MODULE -2

PRODUCT MIX
Syllabus : Product –meaning – classification of products- product line and product mix – New product development –
Steps – reasons for failure of a new product – Product Life cycle – Branding - Types of brand – Brand equity – Brand
loyalty – Trade mark – Packaging – role of packaging –Essentials of good packaging – Product labelling .Marketing of
service – pricing of products – pricing methods and strategies – types of pricing .

Product means anything that is manufactured by labour or effort.

The term 'product' originated from the union of the Latin words
 Pro –forward
 Ducere- to lead.
Product - Lead forward' or 'bring forth'
The product should have the ability to satisfy the needs of the customers.
There are four important aspects which determine the want satisfying capacity of a product;

1. Desirability-It refers to the appeal or attraction of a product. A product must be one which is desired by the
consumers.
2. Purpose-It means the usefulness of a product or the reason for using a product.
For example, a detergent is used for washing clothes.
3. Usability -It implies the performance of a product. A product must be one that can be used comfortably by the
user.
4. User Experience-The product must give a positive feeling, happiness and satisfaction to the person who uses it.

Product includes;
 Goods,
 Services,
 Information,
 Events (stage shows, artistic performances, sports events etc…
 Properties (real estates, financial instruments etc..
 Experiences (amusement parks, water parks etc…

DEFINITIONS
1. According to Philip Kotler, "a product is anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a want or need. It includes physical objectives, services, persons, places,
organizations and ideas".
FEATURES
1. It is something which has the capacity to fulfill the needs of people.
2. A product can be a physical good or service.(Tangible and Intangible)
3. It can satisfy both commercial and personal needs.
4. It is the subject and the object of all marketing activities.
LEVELS OF PRODUCT
According to Philip Kotler, there are five levels of a product. These levels are;
1. Core Benefit -It is the basic need or want that consumers satisfy by consuming the product or service.
2. Generic Product -This level of a product contains those attributes or characteristics absolutely necessary for it to
function.
3. Expected Product -It is the set of attributes or characteristics that buyers normally expect from the product.
4. Augmented Product -This level contains the additional features, benefits, attributes or related services that
differentiate the product from its competitors.
5. Potential Product- It is the additions (modifications) and transformations a product might undergo in the future

PRODUCT AND SERVICE

Products can be tangible or intangible in nature.
A tangible product is any physical product that can be touched
Intangible products are non-physical products which cannot be touched,
Product Service

1. The term product is used to refer tangible 1. It means intangible goods

commodities/goods.
2.When a person purchases a product he can 2. A buyer cannot see a service but can feel or
physically see (examine) and touch it experience it.
3. If a product is not available in the market, 3. There are no substitutes for services.
customers can use substitute products. For For example, only doctors can provide the
example tea for coffee, milk powder for milk etc service required by a patient.
4. It can be preserved and stored for future use 4. It cannot be stored.
5. A buyer can examine the quality of a product 5. Quality can be understood only after getting
before making the purchase the service. No prior examination is possible in
the case of service.

