International Product Planning :

STANDARDISATION vs ADAPTATION
By:

Mrunalini Rane, Roll No :- MBA/12/14

Objectives
1. Definitions of product

2. Importance of product
3. Levels of product 4. Classification of products
Traditional Classification Modern Classification

5. Product Adaptation and strategies 6. Standardization and its benefits 7. Product planning

What Is a Product?
According to P.Kotler A product is a bundle of physical service & symbolic particulars expected to yield satisfaction or benefits to the buyer.

Bradley Johnson

What Is a Product?
A product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want.
E.g. soap, toothpaste, Lipsticks etc

Bradley Johnson

What Is a Product?
Experiences represent what buying the product or service will do for the customer.
E.g., Disney, Lego, Toys R Us

Bradley Johnson

Audry Drapier

Importance of Product
Product is the central point of all marketing activities

Marketing activities revolve around product

Marketing, selling, purchasing, advertisement, distribution, sales promotion are useless without product Firms bargain profitability through their product Marketing program not possible without product

Marketing activities like distribution, price, sales, promotion etc is done on the basis of nature, quality and demand of the product

Importance of Product
Product is an end: Main objective of all marketing is to satisfy the customer. Decisions are taken to provide customer benefit, utility and satisfaction through product Product is an end and that is to satisfy the customers

Employment opportunities:-

Product provides employment to crores of people in activities of production, distribution, advertisement, sales, transportation, warehouse etc

Importance of Product
Product is a competitive weapon: Competition develops change in consumer preference Manufacturer needs to change the product in terms of packing, colour, size etc to stay in the market Product affects purchasing power, standard of living and mental satisfaction of buyer Life of a buyer is deeply associated with various products available in market

Importance for Buyer:

Importance of Product
Importance for Seller: Existence of any company depends upon acceptance of its products in the market Profits depend upon how much products are being sold & at what price Products fulfill necessities of society Distribution of goods at proper prices is necessary for society

Social Importance:

Levels of Product Core product

Actual product Augmented product

Levels of Products
Core benefits represent what the buyer is really buying

Actual product represents the design, brand name, and packaging that delivers the core benefit to the customer.
Augmented product represents additional services or benefits of the actual product

8-7

Levels of Products
Core benefits represent what the buyer is really buying. Actual product represents the design, brand name, and packaging that delivers the core benefit to the customer. Augmented product represents additional services or benefits of the actual product.

What Is a Product?
Core A software application that enables a PC to function Actual A well-designed, high-quality, branded, and packaged
computer operating system that provides a variety of features that are important to the user

Augmented An operating system software application that offers a

series of channel and consumer services. The channel member can obtain favorable pricing and credit terms, training, engineering support, etc. The consumer can get online support, version updates, access to forums and communities, etc.

Classification of Products
Consumer products Industrial products

Classification of Products
Consumer products are products and services bought by final consumers for personal consumption. Classified by how consumers buy them
Convenience products

Shopping products
Specialty products Unsought products

Classification of Products
Convenience products are consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort.
Newspapers

Candy
Fast food

Classification of Products
Shopping products are consumer products and services that the customer compares carefully on suitability, quality, price, and style.
Furniture Cars

Appliances

Classification of Products
Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort.
Designer watches
Branded fashion wear High-end electronics

Classification of Products
Unsought products are consumer products that the consumer does not know about or knows about but does not normally think of buying.
Life insurance

Funeral services
Blood donations

Classification of Products
A laptop computer shopping good: most people purchase a laptop infrequently, and when they purchase it, they usually conduct extensive research and comparison of brands and features A surgeon Specialty good: There is usually little comparison between doctors as most patients collect only a few names Automobile tires it depends on the individual and the situation. If a consumer has a luxury brand of car and will consider only designer tires, this is a specialty good; for most consumers, tires are a shopping good, and they will be heavily influenced by price and brand name; in some situations, the tires could be an unsought good.

