UNIT– I : INTRODUCTION TO MARKETING

MANAGEMENT
WHAT IS MARKETING?

‘Marketing is a social process by which individuals and groups obtain what

they want and need through creating, offering and exchanging products of
value with others’ KOTLER 1991

Marketing is the activity, set of institutions, and processes for creating,

communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large.

-AMA
WHAT IS MARKETING MANAGEMENT?

Marketing management is theart and science of choosing target marketsand

getting, keeping, and growing customers through creating, delivering, and
communicating superior customer value.

SCOPE OF MARKETING

 Goods Ex.-Food Products,Cars

 Service Ex.-Work of Airlines,Hotels
 Events Ex.-CWG, Olympics, World Cup
 Experiences Ex.-Walt Disney Kingdom
 Persons (Celebrity) Ex.-Amitabh, Dhoni
 Places Ex.-Cities,States
 Properties Ex.-Real estate
 Organizations (Philips) Ex.-Let’s Make things better
 Information Ex.-Universities,Encyclopedias
 Ideas (Revlon) In the factory, we make cosmetics, In the store we
sell hope.
CORE MARKETING CONCEPTS :
 Needs, wants, and demands
 Segmentation, Targeting, positioning,
 Offerings and brands
 Value and satisfaction
 Marketing channels
 Supply chain
 Competition
 Marketing environment

PHILOSOPHIES OF MARKETING MANAGEMENT :

Production Concept :
 Consumers prefer products that arewidely available and
inexpensive.
 The idea that consumers will favor products that are available and
highly affordable & that the organization should therefore focus on
improving production and distribution efficiency.
Product Concept :
 Consumers favor products that offer the most quality, performance,
or innovative features
 The idea that consumers will favor products that offer the most
quality, performance, and features and that the organization should
therefore devote its energy to making continuous product
development.

Selling Concept :
 Consumers will buy products only if the company aggressively
promotes/sells these products
 The idea that consumers will not buy enough of the firm’s products
unless it undertakes a large-scale selling and promotion effort.

Marketing Concept :
 Focuses on needs/ wants of target markets & delivering value
better than competitors
 It is the philosophy that achieving organizational goals depends on
knowing the needs and wants of target markets and delivering the
desired satisfactions better than competitors do.
Micro Environment
The micro environment includes factors that are close to the company and directly influence
its ability to serve its customers. These factors are within some level of control by the
company.

1. The Company:
o Explanation: The company itself, including all its departments such as
finance, R&D, purchasing, operations, and marketing, must work together to
create a cohesive strategy that meets customer needs and achieves business
goals.
o Example: Apple Inc. exemplifies this well. When developing a new iPhone,
Apple’s design, engineering, manufacturing, and marketing teams collaborate
closely. The design team focuses on aesthetics and functionality, while the
engineering team ensures technical feasibility. Marketing then positions the
product in a way that aligns with Apple’s brand identity of innovation and
quality. This internal alignment is crucial for Apple to deliver products that
meet customer expectations and maintain its brand image.
2. Suppliers:
o Explanation: Suppliers provide the essential inputs a company needs to
produce its goods or services. The reliability, quality, and cost of these
supplies can significantly impact the company's ability to deliver its products
to market.
 o Example: Toyota depends on a global network of suppliers to provide the
parts necessary for its vehicles. During the COVID-19 pandemic, the global
shortage of semiconductor chips—a critical component in modern vehicles—
disrupted Toyota’s supply chain. This shortage led to delays in production and
reduced the number of vehicles Toyota could deliver to the market, impacting
sales and customer satisfaction.
3. Marketing Intermediaries:
o Explanation: These are firms that help the company promote, sell, and
distribute its products to final buyers. They include resellers, distribution
firms, marketing services agencies, and financial intermediaries.
o Example: Coca-Cola relies heavily on its network of bottling partners,
distributors, and retailers to get its products into the hands of consumers. For
example, Coca-Cola products are sold in nearly every grocery store,
restaurant, and vending machine worldwide. These intermediaries help Coca-
Cola maintain its massive distribution network, ensuring that its products are
available wherever consumers are.
4. Customers:
o Explanation: Customers are the most important actors in the company’s
micro environment. Understanding their needs, behaviors, and preferences is
crucial for developing successful marketing strategies.
o Example: Netflix uses data analytics to understand its customers’ viewing
habits. By tracking what shows and movies users watch, Netflix tailors its
recommendations and even decides which new content to produce. This
customer-centric approach has allowed Netflix to grow its subscriber base and
maintain high levels of customer satisfaction.
5. Competitors:
o Explanation: Competitors are other companies offering similar products or
services. A company must offer greater value and customer satisfaction than
its competitors to succeed in the market.
o Example: PepsiCo competes directly with Coca-Cola in the global soft drink
market. Both companies constantly monitor each other's products, marketing
campaigns, and pricing strategies. For example, when Coca-Cola launched its
"Share a Coke" campaign, PepsiCo responded with its own personalized
marketing efforts. Understanding and responding to competitors' actions is
crucial for staying competitive.
6. Publics:
o Explanation: Publics are groups that have an actual or potential interest in or
impact on a company’s ability to achieve its objectives. These can include
financial publics, media publics, government publics, citizen-action publics,
and local communities.
o Example: Google has to manage its relationship with various publics,
including government regulators who scrutinize its practices related to data
privacy and anti-competitive behavior. In Europe, for instance, Google has
faced significant fines and regulations related to its market dominance.
Managing these relationships carefully is essential for Google to maintain its
reputation and avoid legal issues.
Macro Environment