TYPES OF PRODUCT
Products can be classified under two heads;
1. Industrial Products
2. Consumer products
1. Industrial Products
Industrial products are products that are sold by one business to another (B2B). These are items purchased
by business enterprises for using in the production of other goods, in the operation of a business, or for resale to
other consumers.
For example, machinery, components, equipments, tools, raw materials etc.
2. Consumer Products
Consumer products are those products that are bought by the ultimate consumers for personal, family,
household and other non business purposes (B2C).
For example, food items, clothes, toothpastes, soaps, vegetables, fruits etc.
Consumer Products can be classified into;
a) Fast Moving Consumer Products (FMCGs) -These are products which are sold quickly and at relatively low price.
Examples: Soaps, toothpastes, pen, soft drinks, chocolates etc.
b) Consumer Durables -Consumer durables are goods that are not quickly wear out or destroyed by use. They are
also known as durable goods or hard goods.
Consumer durables are further divided into;
i) White Goods (White Wares): Major household appliances and heavy consumer durables come under this
category.
Example, air conditioners, refrigerators, washing machines etc.
ii) Brown Goods: Light electronic durables come under this category.
Example, TV, computers, DVD players, mobile phones etc.
iii) Soft Goods: Goods made from soft materials are referred to as soft goods.
Examples are fabrics, dress items, window curtains etc.
(c) Perishable Goods -These goods are subject to decay and spoilage within a short period.
Example, butter, meat, fish, vegetables, ice cream etc.
d) Convenience Goods -Goods which are easily available to consumers without any extra effort are convenience
goods.
Example, fast foods, cigarettes, chocolates, pen etc.
e) Shopping Consumer Goods -In shopping consumer goods, consumer makes a lot of selection and comparison
based on various factors such as cost, brand, style, comfort etc, before buying a product. Example, jewelry shops,
textiles, footwear’s etc.
f) Specialty Consumer Goods -Goods which are very unique, unusual, and luxurious in nature are called specialty
goods. Specialty goods are mostly purchased by upper-class members of a society. Example, diamond, gold, costly
dress materials etc.
g)Non Sought/Unsought Consumer Goods -Goods or services which are available in the market but customers are
not really interested in buying them are called non-sought goods. These products are purchased not out of desire
but due to certain compulsions.
Example, medicines, coffins etc.

NEW PRODUCT DEVELOPMENT

Product development means manufacturing of a product best suited to satisfy the needs of the target
market.
Product development deals with;
 Development of a new product (NPD)
 Modification of the existing product

Definition
Product development is defined as “the science and art of developing new products and improving existing
products to their fullest potential in the target market”
There are different interpretations or definitions for a new product. Some of them are as follows;
1. New product –New Market
2. Existing product-New Market
3. Existing product– New Package
4. Existing product- New marketing strategies.
NEED FOR PRODUCT DEVELOPMENT
Product development is highly essential for a firm to enter into the target market. The growth and survival of
a firm in the market depend on the quality and ability of its product to meet the needs of the customers.
The needs of customers are dynamic in nature. So a company has to modify its product as per the changing
needs of the customers. No product can exist in a market for a long period of time without any additions in its value.

The need for product development can be well understood from the following points;
1.Customisation of Product
Customer needs are diverse in nature. In a market, there are a variety of different needs. Even within a
family buying unit, there are multiple customer voices For example, children may have different needs compared to
parents. A marketing firm must address these diverse needs of the target market.
2. Adjust with Product Lifecycle
Product development is necessary to overcome and exploit the emerging challenges and opportunities in the
different stages in the life of a product (Introduction-Growth-Maturity-Decline)
3. Innovation
Innovation means renewal or improvement to bring novelty to a product. Continuous innovation of the
product is necessary to adapt with the economic and technological changes in the market.
4. Fighting Competition
Product development helps a firm to differentiate its product in the target market. As a result, the product
of the firm enjoys an advantage over the products of the competitors. Customers will prefer products having a
unique image in the market.

5. Improving Brand Loyalty

Brand loyalty is the result of successful product development efforts. When the brand loyalty increases,
market share of the brand increases and the brand becomes more popular and profitable.
6.Increasing the Market Share
Product Development leads to a rise in the sales volume of the product ultimately resulting in an increase in
the market share of the product.

