Unit 2 | unit 2 product

MARKET

Unit 2

Product

Q1) Write about the concept of product?

A1) A product is the item offered for sale. A product can be a service or an item. It can be physical or in virtual or cyber form. Every product is made at a cost and each is sold at a price. The price that can be charged depends on the market, the quality, the marketing and the segment that is targeted. Each product has a useful life after which it needs replacement, and a life cycle after which it has to be re-invented.

A product needs to be relevant: the users must have an immediate use for it. A product needs to be functionally able to do what it is supposed to, and do it with a good quality.

A product needs to be communicated: Users and potential users must know why they need to use it, what benefits they can derive from it, and what it does difference it does to their lives. Advertising and 'brand building' best do this.

A product needs a name: a name that people remember and relate to. A product with a name becomes a brand. It helps it stand out from the clutter of products and names.

A product should be adaptable: with trends, time and change in segments, the product should lend itself to adaptation to make it more relevant and maintain its revenue stream.

Q2) Explain consumer and industrial goods?

A2) Consumer Products:

Consumer products are those products that are bought by the final customer for consumption.

Consumer products are of four types:

i. Convenience Products:

Convenience Products are usually low priced, easily available products that customer buys frequently, without any planning or search effort and with minimum comparison and buying effort. Such products are made available to the customers through widespread distribution channels-through every retail outlets. This category includes fast moving consumer goods (FMCG) like soap, toothpaste, detergents, food items like rice, wheat flour, salt, sugar, milk and so on.

Ii. Shopping Products:

Shopping products are high priced (compared to the convenience product), less frequently purchased consumer products and services. While buying such products or services, consumer spends much time and effort in gathering information about the product and purchases the product after a careful consideration of price, quality, features, style and suitability.

Such products are distributed through few selected distribution outlet. Examples include television, air conditioners, cars, furniture, hotel and airline services, tourism services.

Iii. Speciality Products:

Speciality Products are high priced branded product and services with unique features and the customers are convinced that this product is superior to all other competing brands with regard to its features, quality and hence are willing to pay a high price for the product. These goods are not purchased frequently may be once or twice in lifetime and are distributed through one or few exclusive distribution outlets. The buyers do not compare speciality products.

Iv. Unsought Products:

Unsought product is consumer products that the consumer either does not know about or knows about but does not normally think of buying. In such a situation the marketer undertakes aggressive advertising, personal selling and other marketing effort. The product remains unsought until the consumer becomes aware of them through advertising. The price of such product varies. Examples of unsought product are cemetery plots, blood donation to Red Cross, umbilical cord stem cell banking services.

Industrial Products:

Industrial Products are purchased by business firms for further processing or for use in conducting a business .The distinction between consumer product and industrial is based on the purpose for which the product is bought. Like a kitchen chimney purchased by a consumer is a consumer product but a kitchen chimney purchased by a hotel is an industrial product.

Business products include:

i. Material and parts – Material and parts include raw material like agricultural products, crude petroleum, iron ore, manufactured materials include iron, yarn, cement, wires and component parts include small motors, tires, and castings.

Ii. Capital items – Capital items help in production or operation and include installations like factories, offices, fixed equipments like generators, computer systems, elevators and accessory equipments like tools office equipments.

Iii. Supplies – Supplies include lubricants, coal, paper, pencils and repair maintenance like paint, nails brooms.

Iv. Services – Services include maintenance and repair services like computer repair services, legal services, consultancy services, and advertising services.

Q3) Write the types consumer goods?

A3) Consumer Products:

Consumer products are those products that are bought by the final customer for consumption.

Consumer products are of four types:

i. Convenience Products:

Ii. Shopping Products:

Such products are distributed through few selected distribution outlet. Examples include television, air conditioners, cars, furniture, hotel and airline services, tourism services.

Iii. Speciality Products:

Iv. Unsought Products:

Q4) Explain product planning and development?

A4) As indicated by William J.Stanton Product arranging grasps those exercises which empower makers and agents to figure out what ought to establish а organization's line of products. In a perfect world, product arranging will guarantee that the full supplement of а company's products are consistently related, exclusively legitimate things intended to fortify the organization's competitive and benefit position.

