Principles Principles of of

MarketingMarketing

Lecture-6Lecture-6

Today’s Today’s TopicsTopics

Product Strategies and Product Strategies and FeaturesFeatures

Product Mix and Product Product Mix and Product LineLine

Product MixProduct Mix The set of all product offered for sale by The set of all product offered for sale by

a company is called a product mix.a company is called a product mix. Breadth and DepthBreadth and Depth

Breadth = the number of product lines Breadth = the number of product lines carriedcarried

Depth = variety of sizes, colors and models Depth = variety of sizes, colors and models within each product line.within each product line.

Product LineProduct Line A group of products similar in usage and A group of products similar in usage and

physical characteristics.physical characteristics.

Product Mix – Kraft Product Mix – Kraft FoodsFoods

BeveragesBeverages CoffeeCoffee Refreshment BeveragesRefreshment Beverages

Cheese & DairyCheese & Dairy SnacksSnacks

ConfectioneryConfectionery Salty snacksSalty snacks BiscuitsBiscuits

Convenient MealsConvenient Meals GroceryGrocery

DessertsDesserts Enhancers (dressings and spreads)Enhancers (dressings and spreads) CerealsCereals

Kraft –BeveragesKraft –Beverages BeveragesBeverages > > CoffeeCoffee

Kraft –BeveragesKraft –Beverages BeveragesBeverages > > CoffeeCoffee

Kraft –BeveragesKraft –Beverages BeveragesBeverages > > CoffeeCoffee

Kraft –BeveragesKraft –Beverages BeveragesBeverages > Refreshment Beverages > Refreshment Beverages

Kraft –BeveragesKraft –Beverages BeveragesBeverages > Refreshment Beverages > Refreshment Beverages

Kraft –BeveragesKraft –Beverages BeveragesBeverages > > CoffeeCoffee

Kraft – Cheese and DairyKraft – Cheese and Dairy

Kraft – Cheese and DairyKraft – Cheese and Dairy

Product Mix – Kraft Product Mix – Kraft FoodsFoods

SnacksSnacks ConfectioneryConfectionery Salty snacksSalty snacks Biscuits Biscuits

Convenient MealsConvenient Meals GroceryGrocery

Desserts Desserts Enhancers (dressings and spreads) Enhancers (dressings and spreads) Cereals Cereals

Lets end here……Lets end here……

Positioning the ProductPositioning the Product Management's ability to bring attention to a Management's ability to bring attention to a

product and to differentiate it in a favorable product and to differentiate it in a favorable way from similar products goes a long way way from similar products goes a long way toward determining that product’s revenues toward determining that product’s revenues and the company’s profits. Thus management and the company’s profits. Thus management needs to engage in needs to engage in positioning,positioning, which means which means developing the image that a product projects developing the image that a product projects in relation to competitive products and to the in relation to competitive products and to the firm’s other products.firm’s other products.

Marketing executives can choose from a Marketing executives can choose from a variety of positioning strategies. Sometimes variety of positioning strategies. Sometimes they decide to use more than one for a they decide to use more than one for a particular product. Here are several major particular product. Here are several major positioning strategies.positioning strategies.

Positioning in Relation to Positioning in Relation to CompetitorCompetitor For some products the best position is directly against the For some products the best position is directly against the

competition. This strategy is especially suitable for a firm competition. This strategy is especially suitable for a firm that already has a solid differential advantage or is trying to that already has a solid differential advantage or is trying to solidify such an advantage. To fend off rival makers of solidify such an advantage. To fend off rival makers of microprocessors, Intel Corp. launched a campaign to microprocessors, Intel Corp. launched a campaign to convince buyers that its product is superior to competitors. convince buyers that its product is superior to competitors. The company even paid computer makers to include the The company even paid computer makers to include the slogan, “Intel Inside,” in their ads. In other fields, Cadillac slogan, “Intel Inside,” in their ads. In other fields, Cadillac introduced the Allante model to regain sales lost to introduced the Allante model to regain sales lost to European-made prestige cars, but it failed. And Coca-Cola European-made prestige cars, but it failed. And Coca-Cola and Pepsi-Cola compete directly with each other in virtually and Pepsi-Cola compete directly with each other in virtually every element of the marketing mix (even celebrity every element of the marketing mix (even celebrity endorsers).endorsers).

For other products, head-to-head positioning is exactly what For other products, head-to-head positioning is exactly what not to do, especially when a competitor has strong market not to do, especially when a competitor has strong market position. In France, the La Cinq television network decided position. In France, the La Cinq television network decided to compete directly against the well-established TF-1 to compete directly against the well-established TF-1 network. La Cinq could not gain an advantage over TF-1, network. La Cinq could not gain an advantage over TF-1, however, and this positioning error was a major reason for however, and this positioning error was a major reason for La Cinq’s failure.La Cinq’s failure.

Positioning in Relation to a product Class Positioning in Relation to a product Class or Attributeor Attribute Sometimes a company’s positioning strategy entails Sometimes a company’s positioning strategy entails

associating its product with (or dissociation it from) a associating its product with (or dissociation it from) a product class or attribute. Some firms promote their product class or attribute. Some firms promote their wares as being in a desirable class, such as “Made in wares as being in a desirable class, such as “Made in America,” or having an attractive attribute, such as America,” or having an attractive attribute, such as “low energy consumption” or “environmentally “low energy consumption” or “environmentally friendly.”friendly.”

This strategy is widely used now for food products. For This strategy is widely used now for food products. For example, Libby’s, Del Monte, Campbell’s, Kellogg’s, and example, Libby’s, Del Monte, Campbell’s, Kellogg’s, and competing companies have introduced lines of competing companies have introduced lines of vegetables, soups, cereals, and other foods with one vegetables, soups, cereals, and other foods with one common denominator---they contain no (or very little) common denominator---they contain no (or very little) salt. These items are positioned against products that salt. These items are positioned against products that are packed with the conventional amounts of salt. are packed with the conventional amounts of salt. Similarly, as discussed in the chapter-opening case, Similarly, as discussed in the chapter-opening case, makers of healthful frozen foods really are positioning makers of healthful frozen foods really are positioning their products in relation to not just salt but also their products in relation to not just salt but also calories, cholesterol, and fat content. Sometimes what’s calories, cholesterol, and fat content. Sometimes what’s in (rather than left out of) the product in emphasized. in (rather than left out of) the product in emphasized. That’s the case with Volvo, which constructed a steel That’s the case with Volvo, which constructed a steel frame around the passenger compartment of its brand frame around the passenger compartment of its brand of automobile.of automobile.

Positioning by Price and Positioning by Price and QualityQuality

Certain producers and retailers are known for Certain producers and retailers are known for their high-quality products and high prices. In their high-quality products and high prices. In the retailing field, Saks Fifth Avenue and the retailing field, Saks Fifth Avenue and Neiman-Marcus are positioned at one end of Neiman-Marcus are positioned at one end of the price-quality continuum; discount stores the price-quality continuum; discount stores such as Target and Kmart are at the other. such as Target and Kmart are at the other. We’re not saying, however, that discounters We’re not saying, however, that discounters ignore quality; rather, they stress low prices. ignore quality; rather, they stress low prices. In recent years, J. C. Penney has tried with In recent years, J. C. Penney has tried with limited success to reposition its retail stores limited success to reposition its retail stores on the price-quality continuum by upgrading on the price-quality continuum by upgrading apparel lines and stressing designer names.apparel lines and stressing designer names.

End of Lecture -6End of Lecture -6