STEPS IN PRODUCT DEVELOPMENT/PRODUCT DEVELOPMENT PROCESS

1.Idea Generation
Every new product and every new product development process starts with the idea generation. Idea
generation is a process in which creative thinking is used to generate large amount of ideas for the development of
new products.
They use a wide range of techniques for idea generation. For example, market surveys, research, interaction
with customers, consulting the experts, encouraging ideas from the sales personnel, conducting brainstorming
2.Idea Screening
Idea screening or selection is the activity in which various product concepts are analyzed and sequentially
eliminated to identify the best idea.
The following are some of the important factors on the basis of which ideas are screened;
1) Novelty (innovation) of the idea. (Innovation)
2) Ability of the idea to attract the target market.(Attractiveness)
3) Benefits offered in comparison to competitive products.(Benefits)
4) Features that differentiate the product from the competition.(Different features)
5) Ability to generate the profits expected by the firm (profitability).
6) Availability of raw materials.
7) Financial and managerial capacity of the firm to implement the idea.
8) Production capacity of the firm.
3. Product Concept Development and Evaluation (Concept Testing)
When an idea or concept has been chosen, it is evaluated more carefully. For help in idea evaluation, firms
use concept testing by collecting feedback from customers about how well a new product idea satisfies their needs.
Concept testing is a quick and inexpensive way of measuring consumer perception. It asks potential consumers to
react to a product idea of the firm. This helps a firm to determine initial attitudes prior to expensive, time-consuming
product development.
4.Business Analysis
At this stage, the marketer analyses the viability of the product idea selected.
The key objective of this stage is to obtain useful forecasts of market size, operational costs and financial projections
(e.g., sales and profits).
5. Product and Marketing Mix Development
Companies construct an initial design or prototype (sample/model) of the idea. Once the prototype is ready
the marketer seeks customer opinion.In this stage the customers get to experience the real product as well as other
aspects of the marketing mix, such as advertising, pricing, and distribution.
In this stage, idea is transformed into tangible product. The result of the development stage is the prototype
(sample/model).
6.Product Testing/Test Marketing
 Usually firms conduct a product testing before launching the product. In test marketing stage, products are
sold to selected customers of the target market to assess their responses. The most common type of test marketing
is making the product available to a selective small segment of the target market (e.g., one city) to clearly
understand the performance and customer acceptance of the product.

Advantages of Test Marketing

1) It helps to understand the customer attitudes and responses
2) It helps firms to understand the deficiencies and make modification accordingly
3) It helps to decide the time of commercialization .
4) Firms can forecast their sales through test marketing.
5) Firms can finalize their marketing strategies on the basis of test marketing.

7.Commercialisation/Launching the New Product

This is the final phase of the new product development process. If market testing offers promising results the
product is ready to be introduced to a wider market. Full scale production and commercial launch take place during
this stage.
8. Post Launch Analysis
Marketing strategies adopted for launching a new product need to be revised in order to adjust with
changing needs and conditions of the target market. A typical product development process ends at
commercialization of product. But most firms conduct a post launch analysis to monitor the performance of the
newly introduced product in the market.
Post launch analysis is conducted to understand
1) The strengths and weaknesses of the product and marketing strategies adopted,
2) Nature of competition
3) Economic conditions
4) Technological advancements
FACTORS TO BE CONSIDERED IN PRODUCT DEVELOPMENT
1. Demand
It is the major factor that determines the success of a product in the market. If the consumers are not interested in
buying a product, then the product cannot survive in the market. So firms first conduct a demand analysis in order to
forecast the market demand for the new product.
2. Availability of Raw Materials
Marketing is not a one day programme. It is a continuous process. After launching the product, it has to be offered
to the target market without any interruptions. Raw materials are the major factors which determine the supply of
products. So firms have to ensure that the raw materials are readily available on a continuous basis.
3. Finance
Product development is a costly venture. Finance is a critical factor of product development. If the funds are not
readily available to create the product, development process will be delayed. So firms have to ensure the availability
of fund.
4. Development Team
The quality of product depends on the quality of the team of manpower behind its development. Finding skilled
manpower with the talent and knowledge is highly essential for product development.
5. Legal Standards
A firm should comply with the legal requirements in the development of new product. The new product must be in
accordance with the quality and safety standards and other stipulations prescribed by the law.
6. Reputation
The product should increase the reputation and image of the company. Reputation and image help firms to win the
trust of customers.
REASONS FOR FAILURE OF NEW PRODUCTS
1. Lack of Specialty
Uniqueness of the product is very important to attract the attention of the customers. A new product must be
different from the existing similar products in one way or the other. Lack of specialty or uniqueness may lead to the
failure of a new product in the market.
2.Poor Timing
Time of introduction of a product in the market is an important aspect deciding its success. A product has to be
introduced in the right time when the demands of the consumers are high.
3.Inferior Quality
Lack of quality is another major reason behind the failure of a new product in the market. Sub standard and cheaper
raw materials used in the manufacturing of a product reduces its quality and consumers prefer to avoid low quality
products.
4.Unfair Price
Some companies charge high price for their products much more than the cost of production. But consumers usually
compare the cost and price of a product and choose a product at reasonable price.
5. Lack of competitive Strength
Excessive competition and inability to meet the challenges of the dominant products in the market reduces the
market scope of new products.
6. Lack of Promotion
Companies have to evolve and implement appropriate promotion strategies to position their products in the market.
Lack of adequate promotion reduces the market scope of new products.
7. Poor Distribution Network
Availability of the product is a decisive factor in the success of a product in the market. The product must be easily
available to the customers as and when needed. For this, companies have to set up an appropriate distribution
network. Products may fail due to poor distribution network.
8. Poor After-Sales Service
After-sales service is another major issue in marketing of new products. Good after-sales service and support must
be availed for encouraging customers to buy a product. In the case of poor after sales service, customers will discard
a product or service.
9. Unavailability of Spare Parts
In the case of durable products, repairs and periodic services are inevitable. In such situation companies, have to
ensure continuous supply spare parts and other accessories to the consumers. Usually, consumers refuse to buy
products which are not having a regular supply of spare parts.
{{Measures to prevent product Failure- Write opposite of reasons for failure}}