Based on scientific investigation of above definitions, it very well may be inferred that product arranging includes taking choices with respect to:

Which products must be created or conveyed by the endeavor? Which new product should be created? What sort of upgrades and improvements needed in the product? What sort of extension or withdrawal must be made in the product mix of the endeavor? What must be the amount of creation? What must be the cost of the products?

Product Development

1. Idea Generation - The New Product Development Process

The new product improvement measure begins with thought age. Thought age alludes to the efficient quest for new-product thoughts. Ordinarily, an organization creates several thoughts, perhaps thousands, to locate a modest bunch of good ones eventually. Two wellsprings of groundbreaking thoughts can be recognized:

Internal Idea Sources: the organization finds novel thoughts inside. That implies R&D, yet in addition commitments from representatives.

External Idea sources: the organization finds novel thoughts remotely. This alludes to a wide range of outer sources, for example merchants and providers, yet in addition contenders. The main outer source is clients, on the grounds that the new product promotion cycle should zero in on making client esteem.

2. Idea screening - The New Product Development Process

The subsequent stage in the new product improvement measure is thought screening. Thought screening amounts to nothing else than sifting the plans to look over great ones. As such, all thoughts produced are screened to place great ones and drop helpless ones at the earliest opportunity. While the motivation behind thought age was to make countless thoughts, the reason for the succeeding stages is to lessen that number. The explanation is that product promotion costs rise significantly in later stages. Consequently, the organization might want to proceed just with those product thoughts that will transform into beneficial products. Dropping the helpless thoughts as quickly as time permits is, therefore, of urgent significance.

3. Concept Development and Testing -The New Product Development Process

To go on in the new product improvement measure, appealing thoughts must be formed into a product idea. A product idea is a definite variant of the new-product thought expressed in important purchaser terms. You ought to recognize a product thought à a thought for a potential product A product idea à a definite adaptation of the thought expressed in important shopper terms.A product picture à the manner in which buyers sees a genuine or likely product. How about we explore the two pieces of this stage in more detail.

Concept Development: Envision a vehicle maker that has built up an all-electric vehicle. The thought has passed the thought screening and should now be formed into an idea. The advertiser's undertaking is to form this new product into elective product ideas. At that point, the organization can discover how appealing every idea is to clients and pick the best one. Conceivable product ideas for this electric vehicle could be:

Concept 1: A moderately priced medium size vehicle planned as a second family vehicle to be utilized in and out of town for visiting companions and doing shopping.

Concept 2: A mid-evaluated lively minimized vehicle speaking to youthful singles and couples.

Concept 3: A very good quality medium size utility vehicle speaking to the individuals who like the space SUVs give yet additionally need an efficient vehicle. As should be obvious, these ideas should be very exact to be important. In the following sub-stage, every idea is tried.

Q5) Explain packaging role and function?

A5) Packaging is one of the most important functions in marketing. The task of keeping any product in container, carton, or wrapping in, binding with, or keeping in boxes etc. for freshness and protection of products is called packing. But packaging does not mean only this task. Packaging has broad meaning.

Role and functions of Packaging:

1. Containment

To provide proper and safe container or place for keeping any product is an important function of packaging. The functions of designing, producing and providing containers, boxes, packets, bottles, paper, or paper-bags, or plastic bags etc. according to the nature of products to put them include in packaging. Suitable kind of containers or boxes are used according to the nature of products for transporting or keeping them in warehouse or in showroom.

2. Protection

The main or important function and objective of packaging is to keep the products safe and fresh. Packaging helps to protect products from the possibility of loss, damage, decline in quantity and quality, color, size, etc. that may be caused by sun, rain, dust, insect, air and so on. The products are packed in proper materials to carry them from one place to another in right condition. Some cases, package increases the life span of the products. Glass made goods, food products and many other goods can be kept safe from crack and break, damage, decaying, adulteration etc. by packaging.

3. Identification

Packaging gives short introduction of different kinds of products and their producers. Every producer or middlemen select color, size, design of container or box, and package their products in a way that they look different from competitors' products. This makes customers easy to identify the same-nature products of different firms. The customers can recognize and may buy the products of their favorite company or brand as soon as see the package. Mostly, information such as name of the product, name of manufacturing company, ingredients used i product, weight, quality of the product, its using method are printed or written on the package.

