Packaging: Meaning, Objectives, Functions and Levels of Packaging | Essentials of a Good Packaging

Meaning of Packaging

Any product of any company can be exported or imported to any country of the world. The products need to be exported or imported from or to far off countries. So, products are packed to make easy to do so. Generally, packing or parceling products is called packaging. This is an important task of marketing. It plays an important role in this competitive business age.
So, packaging is also called fifth ‘P’ of market mix. Packaging means putting any product safely in a pocket or pot or envelop. This makes the products more attractive, safe and trouble-free. This also works as effective communication.

Packaging also provides information to the consumers about features, quality, using method etc. This also plays a great role in maintaining quality of products. This also forms good impression on customers towards products. There are some products which may lose even their existence if they are not nicely packed. For instance, gas, camphor, alcohol, liquid medicines, kerosene, petrol etc. So, the products should be suitably as well as properly packed according to their nature. Liquid medicines, alcohol, beer, soft drinks like CokaCola, Fanta etc. are packed in glass bottles. Juice, meat, fish, oil, etc. are packed in tin cans. Similarly, fruits are packed in wooded boxes, ghee, water and other similar natural things are packed in plastic cans.

According to the nature of products, biscuits, breads, chocolates, etc. are packed in paper. Pulse, rice, etc. are packed in sacks or clothes. Nowadays products are packed in reusable materials. Packs should also be protective from environmental pollution. Plastic packing has negatively affected and dirtied the cities like Kathmandu. The government also can prohibit such materials used in packing. So, society and environment related matters also should be considered to use packing materials.

Packing can be done using different methods. Mostly there are three levels of packaging. Keeping the products in any port or bottles or bag is primary packaging. For instance, putting oil in a pot or can, cream in tube, etc. are primary packaging. Putting primary pack in any bag is called secondary packing. Generally such bag should be made of thick paper. After secondary packaging, the products are kept in wrappers, in cartons or cans. This is called shipping packaging. In such types of packaging, the products can be put in each packet such as one dozen, two dozens, twenty units, thirty units etc. This makes easy to supply, store, or transport the products.

Different writers and experts have defined packaging in different ways as follows:
According to Prof. Philip Kotler, “Packaging is the activity of designing and producing the container or wrapper for products.”


According to David J. Schwartch, “The package that contains protects and identifies the basic products.”


According to Prof. William J. Stanton, “The packing may be defined as all the activities involved in designing and producing the container or wrapper for a product.”


From the study of the above definitions, we can make out conclusion that packaging is the task which protects the products and gives identity. In other words, it keeps the products safe, makes attractive and easy to handle. It also helps in sales promotional activities.

Objectives of Packaging

Packaging is done to facilitate distribution and use of products. Its importance is growing day by day. The business companies have remained engaged in improving packaging how it can be made attractive. For doing such important task, some objectives are also ascertained. They are as follows:

1. Product protection

Most of the business firms produce quality goods. Packaging is done to protect quality, features, utility etc. This also saves products from different risk or damage. After the products have been produced, they need to be transported to target markets. For this purpose, they are properly packed according to their nature. If packing could not be properly done, they may be damaged, ruined or broken. So, the main objective of packaging is to protect products.

2. Product prestige

Every product needs packaging for carrying to sell or market from production place. Then the customers like to keep them secure until they use it. On the other hand, unpacked products do not look attractive. Packing is necessary for making product attractive, winning the heart of customers and increasing prestige of the products.

3. Easy in handling

Packaged products/ goods become easy to take from one place to another. On the other hand, packed goods can be used at any time when needed. Products are also packed with the objectives that the customers feel easy to handle and use them easily. So, proper packaging methods are devised by the producers.

4. Promotional appeal

Effective packaging gives information about the feature, quality and using methods. The producers give such information so that the customers accept the goods. So, good packaging is also called silent salesman. It effectively advertises the goods in markets. So, the producers include appealing information for the promotion of the products.

5. Reasonable cost

Good packaging should also have reasonable cost. Packaging cost should not be high burdening the customers. So, packaging of the products should involve reasonable cost so that the customers do not feel burden. So, packaging should be done with reasonable cost.

Functions of Packaging

Packaging involves many activities. This function gives protection to products keeping in packs. It also makes easy to transfer from production place to markets. The main functions of packaging can be mentioned as follows:

I. Basic functions

Basic functions of packaging are of different kinds. They are mentioned as follows:

  1. Product containment: At first packaging design should be prepared and produced. After this task is completed, the products are put into covers. The covers, containers or wraps or packs become different according to the nature of the products. In order to keep the produced goods in safe, bottles, containers, bags, tubes or drums or plastics, tin boxes or wooden boxes are used according to the nature of the products.
  2. Product protection: The second important function is to protect the products. This plays an important role to keep the quality and feature of the products fresh. It becomes impossible to supply goods to the customers without proper packaging. Packaging protects products from damage, breaking, leaking, or moistening or ruining. Any product should not get mixed with other products. Packaging protects products from such possibilities.
  3. Product identification: Besides brand, other instructions and information are also written on packs. Producer’s name, production date, usable duration, expiry date, suing methods etc. are written on packs. Composition of the packed products is also given on it. So, important information about the product can be obtained from pack. In this way, every packaging gives introduction of the product with which the customers feel easy to take decision to buy or not to buy.

