Importance Of Product Strategy Marketing Essay

Published Date: 23 Mar 2015

This chapter gives an overview of the dissertation and the importance of the subject matter. The importance of product strategy, the textile industry and a brief introduction on the Diesel Jeans sector will be presented. Problem formulation, research questions, hypotheses formulation, research aim, research objectives, reasons for choosing of the topic, previous studies, and format of the study will be spelt out. The research is focus on the product strategy implemented by Diesel Jeans in Mauritius.

1.2 Importance of product strategy

The value realised by a firm from selling its products is determined to a large extent by the strategy that is used to bring the products to market (Chesbrough, 2003). Organisations that launched flourishing products such as Apple and Microsoft have been credited with adopting the right product strategy for their products (Wall Street Journal, 2006). Consequently it is imperative for firms to recognize the impact of the product strategies formulated.

A product strategy is the critical vision of the product and affirmed where the product will cease. When a product strategy is developed, it becomes easy for firm to determine the direction of the product efforts. The product strategy forms the basis for executing a product roadmap and consequently product releases. However company is able to concentrate more on a target market specifically and set feature. Bantel (1997) suggests that particular product/market strategies are effective at achieving particular performance goals to the exclusion of others.

The role of product strategy is to make an association between the company's product development and its business strategy (McGrath, Anthony, & Shapiro, 1996) and according to McGrath (2000) it guarantees that the firm and its products is engaged in the right markets from a strategic viewpoint. Product strategy is referred as the consequence of making important decisions in managing new product development (Krishnan and Ulrich, 2001; Mintzberg, Ahlstrand, and Lampel, 1998). The product strategy process involved the process of decision making within a company.

1.3 Textile Industry in Mauritius

The textile industry is among the most significant pillars of the Mauritian economy. In the early's 70, the government created the Export Processing Zone (EPZ) in order to fight unemployment. Many changes have occurred almost forty two years of its existence. Mauritius manufactures products of quality like Boss, Ralph Lauren, Next, Gap, Mark and Spencer and others trade mark for export towards the Europe and USA due to the high skilled labour force and efficient management practices.

According to the Mauritius Export Association (MEXA) report 2012, the export sector contributes around Rs 45 billion revenue to the Mauritian economy representing around 14% of GDP and generates approximately 60 000 direct jobs. It has been resilient to the difficult global economic situation and has achieved a modest growth of 7.8% during the year 2011.

Table 1.1 below shows the domestic export of textile products through the year.

Table 1.1: Domestic Export of Mauritius for year 2008 to year 2011

Domestic Exports

2008

2009

2010

2011

Cotton articles not knitted

Men's trousers

6576

7126

6395

7507

Men's shirts

11796

10742

11017

13691

Women's trousers

2043

2722

3445

2971

Women's blouses

886

1170

968

931

Cotton articles knitted

Men's trousers

444

217

363

177

Men's shirts

6384

3671

3883

4010

Women's trousers

622

1226

1779

2495

Women's blouses

2081

1170

968

937

Source: MEXA Report 2012

1.4 Diesel Jeans in Mauritius

Based on a report of the Diesel Heritage web site, Diesel is viewed as an innovative international design company, making a wide-ranging collection of jeans, clothing and accessories. Diesel is a leader in pioneering new styles, fabrics, manufacturing methods and quality control to assure an excellent product. The company is present in over 80 countries with over 5,000 points of sale and more than 300 monobrand stores (200 of which are company-owned and the rest in partnership with local distributors). Diesel operates through franchise in Mauritius since 1994, and now runs three shops on the territory. The company imports its entire ready to wear products from its country of origin, that is, Italy. Diesel expanded its design to bags, watches, footwear, sunglasses, belts, to bring more options to the customers. Lately more diversified designed products have been added to its portfolio for example designer helmets for motorcyclists and earphones.

Competitors of Diesel in Mauritius are Calvin Klein, Guess, Celio, and Levi's and the target market of these competitors are the same as Diesel. They are still expanding their branches simultaneously with building close relationship with customers.

Figure 1.1 shows the number of products that the Diesel Jeans imported to Mauritius and those products are classified into two seasons, that is, Spring Summer and Fallwinter.

Figure 1.1: The import of Diesel Jeans products from 2008 to 2012.

