Classification of product:Products or goods are basically of two types.

(1). Consumer goods

(2). Industrial goods.
Consumer goods:Consumer products are produced for personal consumption by households. There are
four types of consumer goods.
(1). Convenience goods:Goods that the consumer usually purchase frequently, immediately, and with the
minimum of effort in comparison and buying for most buyers, convenience goods
include many food items, inexpensive candy, drugs like aspirin and tooth paste,
hardware items such as light bulbs and batteries. Convenience goods have low price
an are not greatly affected by fad and fashion. A manufacturer prepares these products
to distribute it widely and rapidly.
(2) Shopping goods:A tangible product for which a consumer wants to compare quality, price and perhaps
style in several stores before making a purchase is known as shopping goods.
Examples of shopping are furniture, automobiles, major appliance etc. The process of
searching and comparing continues as long as consumer feels satisfaction. The
shopping goods can be divided into homogeneous and heterogeneous goods. The
homogeneous goods are similar in quality but different in price. The heterogeneous
products are different in quality and prices.
(3) Specialty goods:A tangible product for which a customer give preference to a strong brand and he
wants to expend substantial time and effort in locating the desire brand is called a
specialty good.
Examples of specialty goods are mens suits, stereo sound equipment, health foods,
photograph equipment, new automobiles and certain home appliances. The specialty
goods do no involve the buyers making comparisons, the buyer only invest time to
reach the dealers carrying the wanted products.
(4) Unsought goods:An unsought good is a new product from which a consumer is not aware. More
people are unaware of interactive movies. An electric car might be an unsought good
for most people,because they are unaware of it. Bathroom tissue made strictly from
cotton fiber would seem to be an unsought good. A firm faces a very difficult,
perhaps impossible advertising when trying to market unsought goods. Marketers
market unsought goods by placing ads on bus-stop benches or in church buildings.
(b). Industrial goods/Business goods:Industrial products are purchased to produce other products or for use in a firms
operations. Industrial products are purchased on the basis of organizations goals and
objectives.

On the basis of their uses and characteristics, industrial or business products can be
classified
into seven categories.
1).Raw material:-Raw materials are the basic materials that actually become part of
the product. They are provided form mines, forests, oceans, farms and recycled solid
wastes.
2).Fabricating Materials and parts/Capital items:Major equipment includes large tools and machines used for production purposes.
Examples are rather, cranes, Stamping machines.
3). Accessory Equipment:-Accessory equipment does not become part of the final
product but is used in production
or office activities.
Examples include, hand tools, type writers, fractional horse power motors etc.
Accessory equipments are less expensive than capital items.
4).Component Parts:-Component parts become a part if the physical product and
either are finished items ready for assembly or are products that enter the finished
product completely with no further change in form, as when small motors are put into
vacuum cleaners and tires are added on automobiles.
Spark plugs, tires, clocks and switches are all component parts of the automobile.
5).Process material:-Process materials are used directly in the production of other
products. Unlike component parts, however process materials are not identifiable
process materials are further fabricated. For example, Pig iron is made into steal and
Yarn is woven into cloth.
6).Supplies:-Supplies facilitate productions, but they do not become part of he
finished product. Paper, pencils, oils, cleaning agents and paints are examples.
7).Industrial Services:-Industrial services include maintenance and repair services.
(e.g.; window cleaning,typewriter repair) and business advisory services. (e.g.; legal,
management, consulting, advertising, marketing research services). These services
can be obtained internally as well as externally

New Product Strategy:A new product strategy is a statement identifying the role of new product is expected
to play in achieving corporate and marketing goals.
New product development process Stages:A new product is best developed through a series of eight stages.
As compared to unstructured development the formal development of new product
provides benefits such as improved team work, lesser work, earlier failure detection
and most important higher success rate.
1).Idea generation:The new product Development process with the search for ideas. New product ideas
comes through interacting with various group of people , such as customer, scientists,