II. Selling function

Packaging performs different activities related to sale. These activities are mentioned as follows:
  1. Promotion: Good packaging itself advertises the products. Good packaging attracts the customers and makes them confident about the quality of the product. Multiple packaging becomes successful to win the heart of customers in competitive situation. Such attractive packaging can be seen at super market, big shopping centers etc. So, it is said attractive packaging plays a role of silent seller.
  2. Creation of public image: Dependable and attractive packaging creates positive attitude of the public. If positive public image is created towards the products, the customers buy such products regularly. They also tell their relatives, friends, neighbors etc. about the products and suggest them to buy it. This plays an important role in the achievement of the objective of the company.
  3. Communication: Good packaging gives information about quality and features of the products to the customers. Together with this, the customers get every information about products mix, manufactured date, duration of the use of the products, method of use, keeping safe the product etc. from the packaging. Such information or notices motivate the customers to buy product.
  4. Product differences: Nowadays, many products of various companies can be found in markets. In this age of market competition, it is necessary to know which product belongs to which company. This becomes possible only from packaging. From this customers can take buying decision to the best product only by reading the information about quality, feature, price, mix etc.

Functions of Packaging

Levels of Packaging

Packaging should be done on the basis of nature and lastingness of the products. Packaging can be done at different standard and levels. According to the modern method, packaging can be classified as follows:

1. Primary package level

After the goods have been produced they are put in any container, bottle or wrapper. This is called primary packaging. The products are packed in such way that their quality and features do not get declined or damaged. This also creates convenient value for the customers.

2. Multiple package level

If the primary packed products are again packed in any other container, box or packs or anything, this is called multiple packaging. Different decorative and cosmetic goods can be packed in a single box. It makes the customers easy to use different goods taking out from a single box according to necessity. As it becomes easy for the consumers, sale of such products can also increase.

3. Distribution package level

Any product produced by any company needs to supply, send to target markets and even foreign countries. This needs transport and distribution packaging. Such packaging is also called shipping package. To transport them by bus, truck, plane, train etc. only packing in thick paper bags cannot be safe. The products to be transported in such way should be packed in tin or steel can or wooden box. Keeping products in these types of container is called distribution package. Such packaging becomes very safe and dependable.

Essentials of a Good Packaging

Good packaging is an important tool/ equipment for selling products. It gives short information about product and services. Besides, it also gives introduction of product and makes transportation easy. This is also taken as an important means for advertisement of the products. This motivates customers for impulse buying i.e. they buy products without plan. The following things should be studied to understand the necessity of good packaging.

1. Protection

Good packaging keeps safe the quality of the products when kept in warehouse or transported. Keeping safe quality, feature and utility of the products is the basic activity of packaging. So, packaging should be compulsorily done for the safety of the products.

2. Dependable

Producers sincerely mention true information on the package. Products in such package become good in quality. So, the customers confidently decide to use packed products. While buying such packed products, the customers are not confused. So, packed products become dependable and believable.

3. Easy in handling

Produced goods should be supplied to different target markets. They should be taken to or from warehouse. Taking out or in or supplying to far off places, the products should be easy in handling. Packed products become easy to handle or distribute.

4. Convenient

Design, shape, or form of packaging should be good. Good packaging becomes easy for middlemen, retailers, wholesalers and customers to handle, use or distribute. Such products become easy to store in warehouse, showrooms, and sell from sale centers, or to use by the customers.

5. Reasonable cost

Products should be made safe and attractive with effective packaging. But is should not be much costly. Much packaging cost increases price of the product. On the other hand, cheap packaging also should not be used. It causes decline in quality and utility of the products. So, packaging should be done with reasonable and balanced cost.

6. Easy to identify

Good packaging gives clear introduction of the product. One of the important tasks of good packaging is to provide clear introduction of the products. Manufactured/ production date, quality, features, price, utility, using method etc. should be compulsorily mentioned on the cover, can, bottle, or box. Everything should be clear to the customers about the product from the introduction written on the package.

7. Attractiveness

Packaging products should be attractive to the customers in looking. While packaging any product, much attention should be paid to its size, form, design, figure, printing etc. on the cover-pack. They are important tools for product sale. So, attractiveness should be taken as a necessary.

