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Premium member Presentation Transcript PRODUCT MIX STRATEGIES: PRODUCT MIX STRATEGIESSlide 2: Color cosmetics Skin care Oral care Confectionaries Hair care Deodorants Soaps & detergents Toilet Soaps Beverages food Lakme Fair & lovely pepsodent Max Sunsilk Axe Surf Liril 3 roses Knorr Annapurna Atta Aviance Pond’s toothbrush Clinic Pond’s Rin Lifebuoy Lipton yellow label Knorr Annapurna Salt Close up Rexona Wheel Lux Lipton green label Modern foods range Denim Vim Breeze Lipton Ice tea Kwality Wall’s feast Ala Pears Red Label Kwality Wall’s cornetto OK Hamam TajMahal Sundae’ Dove Brooke Bond Kissan Fair & Lovely BruSlide 3: L E N G T H WIDTH- (P&G) Shampoo Oral Care Soap & Detergent Baby Care Personal CareSlide 4: L E N G T H WIDTH- (Marico) Hair Oil Shampoo Edible Oli Detergent & Soap FoodsProduct mix concepts: Product mix concepts Product Mix Product line- E.g – Bata had a range of 1138 product lines(1999) Width of Product mix Length of the product mix is the total no of items in the mix(our example ,it is 46) Avg length of a line- total length/no of linesProduct mix concepts: Product mix concepts Depth – the depth of the product mix is the assortment of all sizes, colors and variations offered for each product in the product line For example- Lifebuoy Active Red comes in three sizes- 125 gms,100 gms and 60 gms cakes Consistency : closeness exhibited by the product lines in production requirements , distribution and end usage For example- most of the HUL Product lines are consistent as they are consumer goods distributed using similar channels and produced using similar facilitiesProduct Mix strategies: Product Mix strategies Product line analysis – too short Vs too long Company’s objectives affect product line length Market share and Higher ProfitabilityLine stretching : Line stretching A company stretches its product line beyond the current range of products. It can stretch its product line in either the down market , up market or both Down Market stretch – introduce the products at a lower price E.g – 3 Roses for the lower end market (HUL) Reasons- Middle market stagnation, potential for growth in Down market ,aim to tie up with the lower end competitorsUp market stretch : Up market stretch Enter the high end of the market The objective of the firm may be to have higher growth , increase its margins, or to simply project itself as a full line mfgg firm E.g Lipton Yellow Label (HUL) is a high end stretch with Rs 75 for 250 gms tea . A company serving in the middle market might indulge in stretching its product line both ways – upward and downwardStrategies: Strategies Ariel green – down market stretch Parker Low priced models – down market stretch Haier – Rs 97 k and above – Up market stretch Samsung – Side by side model- Up market stretchProduct Mix Strategies: Product Mix Strategies Trading up-Offer high priced , prestige products to their existing product line in an effort to increase the sale of their low priced products and enhance the company image Trading down –new products, low priced to the existing line E.g –Marriot Corporation introduced a new chain of Hotels called ‘Holiday Inn’ to cater to the needs of not so affluent customersLine filling Vs Line Pruning : Line filling Vs Line Pruning Kimberley Clark –closed underperforming business –Midwest express Company might be carrying some products in the product line that yield lower or no profits. Prune or remove unnecessary productsReasons for line extensions: Reasons for line extensions Logistics and storage costs Entry barriers for new labels Sales forecasting is easier as an analogy with the existing products in the line could be had . Surf, Surf Excel, Surf Excel Blue Coke, Diet Coke, Vanilla Coke Clinic All Clear, Clinic PlusA small gesture of helping you revise !!!: A small gesture of helping you revise !!! Line extensions Colgate dental cream Colgate gel , Colgate calciguard , Colgate Total , Colgate sensitive , Colgate Herbal , Colgate cibaca topReasons for Line extensions: Reasons for Line extensions Marketing Managers perceive line extension as a low cost , low risk way to meet the needs of various customer segments . Extension helps reducing the cost of Marketing research and direct marketing . US based POP advertising institute- line extensions stocked in a retail outlet can help a brand increase its shelf space and attract customer’s attentionLimitations of line extensions: Limitations of line extensions Super saturation would lead to weakening of product lines. Profits are short lived ,efforts can be duplicated by the competitors!! New ideas get stagnated Lowers brand loyaltySlide 18: Largest Indian Personal & Healthcare Company DABUR Largest in Ayurveda Herbal & Natural Products 350+ Products 3500 employees 14 Plants 3000 Distributors Retail Reach 25,00,000 One of the 3 most respected FMCG Companies ( BW, March 2007 ) Among “ Best under a Billion “ companies in Asia Pacific ( Forbes Asia 2005 & 2006 ) One of the fastest growing in Industry with CAGR of 19% in Sales & 39% in Profits over last 4 yearsSlide 19: Consumer Care Division Key Products Hair Oils Shampoo Dabur Amla Hair Oil : increasing penetration Vatika Hair Oil : targetting share gain Dabur Anmol : value platform Vatika Root Strengthening with Hair Conditioning Vatika Dandruff ControllSlide 20: Oral Care Dabur Ayurvedics Baby Range Gulabari skin care range Herbal & medicated soaps Baby & Skin Care Dabur Red