competitors , employees and top management. Companies can also find good ideas
by searching competitors products and services. From this they can find out what the
customers likes and dislike about competitors products. They can buy their
competitors products, take them a part and build better ones. Many companies also
encourage employees particularly those on production line to come forth with ideas,
often offering cash reward for good suggestion. New product ideas also come from
inventors, university and commercial laboratories, advertising agencies. As the ideas
start to flow, one will sprat another, and within a short time hundred of new ideas
may be brought to surface.
2) Idea screening: Idea screening is second stage in new product development once a large pool of ideas
has been generated by what ever their means, their number have to be pruned to
manageable level. In screening ideas the company must avoid two types of error.
Drop error: Occurs when the company dismisses an otherwise good idea.
Go error: - Mean adoption of poor ideas
The purpose of screening is to drop poor ideas as early as possible. Many companies
require their executives to write up new product on a standard form that can be
received by a new product committee. The write up describes product idea, target
market and competition. It makes some rough estimate of market size, product price,
development cost and rate of return.
3) Concept development and testing: A product idea is possible product the company might offer to the market. A product
concept is an elaborated version of ideas expressed in a meaningful consumer terms.
Throughout the stages of idea generation and screening, the developers are only with
the product idea,general concept of what product might be.
Concept development involves many questions:
i) Who will buy the new product?
ii) What is the primary benefit of new product?
iii) Under what circumstances, the new product may be used?
Concept testing:Concept testing involves presenting the product concept to appropriate target
consumers and getting their reactions.
4) Marketing Strategy: Following the successful concept test, the new product manager will develop a
preliminary marketing strategy plan for introducing the new product into market. The
plan consists of three parts. The first part describes the target market size, structure
and behavior, the planned product positioning and sales, market share, profit goals
sought in the first few years.
The second part outlines the planned price, distribution strategy and marketing
budget for first year.
The third part of marketing strategy plan describes the long run sales and profit goals
and marketing strategy overtime.
5) Business Analysis: -

The next step in new product development is business analysis. The market must
project costs, profit and return on investment for the new product if it were placed in
market.Business analysis is not a short process; it is a detailed realistic projection of
both maximum and minimum sales and their impact on economy or company.
For some products such as another candy bar, marketers can use existing sales data to
guide themselves. But with a product, for which sales data does not exist, only
estimation can be used.
6) Product Development: If the result of business analysis is favorable then a prototype of the product is
developed.In development stage, the idea is given in a concrete or tangible form. Up
to now, the product has existed only a word description, a drawing or a prototype.
This step involves a large investment. The company will determine whether the
product idea can be translated into a technically and commercially feasible product.
7) Test marketing: After management is satisfied with functional and psychological performance, the
product is ready to be dressed up with a brand name and packaging and put into a
market test.Test marketing involves how large the market is and how consumers and
dealers react to handling, using and repurchasing the product.
The amount of test marketing is influenced by investment cost and risk on one hand
and time pressure and research cost on the other.
8) Commercialization: As the company goes ahead with commercialization, it will face its large gest costs to
date. The company will have to contract for manufacturing facility. Another major
cost is marketing
Example:To introduce a major new consumer packaged good into the national market, the
company may have to spend b/w $20 million and $80 million in advertising and
promotion in the first year. In the introduction of new food products, marketing
expenditures typically represents 57% of sales during the first year

PRODUCT LIFE CYCLE

A product life cycle consists of the aggregate demand over an extended period of
time for all brands comprising a generic product category. A product life cycle can be
graphed by plotting aggregate sales volume for a product category over a time,
usually years. It is also worthwhile to accompany the sales volume curve with the
corresponding profit curve for the product category.
Introduction
Growth
Maturity
Decline