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Type of Brands and Essentials of a Good Brand Name

Type of Brands

Brand is the name, sign, symbol, mark given to the particular goods or services. The process of providing name, sign, symbol, mark to the particular product is known as branding of products. There are various types of brand of products. The types of brand are as follows:

1. Individual Brand

A company may produce different types of goods. The task of giving separate brand to each type of products is called individual branding. Branding of Khukuri, Surya etc. brand of cigarette of Surya Tobacco Company is the example of individual brand. Although this brand policy is very good, it becomes expensive and challenging in market promotion.

2. Family Brand

If one brand name is given to the products of same product line, it is called family brand. Family branding policy becomes suitable for some companies producing different product lines. For example, a food stuff producer can give different brand names to different productions such Mohuns for snacks, Dippy for Juice, and Amul for milk. This type of branding makes combined advertisement easy and help in sales promotion. But, if any customer does not like any products of one product line, other products may also be affected negatively.

3. Umbrella Brand

One company may produce several product lines or products. The company may give same brand to all its products. Such branding policy is called umbrella branding policy. The products produced by the Tata Company of India gives TATA brand name to all its products such as Bus, Truck, Machineries, Soap, Chemicals, and Cloths etc. This type of branding economizes promotional cost. On the other hand, if any one product does not get success in market, it adversely affects other products also. However, on the whole, this branding policy becomes fruitful for quality products.

4. Manufacturer’s Brand

If any producer uses brand in its product, it is called producer’s brand / mark. Producer name is mentioned in such products. If there is a condition to maintain quality of the product, such policy should be adopted. Besides, this policy should be adopted if the producer’s image or reputation is high.

5. Distributors’ Brand / Mark

All of the producers do not give brand to products by themselves. They may delegate the right to keep brand name / mark to intermediaries, this is called distributor’s brand. Experienced and reputed agent, wholesaler, big retailers and distributors perform this. Generally, this branding policy is adopted if the producer is inexperienced and distributor is experienced. This policy may be useful to the producer.

6. Licensed Brand

A producer can use the brand of other producers who do not put their products in competition. Permission can be taken through agreement to use any brand of other producers. After such permission /  authority have been got, royalty is paid for the use of such brand. Such brand is called delegated brand or licensed brand.

Essentials of a Good Brand Name

Mark name is used to give correct introduction of the product in market. This plays an important role to increase the fame and reputation of the production company. This also encourages sellers for continuous sale. Besides, this also helps in controlling market. So, products should be compulsorily given brand name. The following points can be mentioned to make clear why it is necessary.

1. Suggestive

Brand of the products that enter in the market should be suggestive. Such suggestion encourages customers to use products of the concerned company. For example, the brand Safa Sabun suggests that it makes clothes clean. In this way, brand name of any product can give suggestion to the customers. So, brand name of products should be suggestive.

2. Easy to pronounce

Name of any products should be easy for the customers to pronounce. If such easy name is given to the products, the customers feel easy to pronounce. Just the opposite, if the brand name is difficult to pronounce, they feel difficulty. So, easy brand name should be given so that the customers can pronounce it easily.

3. Capable to be registered

Brand name of the product should be able to get it registered. Any name already registered by other companies should not be registered. Legally prohibited name also should not be registered, or it is not registered. If brand name is not registered, it cannot be used solely. So, registrable brand name should be given to the products.

4. Stable life

Brand name of product should be long lasting. Brand should not be dependent upon fashion and style. Similarly, brand name should be kept which cannot be negatively affected by the time. This makes brand name long lasting.

5. Distinctive

Brand name of any products should be new and unique. Same brand name or similar kept by other companies or competitors should not be given to the products. If the brand is similar or same, difficulties may arise in marketing mix. So, similar name or brand should be avoided, it should be unique and different from others.

6. Attractive

Brand name of product should be very attractive. If attractive brand is given to the products, the customers are attracted to buy such products. It also makes easy to conduct promotional activities. They also feel easy to remember the brand. They keep it in their mind.

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Meaning of Branding, Characteristics, Objectives, Reasons for and Against Branding

Meaning of Branding

After producing goods, the producer provides sign or mark to justify ownership of the products. The same sign or mark is called brand. In other words, the name, sign, symbol or digit or letter is called branding of products. As various types of products enter in markets, every company or firm tries to give separate identity of the product and firm. So,
this task is called creative process. YamYam noodles, Puja Soap, Pepsodent tooth paste, Premise tooth paste, OK soap, etc. are some examples of branding. In this age of competition, there are various products’ substitute products in markets. Branding of the products plays an important role to identity the goods of any producing company or firm.

Products branding makes easy to a company to have product positioning. Its products and customers also feel easy to demand for the products. Healthy competition makes market management easy and strong. So, branding of the products is an important task. It reflects the features of the product. The brand of Brighter Tooth Paste reflects teeth become bright, if pasted with it. Brand / name of any product should be short, easy to pronounce and attractive so that it can be kept in mind by the customers. This makes both customers and producers feel easy in dealing. The combined activity of mark, trademark, brand etc. is called branding of product. It can be mentioned as follows:

1. Brand

Brand is the combined form of name, mark, word, sign or symbol used to as an identity of the product.