PRODUCT INNOVATION
The term innovation was derived from the Latin word 'innovatio which means 'to renew' or 'change'.
Anything which is new to the market and the product is termed as innovation. Product innovation refers to
the creation and introduction of a new product or improvements made in an existing product.
1. Modification of an existing product. For example, Tata Indica Vista' is the modified version of Tata Indica V2'.
2. New model of the existing product. For example, 'Swift Dezire' is the latest model of 'Maruti Swift' car.
3. New product outside the existing range but in a similar field of technology. For example, introduction of 'Nano'
cars by Tata.
4. A totally new product in a new field of technology.

NEED AND IMPORTANCE

Innovation is necessary for the survival of a firm in a market. The following points show the need for product
innovation;

1. Increasing sales and profits

Innovation usually adds more value to an existing product. This helps firms to attract more customers and thereby
increase the volume of sales and profits.
2.Increasing competitive advantage
Innovative products are the centre of attraction of most consumers because innovation results in the refinement of
a product or service. This increases the advantage of a firm over its competitors.
3. Offering more benefits
Innovation helps firms to add more benefits and features to a product. The needs of customers can be well
addressed with the help of an innovative product.
4. Reducing cost
Innovation is required to identify better ways of production so as to improve the efficiencies and reduce the cost.
5. Improving quality
Innovation helps firms to continuously improve the quality of their products. New ways of production, technology,
machinery, raw materials etc. result in the enhancement of product quality.
PRODUCT MIX
Product mix is refers to a group of products manufactured or traded by the firm in order to
 Strengthen its presence in the market
 Increase its market share
 Increase the sales turnover for more
 Increase profitability.

 According to Philip Kotler, "product mix is the set of all product lines and items that a particular seller offers
for sale to buyers"
 According to W.J.Stanton, "product mix is the full list of all products offered for sale by a company".
PRODUCT LINE
A product mix consists of both product lines and individual products.
A product line is a group of products within the product mix that are closely related to each other. It is a set
of related products marketed by a firm.
For example, all the courses of study offered by a college constitute a product mix,courses offered by a particular
department of the college refer to a product line and a particular course of a department is a product.
DIMENSIONS OF PRODUCT MIX
There are four important dimensions of product mix. They are as follows;
1.Width of product mix- It means the number of different product lines offered by a firm.
For example, if a company has 3 product lines, its product mix width is 3.
2. Length of product mix- It refers to the total number of products within all product lines of a company.
For example, ABC Company has 3 product lines, and 3 products within each product line. Then, ABC's product mix
length would be 9.
3.Depth of product mix- It refers to number of varieties of each product (product variants) in a product line.
For example, if a company markets 3 cups (small, medium and large) and 3 flavors of ice cream, that particular
brand of ice cream has a depth of 9.
4.Consistency of product mix-It measures how closely related are the different product lines.
For example, The different product lines of P & G follow the same distribution channels.