Source: Fieldwork

1.5 Statement of the problem

The rapidly changing culture, politics and economics of modern life deeply influence the industrial environment, particularly consumer industries such as textile and clothing (Lowson, King and Hunter, 1999).The problem is that nowadays the consumers control the marketplace in order to customise the style, fit and colour of the clothes to purchase, and require high quality personalised products at low prices. Therefore many organizations adopt aggressive product strategies to survive and maintain market share and surpass their competitors to satisfy consumers. However, seasonal and highly volatile market industry is always vulnerable to the concept of fading out and sometimes difficult to survive.

Meeting multicultural consumer requirements by supplying the right products and services in a global market is an ongoing challenge for marketers, retailers, and suppliers. Now, various clothing industries due to the effect of globalisation, were keen to benefit a larger market, within their country of origin, and also in other markets with high potential. (Kim, Forsythe, Gu & Moon, 2002)

Moreover the Diesel Jeans is a global brand and it should seek to become part of the local culture and difficulties may rise according to the new designs and new collections of clothes that the organization brings to the Mauritian culture. Hence it would be worthwhile to study the product strategy of Diesel Jeans in the context of Mauritian culture.

1.6 Research question

The research question of this project is "Whether the product strategy of Diesel Jeans suits the Mauritian market?"

1.7 Hypotheses formulation

Five hypotheses were formulated to test whether there is any difference between product strategy and customer satisfaction in Chapter five under section 5.5.

1.8 Research aim

To study the product strategy and it dimensions for customer satisfaction.

1.9 Research objectives

The main objectives of the project are as follows:

To review the literature on product strategy dimensions.

To assess the product strategy of Diesel Jeans in Mauritius.

To measure customer satisfaction.

To make recommendation within the context of the study.

1.10 Reasons for choosing the topic

The reason why the topic was chosen was the author's interest in product strategy adopted by a global branded clothing industry. The author has chosen global industry to show how the brand integrates the lifestyle of people and fashion in Mauritius. In order to be successful a global brand should seek to become part of the local culture, adapting to the unique needs, values and desires of the targeted group.

1.11 Previous research

Table 1.2 Previous studies of the subject matter

Title

Author

University/ Institute

Year

Product strategy in response to technological innovation in the semiconductor test industry.

Robert W.LIN

Massachusetts Institute of Technology.

2004

Product strategies under durability, look-in and Assortment Considerations.

Sreelat

Jonnalagedda

University of Texas at Austin.

2009

Enterprise Product strategies and employer Demand for skills in Britain.

Geoff Mason

National Institute of Economic and Social Research

2004

Source: Fieldwork

1.12 Format of the study

This study consists of 6 chapters and it is organized as follows:

Chapter 1: Introduction

This chapter provides a background of the textile industry in Mauritius and the study the importance of product strategy. The research question, problem statement, reason for choosing the topic and previous studies on the topic are cited.

Chapter 2: Literature Review

This chapter reviews theoretical view on product strategy.

Chapter 3: Company Profile

The chapter provides details on the company.

Chapter 4: Research methodology

This section will mainly describe all the methods and tools used in carrying out the entire research.

Chapter 5: Data Presentation and Analysis

It provides presentation of the data collected through charts, tables and graphs for better understanding.

Chapter 6: Recommendation and conclusion

The final chapter will make necessary recommendations and the conclusion of the dissertation related to the findings.

1.13 Conclusion

This chapter has given an overview of the business climate in Mauritius. A brief detail is given on the Diesel Jeans Company in Mauritius and on the textile industry which is one of the main pillars in Mauritian economy. Furthermore the problem statement, the research aim, research objectives and the research question are spelt out for the purpose of the project. The next chapter will review the literature about product strategy and its dimensions.

CHAPTER 2

Literature review

2.1 Introduction

The aim of this chapter is to provide a detailed explanation of the product strategy concept and how it evolved. Firstly, the marketing concept and product is well defined. Furthermore the review describe the important aspects in the product strategy for the success of a product such as the market segmentation, product development, product differentiation, product attributes, brand strategy and brand awareness , product packaging, product quality, product price product diversification and customer satisfaction. Textbooks and Journals were used for the study and are considered as secondary information sources (Schindler and Cooper, 2001 p.166).

2.2 Marketing concept

According to Kotler, Armstrong, Wong and Saunders (1996) the marketing concept is a philosophy. However the central attentions of all activities of an organization are the consumers, as no organization can continue to exist without the support of its consumers. The marketing concept asserts that the organization should make every effort to satisfy the needs and wants of the customers at the same time meet the company's goals and objectives set.