Different experts and writers have defined Brand in different ways. Important definitions have been given as follows:

According to Prof. Philip Kotler, “Brand is the name, term, symbol, or design or a combination or services of one seller or group of sellers and to differentiate them from those of competitors.”

2. Brand name

Brand name is the word, sign, symbol or letter which can be easily pronounced. Washing soap Diyo, bathing soap Liril, Cammay, Lux etc. can be taken as examples of brand name.

According to Prof. Philip Kotler, “Brand name is that part of brand which can be vocalized.”

3. Brand mark

Brand mark is the sign used to popularize product which can be identified easily by the customers but cannot be pronounced.

Prof. Philip Kotler has defined it as, “Brand mark is that part of a brand which can be recognized but is not alterable such as a symbol, design, or distinctive coloring and lettering.” The feature of attractiveness should contain in the product.

4. Trade mark

An established trade mark permitted by law, rules and regulations used to identify any production by a company is called trade mark. This mark becomes legal mark. It is protected and recognized by law. An owner of the company has the full right to use such mark. Trade mark can be legally recognized and protected only after getting the company registered from government office.

According to Prof. Philip Kotler, “Trade mark is a brand or part of brand that is given legal protection because it is capable of exclusive appropriation.”


For example, Dettol, Nycil, Break etc.

Characteristics of Branding

Branding of any product becomes very challenging. Different aspects should be considered while branding a product. If suitable brand is not given to any product, the product cannot live long in market. So, while branding a product, quality, features and characteristics or nature of the product should be studied. Branding should reflect the characteristics as follows:

1. Attractive

Branding of any product should be attractive. If brand name is attractive, customers are attracted to such products. As the customers themselves are attracted, much amount should not be spent on promotional activities. If the brand name is enticing, customers remember and call the name of such products. As a result, the name becomes popular among them.

2. Product features

Branding should reflect the features of the products. If brand reflects the feature of the product, various information can be obtained about the products. For example: GoGo Detergent Powder, Brighter tooth paste etc.

3. Short and simple

Brand name of any product should be simple and short. If it becomes short and simple, it can be easily pronounced and remembered. But if it becomes complex and difficult to pronounce the customers cannot remember nor pronounce. As a result, the product does not become popular. Diyo Soap, Puja Soap, Brighter tooth paste, Baba biscuit etc. are some of the examples of short, simple and easy brand names.

4. Easy to pronounce

The brand name of any product should be easy to read or pronounce. The brand name should be easy to pronounce for all levels of customers such as educated, uneducated, children, young, old, men, women etc. Difficult brand name to pronounce makes customers feel difficult. As a result, the product becomes popular.

5. Distinctive

Brand name should be very new and distinctive from competitors’ products. If the brand name becomes similar to competitors’ products, there arise difficulties in marketing mix. Customers also may be confused. So, brand name should be new and distinctive.

6. Suggestive

Brand name ‘Safa Sabun’ suggests that it makes cloth clean, if washed with it. Similarly, A.M. P.M. – Tooth Brush suggests that teeth should be brushed in the morning and evening.

7. Registrable

Brand name of product should be registrable. It should not be similar to those which have been already registered by other companies. Similarly, brand name which has been banned by law of any country should not be kept. If the brand name could not be kept separate and distinct from others, the producing company cannot have right of sole ownership. Besides, repeated brand name or already used brand name should not be used. If done so, promotion of the product cannot be made with the unqualified brand.

8. Avoidance/ lack of obscenity

While branding of any product, social values and norms should be specially considered. It should not be obscene and should avoid obscene word, sign or symbol. Even unknowingly if such obscenity is used the whole society boycotts such products. So, brand name for the product should be selected carefully so that every class, group, and society can accept it.

9. No hurting religious feelings

The brand name of a product should not hurt the religious feeling, tradition, values and norms of society. Brand of product should be kept respecting religious feeling and belief of any group of society. If any such mistake is done in selecting brand, the related religious people feel hurt in their religious belief due to which marketization of the product gets hampered.

10. Memorable

When once the brand name of a product is heard, it should be easily remembered. The brand name should be able to leave impression on the customers even when it is heard once. If such brand name is kept, trust and loyalty of customers to the product becomes long lasting.

