those that cannot be
perceived right away or one that is not so very apparent. Ex: repairing, hair-dressing,
banking or insurance. These services may be bought independently or associated
with tangible products.
3) Peripheral or associated attributes: These help in identification of a product and
acceptance by buyers. Ex: Brand, package, warranty, credit delivering terms.
4) Exchange value: Every product should have an exchange value and should be
capable of being exchanged between buyer & seller for a mutually agreeable
consideration.
5) Consumer satisfaction: Products should be able to deliver satisfaction to
consumers, which could be real or psychological. Ex: When a girl buys a lakme
lipstick, she not only buys a chemical compound which is real but also buys ‘beauty’
which has some psychological value.
6) Business need satisfaction: Any product should be able to satisfy a business need.
A very basic business need is to earn profit. Another one is societal need. Ex:
Cholesterol free edible oil is a product that satisfies social need
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presentation title 10
20XX
CLASSIFICATION OF PRODUCT

UNIT2 11
CONSUMER PRODUCTS
Products are broadly classified into two categories – consumer products and industrial products.
Consumer products are products that the ultimate consumer purchases himself for direct use.
The consumer purchases these consumer products to satisfy his personal needs and desires.
Some examples of consumer products are toothpaste, eatables, textiles, computers etc and
various such products. Now there are many types of consumer products as well. Let us take at
the classification of consumer goods based on the shopping effort involved.
 Convenience Products: These are consumer goods that are very convenient
to purchase. They are bought frequently and with very little effort. Examples
include medicines, toiletries, newspapers etc. Such convenience products
have ongoing and continuous demand. Such goods are also bought in small
quantities and are also generally lowly priced.
 Shopping Products: To shop for these consumer products, consumers
devote considerable time and effort. They compare prices and features and a
lot of thought is involved before making the decision to buy. Some such
examples are electronics, furniture, jewelry etc. These products generally fall
in the higher price range. Such products are pre-planned purchases.
 Specialty Products: For specialty products, consumers make special efforts
to buy them. They are not your regular run of the mill consumer products.
The buyer is willing to go through a lot of effort to purchase such products.
Take for example any artwork, paintings, sculptures etc. The demand for such
specialty products is usually pretty limited and the prices are high
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UNIT 2 12
INDUSTRIAL PRODUCTS
These are products which are used as input for manufacturing other
products. Unlike consumer goods, these are not for direct consumption.
These are meant for business and nonpersonal use. Some examples of
industrial products are raw materials, machines, tools etc. Here the
demand for industrial products is limited. Since they are not consumer
goods the demand for them is not vast. The three broad categories of
Industrial goods are as follows.
 Machine and Machine Parts: These goods are used entirely in the
manufacturing process. These include raw materials like cotton,
lumber, petroleum etc. They also include manufactured products like
glass, rubber etc.
 Capital items: These are goods/products used to manufacture
finished goods. They include installations (lifts, mainframe
computers etc) and equipment (hand tools, personal computers etc)
 Business Services and Supplies: These are industrial goods and
services that facilitate the manufacturing process. They include
services such as painters, technicians, maintenance, and repairs. And
products such as lubricants, stationary etc.
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Marketing Mix - Product and Pricing Strategy

16
MANAGEMENT OF PRODUCT MIX THROUGH PLC
EFFECTS AND
RESPONSE
INTRODUCTION GROWTH MATURITY DECLINE
COMPETITION NOT IMPORTANT SOME EMULATOR MANY COMPERTITORS
ENTERING THE FIELD
FEW IN NUMBER WITH
RAPID SHAKEOUTOF WEAK
MEMBERS
PROFIT PROFIT IS NEGLIGIBLE
BECAUSE OF HIGH
PRODUCTION AND
MARKETING COST
PROFIT REACHING PEAK
LEVEL AS A RESULT OF
HIGH PRICES AND
GROWING DEMAND
STIFF COMPETITION
EATING INTO PROFITN
MARGIN AND IMPACTING
TOTAL PROFIT ADVERSELY
DECLINING VOLUME
PUSHES COSTS UP TO THE
LEVELS THAT ELIMINATE
PROFITS ENTIRELY
DISTRIBUTION SELECTIVE DISTRIBUTION DEPLOYMENT OF SALES
PROMOTIONAL TOOLS
TARGETED AT WINNING
DEALER SUPPORT
USING SALES
PROMOTIONAL TOOLS
TARGETED AT DEALERS SO
THAT THEIR SUPPORT IS
SUSTAINED
PHASING OUT UN
PROFITABLE OUTLES
ADVERTISING
STRATEGY
TARGETED AT EARLY
ADOPTERS
RAISING AWARNESS
ABOUT THE BENEFITS OF
PRODUCT AMONG
CONSUMING PUBLIC
HIGHLIGHTING PRODUCT
DIFFERENTIATION
USING
ADVERTISEMENT
HIGHLIGHTING LOW
PRICES TO REDUCE STOCK
PILE UP THROUGH
ADVERTISINGAND SALES
PROMOTIONAL TOOLS
OVERALL
STRATEGY
PERSUADING EARLY
ADOPTERS TO TRY THE
PRODUCT
PERSUADING THE MASS
TO PREFER THE BRAND
THROUGH MARKET
POPULARIZING BRAND
THEREBY CHECKING THE
INROAD OF COMPETION
PREPARINGTO DROP THE
BRAND AFTER
EXHAUSTINGALL