If one was traveling and had a flat tire in an unknown area he would probably be towed to a local station and with little product knowledge, agree to a tire carried by the local station

Classification of Products
Industrial products are products purchased for further processing or for use in conducting a business. Classified by the purpose for which the product is purchased
materials and parts

capital items
supplies and services

Classification of Products
Materials and parts include raw materials and manufactured materials and parts usually sold directly to industrial users.
Wheat Lumber

Iron
Cement

Classification of Products
Capital items are industrial products that aid in the buyers production or operations.
Buildings
Elevators Computers

Classification of Products
Supplies and Services include operating supplies, and repair and maintenance items, as well as maintenance and repair services and business advisory services.
Copy papers

Stationary
Training service Market research/Advertising service

Modern Product Classification

Proposed by famous scientist Prof. L. Aspinwall

Traditional product classification does not clear the relationship between BUYER SEARCH PRODUCT and MARKETING MIX

Modern Product Classification

Replacement rates Gross margin
Product Characteristics

Adjustment
Consumption time Searching time

Replacement rate : Rate at which the product is purchased and Adjustments Gross Margin: related Sales to price the use Cost of product of product consumed Searching Consumption time: time Contact : Time time taken between in consumption consumer and of product retailer

Modern Product Classification

Prof. Aspinwall classified products into three categories

RED PRODUCTS ORANGE PRODUCTS YELLOW PRODUCTS

Type
Replacement Rate Gross Margin Adjustment Consumption Time Searching Time Details Products

RED PRODUCTS
High Replacement Rate Low Score Value Low Score Value Low Score Value Low Score Value Convenience products, Dominated by buying habits of consumer Household products like soap, pen, pencil, bread, cigarettes, Ice cream etc

Type
Replacement Rate Gross Margin Adjustment Consumption Time

ORANGE PRODUCTS
Medium Replacement Rate Medium Score Value Medium Score Value Medium Score Value

Searching Time
Details

Medium Score Value

Mixture of red & yellow products, Marketer adopts middle level distribution system for sale

Products

Crockery, readymade garments, Tinned eatable products, Radio, TV, AC etc

Type
Replacement Rate Gross Margin Adjustment Consumption Time Searching Time Details

YELLOW PRODUCTS
Low Replacement Rate High Score Value High Score Value High Score Value High Score Value Shopping & specialty products, Consumer buys after comparison on criteria like quality, price, suitability, style Furniture, sarees, jewellery, car, bike, costly watches etc

Products

Modern Product Classification

G.E.Miracle, Lipson & Darling also contributed to development of Modern Product Classification Theory Lipson & Darling divided products into following categories:-

1. Low
2. Very Low 3. Medium

4. High
5. Very High

Modern Product Classification

Lipson & Darling is broader classification of Prof. Aspinwalls theory. Prof. Aspinwall
RED PRODUCTS

Lipson & Darling

1st Group

ORANGE PRODUCTS

2ND,3RD & 4TH group

YELLOW PRODUCTS

5th Group

Product Adaptation Strategies

Warren Keegan has suggested following product adaptation strategies: 1. One product one message worldwide 2. Same product modified communication

3. Product adaptation communication extension

4. Double adaptation

5. Product innovation

Choosing the correct Strategies

Product Market Analysis -Who -When -What

-How

Firms Objectives Financial position of the firm Packing

Standardization
According to Lipson & Darling
Standardization is the process of establishing

particular physical attributes and chemical

composition against other items.

Activities involved in standardization:1. To determine the standard of the product 2. To inspect the product on the basis of predetermined standard 3. To divide the product according to these standards into several groups

Advantages of product Standardization

1. Increase in sales 2. Easy marketing 3. Goodwill 4. Less selling risk 5. Large scale production economies 6. Technical factor 7. Legal factor 8. Buyers will 9. Resource environment

Standardization versus Adaptation

Factors Encouraging Standardization Factors Encouraging Adaptation

Economies of scale in production

Economies in product R&D

Differing use conditions

Government and regulatory influences Differing consumer behavior patterns Local Competition True to the marketing concept

Economies in marketing
Shrinking of the world marketplace/ economic integration Global competition

Product Planning
According to Johnson
Product planning determines the characteristics of product that best meets the consumers numerous desires, characteristics that add salability to products and incorporates these characteristics into the finished products.

Characteristics of product planning:1. 2. 3. Product investigation Changing in commodity according to demand To know the practical aspect of the product

4.
5.

Discontinuance of the product

Importance of the product planning

Product Planning
Importance of the product planning marketing:1. Starting point of the marketing

2. Means of fulfilling social ability

3. Indicators to managerial ability 4. Competitive tool

5. Wide scope