flowchart LR I[Introduction] --> G[Growth] G --> M[Maturity] M --> D[Decline] style I fill:#FFEBEE,stroke:#C62828 style G fill:#FFF8E1,stroke:#F9A825 style M fill:#E8F5E9,stroke:#2E7D32 style D fill:#E3F2FD,stroke:#1565C0
70 Product Decisions
70.1 What is a Product?
In marketing, a product is “anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or a need” — Kotler’s broad definition (kotler2021?). A product can be a good, a service, an experience, an event, a person, a place, an organisation, an idea, or a property right.
70.2 Five Levels of a Product
Theodore Levitt’s total product concept (later refined by Kotler) identifies five levels:
TipFive Levels of a Product (Kotler)
| Level | Working content | Hotel example |
|---|---|---|
| Core benefit | Fundamental need being satisfied | Rest and sleep |
| Basic / Generic product | Functional version of the core benefit | Bed, bathroom, towels |
| Expected product | Attributes buyers normally expect | Clean linens, working AC |
| Augmented product | Additional services and benefits beyond expectation | Free Wi-Fi, premium toiletries |
| Potential product | All possible augmentations and transformations | Personalised concierge service, bespoke experience |
70.3 Classification of Products
TipClassification of Products
| Basis | Categories |
|---|---|
| Tangibility | Tangible goods, intangible services, hybrids |
| Durability | Durable goods, non-durable goods |
| Use | Consumer goods, industrial goods |
| Consumer goods | Convenience, Shopping, Speciality, Unsought |
| Industrial goods | Materials, Capital items, Supplies and services |
TipFour Types of Consumer Goods
| Type | Working content | Examples |
|---|---|---|
| Convenience | Frequent purchase, low effort | Milk, soap, newspaper |
| Shopping | Compared on quality, price, features | Clothes, appliances |
| Speciality | Unique characteristics; customer makes special effort | Luxury cars, designer brands |
| Unsought | Not actively sought; need persuasion | Life insurance, funeral plans |
70.4 Product Mix and Product Line
TipProduct-Mix Concepts
| Concept | Working content |
|---|---|
| Product mix (assortment) | All product lines and items offered by a firm |
| Product line | Group of related products serving similar customers |
| Product item | Specific version of a product |
| Width | Number of product lines |
| Length | Total number of items |
| Depth | Number of variants of each item |
| Consistency | How closely related the lines are |
70.5 Branding
A brand is “a name, term, sign, symbol or design, or combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors” — American Marketing Association.
TipBranding Decisions
| Decision | Working content |
|---|---|
| Whether to brand | Branded vs generic |
| Brand sponsorship | Manufacturer brand, private label, licensed brand |
| Brand name selection | Name choice — descriptive, suggestive, abstract |
| Brand strategy | Line extension, brand extension, multi-brand, new brand, co-branding |
| Brand positioning | How brand is perceived in customer’s mind |
David Aaker’s brand equity — the value a brand adds to the product — has five components: brand awareness, perceived quality, brand associations, brand loyalty, other proprietary assets.
70.6 Packaging and Labelling
Packaging is the design and production of the product container. It serves four functions:
TipFunctions of Packaging
| Function | Working content |
|---|---|
| Protection | Safe storage and transport |
| Containment | Convenient unit |
| Promotion | Eye-catching design, branding, communication |
| Information | Ingredients, instructions, MRP, expiry |
Labelling — the Legal Metrology (Packaged Commodities) Rules 2011 in India require key disclosures: name and address of manufacturer, MRP, net quantity, date of manufacture / packaging, contact details, country of origin (for imports).
70.7 Product Life Cycle (PLC)
Every product passes through a life cycle of stages, each with distinct marketing implications (kotler2021?).
TipStages of the Product Life Cycle
| Stage | Sales | Profit | Strategy |
|---|---|---|---|
| Introduction | Slow growth | Negative or low | Build awareness; high promotion |
| Growth | Rapid increase | Rising | Product enhancement; widen distribution |
| Maturity | Slowing growth | Peaks then declines | Differentiation; cost cuts; promotions |
| Decline | Falling | Falling | Harvest, divest or rejuvenate |
70.8 New Product Development (NPD)
TipEight Steps in New-Product Development
| Step | Action |
|---|---|
| 1 | Idea generation |
| 2 | Idea screening |
| 3 | Concept development and testing |
| 4 | Marketing-strategy development |
| 5 | Business analysis |
| 6 | Product development (prototype) |
| 7 | Test marketing |
| 8 | Commercialisation |
The Bass diffusion model (1969) describes how innovations spread through a population — adopters fall into innovators, early adopters, early majority, late majority, laggards (Everett Rogers’s Diffusion of Innovations, 1962).
70.9 Product Strategies — BCG Matrix
The Boston Consulting Group matrix classifies products / business units by market growth and relative market share:
TipBCG Growth-Share Matrix
| Quadrant | Growth | Share | Action |
|---|---|---|---|
| Star | High | High | Invest aggressively |
| Cash cow | Low | High | Milk for cash |
| Question mark | High | Low | Build or harvest selectively |
| Dog | Low | Low | Divest or harvest |
The GE / McKinsey matrix is a more nuanced 3 × 3 generalisation using industry attractiveness and business strength.
