By

DSK

Marketing Mix Decisions – Part

1

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What is marketing mix

 Product (Customer
solution)
 Price (Customer cost)
 Place (Customer
convenience)
 Promotion (Customer
communication)

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The first P is = Product
 Which means
 Anything that can be offered to
create an exchange
 It is looking at satisfying a
customer problem
 Hence we say that a product is a
customer solution

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Kotler says

 At the heart of a great brand is a great

product.
 Product is a key element in the market
offering
 Market leaders generally offer products and
services of superior quality that provide
unsurpassed customer value

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Product decisions

 At the time of deciding your marketing plan

you will have to take a number of product
decisions such as
 What will constitute the product
 How many variants of it should be there on offer
 How it should be different from competing
products
 How it should be packaged

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Levels of product

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Levels of product (Extended)

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Levels explained

 We take an example of a Hotel

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Core benefit

 At the first level In a hotel (which is a product)

the core benefit is
 Rest and sleep (A hotel guest is basically buying
rest and sleep in a hotel)
 it is the basic benefit

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Basic Product

 In case of hotel the basic product will

constitute
 Hotel room (including a bed, bathroom, towels,
desk, TV etc)
 At this second level marketers must turn the basic
benefit into a basic product.
 Match basic benefit with a basic product

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Expected Product

 At the third level, the marketer prepares on

expected product
 A set of attributes and conditions buyers
normally expect when they purchase this
product.
 Hotel guests expect a clean bed, fresh towels,
working lamps, and a relative degree of quite

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Augmented Product
 At the fourth level, the marketer prepares an augmented
product that exceeds customer expectations
 In developed countries brand positioning and competition take
place at this level.
 In Developed countries, brand positioning and competition
take place at this level.
 However in developing countries like India and Brazil
competition takes place mostly at the expected product level.
 In a hotel augmented may be a PC in the room or the welcome
drink to improve the position of the product in the eyes of the
customer

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Potential Product

 It includes all the possible augmentations and

transformations the product or offering
might undergo in the future.
 Here is where companies search for new ways
to satisfy customers and distinguish their
offerings
 Like a Hotelier might look forward to add Gym or
swimming pool in future

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Hence

 Differentiation arises and competition

increasingly occurs on the basis of product
augmentation, which also leads the marketer
to look at the user’s total consumption
system: The way the user performs the task
of getting and using products and related
services.

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However

 Each augmentation adds cost, and

 Augmented benefits soon become expected
benefits and necessary points of parity
 Today’s Hotel guests expect cable or satellite
TV with a remote control and high speed
internet access or two phone lines.
 This means competitors must search for still
other features and benefits

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And

 As some companies raise the price of their

augmented product, others offer a “stripped
down version” at a much lower price

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Example : ITC Welcome Group

 It has four set of properties

 Super Delux hotels (ITC Hotels)
 Five star hotels (Welcome Hotels)
 Budget hotels (Fortune Hotels)
 Palaces, Forts and Havelis (Welcome heritage)

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Product Classification

 Basis
 Durability and tangibility
 Consumer goods classification
 Industrial goods classification

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Durability and tangibility

 Nondurable (Soft Drink and soaps)

 Durable (Refrigerators, TV etc)
 Services (Intangible)

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Consumer Goods classification
 Convenience (Soft Drink, Soap)
 Staples (Purchase on regular basis) – toothpaste
 Impulse (without any planning or search effort) –
Chocolate, Candy etc
 Emergency Goods (Urgent need ) - Umbrella
 Shopping (Furniture, Clothing)
 Homogeneous (Similar in quality may be different in price)
– Lux and Rexona
 Heterogeneous (Differ in product features and services
which happens to be more significant than price) – Lux and
Dove
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Contd..

 Specialty goods (a Mercedes)

 Unsought (Life insurance)

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Industrial goods classification

 Materials and parts

 Raw Materials
▪ Farm products
▪ Natural products
 Manufactured materials and parts
▪ Component materials (pig iron, yarn – to be further
processed)
▪ Component parts (finished products, small motor, light)

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Contd..

 Capital items
 Installations (Buildings and heavy equipments)
 Equipments (Portable factory equipments and
tools) – hand tools, lift trucks etc
 Supplies and business services
 Maintenance and repair (Paints, nails)
 Operating supplies (Lubes, coal, writing paper)
Together they come under the category MRO

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Contd..

 Business services include

 Maintenance and repair services
 Business advisory services

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 Thanks n have a nice day

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