The macro environment includes larger societal forces that affect the micro environment.
These forces are often outside the company’s control and require constant monitoring and
adaptation.

1. Demographic Forces:
o Explanation: Demographic forces refer to the characteristics of a population,
such as age, gender, income level, and education. These trends can affect
market demand and the type of products or services a company should offer.
o Example: The aging population in countries like Japan has led companies
such as Panasonic to develop products tailored for older consumers, such as
easy-to-use electronics and home healthcare devices. Understanding
demographic trends allows companies to target their offerings to the right
segments of the population.
2. Economic Forces:
o Explanation: Economic forces include factors such as inflation,
unemployment, economic growth, and consumer spending patterns. These
factors influence consumers’ purchasing power and spending behavior.
o Example: During economic recessions, companies like Walmart often see an
increase in customers as consumers become more price-conscious and seek
out value-oriented retailers. Walmart’s “Everyday Low Prices” strategy is
particularly effective in attracting customers during tough economic times.
3. Natural Forces:
o Explanation: Natural forces include environmental and ecological aspects like
natural resource availability, environmental sustainability, and climate change.
Companies must consider these factors when developing their products and
strategies.
o Example: IKEA has committed to sustainability by using more renewable and
recycled materials in its products and by sourcing wood from responsibly
managed forests. This focus on sustainability helps IKEA appeal to
environmentally conscious consumers and ensures the long-term availability
of resources.
4. Technological Forces:
o Explanation: Technological forces involve innovations and advancements
that can create new products, improve production processes, or render existing
products obsolete.
o Example: The rise of smartphones and mobile apps has transformed
industries. For instance, Uber leveraged smartphone technology to disrupt the
traditional taxi industry by offering a more convenient and efficient way to
book rides. Companies that stay ahead of technological trends can gain a
significant competitive advantage.
5. Political and Legal Forces:
o Explanation: Political and legal forces include laws, government agencies,
and pressure groups that influence or limit various organizations and
individuals in a society.
o Example: Facebook has faced increasing scrutiny from governments around
the world regarding data privacy and the spread of misinformation. In
response to regulatory pressure, Facebook has had to implement stricter data
privacy measures and content moderation policies. Navigating political and
 legal environments is critical for companies to avoid fines, lawsuits, and
reputational damage.
6. Cultural Forces:
o Explanation: Cultural forces involve societal values, perceptions, preferences,
and behaviors. These cultural trends influence how consumers interact with
products and brands.
o Example: The growing cultural trend towards health and wellness has led
companies like PepsiCo to expand their portfolio to include healthier options,
such as their acquisition of Quaker Oats and Tropicana. Understanding and
responding to cultural trends allows companies to align their offerings with
consumer values and preferences.