The needs, wants, and satisfaction of all customers should constantly be the first concern for every manager and employee. Marketing is not a function of business, but a view of the entire business seen as the economic organ to provide goods and services (Drucker. 1954, p.38-39). In other words, it is important to understand that the marketing concept refers to sell satisfaction rather than to sell a product or a service only.

Kotler (1998) stated that the marketing concept is based on the following pillar, target market, customer needs, integrated marketing, and profit through customer satisfaction. In line with Kotler, Walker, Boyd, and Larreche, (1992, p.22) asserted that the

marketing concept is a useful way of getting a competitive advantage and to achieve company objectives that set off the planning and coordinating all activities for satisfying customers requirements.

In summary, marketing concept can be viewed as a consumer focus characterized by the capacity to identify basic requirements of targeted customers. And satisfying them by constantly providing and bringing superior value supported by a firm which deeply involved it efforts of all practical areas within the organisation by reaching long-term goals and objectives.

2.3 Dimension of Product

A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need, which comprised physical objects, services, persons, places, organizations, and ideas (Kotler and Armstrong, 1990, p 226). Consequently a product is the main element in an organization and without a product there is no place, no price, no promotion, and no business as it refers to the most important ingredient of the marketing mix. Similary Assael (1993) asserts that a product is the most fundamental component of the marketing mix. Kotler and Keller (2006) define a product as a bundle of attributes and benefits provided to satisfy the customer.

Kotler and Keller (2009, p.358) defined five levels a product.

Figure 1.2 illustrates the five levels of a product.

Figure 2.2: Five levels of a product

http://train-srv.manipalu.com/wpress/wp-content/uploads/2009/07/clip-image00217.jpg

Source: http://train-srv.manipalu.com/wpress/?p=42740

The core product is the main benefit, service or need satisafaction, required by the customer. The basic product is the physical product, made up of the core product or service and includes all physical aspects of the product or services that are brand name, packaging, styling, features and quality. The expected product is a common set of attributes and conditions where buyers expect when they purchase a product. The augmented product is the consumer services and benefits added which exceed customer requirement such as installations, warranty, after sale services and delivery and credit services. And the potential product cover all the possible augmentation and changes the product might experience in the furture.

2.4 Definition of product strategy

In order to launch a product in the marketplace firm needs a well-established product strategy. The executed product strategy must include all that is required in planning, manufacturing, advertising, selling and distributing the product from production to customer service. According to Teece, Pisano and Shuen (1997), a strategy is the technique that an organisation used to positions itself, in order to get a competitive advantage on the marketplace. However the achievement of a strategy is to assure the success of the firm by executing specific tasks at a right time and it should acquire the significant purpose of the product.

The term product strategy attempts to capture the decisions made by organisations about product within particular markets. Product strategies are decisions settled to improve products to satisfy market requirements and determine in which way to gain competitive advantage for products (Steinhardt, 2010, p.50). Kotler (1991) asserts that product strategy is the heart of the marketing mix. However product strategy formed part of the product management process.

Thus McGrath (1995) states that product strategy is involved in the decision and management of the different levels of a product, product platforms, product lines and individual products. And according to Lehmann and Winer (1994, p. 205-206) the main function of a product strategy is to supply managers the path to pursue for running a business.

Taggartand, James and McDermott (1993) asserts that product strategies are composed of the categorisation of a differentiated product by the organisation in respect of the needs and wants of the customers and the satisfaction they aim to obtain from the product. For a product strategy to be successful, it should facilitate the classification between different aspects in a way to make a product successful. In addition, within an organization a product strategy aids to depict in what way resources should be allocated and demonstrates how products may reach a high market positioning.

Handscombe (1989, p.234) insists on the point that a product strategy should essentially describes the firm that the set of product represent. Following this further groundwork is required for single product decisions, the plan for product development, marketing strategies and development of manufacturing strategy. However assigning resource for

particular product, and to segment the market and areas, the product strategy should be able to recognize the priorities of the market.

McGrath (2001) broadly describes product strategy and according to him a product strategy is opened to a core strategic vision that demonstrates the directions that an organisation takes. A product strategy is the result of the strategic vision, the platform strategy and the product line strategy and lastly the new product development. However the product platform strategy is obtained from the core strategic vision and the product line strategy referred to the product offering for a specific product platform. And the new product development determines the capabilities for new product offering that is suitable to the product line strategy.