4. Promotion

The other important objective and function of packaging is to promote sales of the product. If the product has been packaged in attractive material nicely, it plays important role in sales promotion. Attractive packaging draws attention of customers, stimulates their interest toward the product and motivates them to buy.

5. Prestige

The other function of packaging is to create brand prestige of product. A quality product properly packaged in good material becomes prestigious. Even though the product is good in quality, but its packaging is not attractive, customers' attitude becomes negative towards the product itself. So, packaging is an important function of the firm to increase reputation and prestige.

Q6) Write about brand name?

A6) Brand name:

A brand is a name, term, plan, image, or whatever other component that recognizes one vender's acceptable or administration as particular from those of different dealers. You can consider a brand as the thought or picture individuals have at the top of the priority list when pondering explicit products, administrations and exercises of an organization, both in a pragmatic (for example "the shoe is light-weight") and passionate way (for example "the shoe causes me to feel amazing"). It is thusly not simply the actual highlights that make a brand yet in addition the emotions that shoppers create towards the organization or its product. This mix of physical and enthusiastic signs is set off when presented to the name, the logo, the visual personality, or even the message imparted. A product can be effectively duplicated by different parts in a market, yet a brand will consistently be extraordinary. For example, Pepsi and Coca-Cola taste fundamentally the same as, anyway for reasons unknown, a few people feel more associated with Coca-Cola, others to Pepsi.

Roles & Importance of Branding

Roles

• The Role of Branding in Business Marketing.

• With any new business, building up your foot on the lookout and to your intended interest group is vital.

• With this early issue, you should actualize exhaustive and well-strategized branding for your business.

• Building your image around your products or administrations is effortlessly done on the off chance that you have foundation information and examination.

• It tends to be an enormous issue in the event that you don't have any data on the best way to do it.

• In this sort of occurrence, it is ideal to employ specialists who are knowledgeable about the part of branding to assist you with working out the methodology.

• Branding isn't generally the most basic factor to make your business a triumph; however a solid brand personality can make numerous favorable circumstances for your business.

• Branding is a marketing practice that an organization displays in making its name, image or logo, and by and large plan that is promptly recognizable as the organization itself.

• It gives your business its attributes and persona.

• It likewise assists with speaking to what you offer as a business, what you sell, and how unique you are from different products or administrations.

• Your image resembles the public face and character of your organization.

• Branding isn't restricted to logos, plans, and friends shading palette.

• It likewise incorporates each part that finishes your business – from shading mixes and typography styles to the packaging of your products and the general introduction of the organization when in a pitch introduction.

• It covers all that you present as a business.

• Branding is the actual picture and character of who you are as a business and how you focus to be perceived.

Q7) Write about trade mark?

A7) A “Trade mark” [TM] is defined under Section 2(zb) of the Indian Trademarks Act, 1999 as “mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include a shape of goods, their packaging, and combination of colors.”

A trademark may be divided into the following categories:

1. Word marks: Word marks may be words letters or numerals. A word mark gives the proprietor a right only in the word, letter or numerical. No right is sought with respect to the representation of the mark.

2. Device marks: Where the trademark lies in the unique representation of a word, letter or numerical, it is called as a device mark.

3. Service Marks: A service mark is nothing but a mark that distinguishes the services of one person from that of another. Service marks do not represent goods, but the services offered by a person/ company.

4. Collective Marks: Marks being used by a group of companies can now be protected by the group collectively. Collective marks are used to inform the public about a particular feature of the product for which the collective mark is used. The owner of such marks may be an association or public institution or cooperative. Collective marks are also used to promote particular products which have certain characteristics specific to the producer in a given region.

5. Certification Marks: Certification marks are used to define standards. They assure the consumers that the product meets certain prescribed standards. The presence of a certification mark on a product indicates that the product has successfully gone through a standard test specified. It assures the consumer that the manufacturers have gone through an audit process to ensure the quality of the product. For example, Toys, Electrical goods, etc. have such marking that indicates the safety and the quality of the product.

Q8) Write a short note on after sales service?