SELLING VS MARKETING

FROM SELLER’S VIEW POINT

4 P’s 4 C’s

 Product – Customer solution

 Price – Customer cost
 Place- Convenience
 Promotion - Communication
Five Marketing Concepts Explained with
Examples
The marketing concept is the strategy that firms implement to satisfy customers
needs, increase sales, maximize profit and beat the competition. There are five
marketing concepts that organizations adopt and execute.
Marketing is a department of management that tries to design strategies that
will build profitable relationships with target consumers. But what philosophy is
the best for a company in setting marketing strategies?
There are five alternative concepts under which organizations design and carry out
their marketing strategies.
5 Marketing Concepts
1. Production Concept,
2. Product Concept,
3. Selling Concept,
4. Marketing Concept,
5. Societal Marketing Concept.

These concepts are described below;

Production Concept
The idea of production concept – “Consumers will favor products that are available
and highly affordable”. This concept is one of the oldest Marketing management
orientations that guide sellers.
Companies adopting this orientation run a major risk of focusing too narrowly on
their own operations and losing sight of the real objective.
Most times; the production concept can lead to marketing myopia. Management
focuses on improving production and distribution efficiency.
Although;
in some situations; the production concept is still a useful philosophy.

Product Concept
The product concept holds that the consumers will favor products that offer the
most in quality, performance and innovative features.
Here; under this concept,
Marketing strategies are focused on making continuous product improvements.
Product quality and improvement are important parts of marketing strategies,
sometimes the only part. Targeting only on the company’s products could also lead
to marketing myopia.
For example;
Suppose a company makes the best quality Floppy disk. But a customer does really
need a floppy disk?
She or he needs something that can be used to store the data. It can be achieved by
a USB Flash drive, SD memory cards, portable hard disks, and etc.
So that company should not look to make the best floppy disk. They should focus
to meet the customer’s data storage needs.

Selling Concept
The selling concept holds the idea- “consumers will not buy enough of the firm’s
products unless it undertakes a large-scale selling and promotion effort”.
Here the management focuses on creating sales transactions rather than on building
long-term, profitable customer relationships.
In other words;
The aim is to sell what the company makes rather than making what the market
wants. Such aggressive selling program carries very high risks.
In selling concept the marketer assumes that customers will be coaxed into buying
the product will like it, if they don’t like it, they will possibly forget their
disappointment and buy it again later. This is usually very poor and costly
assumption.
Typically the selling concept is practiced with unsought goods. Unsought goods
are that buyers do not normally think of buying, such as insurance or blood
donations.
These industries must be good at tracking down prospects and selling them on a
product’s benefits.

Marketing Concept
The marketing concept holds- “achieving organizational goals depends on knowing
the needs and wants of target markets and delivering the desired satisfactions better
than competitors do”.
Here marketing management takes a “customer first” approach.
Under the marketing concept, customer focus and value are the routes to achieve
sales and profits.
The marketing concept is a customer-centered “sense and responds” philosophy.
The job is not to find the right customers for your product but to find the right
products for your customers.
The marketing concept and the selling concepts are two extreme concepts and
totally different from each other.
Difference between Selling Concept and Marketing
Concept
No. The Selling Concept The Marketing Concept
1 undertakes a large-scale selling and undertakes activities such as; market research,
promotion effort
2 The Selling Concept is suitable with The Marketing Concept is suitable for almost
unsought goods—those that buyers do not any type of product and market.
normally think of buying, such as
insurance or blood donations.
3 Focus of the selling concept starts at the Focus of the marketing concept starts at
production level. understanding the market.
4 Any company following selling concept Companies that are following the marketing
undertakes a high-risk concept requires to bare less risk and
uncertainty.
5 The Selling Concept assumes Instead of making an assumption, The
–“customers who are coaxed into buying marketing concept finds out what really the
the product will like it. Or, if they don’t consumer requires and acts accordingly to
like it, they will possibly forget their them.
disappointment and buy it again later.”
The Selling Concept makes poor Marketing concept works on facts gathered by
assumptions. its “market and customer first” approach.