PRODUCT MIX STRATEGIES

1.Expansion of Product Mix/Product Diversification
A firm may decide to expand its existing mix by increasing the number of lines or the depth within the lines.
The new lines added may be related or unrelated to the existing mix. The firm may also increase the number of
items in its product mix.
For example, 'Milma' of Kerala Co-operative Milk Marketing Federation (KCMMF) diversified/expanded its product
offerings from packaged milk to ice creams, curd, ghee, butter, beverages (milk drinks and mango drinks), sweets
(peda and cream roll) and cattle feed.
2. Contraction of Product Mix/Product Simplification
Another product strategy is slimming down (reducing) the existing product mix either by eliminating a line or
by simplifying the variety of products within a line. It is adopted to eliminate low-profit products and to get more
profit from fewer products.
For example, Bajaj Auto Ltd. eliminated Bajaj Scooters from their product line to concentrate more on the profitable
market segment of bikes.
3.Alteration of Existing Products
In spite of developing a complete new product, a firm takes the effort to alter or modify the existing
products.
For example, Hindustan Motors modified the style and appeal of Ambassador Cars several times without going for
the production of a new car.
4.Development of New Uses for Existing Products
This strategy requires firms to find new uses for an existing product.
For example, Dettol India markets its brand Dettol Antiseptic Liquid' as a versatile product which has many uses for
protecting the family from germs. The company claims that the product can be used as first-aid in wounded (injured)
areas, germ-free bath, after shave lotion, cleaning floors and washing laundry.
5. Trading-Up and Trading-Down
Trading-up means, adding a higher priced prestigious product to the existing line of lower priced products.
For example, Maruti Suzuki India Ltd. added high priced luxury (prestigious) cars like 'Swift DZire', 'SX4' and 'Ertiga' to
its existing line of cars. There are two options before a firm which adopts a trading-up strategy;
1) Promoting the older, lower-priced product
2) Promoting the new product and expect it to gain a major sales volume.
Trading-down is the opposite of trading-up. In trading down, a firm adds a lower priced product to its
existing line of prestigious products.
While following this strategy, the firm expects that consumers who cannot afford to purchase the existing high
priced prestigious products can purchase the newly added low priced product.
For example, Chevrolet India added low priced cars like 'Chevrolet Spark' and 'Chevrolet Beat' to its existing lines of
luxury cars.
6. Product Differentiation
Product differentiation is the process of differentiate a product from that of the competitors. It is a process
of creating a different appeal to a product as against the products of competitors. The ultimate objective of
differentiation is to make the brand more attractive to a particular target market.
For example, Close up and Pepsodent brands of Hindustan Unilever Ltd. offers a variety of differentiated (different
colors and flavors) toothpastes.
PRODUCT LIFE CYCLE (PLC)
It is the process analyzing the different stages in the life of a product. This concept observes and compares
the life of a product with the life of living beings.
For example, a living being takes birth and grows through the youth stage to become an adult. From the
adult stage, it becomes aged (old) and declines both physically and mentally, after which it dies.
A product also passes through almost similar stages in its life in a market situation. It has a birth, growth and
death. Different stages in the life of a product can be identified by critically analyzing the sales and revenue
generated by that product.

1. Introduction
This is the commercialization or launching stage of a new product or service. This stage is charecterised by intense
marketing efforts of the firm to promote the newly introduced product in the target market.
The important features of this stage are as follows;
1) High cost of production and market operations
2) Intense promotional measures.
3) Low sales.
4) Low demand.
5) Low profit.
6) Customers are to be encouraged to buy the product.
7) Customers do not have adequate knowledge about the product.