Objectives of Branding

One of the many important functions of marketing is product branding. Name, symbol, sign or letters given to the any product by its producer for separate identity are called branding. In this age of business competition, its importance cannot be underestimated. Branding to any product has important objectives. They are as follows:

1. Business organization related objectives

Business organizations give brand name to their products. They give brand name to achieve the following objectives.
  • Safety from competition: Business organizations give brand name to their products so as to make easy to positioning and advertise the product. It helps customers to know about quality and features of the product. In this way, the product can be saved from unhealthy competition.
  • Promotion: Business organization should conduct promotional activities. Brand of the product greatly helps in conducting such activities. Brand also helps to know about price and features of the product. So, production organization aims to promote the product while giving brand to the product.
  • Brand loyalty: The customers can get information about the feature, quality, price, aim and utility of the product. They can easily know about the company and its products. In this way, the objective of a company is to make customers loyal to brand name by maintaining quality.
  • Product mix expansion: Quality product is first given brand name. In this way, product line or products can be expanded in markets. New products can be easily taken to target markets. So, the business firms have their objective to expand products mix.
  • Legal protection: The brand name of the product registered by fulfilling legal requirements cannot be used by any other producers or companies. But such brand name can be given on hire, lease, or can be sold to any company to use it. So, the concerned company forms its objective to have legal protection.
  • Product positioning: In order to positioning any product, it should be given brand. It can be easily distinguished on the basis of brand. Loyal customers can be provided sufficient description by comparing brand of the products. So, every company forms its objective of product positioning.

2. Society related objectives

Every company determines some important society related objectives. They can be mentioned as follows:
  • Consumers’ welfare: While buying branded products, the rights of the consumers remain secure. Consumers can get legal remedies if they have been given wrong or false information, or found any defect in the products. If some wrong products are sold to customers, the company should take responsibility for it. So, the producer company has the objective to give special attention to the interest of the consumers.
  • Environmental protection: The companies which give brand to their products also become equally careful towards environment. They try to protect environment. In fact, the products of the company which do not pay attention toward protection of environment may be boycotted by the society. So, the producers themselves form objective to protection of environment.
  • Social welfare: Popular and reputed companies/firms conduct social welfare activities while branding their products. Such activities contribute to the interest of the society and welfare of the companies themselves. The society accepts the products of such companies with priority.

3. Customer related objectives

The producer company also forms customer related objectives. Such main objectives are mentioned as follows:
  • Product identification: The customers can easily identify and adopt the branded products. They take decision to buy products by comparing with other company’s products on the basis of brand. While taking decision to buy such products, there does not remain possibility to be confused, cheated or misled. Hence, the producers make their objective to give exact introduction or their products.
  • Price stability: The producers always aim to maintain price stability. The price of the branded products is fixed by the producers themselves. So, the price of such product does not change frequently. The producers try to keep price stable for long time.
  • Quality stability: The producers try to maintain stability in quality of the branded products. If quality of the product declines for any reason, the customers’ attitude towards such products becomes negative. Hence, the customers can always get opportunity to get high quality products. So, the producers try to maintain stability in the quality of branded products.
  • To maintain the prestige: All the branded products make customers’ prestige high. When the quality products enter into markets, the customers feel satisfied with the quality products, due to which their image also heightens.

Reasons For and Against Branding

1. Reasons for Branding

Branding of product gives satisfaction to customers besides enhancing image of the company. As only quality products are given brand name, it has more importance. This task also plays an important role for society including customers. There are many reasons for branding products. The main reasons are as follows:
  • Product identification: The customers can easily identify / recognize branded products. They can easily buy branded products whichever they want. They do not become bewildered to buy. There does not remain possibility to be cheated. So, products should be branded for the protection of the customers.
  • Price stability: The price of the products is fixed by the production company itself. The price of branded products does not fluctuate frequently. So, price of such products remains stable. That’s why, the producer gives brand name of the products.
  • Quality stability: The producers give brand name only to the quality products. They make policy not to give brand name to the quality less products. Quality of branded products does not decline. So, firm or company tries to maintain quality so that the customers can always get quality products.
  • Regular supply: Producer, at first, gives brand name to the products. Such branded products are regularly supplied to target markets. The customers can easily get demanded products. Products are given brand name with the intention that products demanded by customers become available in market.
  • Demand creation: Information about quality, feature and price etc. is given in branded products. Brand promotes sale of the products. It creates demands by attracting possible customers. It also encourages customers by appealing them to buy products.
  • Time saving: Branded products do not take long time for selection. Customers can give prompt purchase order by mentioning brand of the products whichever they like. As adequate information can be found in the branded products, selection of product becomes fast, time is saved. So, products are also branded for time saving.
  • Prestige: Branded products heighten the customers’ prestige. Branded products increase customers’ dignity in society. So, producers give brand name to their products to help to increase customers’ prestige and dignity.