Societal Marketing Concept :

Societal marketing concept questions whether the pure marketing

concept overlooks possible conflicts between consumer short-run
wants and consumer long-run welfare.
The societal marketing concept holds “marketing strategy should
deliver value to customers in a way that maintains or improves both
the consumer’s and society’s well-being”.
It calls for sustainable marketing, socially and environmentally responsible
marketing that meets the present needs of consumers and businesses while also
preserving or enhancing the ability of future generations to meet their needs.
The Societal Marketing Concept puts the Human welfare on top before profits
and satisfying the wants.
The global warming panic button is pushed and a revelation is required in the
way we use our resources. So companies are slowly either fully or partially
trying to implement the societal marketing concept.

Marketing management process:

Step 1: Setting Marketing Objectives

→The process of marketing management starts with the activity of

setting objectives.The organisational mission provides the priorities

for scanning the environment and finding out the opportunities

Step 2: Analysing Marketing Opportunities:

→This involves analysis of opportunities in the light of company

strengths and weakness-both internal and external.The task may be
to analyse long-run opportunities or short-run opportunities or even
medium term.

→This helps the companies to know the needs and wants of their
customers,their locations,buying and social practices and so on.

Step 3: Researching and Selecting Target Markets

→The select target market company needs to know how to measure

and attractiveness of any given market. This requires estimating the
market’s overall size and growth and profitability.

→The modern marketing divided into major segments, evaluate

them, selecting and targeting those market segments that the
company can best serve.

→Company must know techniques for measuring market potential

and forecasting future demand.

Step 4: Designing marketing strategies

→The marketing strategy spells out the game plan for attaining the
business’s objectives or product/ market objective.
→Marketing strategy defines the broad principles by which the
business unit expects to achieves its marketing objectives in the
target marketing.

→It consists of basic decisions on total marketing expenditure ,

marketing mix , and marketing locations.

Step 5: Planning Marketing Programmes

→It is not enough to formulate only the board of strategies by which

the business expects to achieve its marketing objective but also plan
the supporting marketing mix programmes.

→Decisions have to be taken regarding the features , packaging,

branding ,servicing policies , etc .,of the product

Step 6 : Organising , implementing and controlling marketing

efforts:

→The final stage in the marketing management process is organizing

the marketing resources and implanting and controlling the
marketing plan.

→Marketing organization is typically headed by marketing Vice

President

→The company is requires to design a marketing organization that

will be able to degenerate the marketing plan up to work, i.e.,
implementing its effort.
 UNIT 2 : SEGMENTATION, TARGETING AND
POSITIONING
Market Segmentation
Mass Marketing :
Mass marketing -- also called undifferentiated marketing --
casts a wide net. Companies use mass marketing to promote a
single product or service to as many people as possible without
differentiating how various segments of the market might
respond. For example, a fast-food chain might offer the same
hamburger promotion at all of its franchises to create a
demand for its new product. The ultimate aim is to
create generic product. Eg salt, sugar, , telecom service, gas
cylinder.

Drawbacks :
❖The disadvantage of mass marketing is its limited appeal.

❖Consumers don’t all think alike, so what works well in one geographic region
or for one demographic might not work well for others.

❖For example, a hamburger promotion might be a hit in college towns but fail
in well-off suburbs.

Market Segmentation :

The process of identifying or sub diving a large market into clearly

identifiable segments or groups of customers having similar needs,
wants or demand characteristics .

Market Segment : A subdivision or part of an overall market with

specific and distinctive characteristics.
Market Segmentation : Tailor your marketing to the needs and
wants of the particular market segment.

Levels of market segmentation refer to different approaches and

strategies that businesses can employ to target specific customer
segments.

Levels Of Segmentation--

Segment Market- a clothing retailer might target different

segments based on age groups (e.g., children, teenagers, adults

Niche Market- a company specializing in organic and gluten-free

snacks may target health-conscious individuals with specific dietary
requirements.

Local Market- a restaurant running location-specific promotions or

sponsoring local events to attract customers in a particular
neighborhood.

Individual/One-to-One/Personlaised Market- e-commerce

platforms may use customer browsing and purchase history to
provide personalised product recommendations.
Patterns Of Segmentation (Analysing Demands)

❖How to group customers into

❖segments?

❖Marketer need to identify ‘Demand Patterns’ – do all potential

customers have similar needs/demands or there exist clusters?