The core strategic vision sets the answers to the strategic questions such as, where are we going? How will we get there? Why will we be successful? The first question requires having a balance between the goals and short term objectives. The main purpose of the goals is to set the general directions of movement, whereas objectives state the specific measures of accomplishment. The goals refer to profit, growth, and market share, which potentially can be conflicting. Therefore, the product strategy normally focuses on only one of the goals respectively (McGrath, 2001).

The second question refers to the core of the product strategy which involves elements like customer targets, competitive targets, and differential advantage. Besides the choice of customer targets depends on the nature of the goals and objectives selected when answering "where an organization wants to go". However, as Krishnan and Karl (2001) assumed that the aim is to boost up the market growth and therefore the targeted group should be from a new segment of population.

The third question three is the most important question to be answered for a competitive product strategy, as the answer is related to the differential advantage aspect of the product positioning. A solid product strategy is required to provide concrete arguments for the reason of its success in the light of customers' preferences and competitive targets.

All the definitions demonstrate that product strategy is a set of decisions or processes that aim at making the product flourishing. Hence the product strategy should always take into account the market and current state of the company when making the decisions. A product strategy is a management process, consequently a product strategy cannot be dependent on individual manager, it must become a systematic way of working. Hence, product strategy process must be an integrated process within the organization.

2.4.1 Scope of product strategy

The level of product strategy referred a set of decisions; the product platform determines how to develop the right platform for a global market. Generally different products with attributes are derived from the product platform and they are developed for a product line. Subsequently the product line from the product platform, defines the width, length and depth in every line. And there is also the individual product with its classification and packaging features (Gabrielsson, 2004). According to Meyer and Lehnerd (1997, p.39), "A product platform is a set of subsystems and interfaces that form a common structure from which a stream of derivative products can be efficiently developed and produced". The function of a platform strategy is always essential for the purpose of a successful implementation and development of product lines.

2.4.2 Product line

"Product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlet, or fall within given price ranges" (Kotler, Wang, Saunders and Armstrong (2005). According to McGrath (1995, p.61) product line strategy is describes as a temporary time-scaled plan for the chain of developing products within a product line and the strategy is based on four primary functions.

The first one describes products variations designed to an explicit segment from a market. The following one, attempted to support strategic advantage for a firm compared to its rivals, to be the first one to launch a product at a particular moment within a lifecycle of a product line. The third one brings direction for product development department and made successful productive response to the requirements of particular markets.

Finally, product line strategy facilitates in scheduling the introduction of product development and provides the apparent time and setting up of each product. However because managerial and financial resources are restricted, the number of product lines are limited as well (Gabrielsson, 2004, p.35).

2.5 Market segmentation

Smith (1956) first established the concept of the market segment that turn into an essential part of the modern marketing. Market segmentation means dividing a market into distinct groups of buyer who have different needs, characteristics, or behaviours, and who might require separate products or marketing programs (Amstrong, and Kotler, 2011, p.78). Another definition Kanuk and Schiffman (1994) state that market segmentation is the method of partitioning a promising market into different subsets of individual with familiar needs or behaviours and choosing one or more segment to target with a separate marketing mix. Furthermore market segmentation is a driving force that leads an organisation effort towards the utmost opportunities. The function of market segmentation is to recognise the taxonomy of consumption pattern by dividing a market into several uniformed sub markets. Markets can formulate product strategies, or product positions, tailored specially to the demands of these homogeneous sub-markets (Lin, 2002, p.249). Based on Pollock, Jones, and Brown (1994) point of view, market segmentation should be describes by four primary categories stood on the types of variables applied to define submarket like socio-demographic segmentation, geographic segmentation, product-related segmentation, and psychographic segmentations.

There are a number of different ways for segmentation, and the three conventional approaches employed to segment the market are mass marketing, differentiated marketing, and niche marketing.

Mass marketing is a segmentation strategy for which the market is treated as one segment. Mass marketing is mainly suitable for commodity products but, it is rare that a firm employed this approach (Ferrell, Hartline, and Lucas, 2002). Since mass marketing is built on a single product or services, however it is not a simple task for firm, since markets contain many different consumers.