After all a business in interested in profit not in just sales. The shape of these two
curves varies from one product category to another. Still for most categories, the
basic shape of the relationship between the sales and the profit curves In this typical
life cycle the profit curve for most new product is negative, satisfying a loss, through
much of introductory stages. In the later part of growth stage, the profit curve starts to
decline while the sales volume is still rising. Profit declines because the companies in
an industry usually must increase their advertising and selling efforts or cut their
prices to sustain sales growth in the face of intensifying competition during the
maturity stage.
The product life cycle consist of four stages
1) Introduction:During introduction stage, some times called pioneering stage, a product is launched
into the market in a full scale of marketing program. It has gone through product
development,including idea screening, prototype, and market test. The entire product
may be new, such as the zipper, the video cassette recorder, etc for a new product
there is very little competition.
However, if the product has tremendous promise, numerous companies may enter
into the industry early on. That has occurred with digital TV, introduced in 1988.
Introduction is the most risky and expensive stage because substantial dollars must be
spent not only to develop the product but also to seek consumer acceptance of the
offering.
2) Growth:In the growth stage on market acceptance stage, sales and profit rise frequently at a
rapid rate.Competitors enter the market, often in large number if the profit outlook is
particularly attractive.
Mostly as a result of competition profit start to decline nears the end of the growth
stage.As a part of firms efforts to build sales and in turn, market share, prices
typically decline gradually during this stage. The only thin that matters is if the
exponential growth of your market is faster then the exponential decline of your
prices
3)Maturity:During the first part of the maturity stag, sales continue to increase, but at a
decreasing rate.When sales level off, profits of both producers and middle-man
decline. The primary reason increase price competition. Some firms extends their
product lines with new models, other come up with a new improved version of their
primary brand. During the later part of this stage marginal producers those with high
cost or no differentiate advantage drop out to the market.They do so because the lack
sufficient customers or profit.
4)Decline:For most products a decline stage, as gauged by sales volume for the total category is
inevitable for one of the following reason.
A better or less expensive product is developed to fill the same need.
The need for product disappears, often because of other product development.
People simply grow tired of a product so disappear from the market.

Length of product life cycle:

The length of product life cycle from the start of introduction stage to the end of
decline stage varies across the product categories. It ranges from a few weeks or a
short season ( for a clothing fashion) to many decades ( for autos or telephones). And
it varies because of differences in the length of individual stages from one product
category to the next.
PRODUCT MIX & PRODUCT LINE
Product Mix: A product mix is the set of all the products offered for sale by a company. The
structure of product mix has width, depth, length and consistency.
or
Product mix can be defined as:Product mix is defined as, the set of all product lines and items that a particular
seller offers for sale to buyers.
The product mix is also known as product assortment. Or factors influencing change
in product mix
Width:The width of the product mix refers to how many product lines the company carries.
For Example:-proctor & gamble markets a fairly wide product mix consisting of
many product lines including
food, household, cleaning , mechanical, cosmetics and personal care products
Depth:The depth of the product mix refers to how many varieties are offered of each product
in the line.
For example: -P&G Crest tooth paste comes in three sizes and two formulations
(paste,gel)
Length:The length of the product mix refers to the total number of items in its product mix.
For example:P&G typically carries many brands within each line It sells eight
laundry detergents, six hand soaps , six shampoos, & four dish washing detergents.
Consistency: The consistency of the product mix refers to how closely relate the various product
lines are in end-use, production requirements, distribution channels or in some other
way.
For example: -P&G product lines are consistent insofar as they are consumer
products that go through the same distribution channels. The lines are less consistent
insofar they provide different functions for buyers.
These four dimensions of the product mix provide the handles for defining the
companys product strategy. The company can adopt product lines, thus widening its
product mix.

Major Product-Mix Strategy: Manufacturers we several major strategies in managing their product mix.
1) Expansion of product mix: A firm may decide to expand its present mix by increase the number of lines or the
depth with in the lines. Now lines may be related or unrelated to the present products.
The company may also increase the number of items in its product mix.
2) Contraction of product mix: Another product strategy is to thin out the product mix, either by eliminating entire
line or by simplifying the assortment with in a line. The shift from fat and long lines
to thin and short lines, is designed to eliminate low-profit products and to get more
profit from fewer products.
There are many examples of product mix contraction, sometimes involving will
known firms. For example, Unilever, and English, Dutch firm decided to produce
more than 1000 brands from its total set of about 1600. The company wants to
concentrate its marketing resources on the 400 or so remaining brands including
Lipton teas, Lever soap that generate 90% of annual revenues.
3) Alteration of existing product: In spite of developing a complete new product, management should take a fresh look
at the companys existing products. Often, improving and established product can be
more profitable and less risky than developing a completely new one.
For material goods, especially, redesigning is often the key to products, renaissance
packaging has been a very popular area for product alteration, particularly in
consumer products.
4) Positioning the product: Positioning of product in the market is a major determinant of company profits. A
product position is the image that the product projects in relation to competitive
product and to other products marketed by the same company.
Marketing executives can choose from a variety of positioning strategies. These
strategies can be grouped into following six categories:
1). positioning in relation to a competitor: Position is directly against the competition.
2). positioning by product attribute: The company associates its product with some product features.
3). positioning by price and quality: To position on high price, high quality or low price, low quality basis.
4). Positioning in relation to product use.
5). Positioning in relation to a target market: - (Market Segmentation)
6). Positioning in relation to product class: - (Associating the Product) a class of
product
5) Trading up & trading down: As product strategies, trading up and trading down involves, essentially, an expansion
of the product line and a change in product positioning.
Trading up means adding a higher priced prestige product to a line in the hope of