The Milk, sugar, Basic Stationary market segment can be considered an

example of homogeneous segmentation

The perfume market is highly diffused, as individual preferences for scents

vary widely. The automobile market can be segmented into different clusters,
such as economy cars, luxury cars, sports cars, and electric vehicles.
Segmenting Consumer Market

Geographic segmentation is the practice of segmenting a campaign’s

target audience based on where they are located along with its population &
climate.

•Segments can be as broad as a country or a region, or as narrow as one street

of homes in a town.

•useful for both large and small businesses alike.

•extremely easy to implement

•Example - a local pizzeria could present their ad to only people within the
town they are located.

Demographic Segmentation is segmenting the market based on certain

characteristics of the audience. Characteristics often include, but are certainly
not limited to: race, ethnicity, age, gender, religious, education, income,
marital status, and occupation.

❖can be useful in a variety of ways

❖even more efficient when targeting multiple segments at once.

❖Example - local (geographic) females (demographic: gender) aged 25-50

years old (demographic: age) with a household income of less than Rs.100,000

Psychographic Segmentation divides the market on principals such as

lifestyle, values, social class, and personality.

❖ significantly more difficult to implement than geographic or demographic

segmentation.

❖A prime example of psychographic segmentation is targeting those who are

budget conscious, like Big Bazar, utilize this tactic nicely by using words like
“Unbeatable Prices” and “Sabse sasta”

Behavioral segmentation is the practice of dividing consumers into groups

according to any of the following attributes: usage, loyalties, awareness,
occasions, knowledge, liking, and purchase patterns.

❖can be used in a variety of ways

❖allows marketers to be more relevant and produce messaging that will

resonate well with their desired target market.

❖Example – When segmenting based on awareness, companies may opt to

send their loyal customers one ad campaign, whereas target an additional
campaign to prospective customers who have yet to build a relationship with
the brand.

❖When segmenting based on occasions, companies can target consumers who

are less price sensitive during times like graduation season and the holiday
season.

❖Why Segmentation ?

Differentiation and Positioning:

Differentiation :

•Kotler defines differentiation as the process of adding meaningful and valued

differences to distinguish the product from the competition.

•There are a number of differentiation dimensions and strategies for their

accomplishment.

•Differentiation Dimensions

–A firm can differentiate along 5 dimensions:

•Product •Services •Personnel •Channel •Image

Product Differentiation :
–The Internet differentiates itself by providing a limitless assortment of products.

–Differentiation may include customization, bundling and attractive pricing of products.

–Internet sales may not rely as heavily on product packaging as do traditional retailers.

–Packaging minimization will reduce waste and costs.

Service Differentiation :
–Customer service can be enhanced by 24 hour customer feedback through e-mail.

–Home delivery of groceries and online banking and securities trading are becoming
increasingly popular.

–Today such services supplement traditional services, but may someday

replace them.

Channel Differentiation :

–The Internet is a location-free, time-free distribution and communication

channel.

–The Internet serves as a transaction and distribution channel.

–The Internet provides highly specialized personal services and “do it yourself”
websites.

Image Differentiation :

–A company can differentiate itself by creating a unique experience online,

called “experience branding.”

–The Internet’s interactivity allows companies to respond more quickly to

customer requests. •Faster communication. •Retain current customers and
attract new ones.

Differentiation Strategies
•Differentiation strategies are particularly important Internet. – Internet
marketing strategy revolves around company image and product information
available on the Web.

•Specific strategies may include:

–Being the first to enter the market.

–Owning a product attribute or quality in the mind of the consumer.

–Demonstrating product leadership.

–Utilizing an impressive company history or heritage.

–Supporting and demonstrating the differentiating idea.

–Communicating the difference.

•Amazon.com and Monster.com have successfully differentiated themselves.

Positioning
•Positioning is the process of creating a desired image among its competitors
in the public’s mind.

•The e-marketer’s goals is to build a position on one or more bases that are
relevant and important to the consumer.

•Bases and Strategies for Positioning

 Product or service attribute.
 High-tech image.
 Benefits.
 User categories.
 Comparison with competitors.
 Integrator position.

Product or Service Attribute :

•May include features such as size, color, speed, etc.