A8) After-sales service, also called after-sales support, refers to the services and support a business offers to the customers as part of its customer satisfaction and customer retention policy after the offering is sold.

This after-sales service definition can be divided into three parts:

Services and support provided to the customers: After-sales services include all the services provided to the customer by the manufacturer, retailer, or a third-party customer service or training provider concerning the offering.
As part of customer satisfaction and customer retention policy: After-sales services form a part of the marketing strategy targeted to increase customer satisfaction, brand loyalty, and word-of-mouth-marketing by fulfilling what’s promised to the customers.
After the offering is sold: Such services are provided after the customer has paid for the offering.

Importance Of After Sales Service

Complex products, expensive products, or products with long lifespan often require the seller’s involvement to aid the customers in setting up and/or using the offering. Sometimes, marketing efforts also require the seller to provide the customers with some guarantee of usage and product lifespan to aid the sales.

All these constitute after-sale services and are important towards the fulfilment of the short-term and long-term goals of the organization, like:

To get more customers on board.
To prove that the product is worth buying.
To reaffirm customers’ decision of relying on the brand.
To retain customers and make them buy from the brand again.
To build relationships with the customers.
To enforce referral and word of mouth marketing strategies.

Q9) Explain product life cycle?

A9) The product life cycle is the process a product goes through from when it is first introduced into the market until it declines or is removed from the market. The life cycle has four stages - introduction, growth, maturity and decline.

While some products may stay in a prolonged maturity state, all products eventually phase out of the market due to several factors including saturation, increased competition, decreased demand and dropping sales.

Stages

There are four stages of a product’s life cycle, as follows:

1. Market Introduction and Development

This product life cycle stage involves developing a market strategy, usually through an investment in advertising and marketing to make consumers aware of the product and its benefits.

At this stage, sales tend to be slow as demand is created. This stage can take time to move through, depending on the complexity of the product, how new and innovative it is, how it suits customer needs and whether there is any competition in the marketplace. A new product development that is suited to customer needs is more likely to succeed, but there is plenty of evidence that products can fail at this point, meaning that stage two is never reached. For this reason, many companies prefer to follow in the footsteps of an innovative pioneer, improving an existing product and releasing their own version.

2. Market Growth

If a product successfully navigates through the market introduction it is ready to enter the growth stage of the life cycle. This should see growing demand promote an increase in production and the product becoming more widely available.

The steady growth of the market introduction and development stage now turns into a sharp upturn as the product takes off. At this point competitors may enter the market with their own versions of your product – either direct copies or with some improvements. Branding becomes important to maintain your position in the marketplace as the consumer is given a choice to go elsewhere. Product pricing and availability in the marketplace become important factors to continue driving sales in the face of increasing competition. At this point the life cycle moves to stage three; market maturity.

3. Market Maturity

At this point a product is established in the marketplace and so the cost of producing and marketing the existing product will decline. As the product life cycle reaches this mature stage there are the beginnings of market saturation. Many consumers will now have bought the product and competitors will be established, meaning that branding, price and product differentiation becomes even more important to maintain a market share. Retailers will not seek to promote your product as they may have done in stage one, but will instead become stockists and order takers.

4. Market Decline

Eventually, as competition continues to rise, with other companies seeking to emulate your success with additional product features or lower prices, so the life cycle will go into decline. Decline can also be caused by new innovations that supersede your existing product, such as horse-drawn carriages going out of fashion as the automobile took over.

Q10) Explain importance of price?

A10) Pricing the product or service is one of the most important business decisions you will make. You must offer your products for a price your target market is willing to pay – and one that produces a profit for your company – or you won’t be in business for long. There are many approaches to pricing, included scientific and unscientific.

According to Prof. K.C. Kite, “Pricing is a managerial task that involves establishing pricing objectives, identifying the factors governing the price, ascertaining their relevance and significance, determining the product value in monetary terms and formulation of price policies and the strategies, implementing them and controlling them for the best results”.

Thus, pricing refers to the value determination process for a good or service, and encompasses the determination of interest rates for loans, charges for rentals, fees for services, and prices for goods.

