ACKNOWLEDGEMENT

I would like to thanks to express my gratitude to all those who gave me the possibility to complete the project. I take this opportunity to thanks the University of Mumbai for giving me chance to do this project report.

I am deeply indebted to my project guide Prof. Swati Chiple from L.S. Raheja College of Arts & Commerce whose stimulating suggestions and encouragement helped me all the time of research.

I wish to express my gratitude to Prof. Swati Chiple, Academic Coordinator, and Mr. K. Venkateswarlu, Principal of L.S. Raheja College of Arts & Commerce for their support.

My subject teacher were also of very supportive as they looked closely at the final version of the thesis for English style and grammar, correcting both and offering suggestions for improvement.

Above all, I would like to thank my parents for their patience, love and support enabled me to excel in my studies.

Khan Farah

Table of ContentsSr. No.Topics

1.Introduction

2.Marketing Product Strategies

3.Step Strategy To Improve Consumer Products Profitability

4.Launching A Product

5.Product Classification

6.Price Objectives: Why Customers Think Your Price Is Too High

8.Advertising And Promotion

9.Methodology

10.Methods

11.Recommendation For Consumer Product Companies

12.Product Model

13.Product Distribution

14.Conclusion

15.Bibliography

INTRODUCTIONThe consumer products industry is comprised of a variety of products, such as toiletries and cosmetics, small appliances, consumer durables, consumer electronics, and other household items. This industry has seen steady growth since the Industrial Revolution, and with the rising markets of Russia, China, and India starting to demand more commodities, this growth is expected to continue into the future.The Consumer Products industry isConcentrated. The production in this industry is dominated by a many large firms that are capable of shaping the industrys direction and price levels.MEANING OF CONSUMER PRODUCTInmarketing, aproductis anything that can be offered to amarketthat might satisfy a want or need. Inretailing, products are called merchandise. Inmanufacturing, products are bought asraw materialsand sold asfinished goods.Commoditiesare usually raw materials such as metals and agricultural products, but a commodity can also be anything widely available in the open market. In project management, products are the formal definition of theproject deliverablesthat make up or contribute to delivering the objectives of the project. In insurance, the policies are considered products offered for sale by the insurance company that created the contract.Ineconomicsandcommerce, products belong to a broader category ofgoods. The economic meaning of product was first used by political economistAdam Smith.A related concept is subproduct, a secondary but useful result of aproductionprocess.Dangerous products, particularly physical ones, that cause injuries to consumers or bystanders may be subject toproduct liability.DEFINITION OF CONSUMER PRODUCTConsumer products are defined asitems intended for consumers or likely to be used by consumers, even if not intended for them. Products provided in the framework of a service to consumers are also consideredto beconsumer products.MARKETING PRODUCT STRATEGIESWHAT IS A PRODUCT?In marketing terms, a product is anything that can be offered to a market to satisfy a want or need. In other words, a product is the item(s) or service(s) that you are offering your customers. A product can be a physical object or a service and may refer to a single item or unit, a group of equivalent products or a group of goods or services.PRODUCTS HAVE 3 COMPONENTS : (A) Core product: This is the end benefit for the buyer and answers the question: What is the buyer really buying? For example, the buyer of a car is buying a means of transport, the buyer of an aspirin is buying pain relief and the buyer of financial advice is hoping to buy financial security and peace of mind.(B) Formal product: This is the actual physical or perceived characteristics of your product including its level of quality, special features, styling, branding and packaging.(C) Augmented product: The support items that complete your total product offering such as after-sales service, warranty, delivery and installation.Products incorporate the following characteristics: Product attributesQuality : The major tool in positioning your product. It encompasses two key elements: 1) quality level - how it is made or perceived, and 2) quality consistency - how it performs over its life.Features : The physical or intrinsic characteristics of your product that contribute to the benefits it offers.Design : A combination of how the product looks and how it performs. BrandingA brand is a name, term, sign, symbol or design, or a combination of these elements that identifies the maker or seller of a product or service. Branding is an important part of a product and contributes to its personality and perceived value. The power of a brand cannot be underestimated many people buy on the strength of brand alone with no regard for price or performance. PackagingPackaging incorporates the wrapper or container for your product. It serves to protect the product, ensuring it reaches the buyer in good condition and also conveys the personality of your brand and important safety and statutory information. There are usually two levels of packaging the primary packaging containing each individual product (eg: a can) and the secondary packaging which contains a quantity of products (eg:a carton). LabellingLabelling incorporates all the written information about your product and usually takes the form of an adhesive sticker, a tie-on tag or a printed piece of packaging.Growing a BusinessOnce you have started your own small business, you may decide to stretch your creativity and grow your business and profits.The size of your small business is directly proportional to the number of customers you have, and the number of goods or services you can provide. Essentially, the only ways to grow your business are to get more customers, get your customers to buy more, or get your customers to buy more frequently.However, your business must have the capacity to supply those additional customers, or have the customers to buy the extra goods or services you can source or provide.Growing your business will require planning and preparation. Before expanding through a growth plan, make sure that the fundamentals of your business are sound. Expansion will involve additional risk and will add pressure on your existing business. Plan carefully to ensure that you don't grow into new markets to the detriment of your existing loyal customer base.Your growth strategy may include any activity along a continuum including:relocating your home based business to a business incubator;exploring new markets interstate;exporting to international markets;innovation to develop products to satisfy the needs of a new market segment; andfranchising your business in order to open new retail outlet.By implementing a carefully planned strategy that will increase your customers while maintaining supply, it may be possible to grow the size of your small business. Your business will not only survive, but thrive!Product InnovationListed here are the keystepping stoneson the pathway to commercialisation, and the questions you need to answer to maximise your chances of success.