2. Growth
 After the introduction of a product in the market, consumers get the awareness and knowledge about the
product as a result of the intense promotional measures adopted by the firm. More consumers start to buy and use
the new product.

The important features of this stage are as follows;

1) Reduction in cost as a result of increased production
2) Increase in sales volume
3) Increase in profit
4) Increase in demand
5) Increase in customer awareness and knowledge
6) Increase in competition
7) Stable price
3. Maturity
Market attains saturation during this phase. At this stage, the sales reach its maximum point and maintain a
steady state. Firms try product expansion, contraction, alteration and differentiation during this phase to survive in
the market.
The important features of this stage are as follows;
1) Low cost because of large scale production
2) Sales volume reaches the maximum limit and attains market
saturation
3) Intense competition
4) Reduced price as a result of intense competition
4. Decline
This stage is charecterised by Continuous decline in sales volume. Decline usually occurs as a result of
innovative products or a change in consumer tastes.
The important features of this stage are as follows;
1) Cut throat competition
2) Economic and production conditions become unfavorable.
3) Profits can be improved by reducing marketing and other expenses.
4) Heavy decline in sales volume, price and profitability.
ADVANTAGES OF PLC
 By charting the time, sales, and profits firms can clearly understand the different stages in the life of their
products.
 PLC model gives marketers the ability to formulate adequate marketing strategies and execute these
strategies at the right time.
 It helps firms to study past sales and forecast future sales
 By combining the elements of time and sales volume the PLC
LIMITATIONS OF PLC
 There is no clear evidence to support the existence of a growth, maturity and decline of products. PLC is
only an assumption (hypothesis).
 It is not easy to clearly determine the various stages after introduction to the end of a product.
 PLC reads only the variations in sales and profit of a product from its introduction but does not analyze the
causes of such variations.
 It assumes that all products finally reach a decline stage after passing through growth and maturity stages.
But this is not applicable in the case of many products.
For example, medicines. No stages of growth, maturity and decline can be observed in the case of medicinal
products.
  It only considers the relationship between sales and time and ignores other major factors such as costs,
price, and competition and market conditions affecting the sales of a product model helps firms to
eliminate idle (inactive) products.
 It is highly useful in developing new products and improving existing products.
8) Low or no competition

PRODUCT LIFE CYCLE MANAGEMENT (PLCM)

PLCM deals with the strategies adopted by a firm to manage the product in the target market as the product
passes through various stages of its life.

BRANDING
Consumers choose products they want not only on the basis of product features and benefits but also on the
basis of the name of brand. A brand name helps them to differentiate a product from other similar products in the
market.
Definition
The American Marketing Association (AMA) defines a brand as “a name, term, sign, symbol or design, or a
combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate
them from those of other sellers”
Branding is referred to as a process of creating a unique name and image for a product in the minds of the
consumers through advertisements and other product promotion measures.
OBJECTIVES OF BRANDING
 To help consumers to remember the product.
 To deliver the product message clearly.
 To reach the targeted customers emotionally.
 To make consumers loyal to the product.
 To increase the familiarity of the product in the target market.
 To give a premium image for the product in the market. (Charging high Price)
 To easily expand the product line(Introduce new products in the market)
 To reduce the expenses of marketing.
NEED AND IMPORTANCE OF BRANDING
1.A systematic brand strategy helps a firm to attain a distinct position in a market.
2. Strengthen the brand.
 3. A clear brand strategy empowers employees by reducing ambiguity
4. The identity generated by branding helps firms to communicate product information with different
parties.