2. Reasons against Branding

After the production of goods, it should be branded. Branding of product per unit price can also increase. Some producers supply their products to target markets without giving brand name. Some products become difficult to give brand name to their nature. So, producers may adopt a policy not to give brand name of such products. There are many reasons against branding; the main reasons are mentioned as follows:

  • Increase in price: Branded product may be more expensive than unbranded ones. Brand name should reflect the quality and features of the products. Promotional activities also should be conducted for the branded products, due to which per unit price of such products becomes higher. So, decision can be taken not to give brand name to the products to save for high price.
  • Low quality: Some products are not branded due to being unable to maintain quality. Customers also do not believe in products whose minimum quality cannot be maintained. Once they have bought and used, they do not buy such products again. So, brand name should not be given to some products.
  • Perishable products: While giving brand name to any products, their nature also should be considered. These types of products should be sold promptly. Such products may be perishable. An arrangement should be made to sell such products without giving brand name. Vegetable items, fruits etc. should not be branded. They are perishable goods. So, they should not be given brand name.
  • Homogeneous products: Many companies may produce same type of products. It becomes difficult to identify which product belongs to which company. Raw materials, paddy, wheat, millet, maize or all the food stuffs are the examples of such products. They cannot be distinguished by branding. So, such homogeneous products should be sold without branding.
  • Legal procedure: Legal procedure should be fulfilled for branding. Government prescribed legal procedures and requirement should also be carefully considered. It needs to spend time and money for fulfilling such requirements. So, some production companies decide not to give brand name to their products to avoid legal troubles.

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Service Product and Strategies of Service Product

Meaning of Service Product

The thing which cannot be seen or touched is called service product. Service product is also called non-physical product. Such product does not have physical existence. Communication service, transport service, insurance service, hotel service, restaurant service, advertisement service, counseling service etc. are the instances of service product.
Such service products become perishable. They cannot be stored. Price and quality of the service product also cannot have uniformity. Such service can be classified into two types: personal or person related services and equipment related services. The former service is based on person or person related service. Teacher’s service, doctors’ service, lawyer’s service, technical service, counseling service etc. are provided by persons. The later service is related with equipment. This type of services includes lifting machine, vending machine, television, computer, and other equipment used by a business firm.

Some organizations can be operated in order to provide profitable or business services. Bank, nursing home, private sector school, etc. are profitable business services. Similarly, non-profitable services also can be operated. Government hospital, government school etc. are non-profitable services. Such services can be provided at different times. The services can be provided by giving information or knowledge to the possible customers earlier than providing services. In the course of selling services or goods, agreement can be done for counseling services, repair services, guaranty services etc. Besides, services can be provided after the sale of the goods. For example, transport cost for exchanging goods, free repair services etc. can be provided. In the same way, necessary technical services can also be provided free of charge.

Nature of Service goods

Product service becomes invisible. So, the customers cannot touch, taste, see such services. Service product becomes inseparable. It becomes difficult to divide or separate this service. All the organizations or firms cannot provide same types of services. Standard or level of service may be different according to capacity, goodwill, place and time. No organizations can keep/store service; they are determined to provide service according to necessity. So, it becomes clear from different facts that the products which cannot be touched, seen, felt, and are invisible, perishable, inseparable and remain changing time to time.

Strategies of Service Product

Every business organization should maintain quality of service product. Service oriented organizations should also form proper strategies to satisfy customers’ new wants by carrying out market research and study. Generally, service oriented business organizations should adopt the following marketing strategies.

1. Price Strategy

A service company/firm should give full confidence about price to the customers of target market. Different price strategies should be adopted to keep the customers intact. Such strategies may be one price strategy, flexible pricing strategy, price competition strategy etc.

2. Product mix strategy

Products may have several lines. They may decrease or increase or improve. The customers can be kept intact/ loyal towards the services. The following strategies are included under product mix strategy:
  • Service line featuring strategy
  • Limited line strategy
  • Service mix consistency strategy
  • Broad line strategy
  • Strategy for expansion of semi line length
  • Service line modification

3. Promotion strategy

Service company/firm should, at first, disseminate and advertise its service products giving every information about quality and features of its product. A short description of operating methods of the product should also be made. Sample of the new products also may be provided to certain customers of the target market. The following strategies can be adopted under promotional strategies:
  • Personal selling,
  • Advertising,
  • Sales promotion activities,
  • Publicity.

4. Distribution strategy

In the course of distributing products, simple distribution method should be arranged. At first warehouse should be managed at right place for easy distribution. This may minimize distribution cost. The following strategies can be adopted for distribution.
  • Selection of suitable place,
  • Selection of suitable channel.

5. People strategy

Skill and intelligence of the people involved in business organization can help to achieve organizational goal. The manpower providing such services should be given training and motivation including different facilities. For this, the following strategies can be adopted:
  • Interactive marketing strategy: In this method, effort is made to establish warm relationship between organization and customers. It helps to maintain the loyalty and belief of the customers to the organizations.
  • Internal marketing strategy: Under this strategy, company or firm gives training, motivation, knowledge and other facilities to the manpower due to which they get involved in the campaign to provide services to meet the wants, need and interest of the customers.

6. Physical strategy

The process of providing service strategy also plays important role in marketing services. As the process also becomes different according to the nature of services, there is no certain fixed method or process. Every proper process should be applied according to the nature of services. Service providing organizations, firms, persons, or group should apply different delivery methods. Price should also be fixed by different methods.