increasing the sales of existing lower priced products. When a company going on a
policy of trading up, at least two ways are open with respect to promotional
emphasis.
(1) The seller may continue to depends upon the older, lower-priced product for the
bulk of the sales volume and promote it heavily or
(2) The seller may gradually, promote the new product and expect it to share a major
sales volume.A company is said to be trading down when it adds a lower priced item
to its line of prestige products. The company wants to sale its products rapidly.
Product Line
A product line includes a group closely related products that are considered a unit
because of marketing, technical or end-use consideration.
Definition: A broad group of products intended for essentially similar uses and possessing
reasonably
similar physical characteristics, constitutes a product line. Or
A product line is defined as A product line is a group of products that are closely
related, either because
(1) They function in a similar manner.
(2). Sold to the same customer groups
(3). Marketed through the same type of outlets,
(4). Fall with in a given price ranges.
Clothing is an example of product line. But in a different context, say in a small
specialty shop, mens furnishings (shirts, ties and under wears) and mens ready-towear (suits, jackets,topcoats and stocks) would each constitute a line.
There are product line managers for refrigerators, stoves and washing machines.
Product line decisions, management and responsibilities:Product line decisions are concerned with the combination of the individual products
offered within a given line. The product line manager supervises several product
managers who are responsible for the individual products and the line. Decisions
about a product line are usually incorporated into a marketing plan at the divisional
level. Such a plan specifies changes in the product lines and allocation to the products
in each line. Generally, product line managers have the following responsibilities;
1. Considering expansion of a given product line
2. Considering candidates for deletion from the product line
3. Evaluating the effects of the product addition and deletions on the profitability on
the other items in the line.
4. Allocating resources to individual products in the line on the basis of marketing
strategies recommended by product managers.

Market Segmentation
Meaning
Market segmentation is the process of dividing a market into distinct subgroups of
consumers with distinct needs, characteristics, or behavior, who might require
separate products or marketing mixes.
Factors influencing segmentation

Sustainability
A segment must be large enough to warrant developing and maintaining a special
marketing mix.This criterion does not necessarily mean that a segment must have
many potential customers.
Marketers of custom-designed homes and business buildings, commercial airplanes,
and large computer systems typically develop marketing programs tailored to each
potential customers to make commercial sense. In the 1980s, home banking failed
because not enough people ownedpersonal computers. Today, large number of people
own computers, and home banking is a growing industry.

Identifiability and measurability

Segments must be identifiable and their size measurable. Data about the population
within geographic boundaries, the number of people in various age categories, and
other social and demographic characteristics are often easy to get, and they provide
fairly concrete measures of segment size. Suppose that a social service wants to
identify segments by their readiness to participate in a drug and alcohol program or in
prenatal care. Unless the agency can measure how many people are willing,
indifferent, or unwilling to participate, it will have trouble gauging whether
Market Aggregation
Well market aggregation means mass marketing or undifferentiated marketing, is
simply marketing a product to the largest audience possible this leads to heavy
exposure of the brand and product. This also leads to reduced cost in marketing the
product. Usually undifferentiated marketed products are simple and seen as
necessities such as toothpaste or toilet paper. The key disadvantage to mass marketed
products is that it leaves opportunities for competitors to set up business and market a
product to a individual segmented market, meaning it is more difficult to satisfy the
needs and wants of customers in the total market. The key advantage is it operates in
a larger market and hence more opportunities.
An example would be let's say for toothpaste, toothpaste for sensitive teeth would be
segmentation whereas toothpaste for the entire market would be using market
aggregation theory.
Market segmentation is referring in this case to a more niche market or differentiated
marketing; it is simply a product which is marketing to a distinct target market. That
is the product is marketed to a specific segment of the total market and thus it is more
easily tailored to satisfy the needs and wants of the target market. This has a key
advantage to satisfy the customers but has the disadvantage of a smaller market and
hence less opportunities.