Toothpaste : traditional equity Babool Toothpaste: herbal equity & value Health Supplements Chyawanprash & its variants Glucose& other nutrition supplements HoneySlide 21: Digestives Cleaners Air Fresheners Insect RepellantsSlide 22: Consumer Health Division Dabur Honitus Dabur Churn Dabur ShankpushpiSlide 23: Food DivisionSlide 24: Hair Oils Shampoo Oral Care Baby & Skin care Health Supplements Dabur Amla Hair Oil Dabur Vatika Shampoo Dabur Red Toothpaste Dabur Ayurvedic Baby care Dabur Chyawanprash Vatika Hair Oil Babool Toothpaste Gulabari Skin Care Dabur Honey Dabur Anmol Promise Herbal & Medicated Soaps Dabur Glucose Meswak Width L e n g t h Consumer Care Division ProductsAPPLICATIONS …..: APPLICATIONS ….. Complete set – product mix / Assortment Group of closely related products – A product line No of product lines- width of the mix No of products/ brands in a line – length of a line All SKU ‘s make the depth of a line 3 colours – 3 package types= 9 SKUsSlide 26: PRODUCT MIX A product mix is the set of all products and items that a particular seller offers for sale. A total group of products that an organization markets. A company’s product mix has a certain width, length, depth and consistency.Slide 27: DIMENSIONS OF PRODUCT MIX The width of company’s product mix refers to how many different product lines the company carries, such as bathing soap, detergents, shampoos, toothpaste, food products.Slide 28: DIMENSIONS OF PRODUCT MIX The length of a company’s product mix refers to the total number of items in its product mix.Slide 29: DIMENSIONS OF PRODUCT MIX The depth of a company’s product mix refers to how many variants are offered of each product in the line. Thus if a toothpaste comes in three formulations and in three sizes, it has a depth of nine (3x3).Slide 30: DIMENSIONS OF PRODUCT MIX The Consistency of the product mix refers to how closely related the various product lines are in end-use, production requirements, distribution channels, or some other way. HLL’s product lines are consistent insofar as they are consumer goods that go through the same distribution channels.Slide 31: DIMENSIONS OF PRODUCT MIX These four dimensions of the product mix provide the handles for defining the company’s product strategy. The company can expand its business in four ways. 1. The Co. can add new product lines, thus widening its product mix. 2. The Co. can lengthen each product line. 3. The Co. can add more product variants to each product and deepen its product mix. 4. The Co. can pursue more product-line consistency or less, depending upon whether it wants to acquire a strong reputation in a single field or participate in several fields.Slide 32: PRODUCT PORTFOLIO MANAGEMENT Product Line Length : . Downward Line Stretching . Upward Line Stretching . Two Way Stretching Present Product New Product Low High Low High Price Quality Present New Present New New (Downward) (Upward) (Two Way)Slide 33: INDIVIDUAL PRODUCT DECISIONS Product Attribute Decisions Brand Decisions Brand Positioning Packaging and LabelingP&G India product mix: P&G India product mix Fabric Care Hair Care Baby care Feminine care Health Care Dental Care Skin Care Shave Care Blades & Razors Batteries/Cell Ariel Front-O-Mat Pantene Pro-V Pampers Whisper Vicks VapoRub Oral-B Olay Gillette Gillette Duracell Ariel 2 Fragrances Head & Shoulders Vicks Inhaler 7 o’clock Tide Detergent Rejoice Vicks Formula 44 Tide Bar Vicks Cough Drops Vicks Action 500P&G : Hair care Batteries Health care Baby care Cosmetics Deos Oral care Body wash Head & Shoulders Duracell Braun Pampers Cover girl Old spice Oral B Camay Pantene Vicks Dreft Max Factor Secret Crest Ivory Herbal essences Fibersure Puffs Fixodent Olay Aussie Zest P&GBrand Extensions: Brand Extensions Fortifying Parent Brand ImageBrand Extensions: Brand Extensions Extend and transfer the equity of established brands than to establish new ones. Keller-”A firm uses an established name to introduce a new product” Capitalize on recognition and goodwill of the existing brand, thereby increasing the chances of product success.Risks!!!?: Risks!!!? Image and reputation of parent brands will get tarnished if the brand extension fails Confuse and frustrate the consumers. Retailers unwilling to provide shelf space for the extensions May Obscure the identity of the parent brandRecent failures: Recent failures AMUL pizzas Kellogg Biscuits Tropicana ice creams Ariel Washing soap Dettol fragrant bath soapOther extensions: 2001, Lux to Lux Shampoos Lux International Skincare products – moisturizing , deep cleansing , body washes, Sun protection Fair and Lovely Soap Fair and Lovely dark circles under eye cream Pond’s Cold cream to Dreamflower talc Sunsilk Shampoo to Sunsilk Procolour Axe deos to shaving creams , talcum powders Other extensionsHUL : Company History : HUL : The Focus .. 1885 – Lever Bros 1888- entered India with Sunlight Laundry soap (exports) 1930 – Merger with Maragarine Unie (Netherland based Vanaspati Exporter to India)- Unilever 1931- First Indian Subsidiary , Hindustan Vanaspati Mfgg Co 1933 – Lever Bros Ltd 1935- United Traders Ltd 1956 – three Indian subsidiaries merged to form HLL HUL : Company HistoryHUL : The focus: 1993 – acquired TOMCO Lakme Ltd JV 50:50 1998 - Lakme sold its products to HLL 1996 – HLL absorbed Brooke Bond Lipton India Ltd 1998 – Pond’s India Ltd HUL : The focus You do not have the permission to view this presentation. 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