BRANDING STRATEGIES (TYPES OF BRANDS)

Branding strategies refer to the plan of actions aimed at the branding of the products of a firm.
1. Family Branding (Family Brand/Umbrella Brand)
The concept of this strategy is 'One brand many products'. The strategy fixes a particular brand name for
several related products. Family branding does not mean that the entire product mix of the company should go
under single brand name. A company may use different brand names for different product lines.
For example, Lakme products, Godrej, Johnson & Johnson etc.
2.Corporate Branding
This strategy builds brand identity by using the company name for the products offered.
For example IBM computers, Philips brands , hdfc bank
3. Individual Branding Multi Brand)
It gives a unique brand name for each product in a product line. The advantage of this strategy is that each
product in a product line gets a unique image and identity.
For example, Hindustan Unilever products. 'Rin', 'Sunlight', 'Surf excel', 'Vim' etc.
4. Combination Branding (Combination Brand)
This strategy uses both corporate name as well as the product's brand name.
For example, Microsoft Network (MSN), Microsoft Excel, Word etc.
CHARACTERISTICS OF A GOOD BRAND
1. The name should be easy to read and understand.
2. It should be easy to pronounce.
3. It should be suitable for the features of the product.
4. It should be easy to memorize.
5. It should be unique (entirely different from other brands).
6. It should be one that describes the quality, features and
superiority of the product.
7. It should be one that meets the legal stipulations of the country.
ADVANTAGES OF BRANDING
Branding offers numerous advantages to the producers, dealers and consumers. Some of the major
advantages of branding are given below;
Advantages to the Producers/Companies
 It acts a tool which helps firms to create a unique image.
 A strong brand name helps companies to reduce their product
promotion expenses.
 Branding allows companies to easily introduce new products and expand
their product lines.
 Branded products increases the sales volume and market share of a firm .
 Branding helps a firm to clearly differentiate its products from that of
the competitors.
 Make the company more reliable and trustworthy than an unbranded
business.
Advantages to the Dealers
 Dealers need not take heavy efforts in selling a branded product. Customers voluntarily enquire, search and
purchase branded products.
  Branded products give loyal and regular customers to a dealer.
 By keeping branded products, a dealer can also promote and increase the sale of other products in his store.
 Customer complaints are low in the case of branded goods and so the dealers can run their business
smoothly.
 Branded dealers enjoy a competitive advantage over the competitors.

Advantages to the Consumers

 Branded goods usually maintain top quality and offer more benefits to the consumers.
 Firms offering branded products usually follow a wide distribution network .As a result, the customers need
not have to face any difficulty in purchasing the products.(Easy availability)
 A branded product is available at a uniform price throughout the whole market. This avoids customer
exploitation in terms of excessive pricing by the dealers.
DISADVANTAGES OF BRANDING
• Higher Prices(Customer)
• Higher Costs (Producer)
• Low Profit Margin (Dealers)
• Brand Monopoly (Customer)
• BRAND EQUITY
• It is the sum total of values, assets and liabilities generated by a branded product over a period of time.
• It is referred to as the additional amount of money consumers are willing to pay for a brand compared to
other.
• Companies can create brand equity for their products by making them memorable, easily recognizable and
superior in quality and reliability.
KEY ELEMENTS OF BRAND EQUITY
1. Brand loyalty
2. Brand awareness
3. Perceived quality
4. Brand associations
5. Other proprietary brand assets such as patents, trademarks, logo, package, etc.
1. Brand Loyalty - It is a measure of the attachment that a customer has to a brand.
2. Brand Awareness- Consumers will repeatedly buy a familiar brand because they are comfortable with the
brand. It is also help to increase the brand awareness.
3. Perceived Quality -It is the opinion of a consumer about a brand's capacity to meet his expectations or satisfy
his needs.
4. Brand Association - It is the degree to which a particular brand is associated with the general product
category in the mind of the consumer.
For example, a consumer asking 'Ujala' for Liquid Blue.
5. Other Proprietary Brand Assets - These assets can take several forms. For example, a trademark will protect
brand equity from competitors.. A patent can prevent copying or imitation of the brand.
BRAND LOYALTY
Brand loyalty explains a consumer's devotion to a particular brand and the tendency to repurchase a brand.
According to Philip Kotler, there are four patterns of brand loyalty;
1. Hard-Core Loyals: Consumers who buy the brand all the time.
2. Split Loyals: Consumers who are loyal to two or three brands.
3. Shifting Loyals: Consumers who move from one brand to another.
4. Switchers: Consumers who have no loyalty to any brand.
TRADEMARK
A trademark is a distinctive sign used by a firm to show that the products or services offered are originated
from a unique source and to distinguish them from the products or services of other firms.
 • TM for an unregistered trade mark
• SM for an unregistered service mark and
• R for a registered trademark

A trademark may be a word, name, logo, phrase, image, symbol, design or a combination of these elements.
Trademark is same as brand name. It is a legally protected brand name.