An example would be for computers, computers which we're sold in the earlier days
were standard and sold to the entire market with the exact specifications, and
computers today sold by certain vendors are sold with customized specifications.
Basis for Segmentation
We use two broad groups of variables to segment consumer markets.
Some researchers try to define segments by looking at descriptive characteristics:
geographic, demographic, and psychographic.
Then they examine whether these customer segments exhibit different needs or
product responses. For example, they might examine the differing attitudes of
professionals,blue collars, and other groups toward, say, safety as a car benefit.
Geographic Segmentation
Geographic segmentation calls for division of the market into different geographical
units such as nations, states, regions, countries, cities, or neighborhoods. In the South
Asian context, geographic segmentation assumes importance due to variations in
consumer preferences and purchase habits across different regions, across different
countries, and across different states in these countries.
One of the major geographical segmentation variables relevant for marketers in South
Asia is the division of markets into rural and urban areas. Rural and urban markets
differ on a number of important parameters such as literacy levels, income, spending
power, and availability of infrastructure such as electricity, telephone network, and
roads; as well as social and cultural orientations of people that affect the market
potential, and buying patterns and habits.
Demographic Segmentation
In demographic segmentation we divided the market into groups on the basis of
variables such as age, family size, family life cycle, gender, income, occupation,
education,religion, race, generation, nationality and social class. One reason
demographic variables are so popular with marketers is that they are often associated
with consumer needs and wants. Another is that they are easy to measure. Even when
we describe the target market in non demographic terms (by personality type), we
may need the link back to demographic characteristics in order to estimate the size of
the market and the media we should use to reach it efficiently.
Psychographic Segmentation
Psychographics is the science of using psychology and demographics to better
understand consumers. In psychographic segmentation, buyers are divided into
different groups on the basis of psychological / personality traits, lifestyle, or values.
People within the same demographic group can exhibit very different psychographic
profiles. Values and lifestyles significantly affect product and brand choice of
consumers.

The four groups with higher resources are:

Innovators - Successful, sophisticated, active, take-charge people with high selfesteem.
Purchases often reflect cultivated tastes for relatively upscale, niche-oriented
products and services.
Thinkers - Mature, satisfied, and reflective people who are motivated by ideals and
who value order, knowledge, and responsibility. They seek durability, functionality
and value in products.
Achievers - Successful, goal-oriented people who focus on career and family. They
favor premium products that demonstrate success to their peers.
Experiencers - Young, enthusiastic, impulsive people who seek variety and
excitement. They spend a comparatively high proportion of income on fashion,
entertainment, and socializing.
The four groups with lower resources are:
Believers - conservative, conventional, and traditional people with concrete beliefs.
They prefer familiar products and are loyal to established brands.
Strivers - Trendy and fun-loving people who are resource constrained. They favour
stylish products that emulate the purchases of those with greater material wealth.
Makers - Practical, down to earth, self-sufficient people who like to work with their
hands. They seek products with a practical or functional purpose.
Survivors elderly, passive people who are concerned about change. They are loyal
to their favorite brands.
Behvioural Segmentation
In behavioural segmentation marketers divide buyers into groups on the basis of their
knowledge of, attitude toward, use of, or response to a product.
Decision Roles People play five roles in a buying decision:
Initiator, Influencer, Decider,Buyer and User.
Behavioural variables Many marketers believe behavioural variables-occasions,
benefits, user status, usage rate, buyer-readiness stage, loyalty status, and attitude- are
the best starting points for constructing market segment.
The conversion Model The conversion Model measures the strength of consumers
psychological commitment to brands and their openness to change. To determine how
easily a consumer can be converted to another choice, the model assesses
commitment based on factors such as consumer attitudes toward, and satisfaction
with, current brand choices in a category and the importance of the decision to select
a brand in the category.
Segmentation for Consumer markets
The segmentation of consumer markets requires the creation of sub-groups from a
larger population to more specifically target them. There are virtually dozens of ways
that a market might be segmented and the segments chosen will depend on the
business and the products or services it offers. Basically, segmentation is all about
identifying specific groups of people based on common characteristics.