UNIT 2 18
DEFINITION
Product planning is a technique of planning all the aspects of a product in its relationship with
the market. The aim of product planning is to avoid designing of unsuitable products and all the
related expenses. The present day customer will not accept any product which does not suit his
requirements in any way-price, style, designing, features, distribution etc. Product planning is
always done keeping in mind the market or consumer expectations.
“Product planning is the act of managing and supervising the search, screening, development
and commercialization of new products; the modification of existing lines; and the
discontinuance of marginal or unprofitable items. – Carl H. Titgen
IMPORTANCE
a) Development and introduction of new products.
b) Modification of existing lines as may be needed in terms of changing customer needs and
preferences.
c) Discontinuance or elimination of marginal or unprofitable products.
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UNIT 2 19
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THE NEW PRODUCT DEVELOPMENT PROCESS (NPD)

UNIT 2 20
BRAND
 Brand means a name, term, sign, symbol, design, or a mix thereof
used to identify the product of one firm and to distinguish if from the
competitive products. A brand is usually composed of a name and a
mark or a mnemonic. A brand name is a part of a brand which can be
vocalized. It consists of words, letters, and / or numbers.
 Branding is the process of creating a distinct identity for a business
in the mind of your target audience and consumers. At the the most
basic level, branding is made up of a company's logo, visual design,
mission, and tone of voice.
 Benefits of a strong brand include:
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INCREASED SALES
HELPING CREATE A
CLEAR AND INSPIRING
MISSION OR PURPOSE
COMPANY WIDE.
HELPING CREATE A
STRONG COMPANY
CULTURE WHERE
YOUR EMPLOYEES
LOVE WHAT THEY DO.
ATTRACTING TOP-
QUALITY TALENT TO
HELP GROW YOUR
BUSINESS EVEN
FURTHER.
CUSTOMER LOYALTY
AND RECOGNITION.
DEVELOPING STRONG
BRAND EQUITY
HELPING YOU STAND
OUT FROM YOUR
COMPETITION.

UNIT 2 22
MEANING AND CHARACTERISTICS
 Packaging is the process of providing a protective and informative
covering to the product in such a way that it protects the product
during material handling, storage, and 11 movement and also
provides useful information to all the concerned parties about the
content of the package.
Characteristics of Good Packaging
Packaging is more than just your product’s pretty face. Your package
design may affect everything from breakage rates in shipment to
whether stores will be willing to stock it. These are the characteristics
of good packaging
 Labeling - include certain information on the label of your product
when it is distributed in specific ways.
 Opening - product is one that will be distributed in such a way that
customers will want to–and should be able to–sample or examine it
before buying, your packaging will have to be easy to open and to
reclose
 Size - product must be shipped a long distance to its distribution
point, then bulky or heavy packaging may add too much to
transportation costs.
 Durability - Many products endure rough handling between their
production point and their ultimate consumer.
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UNIT 2 23
FUNCTION OF PACKAGING
Packaging plays a crucial role from the time a product is developed to the time a product is
fully consumed. These functions of packaging include:
Contains the product: Most products need to be contained either during transportation, storage, or consumption.
Packaging makes sure the product is contained as and when required.
Protects the product: Packaging protects the product and its quality, features, utility, etc. from being damaged or
contaminated during transportation, storage, and consumption.
Aids product handling and usage: Proper packaging aids product handling and makes it easy to transport, ship, and
even use the product.
Differentiates the product and makes it stand out: Packaging makes it easier for the customer to identify and
differentiate it from other products. Moreover, attractive packages have a property to stand out and attract customers
towards it.
Forms a part of product marketing strategy: An attractive and/or informative package makes the product stand out
and have a promotional appeal. Packaging also acts as the final touchpoint that helps in product promotion and sale.
Provides customer convenience: Packaging is also a convenience tool that makes it convenient for the customer to
carry, transport, and use the product.
Acts as a communication medium: Packaging along with labelling helps communicate the brand identity, brand
message, and product and company information to the customer.
Adds to the aesthetic value: Packaging can make a simple product look attractive or a unique product look ordinary.
It’s an important aesthetic touchpoint that can make or break a sale.
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UNIT 2 24
LABELLING
Labelling is a part of branding and enables product identification. It is a printed information that is
bonded to the product for recognition and provides detailed information about the product.
Customers make the decision easily at the point of purchase seeing the labelling of the product.
FUNCTIONS OF LABELLING:
 Defines the product and its contents: A label is informative about the product’s
usage and caution to be taken while using the product. Example, Red Label
Natural Care tea mentions five ingredients in its label that provide immunity.
 Recognition of product: Labeling assists in the identification of the product.
Example, the brand name of a chocolate will help one choose from the rest of
the confectionery items available.
 Assorting of products: It means classification or grading of products according
to different categories in the market. Example, shampoos are categorized as dry
hair, normal hair and oily hair types and cater to consumers in the market with
the dry, normal and oily scalp, respectively.
 Assists promotion of products: It gives the customer the reason to purchase the
product. Example, it attracts the attention of the consumer by displaying
messages such as ‘20% free’ or ‘save rupees 15’ message in potato chips packet.
 In compliance with the law: Labels should strictly abide by the law. Example, for
tobacco, the label should mention ‘Tobacco is injurious to health’. Cigarettes
also should have ‘Smoking is injurious to health’ as the statutory warning on its
package
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UNIT 2 26
MEANING OF PRICING
Pricing means the process of selecting the
pricing objectives, determining the possible
range of prices, developing price strategies,
setting the final price, and implementing and
controlling pricing decision. The determination
of price is very important and crucial decision. It
affects all parties involved in the production,
distribution, and consumption of goods. Price
affects the volume of production and the
amount of profit. It is a source of income to
distributors. According to W.J.Stanon, “Pricing is
the functions of determining the products value
in monetary terms.”
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Unit 2 27
OBJECTIVE OF PRICING
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UNIT 2 28
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Profit Oriented Objectives
Profit oriented objectives focus on profit. This objective can be profit
maximization and achieve target return.
 To maximize profit: One of the objectives of pricing is to maximize the
profit. It is very important to maximize the profit to run the
organization.Some company set price to their products or services with a
view of maximizing profit. It is very important to focus on profit
maximization
 Achieving target return: Another objective of pricing is to achieve target
return.Some company may determine the price of their goods or services
to achieve a certain return on investment or on sales. This is the desired
profit. It is necessary to have target return in the pricing process.
 Achieving target return on sales: It is necessary to achieve target
return on sales in pricing.Mostly resellers manage their pricing to achieve
a target return on sales. For example, 10% of sales. If there is not more
competition this objectives can be used.
 Achieving target return on investment: Pricing should focus on
achieving target return on investment too.Manufacturing company
manages pricing in order to achieve specified return on investment in
manifesting, research and development, establishment and
commercialization. For example, 5% on investment.

UNIT 2 29
SALES ORIENTED OBJECTIVES
Sales oriented pricing objectives focus on sales volume rather
than on profit. The profit can be to gain sales volume and market
share.
 Sales volume increase: One of the pricing objectives may be
determined in terms of increasing sales volumes over the
certain period of time. For example, 10% increase annually.
This does not mean that profit should be avoided.
Organization believes that higher sales volume will lead to
lower unit costs and higher long run profit. It is necessary to
focus in the increment in sales volume of the company.
 Maintain market share: Pricing should have the basic
objectives in maintaining market share.Market share is really
a meaningful measure of the success of a firm's marketing
strategy. A market share price objective can be either to
maintain the market share, to increase it or sometimes to
decrease it. The company uses the price as an input to enjoy a
target market share. This market share is normally expressed
as a percentage of the total industry sales.
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UNIT 2 30
STATUS ORIENTED OBJECTIVES
Status oriented pricing focus on maintaining the current
position. This objective can be described as “Don’t Rock the
Boat” objective. The large companies in order to minimize the
risk of loss and maintain their status adopt this objective.
Organization does not take any initiative in the price change.
These objectives are as follows:
 Stabilization of price: Pricing should have the objectives in
stabilizing the price of a product.Some organization may set
their pricing objective in order to maintain or stabilize price
and prevent from market uncertainty. These objectives are
adopted for minimizing the risk of loss. Small organizations
in market adopt these objectives. These objectives build up
their status and goodwill.
 Meet competition: The objective of pricing is to meet the
competition in the market. Now there is big competition in
the market.In highly competitive market some organization
may set the meet competition. Under this objective
organization set the prevailing market price. It is important
to meet the competition in the market. Without it, market
cannot achieve its objectives.
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UNIT 2 31
FACTORS AFECTING PRICING
The factors influencing the price can be divided into two heads –
Internal Factors and External Factors. Internal Factors Talking about
the internal factors means the factors that work from within the
organization. The factors are:
 Organizational Factors: Two management levels decide the pricing
policy, one is the price range and the policies are decided by the top-level
managers while the distinct price is fixed by the lower-level staff.
 Marketing Mix: For implementing a price, the marketing mix needs to
be in sync, without matching the marketing mix, consumers will not be
attracted to the price. The marketing mix should be decisive for the price
range fixed, meaning the marketing mix needs to maintain the standard
of the price of the product.
 Product Differentiation: In today’s market, it is uncommon to find a
unique product, hence the differentiation lies in the nature, feature and
characteristic of the product. The added features like quality, size, colour,
packaging, and its utility all these factors force the customers to pay
more price regarding other products.
 Cost of the Product: Cost and Price are closely related. With the cost of
the product, the firm decides its price. The firm makes sure that the price
does not fall below the cost lese they will run on losses. Cost of the price
includes the input cost that a company spends on raw materials, wages
for labourers, advertisement cost, promotion cost and salaries for the
employees
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UNIT 2 32
External Factors
External factors are not under the control of the firm. These factors affect
the whole industry group uniformly. Yet, a company tries to estimate any
upcoming problems in the external environment and also makes up a
backup plan in advance. This is done by forecasting the market trend.
The factors are:
 Demand: The market demand of a product has an impact on the price
of the product, if the demand is inelastic then a higher price can be
fixed, if the demand is highly elastic then less price is to be fixed. When
the demand for the goods is more and the supply of the goods is
constant, the price of the goods can be increased and if the demand
for the goods decreases the price of the goods should be decreased to
survive in the market.
 Competition: The prices are required to be competitive without any
compromise on the quality of the product. While in a monopolistic
market, the prices are fixed irrespective of the competition. Thus, the
manufacturer tries to estimate the price of his competitor. When the
price of the supplementary goods is high, the customers will buy the
manufacturer’s product.
 Supplies: If the supplies condition, the easy availing option of the raw
materials are available, then the price of the product can be moderate.
Once, the raw materials supply price heightens then the price also
rises. In the period of recession, price is lowered so that easy purchase
is guaranteed. While in boom periods, prices shoot up high as now
they can earn profit.
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UNIT 2 33
TYPES OF PRICING METHOD
The pricing method is divided into two parts:
 Cost Oriented Pricing Method– It is the base for evaluating the price of the finished
goods, and most of the company apply this method to calculate the cost of the
product. This method is divided further into the following ways.
1) Cost-Plus Pricing- In this pricing, the manufacturer calculates the cost of
production sustained and includes a fixed percentage (also known as mark up) to
obtain the selling price. The mark up of profit is evaluated on the total cost (fixed
and variable cost).
2) Markup Pricing- Here, the fixed number or a percentage of the total cost of a
product is added to the product’s end price to get the selling price of a product.
3) Target-Returning Pricing- The company or a firm fix the cost of the product to
achieve the Rate of Return on Investment.
 Market-Oriented Pricing Method- Under this category, the is determined on the B
base of market research
1) Perceived-Value Pricing- In this method, the producer establish the cost taking
into consideration the customer’s approach towards the goods and services,
including other elements such as product quality, advertisement, promotion,
distribution, etc. that impacts the customer’s point of view.
2) Value pricing- Here, the company produces a product that is high in quality but low
in price.
3) Going-Rate Pricing- In this method, the company reviews the competitor’s rate as a
foundation in deciding the rate of their product. Usually, the cost of the product will
be more or less the same as the competitors.
4) Auction Type Pricing- With more usage of internet, this contemporary pricing
method is blooming day by day. Many online platforms like OLX, Quickr, eBay, etc.
use online sites to buy and sell the product to the customer.
5) Differential Pricing- This method is applied when the pricing has to be different for
different groups or customers. Here, the pricing might differ according to the
region, area, product, time etc
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UNIT 2 34
SETH GODIN
“DON’T FIND CUSTOMERS FOR YOUR
PRODUCT FIND PRODUCTS FOR YOUR
CUSTOMERS”
2023

Marketing Mix - Product and Pricing Strategy

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