NEED AND IMPORTANCE OF TRADEMARK

 It is essential to give legal protection to a brand and brand name.
 It protects the consumers.
 The consumers can clearly differentiate their brands by identifying trademark
 A trademarked brand gets more acceptance and appreciation from the customers..
 It increases the authenticity (legitimacy) of a brand.
PRODUCT STANDARDISATION
 Product standardization is the adoption of generally accepted uniform procedures, materials, or parts that
directly affect the design of a product.
 For example, a Car manufacturing company has to adopt certain standards in the production of a particular
model of car. There should not be any differences between different cars of the same model. All Innova' cars
marketed by the Toyota Company in India are same.
Standardization brings uniformity in the attributes of different units of the same product. For example, there
is no difference between two Bullet manufactured by Royal Enfield. Both of them offer same design, features,
benefits and price.
There are two types of standards;
1. Voluntary standards (established by the firms)
2.Legal standard (established by the Law or regulations)
For example, BIS (Bureau of Indian Standards),
ISO (International Organisation for Standardization)
PACKAGING
Packaging plays a significant role in modern marketing. It helps consumers decide whether to buy a product
or not. All the marketing efforts are waste, if the package fails to attract the attention of the customers.
Package means a box, wrapper or case used for packing products. Packaging is the application of scientific
knowledge, artistic talents and technology to cover the products so as to preserve them for distribution, storage,
sale, and use.
FUNCTIONS OF PACKAGING/ROLE OF PACKAGING
1. Physical Protection- Physical protection aims at protection from damage or contamination by micro-organisms
and air, moisture and toxins. Protection from climatic changes, high temperatures, rain etc.
2. Containment- Small objects are usually grouped together in one package for reasons of efficiency. For example, a
single box of 100 pens requires less physical handling than 100 single pencils.
3. Information - Packing offers information on product usage, recycle, or disposal methods on the package or label.
For example package of medicines gives information regarding usage.
4. Promotion- The packaging can be designed in such a manner as to encourage potential buyers to purchase the
product.
5. Security- Better and safe packing can reduce security risks during transportation.
6. Convenience- Packages can have features which add convenience in distribution, storage, handling, display,
opening, closing and sale.
ESSENTIALS OF A GOOD PACKAGE
 It must attract attention.
 It must tell the product story (Brand, brand name, ingredients, usage,
price etc.).
 It must build confidence.
  It must look clean and sanitary.
 It must be convenient to handle.
 It must look like good value.
 It must look like a fast seller.
 It must deserve a preferred display.
 It must minimize the clerk's time.
 It must be convenient to stock and display.
 It must prevent spoilage during the selling period.
 It must resist soiling.
PRODUCT LABELLING
A label gives the consumer the necessary information about the product. It includes the names of the brand,
name and address of the manufacturer, date of production, date of expiry, quantity, ingredients, usage instructions
and price.
A label is a piece of paper, cloth, metal, or other material affixed to a container or package.
FUNCTIONS OF LABELLING
1. It clearly specifies the product brand and therefore identification of a product is
easy.
2. It exhibits the standard and other special features of the product.
3. It gives clear instructions to the consumer as to the proper use of a product.
4. It clearly shows the price of a brand which helps to avoid undue price variations
caused by the intermediaries.
5. It gives information regarding the quantity/weight of the product.
6. It gives the customer the contact of the manufacturer.
TYPES OF LABELS
1. Brand Label
2. Price Label.
3. Barcode Label
4. Quantity label
5. Descriptive Label
6. Address Label
7. Date Label
8. Warning Label