Significance

1. Achieving a Target Return on Investments: This is the main target which each worry needs to accomplish. The goal is to accomplish a specific pace of profit for ventures and edge the estimating strategy to accomplish that rate. For instance, the worry may have a set objective of 20% degree of profitability and 10% profit for ventures after charges. The objectives might be a present moment (ordinarily for a year) or a long haul. It is prudent to have a drawn-out objective. Now and again, it is seen that the genuine benefit rates might be more than the objective return. This is on the grounds that the objectives previously fixed are low and new chances and request of the product surpassing the return rate previously fixed.

2. Price Stability: This is another significant target of an endeavor. Dependability of costs over a period mirrors the effectiveness of a worry. However, practically speaking, because of changing expenses every now and then, price security can't be accomplished. In the market where there are not many merchants, each vender needs to keep up steadiness in costs. Cost is set by one maker and others follow him. He goes about as a pioneer in price obsession.

3. Achieving Market Share: Piece of the pie alludes to the portion of the organization in the absolute deals of the product on the lookout. A portion of the worries when present their product in the competitive market needs to accomplish a specific offer in the market in the underlying stages. Over the long haul the worry may target accomplishing a sizeable bit of the market by selling its products at lower costs. The fundamental target of accomplishing bigger offer in the market is to appreciate more standing and altruism among the individuals. The other thought of augmenting the business sectors by bringing costs is down to dispense with contenders from the market. It has been seen that organizations dislike to expand the size of their offer because of dread of Government, mediation and control. General Motors, America, catching about half of the vehicle market, gone through this circumstance. A few organizations like General Electric and Johns-Mauville liked to have moderately little market say 20% instead of half.

4. Prevention of Competition: Current mechanical set up is defied with merciless rivalry. Evaluating can be utilized as one of the successful way to battle against the opposition and business contentions. Lesser costs are charged by certain organizations to keep their rivals out of the market. In any case, a firm can't bear to charge less costs throughout an extensive stretch of time.

5. Increased Profits: Boost of benefits is one of the primary goals of a business venture. A firm can embrace such a price strategy which guarantees bigger benefits. Be that as it may, such undertakings are likewise expected to release certain social commitments moreover.

Q11) Explain factors affecting price of a product?

A11) Pricing Policy

1. Internal Factors:

Internal factors are those components that work from inside the association.

Such factors include:

1. Organizational Factors: In the association evaluating choice occurs at two levels. At the more significant level administration, choices like price range and the estimating approaches are chosen. The genuine cost is then dictated by the lower-level administration. It must be noted, notwithstanding, that such genuine price choices must keep into thought singular product systems and the evaluating arrangements chooses by the high-level market.

2. Marketing Mix: Estimating is just a single component of marketingmix. All different components hold equivalent significance to the accomplishment of advertising systems of the firm. Any move in any of the components affects different components of the advertising mix. A firm should roll out reasonable improvements to all the components of marketingmix to prevail with an adjustment in any component, for example an expansion in cost will get satisfactory just on the off chance that it is combined with sufficient up gradation in the product includes also.

3. Product Differentiation: Cost of the product particularly relies on the nature and qualities of the product. A separated product with esteem added highlights like quality, size, shading, alluring bundling, various employments of the product, utility and so on consistently powers the clients to address more cost when contrasted with some other product.

4. Cost of the Product: Cost and cost of a product are firmly related and are free. The firm should choose a reasonable cost dependent on current interest, rivalry, purchasing capacity, and so forth the firm should likewise keep into thought its expense of creation as it would not have any desire to sell underneath the expense of creation on a drawn-out premise.

5. Objectives of Firm: Evaluating contributes its offer in fulfillment of the targets of the firm. The firm may have an assortment of targets including – deals income expansion, benefit amplification, piece of the overall industry augmentation, boost of client esteem, keeping up picture and position, keeping up stable costs and so on Valuing strategy must be set up simply after targets of the firm have been chosen and perceived.

2. External Factors

Outer components are those elements which influence all the organizations of a given industry consistently and are as a rule outside the ability to control of the firm.

1. Demand: Market interest of a product clearly has a significant effect over its estimating strategy. On the off chance that the interest is inelastic, at that point more exorbitant cost might be fixed yet in the event that the interest is flexible, at that point costs must be competitive. Request is influenced by factors like, number and size of contenders, purchasing capacity and eagerness of planned purchasers, their inclinations and so forth.