Demographics
One common way of segmenting a market is through the use of demographics.
Demographics are quantitative characteristics of a group of people. These
characteristics might include sex, age, income or geography (where they live).
Businesses that segment their market based on demographics are attempting to target
specific market segments that are more likely to be interested in what they have to
offer. The cosmetics industry, for example, primarily targets women. The hunting
industry might be more likely to target men. Luxury car makers target their
markets based on income. Marketers are likely to consider multiple demographic
characteristics when segmenting their consumer markets.
Psychographics
Psychographics are qualitative attributes of a market and refer to the way people
think and what they like to do. Psychographics is sometimes categorized with the
acronym IAO which stands for Interests, Activities and Opinions. It can be difficult
for marketers to segment their markets into these types of categories on their own.
Nielsen is one organization that offers access to consumer lists based on their specific
classifications. They have divided U.S. households into 66 distinct types or segments
to help marketers focus on market segments based on psychographic characteristics.
Psychographics are personal attributes related to personality, values, attitudes,
interests, or lifestyles.
Purchase Behaviors
An important way for businesses to segment their consumer markets is through
purchase behavior. Keeping good records of customers and their purchases, allows
marketers to identify those who have purchased certain types of products or spent at
certain levels and to then target them with similar offers. Marketers are also able to
target customers of other businesses through by renting lists, which can be used in
direct marketing efforts through traditional mail or, increasingly, online.
Pulling It Together
The more segments that marketers are able to identify and combine to specifically
target groups of individuals most likely to be interested in what they have to offer, the
more effective--and cost effective--their marketing efforts can be. Toward this end,
businesses attempt to learn as much as they can about their customers--where they
live, their age, their income levels, what they purchase, what their hobbies are and
what their likes and dislikes are. This information can then be used to "clone" these
customers by reaching out to non-customers who share similar traits and
characteristics.
Segmentation for Industrial markets
Industrial markets can be segmented with many of the same variables used in
consumer market segmentation. Business buyers can be segmented geographically,
demographically, or by benefits sought, user status, usage rate and loyalty status.

Marketers also use some additional variables such as:

Operating variables

Technology
User-non-user status
Purchasing approaches
Centralized / Decentralized
Purchasing power structure
Purchase policies, criteria
Situational Factors Urgency
Specific application
Size of order
Personal Characteristics Buyer-seller similarity
Attitude towards risk
Loyalty
As in consumer segmentation, many marketers believe that buying behavior and
benefits provide the best basis for segmenting business markets.

Market Targeting
Meaning
Choosing an appropriate market for a given product. Marketers of a given product
need to evaluate the different market segments and decide which and how many to
serve. To do this effectively, they must examine three general factors:
(1) segment attractiveness (i.e., the impact of competitors);
(2) segment size and growth;
(3) company objectives and resources.
Market targeting differs from target marketing in that a product is already established
and decisions must be made as to which market is most appropriate for it. In target
marketing, a company finds a market it wants to serve and then develops a product
appropriate for that market.
Basis for identifying target customers

Single-segment concentration
The farm-equipment division of Mahindra & Mahindra concentrates on tractors,
primarily targeted at agricultural markets. Specialty hospitals focus on specific
therapeutic areas such as cancer care, heart specialty, etc. through concentrated
marketing; the firm gains knowledge of the segments needs and achieves a strong
market presence. Furthermore, the firm enjoys operating economies through
specializing its production, distribution, and promotion. If it captures segment
leadership, the firm can earn a high return on its investment.

Selective specialization
A firm selects a number of segments, each objectively attractive and appropriate.
There may be little or no synergy among the segments, but each promises to be a
moneymaker. This multisegment strategy has the advantage of diversifying the firms
risk.
Product Specialization
The firm makes a certain product that it sells to several different market segments. A
microscope manufacturer, for instance, sells to university, government and
commercial laboratories. The firm makes different microscopes for the different
customer groups and builds a strong reputation in the specific product area. The
downside risk is that the product may be supplanted by an entirely new technology.

Market Specialization
The firm concentrates on serving many needs of a particular customer group. For
instance, a firm can sell an assortment of products only to university laboratories. The
firm gains a strong reputation in serving this customer group and becomes a channel
for additional products the customer group can use. The downside risk is that the
customer group may suffer budget cuts or shrink in size.