•Amazon’s one-click check-out process is an example of a positioning attribute.

•Tylenol does not sell online, but provides useful one-to-one features for pain relief and
health information.

Technology Positioning :
•Shows that a firm is on the cutting edge of technology.

•At Lands’ End, consumers can build virtual models of themselves and try on virtual outfits.

•At American Airlines, customers can store seating preferences and frequent flier account
information.

Benefit Positioning :
•Benefit positioning is generally a stronger basis for positioning, because it answers the
consumer question: What will this do for me?
•Miller Lite offers software that can be used as a social organizer.

•On the Valvoline motor oil site, visitors can send greeting cards, download racing
screensavers and sign up for newsletters.

User Category :
•User category positioning relies on customer segments.

•Kellogg’s has an interactive site for children.

•Yahoo! Geo Cities hosts pages organized by neighborhoods and specific interests.

Competitor Positioning :
•Many firms position by benefits that provide advantages over their competitors.

•Companies may position themselves against

 –An entire industry.

 –A particular firm.
 –Relative industry position.

•“I Can’t Believe It’s Not Butter” margarine positions itself against other
margarines.

Integrator positioning :

•We can expect to see more integrator positioning in the lending, jewelry and
hospitality industries.

•Lending Tree helps brokers find clients more quickly and cheaply.

•Blue Nile sells an estimated $129 million of jewelry that would require 116
retail stores.

•Web travel agencies can move market share to hotels that give them
discounts.

Repositioning Strategies :

•Repositioning is the process of creating a new or modified brand, company or

product position.

•A company may enhance or modify a position, based on market feedback, .

•Yahoo! repositioned from online guide to Web portal.

•Amazon repositioned from world’s largest bookstore to “Earth’s biggest

selection.”

5 Levels of Market Differentiation

Strategies :
 Every brand faces the dual challenge of positively influencing growth (by
capturing new customers) and doing it in a way that promotes loyalty to
the brand.
 Every brand seeks to differentiate.
 Strategic differentiation is the key.
 The struggle for differentiation may take many different forms.
 The brand’s differentiation strategy should change and evolve as the
market matures and competition intensifies.

The 5 primary market differentiation strategies can be charted for

comparison based on market penetration and market maturity.

The 5 Market Differentiation Strategies:

Technology Differentiation :
A new technology may provide sufficient value for differentiation in the
market. Mobile operators make liberal use of this strategy (think 4G, HSPA,
WAP).

Price/Quality Differentiation :
Mobile network operators in the U.S. have “innovated” this differentiation
strategy so thoroughly that the majority of customer now have virtually
bottomless bundles of text or voice minutes.
The use Price/quality differentiation fosters a calculative behavior where
customers continually shop for the next best deal. This in turn leads to
customer churn and increased acquisition costs.

Product Differentiation :
Long used by the consumer electronics industry, this strategy is designed to
overwhelm the consumer with features and specifications to provide the value
proposition.
Product differentiation often leads to market confusion which can paralyze
customer spending. Also, too many “big new” things can freeze spending as
consumers fear buying something that may be quickly obsolete.
Customer Service Differentiation :
Moving up the differentiation scale and focusing on superior customer service
is a way to avoid the limitations of a product/service play. This strategy is used
frequently by the insurance and investment industries.
Differentiating on customer service may be more costly for the brand in that it
requires the infrastructural support and continual advertising or messaging to
remind the potential customer of the service offer.

User Experience Differentiation :

In a commoditized market, differentiating based on an emotional bond with
the customer is both very powerful and difficult to do successfully. The brand
that is able to build emotional or social connections will have fiercely loyal
customers with low churn.

How to differentiate using the User

Experience strategy.
Research what your consumers aspire to. Find out what excites them, what
their affinities are, what idols they have? The customer dialog must
extend into the realm of individual values, aspirations, and social interests.
To make an emotional bond, the brand values must match what the customer
aspires to. These aspirations may include the environment, social
responsiveness, exclusivity, career ambition, family, security, fun and style.

Refining the brand experience may include creating extensions of existing

brands that are designed to suit the intended customer segment. The key
is “target”. A single “one-brand-fits-all” approach will only build experiences
with a generic customer.