70.10 Product Positioning
Product positioning is the act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market (kotler2021?). Al Ries and Jack Trout’s book Positioning: The Battle for Your Mind (1981) is the classic reference. Bases of positioning: attribute, benefit, use, user, competitor, category, quality / price.
70.11 Exam-Pattern MCQs
NoteEight-question set
Q1. Match each level of the product with its content (Kotler):
| Level | Content | ||
|---|---|---|---|
| (i) | Core benefit | (a) | Functional version of the core benefit |
| (ii) | Basic product | (b) | Fundamental need being satisfied |
| (iii) | Expected product | (c) | Additional services beyond expectation |
| (iv) | Augmented product | (d) | Attributes buyers normally expect |
A. (i)-(b), (ii)-(a), (iii)-(d), (iv)-(c) B. (i)-(a), (ii)-(b), (iii)-(c), (iv)-(d) C. (i)-(c), (ii)-(d), (iii)-(b), (iv)-(a) D. (i)-(d), (ii)-(c), (iii)-(a), (iv)-(b)
Answer: A.
Q2. “A consumer good purchased frequently with minimum effort and shopping comparison.” This describes a:
A. Convenience good B. Shopping good C. Speciality good D. Unsought good
Answer: A. Milk, soap, newspaper.
Q3. Match each product-mix concept with its meaning:
| Concept | Meaning | ||
|---|---|---|---|
| (i) | Width | (a) | Total number of items |
| (ii) | Length | (b) | Number of product lines |
| (iii) | Depth | (c) | How closely related the lines are |
| (iv) | Consistency | (d) | Number of variants of each item |
A. (i)-(b), (ii)-(a), (iii)-(d), (iv)-(c) B. (i)-(a), (ii)-(b), (iii)-(c), (iv)-(d) C. (i)-(c), (ii)-(d), (iii)-(b), (iv)-(a) D. (i)-(d), (ii)-(c), (iii)-(a), (iv)-(b)
Answer: A.
Q4. Match each PLC stage with its strategy:
| Stage | Strategy | ||
|---|---|---|---|
| (i) | Introduction | (a) | Differentiation; cost cuts |
| (ii) | Growth | (b) | Build awareness; high promotion |
| (iii) | Maturity | (c) | Harvest, divest or rejuvenate |
| (iv) | Decline | (d) | Product enhancement; widen distribution |
A. (i)-(b), (ii)-(d), (iii)-(a), (iv)-(c) B. (i)-(a), (ii)-(b), (iii)-(c), (iv)-(d) C. (i)-(c), (ii)-(d), (iii)-(b), (iv)-(a) D. (i)-(d), (ii)-(a), (iii)-(c), (iv)-(b)
Answer: A.
Q5. Match each BCG quadrant with its description:
| Quadrant | Description | ||
|---|---|---|---|
| (i) | Star | (a) | Low growth, low share — divest or harvest |
| (ii) | Cash cow | (b) | High growth, high share — invest |
| (iii) | Question mark | (c) | Low growth, high share — milk for cash |
| (iv) | Dog | (d) | High growth, low share — build or harvest selectively |
A. (i)-(b), (ii)-(c), (iii)-(d), (iv)-(a) B. (i)-(a), (ii)-(b), (iii)-(c), (iv)-(d) C. (i)-(c), (ii)-(d), (iii)-(b), (iv)-(a) D. (i)-(d), (ii)-(a), (iii)-(c), (iv)-(b)
Answer: A.
Q6. Arrange the steps of new-product development in correct order:
- Idea screening
- Idea generation
- Concept development and testing
- Test marketing
A. (ii), (i), (iii), (iv) B. (i), (ii), (iii), (iv) C. (iii), (iv), (ii), (i) D. (iv), (iii), (i), (ii)
Answer: A. Idea generation → screening → concept testing → test marketing → commercialisation.
Q7. Aaker’s brand-equity model has five components, including brand awareness, perceived quality, brand associations and brand loyalty. The fifth is:
A. Brand colour B. Other proprietary assets (patents, trademarks) C. Brand price D. Brand spelling
Answer: B. The fifth Aaker component is other proprietary brand assets.
Q8. Positioning: The Battle for Your Mind (1981) was written by:
A. Philip Kotler B. Al Ries and Jack Trout C. Theodore Levitt D. David Aaker
Answer: B. Ries and Trout (1981).
ImportantQuick recall
- Product — anything offered to satisfy a need or want; can be a good, service, experience, idea, etc.
- Five levels (Kotler): Core benefit → Basic → Expected → Augmented → Potential.
- Consumer goods: Convenience, Shopping, Speciality, Unsought.
- Industrial goods: Materials, Capital items, Supplies and services.
- Product-mix: Width (lines), Length (items), Depth (variants), Consistency.
- Brand equity (Aaker): awareness, perceived quality, associations, loyalty, other proprietary assets.
- Packaging functions: protection, containment, promotion, information.
- PLC: Introduction → Growth → Maturity → Decline.
- NPD 8 steps: Idea generation → Screening → Concept testing → Strategy → Business analysis → Development → Test marketing → Commercialisation.
- BCG matrix: Star (high/high), Cash cow (low/high), Question mark (high/low), Dog (low/low).
- Diffusion of Innovations (Rogers 1962): Innovators → Early adopters → Early majority → Late majority → Laggards.
- Positioning — Ries & Trout (1981).