Full Market Coverage

The firm attempts to severe all customer groups with all the products they might
need. Only very large firms, such as Microsoft (Software market), General Motors
(Vehicle Market), and Coca-Cola (nonalcoholic beverage market), can undertake a
full market coverage strategy. Large firms can cover a whole market in two broad
ways: through undifferentiated marketing or differentiated marketing.
In undifferentiated marketing, the firm ignores segment differences and goes after the
whole market with one offer. It designs a product and a marketing program that will
endow the product with superior image and appeal to the broadest number of buyers,
and it relies on mass distribution and advertising. Undifferentiated marketing is the
marketing counterpart to standardization and mass production in manufacturing.
In differentiated marketing, the firm operates in several market segments and designs
different product for each. Cosmetic brands that appeal to women (and men) of
different tastes.
Differentiated marketing typically creates more total sales than undifferentiated
marketing.
However it also increases the cost of doing business. Because differentiated
marketing leads to both higher sales and higher cost, nothing general can be said
about the profitability of this strategy.
Target market strategies
Choosing target market and formulation of marketing strategy are intimately linked.
Choosing the target market is a part of marketing strategy formulation, the other two
parts being positioning and marketing mix formulation. Without right targeting, the
firm cannot formulate an effective strategy. It is through careful segmentation and
targeting that the firm picks up the right groups of consumers. Also, it is through this

process that the firm gains vital knowledge about the needs and buying behavior of
the consumers in each segment and the differences between one segment and the
other. And it is by using this knowledge that the firm develops marketing
programmes that matches the specific requirements of the different segments. In other
words, segmentation and targeting help the firm understand not only the
characteristics of each of the segments but also the distinctive excellence that is
required for catering to the specific needs of the consumer in each of them.
Undifferentiated Marketing Strategy
In the absence of a proper mechanism to classify the market into number of market
segments and analyze their potential, many firms decide on the mass marketing
strategy. In this case marketer goes against the idea of differentiated market and
instead decides to sell the product to the whole market. This strategy keeps the
overall marketing costs low and makes it easier to manage and track the market
forces uniformly. The marketer tries to find out commonalities across various
segments rather than focusing on the differences among segments.
The marketing planner designs the marketing programme in such a way that it will
appeal to the largest number of buyers with a mass distribution and mass advertising
programme.
In undifferentiated marketing, the firm ignores segment differences and goes after the
whole market with one offer. It designs a product and a marketing program that will
endow the product with superior image and appeal to the broadest number of buyers,
and it relies on mass distribution and advertising. Undifferentiated marketing is the
marketing counterpart to standardization and mass production in manufacturing.
Differentiated Marketing Strategy
Many marketers chose to target several segments or niches with a differentiated
marketing offer to suit each market segment. Maruti is the leading automobile
company, which has the distinction of having products for different market segments.
Maruti 800 is sold to upcoming middle class. Swift is targeted for the upper rich class
people and Maruti Omni is targeted for large families and taxi operators. In
differentiated marketing, the firm operates in several market segments and designs
different product for each. Cosmetic brands that appeal to women (and men) of
different tastes. Differentiated marketing typically creates more total sales than
undifferentiated marketing. However it also increases the cost of doing business.
Because differentiated marketing leads to both higher sales and higher cost, nothing
general can be said about the profitability of this strategy.
Concentrated Marketing Strategy
In this alternative strategy the marketing manager decides to enter into a select
market segment instead of all of the available market segments. When resources as
well as market access are limited and the company has to face intense competition,
the marketing manager has to stretch the budget for market coverage. In this case the
company is likely to follow the concentrated marketing strategy. The marketing
manager decides to cover a large niche rather than fighting for a small share in large
market. It is an excellent strategy for small manufacturers that can serve the segments
closely and cater to the emerging needs of closed loop customers.

This strategy will help them gather market share in small markets against strong and
large competitors.