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Product Line Strategies and Product Mix Strategies

Product line is a group of any products. They are related to one another. Such products fulfill similar nature of functions. Electrical product line includes electrical goods such as radio, television, telephone, computer, refrigerator, air conditioner, fan etc. Similarly, the line of soap includes detergent, shampoo, gel, surf etc.
Same line products should be supplied to market through same distribution channel. Some products of the same line do the same works. Their target market also becomes the same.

Nowadays, most of the firms give stress to mass production. In such firms, arrangement of line manager is made to look after product line. Besides, brand manager is also appointed to look after each product. The line manager analyzes product line sales and profits and estimates future sales and profits. Strategic decision can be taken on the basis of the estimate. Some important factors should be considered for formation of product line strategy. They are as follows:

1. Product line length

Product line length denotes all the products of the same line. Product line length should be long to expand and increase the market segment. Product length should be short for the increase in profit. However, profit can also be increased by increasing the length of product line according to the context. Decisions can be taken for adopting two strategies to increase or decrease the length of the product line. Two strategies are mentioned as follows:

a) Line expansion

The task of adding any other related new products to product line is called line expansion. This includes two strategies. They are filling the line and expanding the line. If nay textile industry produces three types of jackets pricing Rs. 1000 to 2500, it can be expanded to produce fourth type jackets. In this way, same products can be produced to fill the gap and widening the product length. The same task is called line filling. The task of adding new more products of the same line going beyond the current prices is called product stretching. Three types of strategies can be adopted to stretch the products. They are mentioned as follows:

i. Stretching up: The task of adding new goods of more prices to the existing same product line is called stretching up. This is made clearer by the given figure.

Stretching Up

ii. Stretching down: The task of adding new products of low prices to the existing same product line is called stretching down. This is made clearer by the given figure:

Stretching Down

iii. Stretching both ways: Many types of products can be included in any product line. In this way, the task of adding new products of both more price and low price is called stretching both ways. This is made clearer by the following figure:

Both Ways Stretching

b) Line Contraction

Some products of same line cannot influence target market segments. Such products which cannot influence market and cannot meet market demand should be abandoned or given up. The task of decreasing products or removing them from market is called line contraction. The products which are demanded in market should be encouraged and supplied by removing unnecessary dump of the unsold products. This can help to face market competition and the product can control markets.

2. Product line modification

Any firm or organization should meet market competition and customers’ wants in any way. Besides, improved technology also should be gradually adjusted. This means, product line should be regularly modified and modernized. Such activities are called product line modification. The task of product line modification is compulsory for any firm or business organization. So, the product line manager should take proper decision by researching, studying and analyzing market.

3. Product line featuring

Attention of various groups and classes of customers should be attracted towards products. For this, both low price and high price products should be included in product line. Low priced products attract price sensitive group of customers and the high priced products attract class sensitive customers. That means, low priced products attract the customers having low purchasing capacity and high priced products attract the customers having high purchasing capacity. This can meet the goal of the company or firm.

Product Mix Strategies

The form of all products as a whole presented by producer or seller to sell in the target market is called product mix. In this, product line and unit of the products are integrated. The main products of four product lines of Avon have been mentioned here. They are called cosmetics product line, jewelry product line, fashion line, fashion product line and household product line. In each product line, sufficient auxiliary product line or products may be included. The decision to be taken on width, depth, length and consistency of products is called product mix strategy. In other word, the decision to be taken on product line, auxiliary product line or on product is called product mix strategy.

At the time of distributing products for sale, product mix strategy should be adopted. Generally, four strategies can be given priority in product mix strategy. Such strategy helps product sellers in their functions. The main strategies which also help sellers can be mentioned as follows:

1. Width of the product

If any firm makes clear the number of product lines, it is called width of the product. Product line or product width can be expanded or contracted. The following table also has made easy to understand it.

2. Length of product

Length of product means all the things of product mix. Length of products can be changed by increasing the number of products or decreasing it. So, length of product can be increased or decreased according to the capacity of firm and wants of markets.

3. Depth of product

Depth of product indicates the number of the products belonging to a product line. Product depth can be changed by increasing or decreasing the number of units of products. In the above mentioned table, there are four things belonging to the tooth paste product line.

4. Consistency of product

Consistency of product line shows how many things are related to the use, production and distribution of the products. To increase the consistency of the product, related product should be added to the product line. If the consistency of the product is to be decreased, the unrelated products of the product line should be added.