PRODUCT POSITIONING :Product positioning is the way a product or service is seen by consumers and how they view its important attributes in relation to competitors products. For instance a car can be positioned on the basis of style, performance, safety or economy whilst a computer might be positioned on the basis of speed, capacity, reliabilityChoosing and implementing your product positioning strategy is an important task. You need to determine your products competitive advantages (ie: what sets it apart from its competitors) and then based on this information, decide how to position your offering in the market. Quality, features, design, branding, packaging, labelling and service all affect the way your product is positioned.STEP STRATEGY TO IMPROVE CONSUMER PRODUCTS PROFITABILITYThe rate of change in todays business environment is faster than it has ever been - and getting faster. Years of experience as a CEO of consumer product companies selling to retailers and consumers have taught me that even very strong demand for your product is not nearly enough. The pressures of todays market mean that, no matter how good a product or service you are selling, a strategy to improve profitability in customer package goods must have three components: a well-defined product strategy; a highly coordinated process across the supply chain that optimizes the products value and attractiveness to the end consumer; and the right balance between bricks and mortar and on-line retailing.DEVELOP COMPELLING PRODUCT STRATEGYThe first step is for you, the CEO, to develop and agree with your top team on a well-conceived corporate and product strategy. It starts with clarity on the basics, such as: are you a supplier of unbranded commodity products requiring a lean, low cost structure? Or are you a supplier of consumer-recognized branded productsthat require a more intensive marketing strategy?COMMODITY/PRIVATE LABELIf you are in the former category, your focus must be on an ultra-efficient operating model to service your market. Supplying basic commodity or private label items requires that you master product specifications; commit to a long-term process of producing them consistently and at progressively lower cost; and deliver them on-time. Success requires investment in high volume, efficient manufacturing based on long manufacturing runs. A well-oiled supply chain is essential. Keeping costs low can mean a strategy to maintain access to raw materials and to minimize transportation costs. For example, if you are currently manufacturing in China and your labor costs are rising, a forward-looking strategy might mean considering moving manufacturing to Mexico to take advantage of lower costs to get goods to your North and South American markets. Your strategy must address regularly improving your supply chain, to get your products from Point A to Point B at a cost lower than the competition.BRANDEDIf on the other hand, you sell fashion or branded products, profitable revenue growth requires a business model that can accommodate considerably higher marketing costs than is the case with basic commodity products. These costs include advertising, licensing and marketing staff or outside market research services to gather and analyze consumer data for example via focus groups and branding seminars. There is no alternative to knowing what your consumers are thinking. With fashion or branded products you likely wont have the benefit of highly efficient, long manufacturing runs. Shorter runs result in a more costly manufacturing process.FOCUS IS KEYWhether your strategy is for fashion branded or basic commodity products, the biggest challenge facing a CEO in carrying out a consumer product strategy is to find the time required to make sure that their company stays the course and keeps execution on track. Lack of time is often a management team's worst enemy. Intense daily operational requirements constantly threaten to distract you from sustained focus on executing. For example, are you regularly measuring your level of product and packaging quality? If you are in unbranded goods, are you replenishing store shelves with exactly the same product, for example adhering to precise consistency in color dyes? If you are selling a branded packaged product, is your packaging catchy, speaking clearly to the consumer about your product and telling its story in a glance?In the next parts of this article, I will discuss the two more facets of a successful strategy to improve profitability in your consumer products business: coordinating across all the functions required to get to products through the supply chain; and the need to balance the bricks and mortar and online retail channels.