Positioning
Meaning
Developing a specific marketing mix to influence potential customers overall
perception of the brand, product line, or organization in general.
Positioning is the perception or the image that customers have of the company and its
products. It is customers beliefs about the companys product being of, say high
quality, or low price, or durable, etc. this perception is the stimulus of customers
attitude and behavior towards companys products. Customers positive perceptions
will derive the business of the company and negative perceptions will sink it
Product differentiation Strategies
A positioning strategy that some firms use to distinguish their products from those of
competitors. In competitive market however, firms may need to go beyond these.
Consider these other dimensions, among the many that a company can use to
differentiate its market offerings:

Personal differentiation: Companies can have better-trained employees. Singapore

Airlines is well regarded in large part because of its flight attendants. Similarly,
kingfisher Airlines in India differentiated itself partly by the courteous behavior of
their smartly dressed flight attendants.

Channel Differentiation: Companies can more effectively and efficiently design their
distribution channels coverage, expertise, and performance. Eureka Forbes,
marketers of vacuum cleaners and water purifiers in India, achieved differentiated
positioning through their direct-to-home channel.

Image Differentiation: Companies can craft powerful, compelling images. The

primary explanation for Marboros extraordinary worldwide market share (around
30%) is that Marlboros macho cowboy image has struck a responsive chord with
much of the cigarette-smoking public. In the readymade apparel and accessory
category, brands such as Park Avenue, Louis Philippe, Colorplus, Allen Solly, and
other work hard to develop a distinctive image for their brands. Even a sellers
physical space can be a powerful image generator.
Tasks involved in positioning
Determining Positioning Strategy.
All of us know that it is a complex and difficult task to identify and select a
positioning strategy. Lets us discuss the steps involved in positioning strategy, there
are basically six-step that are adopted.
In each of the steps, marketing research techniques can be employed to get the
necessary information. These steps are discussed as follows:

(1) Identifying the Competitors - A first step is to identify the competition. This step
is not as simple as it seems to be. For example, P
epsi might define its
competitors as follows:
(1) Other cola drinks
(2) Non-diet soft drinks
(3) All soft drinks
(4) Non-alcoholic beverages,
(5) All beverages except water
One thing, which should be clear to you, is that there is basically two types of
competitors
-Primary competitors i.e., competitors belonging to the same product class
-Secondary competitors, those belonging to other product category.
In the above example other cola drinks are primary competitors and other drinks and
beverages are secondary competitors.
(2) Determining how the Competitors are Perceived and Evaluated - The second step
is related to determining the product positioning which is basically done so as to see,
when the competitors products are purchased by the customers. It is to see
comparative view. An appropriate set of product attributes should be chosen. The
term a ttributes includes not only product characteristics and consumer
benefits but also product associations such as product use or product users. In any
product category, there are usually a host of attribute possibilities.
(3) Determining the competitors positions Our next focus should be to determine
how different brands (including our own brand) are positioned with respect to the
relevant attributes selected under the previous step. At this point we should be clear
about what is the image that the customer has about the various product brands? You
have to see how are they positioned in respect to each other? Which competitors are
perceived as similar and which as different? This judgment can be made subjectively.
However a research can be taken up for getting the answer of these questions.
(4) Analysing the Customer Now you need to analysis the customers habits and
behaviour in a particular market segment.
The following questions need attention while understanding the customer and the
market (i) how is market segmented? (ii) What role does the product class
pay in the customers life style? What really motivates the customers? And what
habits and behavior patterns are relevant?
The segmentation question is, of course, critical. There are various approaches to
segmentation but out of all benefit segmentation is relevant here, which focuses upon
the benefits or attributes that a segment believes to be important. In order to specify
that benefit segments, it is useful to highlight the role of ideal object as a tool.
(5) Making the positioning Decision - The above four steps provide you a useful
backgrounds and are necessary to be conducted before taking any decision about
positioning.
The managers can carry these steps or exercises. After these four exercises, the
following guidelines can be offered to reach a positioning decision:
(i) An economic analysis should guide the decision.
(ii) Positioning usually implies a segmentation commitment.

(iii) If the advertising is working, the advertiser should stick to it

(iv) Do not try to be something, you are not
(v) In making a decision on position strategy, symbols or set of symbols must be
considered.
(6) Monitoring the position - An image objective, like an advertising objective should
be measurable. It is necessary to monitor the position overtime, for that you have
variety of techniques that can be employed it can be on the basis of some test and
interviews which will help to monitor any kind of change in the image.
Thus, the first four steps in the process provide a useful background. The fifth one
only is taken to make the position decision. The final step is to evaluate and measure
and follow up.