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Process of New Product Development | Development Process of New Product

Research and study should be carried out to get information about customers’ wants and interests to produce new goods and face different competitions in markets. Only then the task of development of new goods should be started. Some important process should be fulfilled to develop new products as demanded by target market. This can be presented in the figure as follows:

Development Process of New Product

1. Idea Generation

Imagination about new product is called idea generation. Quality, features and utility of new products can be achieved from the idea. Development of new goods starts from idea generation. Idea generation becomes very important for any business company. If generation of ideas for new products is to be achieved, every situation should be studied properly. When the situation appears to get many ideas, the best idea should be selected. Such different ideas can be collected from various sources. These sources can be classified into two categories.
  • Internal sources: The sources which remain under control of company are called internal sources. Such sources also can generate ideas. Specially, sales forces, managers, engineers, planning department, board of directors, research department etc. are internal sources. The force involved in sale of products or services is called sales force. This is also one of the sources of idea generation. Dealers, agents, retailers etc. are included in this source. Useful ideas can also be obtained from these sources to develop new products.
  • External sources: Business Company or firm can collect ideas from external sources. After ideas have been collected, the best among the ideas should be selected considering customers’ wants, interests, needs etc. Customers, organizations, technical publications, advertising agencies, competitors, suppliers, universities etc. are included in external sources. In order to develop new goods, it is also equally necessary to generate ideas from collecting ideas from external sources. Ideas can be collected also from government agencies. The ideas got from government agencies may be very useful for the business firm.

2. Idea Screening

Ideas are collected from several sources in the process of developing new products. The task of giving priority to the collected ideas is called screening of ideas. This is really evaluation system. The ideas should be evaluated on the basis of the objective of firm, technology, capacity, resources etc. Responsibility to evaluate and select the best idea can be given to any group of manpower. While giving such responsibility, authority, right and duty should also be fixed for the group. If done so, the group performs its responsibility easily and completely. Generally, the ideas can be classified into three groups by screening them. They are mentioned as follows:
  • Prominent ideas: As such ideas become very important, they should correctly and properly evaluated.
  • Marginal ideas: Such ideas may be useful to the company in future. So, they should be kept stored for future.
  • Reject ideas: If some ideas are not possible to be useful to the company, such ideas should be discarded/ rejected.

3. Business Analysis

A lot of information should be collected by the company from markets for analysis. For doing so, marketing expert should carry out researches and study. Only then valuable opportunities for business company can be identified. Such analysis is called business analysis. This makes sure whether a certain product becomes marketable or not. This analysis also gives knowledge about the possible economic benefit to be earned in future. Mostly, the analyst of each firm pays attention to the following things.
  • Estimated sales,
  • Features of the product,
  • Competition of the market,
  • Expected rate of return and profitability,
  • Estimated cost,
This type of business analysis may be affected by the means and resources of the company. Even if there is such situation, it is necessary to analyze the main concern/ subject. For analyzing such subjects, risk analysis, break-even analysis, capital budgeting, proportion analysis etc. model can be used. Ideas should be made to develop new product only after finding positive result from the analysis.

4. Product Development

At this stage design, feature and sample of the new product are prepared. Size, shape, weight, materials, performance etc. are given emphasis in the process of determining the form of the product. While developing new product, important decision should be taken on brand, name, packaging, model, price, promotion mix, distribution, market situation etc. After the product model has been prepared, technical and laboratory test should be done to determine whether it becomes better to produce the new goods in huge quantity or not. While testing the product, the following methods should be used.
  • Functional testing: Under this quality, size, durability feature etc. of the product are tested. This type of testing provides certainty about secure functioning and effectiveness of the product.
  • Consumers testing: For testing the consumers, sample of the new product should be distributed to the target consumers, and reaction of the consumers should be collected. This test is called consumer testing. Consumers interest, want, needs etc. are tested under this testing.

5. Test Marketing

The task of testing the effectiveness of new product by supplying it to certain market is called market testing. This type of testing is done specially for measuring the ability, understanding capacity and getting clear reaction of the customers. For this purpose, only certain fixed quantity should be produced and distributed to the targeted geographical area. Such sale is called test marketing. Details about price, quality, promotion, distribution channel and other necessary matters also can be understood through test marketing. Decision can be taken whether to start mass production or modify the product through test marketing.

6. Commercialization

After going through test marketing, the new product is supplied to different geographical areas. This stage is the last stage of the product development. At this stage, preparation of mass production and marketing programs are prepared. In fact, the new product is distributed to different market segments for commercial purpose. While doing so, marketing expert should consider various things. Market competition, product price, distribution channel, sellers’ access etc. should be specially studied. Only after collecting the important information, product distribution can be made effective. The business firm should be paid attention to the following things:
  • Timing: Time should be given importance while taking any decision. New products should be brought to market in proper time. If product is supplied to market in wrong time, it cannot give expected return. If timing is not properly considered, commercialization program cannot get success.
  • Place: While commercializing a new product, proper place decision should be made. One of the best alternatives from the available geographical area/ place should be selected. If wrong place is selected, distribution cost may go high due to which there arises difficulty in market competition.
  • Market segmentation: New products may be useful for many geographical segments. Among them only the best segments should be selected. This task is called market segmentation decision. So, any one or more market segments should be selected by considering the popularity and utility of the new products.
  • Strategy: Strategy should be formed by studying the ability/ capacity and competition of market. Proper short term strategy should be adopted to supply new products to market according to the same strategy which can help new product hold the market.

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