LAUNCHING A PRODUCTMultinational organisations like Amway have to consider the best ways of launching products on a global scale. It may be possible to carry out some aspects of the launch in identical ways in a range of countries, e.g. by providing an almost identical product in all markets. Other aspects, however, such as choosing the right sort of media and the language in which videos and commercials are produced, will be specifically tailored to a local market.When carrying out a major launch, it makes sense to start in your traditional home market (in this case the United States) before rolling out the launch in stages across the globe. Lessons can be learnt from the early launches which can then be built into ongoing launches.

The UK launch involved a number of conferences for distributors at prime locations up and down the country, the creation of a short video highlighting key aspects of the product and the production of a wide range of merchandising material. A promotional price was set for distributors who attended launch conferences, providing them with a high margin on sales made in the period following the product launch.A number of press releases were created which clearly set out the nature and purposes of the product. The press releases and product samples were sent to many national magazines which were relevant to Amway's target market, including Good Housekeeping, Living, Perfect Home, House Beautiful, Homeflair and Woman and Home.

In launching the Super Concentrated System, Amway needed to focus on the competitive advantages that the product would offer when compared with rivals. The key areas of strength that needed to be projected to the consumers were:

The uniqueness of the product - for the first time, consumers would be able to purchase a flexible cleaning system, which they would be able to regulate and control.

The advantages of concentration - in effect, consumers were now able to purchase 'micro liquids'. The new breakthrough product added to the range of choice by breaking from the traditional one litre size product packaging and provided very real benefits to the consumer in terms of convenience and value for money.

Environmental positioning - at a time when many consumers are committed to making purchases which support the conservation of the environment, the new system clearly provides strong competitive advantage. As consumer standards and expectations continue to rise, no company can survive and prosper if it fails to pay full attention to the developing needs of the customer and to the increasingly insistent needs of the environment.

TACTICS OF THE LAUNCHIn Business, there is an important distinction between strategy and tactics. A strategy is a plan or practical measure designed to achieve certain objectives, while the tactics are the actions taken to implement the strategy and achieve these objectives.The strategy relating to the launch of the Super Concentrated Cleaning System involved three stages:

Stage 1: to build excitement Stage 2: to create awareness Stage 3: to build product knowledge.Building excitement usually involves informing the consumer that a new product will shortly be available. Suspense is created by providing very few details of what the product actually is. Nearer the launch, you start to give the public a clearer idea of the product and its attributes. Finally, after the launch, you need to carry out a lot of hard work to build up an understanding of the brand and its advantages so that you build up a solid base of consumers.

One of Amway's best communications vehicles is its regular magazine, Amagram, which provides product details to its distributors. The communications programme devised for the launch of the Super Concentrated Cleaning System began with individual quarter page teaser adverts in Amagram and then built up to a full page spread prior to launch. In terms of communications literature Amway created:

a customer brochure to create the contact and build product awareness among customers a solution guide for the proper use of the products a demonstration kit to help distributors create a professional image and effectively demonstrate the performance of the product.PRODUCT CLASSIFICATIONA product can be classified astangibleorintangible. A tangible product is a physical object that can be perceived by touch such as a building, vehicle, gadget, or clothing. An intangible product is a product that can only be perceived indirectly such as an insurance policy.Intangible Data Products can further be classified into Virtual Digital Goods ("VDG") that are virtually located on a computer OS and accessible to users as conventional file types, such as JPG and MP3 files, without requiring further application process or transformational work by programmers, and as such the use may be subject to license and/or rights of digital transfer, and Real Digital Goods ("RDG") that may exist within the presentational elements of a data program independent of a conventional file type, commonly viewed as 3-D objects or a presentational item subject to user control or virtual transfer within the same visual media program platform. Open Source Code, GNU Linux, or even Android, may manipulate and/or convert base Virtual Digital Goods ("VDG") into process-oriented Real Digital Goods ("RDG"), as part of an application process or manufactured service that may be viewed on Personal Data Assistant ("PDA") or other hand-held tangible devices or OS computer.A third type in this isservices. Services can be broadly classified under intangible products which can be durable or non durable Services need high quality control, precision and adaptability. The main factor about services as a type of product is that it will not be uniform and will vary according to who is performing, where it is performed and on whom/what it is being performed.

PRICE OBJECTIVES: WHY CUSTOMERS THINK YOUR PRICE IS TOO HIGHPrice objections can take you off guard, especially when you thought the sale was closed. Find out the surprising reason behind most price objection.You've had what you think is a great sales call. You feel you've done everything correct, and you are certain the customer will soon say "yes" to your offer.ADVERTISING AND PROMOTIONEvery day we are bombarded with different advertising messages, whether it is on the radio while were driving to work, on television during our favorite programs, or in magazines and newspapers. Were handed flyers while walking down the streets and given tastes of products while walking the aisles of the grocery store. Advertising has entered every area of our lives, and many of us choose to ignore it on many occasions. This might cause you to ask, can advertising and promotional efforts still be effective if we are so saturated with information? The answer is yes, advertising and promotions can be effective if used properly for targeting the right consumer. One of the main rules in advertising has always been to keep your message simple and consistent, and repeat it often. It has been shown that people remember advertising if they see it with great frequency, which explains why while watching two hours of television you may see the same advertisement two or even three times. That way the message will stand out in your mind.ONLINE ADVERTISINGDigital Advertising Wins!Increasingly small businesses are focusing more resources on digitaladvertisingand the providers are finally taking notice.Twitter Small BusinessNext year Twitter will be rolling out a self-serve ad product, aimed at small businesses. Earlier this year, Facebook offered free $50advertisingcredits for up to 200,000 small businesses. When an ad was clicked, theadvertiser paid a set rate predetermined for that click through. This summer, Google offered a credit card to select small businesses that use AdWords. It came with a competitive interest rate, an ample credit line and no annual fee, for the sole purpose of buying searchadvertising.Facebook is WinningA survey by MerchantCircle now suggests Facebook is winning this SMB tug-of-war. It found that Facebookadvertising(23%) trails only print newspaper (25%) and direct mail (24%) in terms of small businessmarketingadoption.SMBs, however, would do well not to invest so heavily in Facebook that theirwebsite suffersa frequent either/or choice that smaller businesses must make.The Equivalent of a $90K Ad BudgetA study by Eden Platform finds that a standardwebpage can deliver moreadvertisingvalue than many companies realize.Eden measured pages and visitors for a sample of more than 100 small businesswebsites. The findings showed that each page on a small businesswebsite produced an average of 55 unique visitors during the measurement period.Small businesses often pay between $2.00 and $3.00 perwebsite visitor using other onlineadvertisingmethods like paid search engine ads and banners. This means that an averagewebsite page generates $137.50 ofadvertisingvalue each month, or $1,650 ofadvertisingvalue each year.Adding one new page of content to a businesswebsite each week can be as effective as having a $90,000advertisingbudget, the study concluded.The importance of providing consumer benefitsOne of the most important lessons to learn about successful marketing is that consumers do not buy products, they buy benefits. For example, when you buy a compact CD player, you may look for one which: is stylish gives good value for money has the latest technology will not get broken easily gives the best quality sound reproduction.You are, therefore, seeking a CD player which includes a whole range of benefits. Some of these are sensory benefits, e.g. the colour and look of the CD player, some relate to value, e.g. the price in relation to the quality of the product, whilst others relate to convenience, e.g. the ease with which the player can be stored or carried around.The same sorts of considerations can be related to cleaning products. The customer will want cleaning products that: are easy to use and control have desirable sensory qualities (i.e. look and smell nice) are easy to store give good value for money.Outlined below is a range of benefits provided by the Super Concentrated Cleaning System:1. Tote tray collapsible handle lightweight easy to carry.2. Super Concentrated Cleaners powerful cleaners save shelf space non-spillable bottle plugs.3. Water bottle refillable bottle which fits next to the product.4. Sprayer no mess, no fuss, no waste guaranteed for two years with domestic use, giving lasting durability.4a) Sprayer Dial lets you dilute the cleaner to suit the job easy to use settings from 0-5 automatically dilutes the product with water to the concentration required for the job.4b) Spray nozzle adjusts to spray or stream.5. Trigger convenience at your fingertips.6. Grip designed for control and comfort.7. Lock tab locks bottles into place allows quick and easy change to another product.

METHODOLOGYWORLDVIEWThere are two main research philosophies in which research can be based upon: positivist or interpretivist. Positivist research stems from the belief that the social and natural worlds conform to certain fixed and unalterable laws in an endless chain of causation creating scientific approaches where the research is to establish causal laws that enable the prediction and explanation of phenomena.Developing scientific laws enables positivist research to be deductive in nature. This allows data collected in the form of quantitative methods such as questionnaires and structured observations, to test theories, which establishes a need for positivist research to be reliable (if it can be repeated and produce similar results). Positivist research is focused on presenting simple and deterministic findings based upon causal relationships; however, limitations such as a lack of depth of understanding can be combated using interpretivist research.RESEARCH DESIGNThe research calls for a deductive approach as it tests an existing theory and looks to prove/disprove hypotheses. By using the Technology Acceptance Model, and the variables included in the conceptual framework, a quantitative approach for the majority of the research will deliver the best reliable results. However, qualitative research presents deeper insights into topics which may not be clear through quantitative research, allowing deeper understanding of how recommendation systems are perceived by consumers.This research used what Creswell (1994, p177) calls dominant-less dominant design, a mixed-method approach where the study is presented within a single, dominant paradigm, with one small component of the overall study drawn from the alternative paradigm. This research design draws mostly quantitative results, however qualitative data probe[s] in detail one aspect of the study to elaborate, enhance or illustrate the results from one method by using another method. Niglas, 2000, writes this method is where qualitative and quantitative approaches are used, but they remain relatively independent until the interpretation stage. By using quantitative data to meet objectives 1, 2 and 4, the research will be quantifiable and valid qualitative data will allow the research to meet objective 3, the extent to which external variables can affect attitudes directly.

METHODSThis study used both surveys and online focus groups to enable a wide, general understanding, upon which individual factors and variables can be later discussed in depth.QuestionnairesA questionnaire was distributed online, and collected both descriptive data and statistical data which can be effectively analysed to determine relationships. Questionnaires, especially those carried out online, are cost and time effective, reducing the time needed to collect results and reach a wide range of respondents.The questions asked began general, asking for attitudes towards online shopping in general, and became more specific, focussing on the variables discussed in the section . Likert Scales were used to enable a quantitative reply of statements that arent usually suited to quantitative methods.Questionnaires also reduce interviewer bias, and are easy to administer. Responses are limited to the alternatives stated and reduces the variability in the results that may be caused by differences in interviewers making the data more useable.The questionnaire generates reliable and valid statistical data for the target population, and data is used to meet objectives (A) Pilot QuestionnairePilot questionnaires allow researchers to improve the internal validity of a questionnaire . The pilot (appendix 1) enabled testing in terms of reliability, validity and error testing (Brace, 2008), as well as design, question wording, response ranges, practicalities and ethics.(B) SamplingSampling was carried out using a non-probability self-selection sampling process, and therefore does not require a sampling frame. The questionnaire was distributed through a number of popular internet consumer forums such as Money Saving Expert, reducing the possibility of geographic bias. However, the pre-questionnaire note explained only 16-34s living in the UK, who have bought from Amazon.co.uk in the last 12 months should answer the questionnaire. Respondents who did complete the questionnaire but fail to meet those criteria had their responses disregarded.The sample size was a minimum of 100 eligible questionnaire completions, which reduced instances of sampling error and maintains a high completion rate.(C) AnalysisData generated by the questionnaire was analysed using SPSS statistical software using a number of techniques such as frequency distribution allowing simple analysis whilst meeting the research objectives.Cross tabulation analysis allows the research to better prove or disprove the hypotheses, and improves upon frequency distribution by reflecting the joint distribution of two or more variables . Correlation statistics such as Pearsons correlation coefficient will also be used where appropriate.

(D) Online focus groupsFocus groups are discussions conducted in a non-structured and natural matter .There are numerous benefits from using focus groups, namely that group members feed off each other and creatively reveal ideas that the research may not have thought of (ibid), and participants can reflect and portray their feelings and behaviour, at their pace and using their language and logic (ibid). Holding focus groups online reduces the possibility of intimidation and the need for travel arrangements or a physical venue. Two focus groups were carried out, both with 6 respondents. Less than 6 respondents could result in less discussion and negatively affect group dynamics, and keeping the focus groups small enabled more in-depth discussions. Both focus groups lasted between 30 minutes and one hour long enough to extract insightful responses without being too over-demanding .

RECOMMENDATION FOR CONSUMER PRODUCT COMPANIES Robust compliance programs that track for gender inequality, including permanent versus temporary contracting, gender wage gaps, and legal compliance issues pertaining to women, such as maternity leave . Technical and management skills trainings for female factory workers Professional advancement programs for female factory workers Financial literacy programs Access to bank accountsexplore partnerships with financial services companiesBy useIn its online product catalog, retailerSears, Roebuck and Companydivides its products into "departments", then presents products to potential shoppers according to (1) function or (2) brand. Each product has a Sears item-number and a manufacturer's model-number. Sears uses the departments and product groupings with the intention of helping customers browse products by function or brand within a traditionaldepartment-storestructure.By associationA product line is "a group of products that are closely related, either because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges."Many businesses offer a range of product lines which may be unique to a single organization or may be common across the business's industry. In 2002 the US Census compiled revenue figures for the finance and insurance industry by various product lines such as "accident, health and medical insurance premiums" and "income from secured consumer loans.Within theinsuranceindustry, product lines are indicated by the type of risk coverage, such asauto insurance, commercialinsuranceandlife insurance.National and international product classificationsVarious classification systems for products have been developed for economic statistical purposes. The NAFTA signatories are working on a system that classifies products called NAPCS as a companion toNorth American Industry Classification System(NAICS).[7]The European Union uses a "Classification of Products by Activity" among other product classifications.The United Nations also classifies products for international economic activity reporting.TheAspinwall Classification Systemclassifies and rates products based on five variables:1. Replacement rate (How frequently is the product repurchased?)2. Gross margin (How much profit is obtained from each product?)3. Buyer goal adjustment (How flexible are the buyers' purchasing habits with regard to this product?)4. Duration of product satisfaction (How long will the product produce benefits for the user?)5. Duration of buyer search behavior (How long will consumers shop for the product?)TheNational Institute of Governmental Purchasing(NIGP)[12]developed a commodity and services classification system for use by state and local governments, theNIGP Code.[13]The NIGP Code is used by 33 states within the United States as well as thousands of cities, counties and political subdivisions. The NIGP Code is a hierarchical schema consisting of a 3 digit class, 5 digit class-item, 7 digit class-item-group and an 11 digit class-item-group-detail.Applications of the NIGP Code include vendor registration, inventory item identification, contract item management, spend analysis and strategic sourcing.raj

PRODUCT MODELA manufacturer usually provides an identifier for each particular type of product they make, known as amodel,model variant, or model number. For example,Dyson Ltd, a manufacturer of appliances ,requires customers to identify their model in the support section of the website. Brandand model can be used together to identify products in the market. The model number is not necessarily the same as themanufacturer part number(MPN).Because of the huge amount of similar products in theautomotive industry, there is a special kind of defining a car with options , that represent the characteristics features of the vehicle. A model of a car is defined by some basic options like body, engine, gear box and axles. The variants of a model are built by some additional options like color, seats, wheels, mirrors, trims, entertainment and assistant systems etc. Options, that exclude each other build an option-family. That means, that you can choose only one option by each family and you have to choose exactly one option. This kind of product definition fulfill the requirements of an idealBoolean Algebraand can be helpful to construct aproduct configurator. Sometimes, a set of options (car features) are combined to an automotivepackageand are offered by a lower price. A consistent car definition is essential for the production planning and control in the automotive industry, to generate amaster production schedule,which is the fundamental for theenterprise resource planning.In addition, a specific unit of a product is usually (and has to be) identified by aserial number, which is necessary to distinguish products with the same product definition. In the case of automotive products it's called the Vehicle Identification NumberVIN, an international standardized format.

PRICEPrice theoryEconomic theory asserts that in a free market economy the market price reflects interaction betweensupply and demand: the price is set so as to equate the quantity being supplied and that being demanded. In turn these quantities are determined by themarginal utilityof the asset to different buyers and to different sellers. In reality, the price may be distorted by other factors, such as tax and other government regulations.When acommodityis for sale at multiple locations, thelaw of one priceis generally believed to hold. This essentially states that the cost difference between the locations cannot be greater than that representing shipping, taxes, other distribution costs etc. In the case of the majority of consumer goods and services, distribution costs are quite a high proportion of the overall price, so the law may not be very useful. In practice it may well make economic sense to offer a product or service for sale at a higher price in a wealthy area than in a deprived area as the marginal utility of the asset for purchasers will be higher in the former.

PRICE AND VALUETheparadox of valuewas observed and debated byclassical economists.Adam Smithdescribed what is now called thediamond water paradox: diamonds command a higher price than water, yet water is essential for life and diamonds are merely ornamentation.Use valuewas supposed to give some measure of usefulness, later refined asmarginal benefit(which is marginal utility counted in common units of value) whileexchange valuewas the measure of how much one good was in terms of another, namely what is now calledrelative price.

AUSTRIAN SCHOOL THEORYOne solution offered to the paradox of value is through the theory of marginal utility proposed byCarl Menger, one of the founders of theAustrian Schoolof economics.As William Barber put it, human volition, the human subject, was "brought to the centre of the stage" by marginalist economics, as a bargaining tool. Neoclassical economists sought to clarify choices open to producers and consumers in market situations, and thus "fears that cleavages in the economic structure might be unbridgeable could be suppressed".[citation needed]Without denying the applicability of the Austrian theory of value assubjectiveonly, within certain contexts of price behavior, the Polish economistOskar Langefelt it was necessary to attempt a seriousintegrationof the insights of classical political economy with neo-classical economics. This would then result in a much more realistic theory of price and of real behavior in response to prices. Marginalist theory lacked anything like a theory of the social framework of real market functioning, and criticism sparked off by thecapital controversyinitiated byPiero Sraffarevealed that most of the foundational tenets of the marginalist theory of value either reduced totautologies, or that the theory was true only if counter-factual conditions applied.One insight often ignored in the debates about price theory is something that businessmen are keenly aware of: in different markets, prices may not function according to the same principles except in some very abstract (and therefore not very useful) sense. From the classical political economists toMichal Kaleckiit was known that prices for industrial goods behaved differently from prices for agricultural goods, but this idea could be extended further to other broad classes of goods and services.

PRICE AS PRODUCTIVE HUMAN LABOUR TIMEMarxists assert thatvaluederives from the volume ofsocially necessaryabstractlabour timeexerted in the creation of an object. This value does not relate to price in a simple manner, and the difficulty of the conversion of the mass of values into the actual prices is known as thetransformation problem. However, many recent Marxists deny that any problem exists. Marx was not concerned with proving that prices derive from values. In fact, he admonished the other classical political economists (like Ricardo and Smith) for trying to make this proof. Rather, for Marx, price equals the cost of production (capital-cost and labor-costs) plus the average rate of profit. So if the average rate of profit (return on capital investment) is 22% then prices would reflect cost-of-production plus 22%. The perception that there is a transformation problem in Marx stems from the injection of Walrasian equilibrium theory into Marxism where there is no such thing as equilibrium.

CONFUSION BETWEEN PRICES AND COSTS OF PRODUCTIONPrice is commonly confused with the notion of cost of production, as in I paid a highcostforbuyingmy new plasma television; but technically these are different concepts. Price is what a buyer pays to acquire products from a seller. Cost of production concerns the sellers investment (e.g., manufacturing expense) in the product being exchanged with a buyer. For marketing organizations seeking to make a profit, the hope is that price will exceed cost of production so that the organization can see financial gain from the transaction.Finally, while pricing is a topic central to a company's profitability, pricing decisions are not limited to for-profit companies. The behavior of non-profit organizations, such as charities, educational institutions and industry trade groups, can be described as setting prices. For instance, charities seeking to raise money may set different target levels for donations that reward donors with increases in status (e.g., name in newsletter), gifts or other benefits. These targets can be seen as prices if they are interpreted as specifying a cost that must be paid by buyers (donors) in order to obtain something of value.[clarification needed]

PRICE POINTThe price of an item is also called the "price point", especially where it refers to stores that set a limited number of price points. For example,Dollar Generalis ageneral storeor "five and dime" store that sets price points only at even amounts, such as exactly one, two, three, five, or tendollars(among others). Other stores will have a policy of setting most of their prices ending in 99 cents or pence. Other stores (such asdollar stores,poundstores,eurostores, 100-yenstores, and so forth) only have a single price point ($1, 1, 1, 100), though in some cases this price may purchase more than one of some very small items. Price is relatively less than the cost price.

OTHER PRICE TERMSBasic priceis the price a seller gets after removing any taxes paid by a buyer and adding any subsidy the seller gets for selling. Producer priceis the amount the producer gets from a buyer for a unit of a good or service produced as output minus any tax, it excludes any transport charges invoiced separately by the producer. A strategy is a plan of action designed to achieve the goals of the organisation. In creating a marketing strategy for the Super Concentrated Cleaning System, Amway needed to set out the key objectives it wanted to achieve. The following objectives for the brand were set: to increase distributor profitability and productivity by providing a new and exciting business opportunity to optimise consumer convenience and value through enhanced product differentiation with this exclusive and revolutionary cleaning system to provide innovative and unique products to enhance the image of Amway Home Care.In order to make this strategy work, it was essential to think very carefully about the position that the new product would take in the market-place. The chosen position was to be:'A revolutionary product system that provides the ultimate in customer convenience and control by automatically diluting and delivering the cleaning concentrates with water, providing customised cleaning at your fingertips, according to the customer's needs.'The product's success would depend, to a certain extent, on the ability of Amway's marketing department to get this message across to distributors and ultimately to consumers. If the product was successful, it would create a winning situation for Amway, its distributors and consumers. Amway would benefit from: environmental source reduction selling a quality product which would increase revenue and provide an ongoing contribution to business profits reduced shipping and storage costs with more value added. The small, concentrated nature of the product would make it easier to distribute and would yield higher returns.Distributors would benefit from: selling a winning solution with world-wide exclusivity selling a product with a high return per unit sold repeat orders from satisfied customers.Consumers would benefit from a range of innovative product features and benefits including: high value relative to price convenience high performance environmental sustainability.Following a product launch, it is vitally important for an organisation to assess how well the product has been received by the consumer. Since the launch of the Super Concentrated Cleaning System, Amway has carried out some detailed research to assess the success of the product and highlight areas for building the brand. The analysis has found that distributors have identified a number of strengths including: the innovative, unique nature of the product ease of use easy of carrying ease of changing between the different products automatic dilution clear bottles so that the product can be seen.The weaknesses identified in the research are that it is difficult to compare usage with the old one-litre bottles, that the multilingual label appears cluttered and that the tote tray is too small.

TYPE OF PRODUCTSKing and Balasubramanian (1994, cited in Senecal and Nantel, 2004, p160) and Nelson (1974) argue the type of product has direct effects on consumer choices. Nelsons article builds upon his earlier work in which he suggests that products can be classified as having either search or experience qualities. Search products are products where the consumer can determine [product choice and quality] prior to purchase a digital camera is an example. An example of an experience product would be food something which the consumer cannot evaluate before purchase. Senecal and Nantel suggest that because experience products are near impossible to evaluate before purchase, product recommendations would be relied upon more.This is supported by King and Balasubramanian (1994, ibid) who found that consumers who are looking to buy a search product are more likely to use their own decision making processes, compared to those looking to buy an experience product, who are more likely to devolve some responsibility in the decision making process to another party. For example, travel agents exist to persuade and match holidays to consumers need, to guide potential purchasers through all stages of the decision making process.Tam and Ho (2005) approach web personalisation in terms of the Elaboration Likelihood Model, as a persuasion strategy. The ELM is based around the central and peripheral routes of information processing. The central route means that the recipient has the ability and motivation to carefully consider the message. If a recipient has no motivation or ability to consider the message content, they rely on the peripheral route, which doesnt require much mental exertion. The route taken depends on many variables.The focus groups enabled deeper insight into some of the issues raised in the questionnaire. Because the sample was those who had selected they would be interested in participating in a focus group, this could have created a bias of participants who are more outspoken, although there were participants who were more reserved. Using online methods was a limitation of the research design; although it allowed a wider range of participants to engage, there was a lack of group dynamics, instances where participants were not paying attention or had dropped out because of technical difficulties. A physical focus group may have meant recruiting local participants, but the discussion may have been more differentiated.

PRODUCT DISTRIBUTIONThe most frustrating decision facing all consumer products marketers is the one they have the least control over distribution. Unlike decisions related to product, pricing and promotion, meeting distribution objectives often means the marketer is at the mercy of retailers decision to stock a marketers product. This problem is especially challenging for marketers selling products in retail stores where they must battle many other companies that are also trying to convince retail store buyers to sell their products.When it comes to buyers learning about a companys products, the most common method is a "push" promotion approach, where salespeople knock on customers doors. While getting a meeting with a retailers buying staff is not hard for well-known companies, a selling opportunity like this is much more difficult for small companies that have yet to establish a track record. They soon discover that convincing a buyer just to schedule a meeting is as difficult as convincing them to buy the product.For smaller firms, a better approach may be to use creative methods that capture the final consumers attention. Labeled as "pull" promotion, these strategies are designed to target final consumers with the hope they will then ask for the product at retail stores. Once enough voices are heard, it is hoped the retailer will agree to distribute the product.Here is a story of one creative way that a small company used to build up consumer interest. After several unsuccessful attempts to obtain distribution through the use of sales calls, the company, which sells a somewhat unusual product tongue cleaner - created a YouTube video that quickly went viral. The interest caught the attention of several retailers including Wal-Mart who agreed to place the product in 3,500 stores. While Wal-Mart claims the You-Tube videos did not influence their decision to stock the product, other retailers did point to consumers' interest in the videos as a key reason for their decision to handle the product.Orabrush's Mr. Davis says he credits the company's social-media efforts for helping get the tongue cleaner into other retail stores. In some cases, he says store managers approached Orabrush on their own, citing requests for the product from customers who'd learned about it online.

CONCLUSION

The launch of any new product poses a number of threats. For example, there is a good chance that competitors will copy the product and steal a share of the market. Amway, therefore, is building on the strengths of the Super Concentrated Cleaning System. Its success clearly indicates that Amway has started a trend which may well revolutionise the cleaning products market. Like any successful organisation, Amway is continuing to develop the product, research the market and respond to customer demand.

There's no better way to improve the quality of information you receive from apotential customerthan by asking short questions. We all can recall far too many times when we've sat across the table from a customer we're trying to help -- and we know we can help -- if they would just provide us information about their needs and goals.

BIBLIOGRAPHYhttp://newportboardgroup.comhttp://www.strategy-business.comhttp://www.kellogg.northwestern.eduhttps://www.deloitte.com