2. Competition: In a market with numerous contenders, costs must be competitive without settling on the quality. However, in a monopolistic sort of market, costs can be controlled by the market chief, regardless of the valuing methodology of its rivals.

3. Supplies: In the event that costs of crude material go up, at that point the cost of completed merchandise will undoubtedly go up. Additionally providers evaluating strategy directly affects the costs. Shortage or bounty of crude material will likewise decide its costs' along these lines influencing the general cost.

4. Economic Conditions: By and large monetary conditions have a significant task to carry out in the evaluating choice. During downturn costs must be decreased extensively to support. Then again, during blast time, costs can be expanded to receive the rewards of improved economy.

5. Buyers: The nature and conduct of purchasers will likewise affect the evaluating choices. Their purchasing capacity and readiness to follow through on a specific cost can't be disregarded by the advertiser.

6. Government: Government may practice some proportion of price control through authorization of specific enactments and so forth Such measures are taken to secure the interest of individuals on the loose.

Q12) Explain discount and rebates?

A12) A discount is a concession in the actual price of a product or service. It is a strategy used by the seller of the product to lure the customers into buying the product. Giving discounts will make the customers revisit the seller in future that in turn will benefit the seller.

It can be strategically utilized by the seller to earn more profit as the actual amount of the product or service can be increased, and then a discount can be provided on that amount. There are two types of discount - cash discount and trade discount.

A Rebate is a special kind of discount that is paid to the buyer by the seller or manufacturer. In this case, a partial refund of the original amount is paid back to the customer. Customers whose purchases reach a certain quantity or amount are eligible for a rebate.

Key Differences between Rebate and Discount

Paperwork is required in case of a rebate, but there is no such need in discounts.
Rebates are offered in the form of cash, other products, or gift cards. There are no such returns in discounts.
Rebate is provided to the customers when the complete payment is made. Discount is offered to customers so that they do not have to pay the full amount.
Rebate is provided for encouraging customers to make full payment. Discount is usually used for clearing the seller’s existing stock.
A rebate is not a reduction in the original amount. A discount is a deduction of the initial amount of the product or service.
Rebate is a partial repayment, whereas a refund is a repayment of the total purchase price discount is a reduction in Price
The discount means it happens on a single purchase when it comes to rebate it happens on only after some particular time. Rebates are retrospective with a specific time frame or other conditions like Sales Volume, Sales Quantity attached to it.
Rebate: an incentive to be given to a customer .clubbed with qty purchased by a customer within the period specified (say one month)-conditional.Discount: unconditional, to be given to a customer on account of massive purchase by one single billing.-From the price List(Base price).
Rebate is a discount which is settled at the end of a period of a contract or an agreement. Discounts are typically given anytime.
Rebate is Discount on turnover, means if you buy three shirts, you will get a discount of 20%, whereas if the no. Of shirts has reduced the discount will get reduced. Discount doesn't depend upon the turnover, and it is fixed and can only differ from customer to customer.
Rebate is a retroactive agreement.it is given to a partial payment to the particular scheduled time. (1yr or 3 Yr).Discount is provided at a time to the customer.
Rebate is given for the purchase of specified quantity or on the volume of the sales over a given time. Discount is given on every good purchased by the customer

Basis of comparison	Discount	Rebate
Definition	It is a reduction in the original amount of a product or service given to the buyer by the seller.	It is the purchase price amount refunded to the buyer by the seller, based on certain conditions.
Strategy	It is an essential tool for marketing strategies.	It is an essential tool for sales promotion strategies.
Time of provision	It is provided to the buyer at the time of purchase.	It is provided to the buyer at a specific time of payment under the approval of the seller or manufacturer.
Availability	It will be available to all the customers.	It will be available to specific customers.
For external factors	Based on customer demands and market requirements, the discount is offered on the spot during payment.	It is a favour provided to the buyer from the seller and is not affected by external factors such as market demands.
Applicability	This deduction applies to any marketing.	This is applicable only under specific conditions and terms.
Preference	It is more preferred by people as buyers want to pay less during purchase.	Most people do not prefer it as paying less while purchasing anything is more convenient.

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