The key metric to gauge success with this strategy is the customer’s ability
to brag about the experience. Are they cooler, more stylish, more caring,
or smarter for choosing your brand?
 UNIT 3: PRODUCT, PRODUCT MIX, BRAND
DECISIONS, PACKAGING, NPD, PLC

PRODUCT
According to Philip Kotler “Product is anything that can be offered to a market
for attention, acquisition use, or consumption and that might satisfy a want or
need”.

What is a Product?
• The Product is a bundle of satisfaction that a customer buys.
• It represents a solution to a customer’s problem.
• Includes:
– Physical Products
– Services
– Persons
– Places
– Organizations
– Ideas
– Combinations of the above

What are Goods and Services?

• Service: intangible task that satisfies consumer or business

user needs
• Goods-services continuum: device that helps marketers to
visualize the differences and similarities between goods and
services.
Levels of Product:

In planning its market offering, the marketer needs to address 5 product

levels. Each level adds more customer value, and together five
constitute a customer-value hierarchy.

5 product levels
Based on Durability :
Durable Goods: These are products that do not wear out quickly and
are intended to last for an extended period. They typically require a
significant investment and are used over time. Examples
include:Appliances (refrigerators, washing machines)
Furniture (sofas, beds)
Electronics (televisions, computers)
Nondurable Goods: These are products that are consumed or used up
quickly and typically have a short lifespan. They are usually inexpensive
and purchased frequently. Examples include:Food items (bread, milk)
Toiletries (soap, shampoo)
Cleaning supplies (detergents, paper towels)

Based on Tangibility :
Tangible Products: These are physical goods that can be seen,
touched, and felt. They have a clear physical form and can be stored
and inventoried.
Examples include: Clothing
Cars
Electronics
Intangible Products: These are services or experiences that cannot be
touched or owned in the same way as tangible products. They provide
value but do not have a physical form.
Examples include: Education (courses, training)
Financial services (insurance, banking)
Entertainment (movies, concerts)

Based on Use :
Convenience Products
> Buy frequently & immediately
> Low priced
> Many purchase locations
> Includes:
• Staple goods
• Impulse goods
• Emergency goods
Shopping Products
> Buy less frequently
> Gather product information
> Fewer purchase locations
> Compare for:
• Suitability & Quality
• Price & Style
Specialty Products
> Special purchase efforts
> Unique characteristics
> Brand identification
> Few purchase locations
Unsought Products
> New innovations
> Products consumers don’t
want to think about
> Require much advertising &
personal selling

Convenience product: good or service that consumers want to

purchase frequently, immediately, and with minimal effort
– Staples are convenience goods and services that consumers
constantly replenish to maintain a ready inventory.
Ex: Bread, Sugar, Pulse
– Impulse goods and services are
purchased on the spur of the moment.
Ex: News paper, toffee
– Emergency goods and services are bought in response to
unexpected and urgent needs.
Ex:Band –ads, Certain Medicines,M-Seal

Shopping product: good or service purchased only after the

customer compares competing offerings from competing vendors on
such characteristics as price, quality, style, and color
– Typically cost more than convenience purchases.
– Include tangible items.
– Shopper lacks complete information and gathers information
during the buying process.
Ex: Suiting, Shoes, Watches

Specialty product: good or service with unique characteristics that

cause the buyer to value it and make a special effort to obtain it
Ex: Jewellery, Sofa set, Carpets, Paintings

Unsought product: good or service marketed to consumers who

may not yet recognized in the need for it
Ex:Insurance, Electric massager, Electric blanket

Based on Use
• Industrial Products
• These are products purchased for further processing or for use in
conducting a business. They are classified as:
 • Materials and Parts: Raw materials (like timber, cotton, or iron) and
manufactured parts (like motors or tires) that become part of the final
product.
• Capital Items: Long-lasting goods that facilitate development or
operations, such as buildings, machinery, or equipment.
• Supplies and Services: Operating supplies (like office supplies or
cleaning products) and business services (like maintenance or
consulting).

PRODUCT MIX
The number of products carried by a company at a given point of
time is called its Product Mix.
Ex. Bajaj Electricals has 90 products in its portfolio.
Product Mix Decisions: