Amity Business School

Product, Classification of Products,

Product Line and Product Mix

Amity Business School

What is a Product?
A product is any tangible, intangible offering
that might satisfy the needs or aspirations of a
consumer.
A product has 3 basic levels
Core Product: This answers WHY the buyer
should have it. It is also called as Generic
Requirement.

Amity Business School

Purchasing agents do not buy drills, they

actually buy its ability to make same
size holes
Theodre Levit

Core Benefit

Amity Business School

The generic product concept has two key

issues:
1.Its consumers view of what a given
product represents.
2.The aspiration of consumer differ from
place to place and time to time.
Eg. For someone Washing Machine would
be: comfort in washing the cloths, some,
tough wash, some complete dryer

Tangible Specifications

Amity Business School

Tangibility is added to the core product in

the form of features, style, color, design,
efficiency etc.
Eg. The Color of the machine
The Electricity consumption
Detergent Consumption
Capacity
Quality .

Augmented Features

Amity Business School

This fulfill more of psychological or esteem

needs.
Eg. Brand Name
Services provided
Warranty
Credit Terms
etc.

Classification of Products
Amity Business School
The classification of the product depends
upon the TANGIBILITY and DURABILITY
found in an offering.
Typical classification of Product:
Service
Durable
Non Durable

Non Durable Products

Amity Business School

Products that are consumed fast and are

purchased on a regular basis. The
consumer here spends minimum time and
effort in comparing and buying the item.
Consumer Products are further classified
according to its use: Personal, Family and
Household as Convenience, Shopping
and Specialty.

FMCG

Amity Business School

Fast Moving Consumer Goods are the

Non Durable Goods. Eg. Sot Drinks,
Chips, Ice Creams etc. The consumer
shows minimum effort in buying these
articles.
FMCG is further sub divided into 3
Classes

Amity Business School

Staples
These are goods purchased on a regular
basis. Eg. Soap, Pulses, Toothpaste etc
Whenever the stock is about to end the
consumer buys these products again.

Amity Business School

Impulse Goods
These are the goods which are purchased
without planning or search Our external
stimuli provokes us to buy these products.
Eg. Cold drinks, Chocolates, Chips.
Most of the time the consumers aim is not
buying the product solely but when spots
them, feels, attracted and ends up in
buying them.

Amity Business School

Emergency Goods
These goods are purchased when the
need arises. Eg. Umbrellas in rainy
season, Pullovers in winters etc..
The marketers tries for a very good
distribution chain, as the sales is not the
same throughout and whenever the need
arises, the product should be available at
maximum places

Characteristics of FMCG
Consumers Point

Amity Business School

FMCG has a very low shelf life

1. Frequent Purchases: Salt, Rice,
Chocolates
2. Low Involvement: The consumer will
buy an alternative if the brand ask for is
not available.
Exceptions to the rule: Products like
Cigarettes, Personal Hygiene Products,
Brand Loyalty.

Characteristics of FMCG
Marketers Point

Amity Business School

High Volumes
The volume of the product required is very
high.
Eg. An average family may require 3-4
Soaps a month Imagine No. of family
using it in the whole country???
If the organization cannot ensure high
sales volume, they will have difficulties in
surviving.

Amity Business School

Low Margins
As the product is required in high volume, there
is an intense competition which makes the
marketer sell the product with very less margin.
They earn through high volume sales to
maximize their turnover.
The Key Becomes High Volumes Low Margins.

Amity Business School

Extensive Distribution Networks

Consumer preference in FMCG products

are not that rigid.

Recall plays a very important role.

Brand Loyalty is not very high.

Consumer allows shopkeeper to decide for

him.
Due to all this it becomes very important for the
marketer to make its product available at
maximum place possible.

Amity Business School

High Stock Turnover

It is a characteristic feature of FMCG. It is
because these products are bought
frequently or on a regular basis.
Which in turn allows the marketer to rotate
the capital invested.

Product Mix

Amity Business School

It is the set of product lines and items that a

particular company offers to buyers.
The Width of product mix refers to how many
different product lines a company carries.
Product Line: It is a group of products that is
closely related because they perform a similar
function, targeted at the same customer groups,
marketed through same channel.

Amity Business School

Eg. Products line of P & G :

Detergents
Bathing Soaps
Shampoos
Disposable Diapers etc.
If, Pantene comes in 4 variants in 3 different
sizes, the depth of the product mix
becomes 4 X 3 = 12. This can also be
referred as Stock Keeping Units (SKUs)

Amity Business School

Consistency of a product mix refers to how

closely related the various product lines
are to the end user.
The Width, Depth and consistency of
product mix enables the company to
define the Product Portfolio.

Product Line

Amity Business School

Line Stretching
Downward Stretch : It takes place when
the company finds a particular segment
(Lower) which is un-attended by the
existing product. And introduces a product
to cater that lower segment.
Upward Stretch : It is when company a
company enters Upper market through
Line Extension.

Amity Business School

Line Filling : A product line can be extended by

adding more items to the existing range.
Reasons:
Reaching for more profits
Trying to satisfy dealers who complain about lost
sales due to missing items in the line
Trying to utilize excess capacity
Trying to offer a full line of the production
Trying to plug holes in the positioning map.

Amity Business School

Line Modernization : Modernization is

carried out continuously as competitors
are constantly growing and coming out
with new products and ideas.
In this process an Organization should not
be too early, if so, It can harm the existing
product or late so that competitors already
have a hold in the market.

Amity Business School

Line Featuring
Its about featuring a particular product of
the product line, so as to increase foot
falls and then making the consumer
exposed to other products too.

Growth Strategies for FMCG

Amity Business School

Multi-brand Strategy
When a company nurtures number of brands in
a single category.
Strategy: To capture as much market share as
possible by trying to cater as much possible
segments.
Eg. HUL Bathing Soaps:
Names??????
P&G Shampoos?
Names?????

Amity Business School

Product Flanking
Basically offering same product in different
and price combinations to tap diverse
market opportunities.

Amity Business School

Brand Extensions
This enables the company to enter new
product categories more easily.
Eg. Lifebuoy: Lifebuoy Plus, Lifebuoy
Liquid, Lifebuoy Gold.
Eg. Amul: Amul Butter, Amul Ghee, Amul
cheese, Amul Milk, Amul Chocolates

Amity Business School

Building Product Lines

Companies add related new product line
to the existing Line.
Eg. Britannia: It has all Baked food items
which are increasing. Have also added
milk products to its kitty.

Amity Business School

New Product Development

Its due to ever increasing Competition in
the market

Amity Business School

Innovations in Core Product

The life of a FMCG product is short. The
marketer continuously tries to introduce
new products and a consumer is also
open to try new products.

Amity Business School

Long Term Outlook

Eg. Kelloggs

Amity Business School

Extending the PLC

Expanding Markets by Usage
a.Increase the Number of Customers
b.Encouraging more consumption.
Wide distribution Network

Amity Business School

Advertising and Media Coverage

Sales Promotion
Sales Pomotions offer a direct incentive to
buy more in the short term.

Amity Business School

Thank You