Differentiated marketing is engaged in partitioning the market into homogeneous submarket which stand on customer requirements and addressing specific marketing plan to the homogeneous submarket. To succeed for a differentiated marketing strategy the behaviors and requirements of consumers for each submarket in particular should be familiar since simultaneously having different needs and characteristics across the different groups. Meanwhile differentiated strategy is the offering of a firm as an original product on the market by evidence that it gives a different advantage over its competitors. Companies that applied this approach must develop an original marketing mix for every subgroup recognised within the market. According to Ferrell, Hartline, and Lucas (2002) both medium and large firms applied differentiated marketing strategy, for the reason that they have the resource needed to provide various products and promoting many marketing mixes that are not common to reach the requirements of several segments. Finally differentiation is viewed as an art to plan a bundle of significant distinction to differentiate the offering of the organisation from those of its rivals.

Kotler et al, (2005) state that niche marketing's focal point is to find subgroups of customers. The niche marketing strategy is based on merely a single segment and builds up a marketing plan that matched for the specific subgroup. The niche marketing strategy necessitates an absolute consideration of the requirements of the segment matter because the possibility for the market share to increase in this market gap can surpass the small size of the market.

2.6 Product development

Littler (1984, p.20) states that product development is ascertaining the attributes that target customers seek in products and developing products to meet the market requirements. However product development leads to modify an existing product or its presentation, or formulation of an entire new product that satisfies customer or market niche. Product development is critical for the performance of many companies. The success of product development efforts can determine the viability of companies and economies (Ulrich and Eppinger, 2000).

"Product development consists of three critical elements, namely strategic processes to specifically address the effective management of product development assets, the selection of a target market and a structured product development process." (Bean and Radford 2000, p.3) According to the above definition there are different levels at which the product development process takes place. The purpose of the process is essentially to identify the market needs and the development of the products in order to suit potential customers.

The product development process includes a set of activities required for the formation and design of a product, from the detection of a market opportunity to its delivery to the final client. The main focus of the product development process is to convert customer requirements and needs into a design solution. The purpose of the product development process is to make a recipe to produce the product (Reinertsen, 1999). The recipe includes the product, manufacturing process, supply, distribution, and the support systems. (Browning, Deyst, and Eppinger, 2002)

The success of product development is vital to the performance of any organisation. And Ulrich and Eppinger (2004) points out that fast and novel product development may be a critical competitive advantages to firms. In addition a successful product development process requires the effective control of the work developed by the persons involved.

There are a variety of methodologies for understanding and improving the effectiveness of the product development process. Smith and Morrow (1999) defines product development as a method to transform any objective and market requirements into the information needed to how a product can be manufactured. Even that each product development process is distinctive there are still familiar characteristics that are administered among different tasks.

2.7 Product differentiation

Lancaster (1990) asserts that product differentiation study has drawn significant interest in economics and marketing. Product differentiation is concerned to alter the marketing mix of a product so as to differentiate it from what the competitors is offering. Scheuing (1974) defines differentiation by, "adding variations of one product which will compete with it within the same market". According to Kotler (1998) "differentiation is the introduction of differential features, quality, style or image of brands as a basis for commanding a premium".

A product becomes different at the consumer's eye when it has some features, which make it different from others products and services offered by competitors, of course the product should be unique and difficult to imitate (Murphy, 2007). Firms that employed product differentiation strategy form a perception between some target groups of the product or services offered by the company. And therefore assured that the products or services are somehow different with the value added that is not available from competitors. "Consumers may perceive the product sold by an incumbent firm to be superior to that offered by prospective rivals. Based on this perception consumer is willing to pay more for the incumbent firm's product" (Browning and Zupan, 2003, p.314).

Product differentiation is classified into three categories such as, vertical differentiation, horizontal differentiation, and mixed differentiation. Vertical differentiation arises in a market where various goods which are present can be ordered according to their purpose quality from the highest to the lowest. And horizontal product differentiation is termed as products that have different features which cannot be ordered in an objective way. Features for horizontally differentiated products are often based on colours, styles, and tastes (Piana, 2003).

Mixed differentiation is described by vertical and horizontal differentiation. Consequently, mixed differentiation includes products that have distinct quality dimension which is similar to the vertical one and are included diverse characteristics like colour, taste, shapes as well as styles which relate to the horizontal differentiation. And customers pay attention to these prominent aspects when buying a product.

Product differentiation is particularly important to undertake any kind of business, because of the economic principles that have been demonstrated time to time again in nearly every market place. If the public perceives no difference between two competing products, then the only possible means of competition is through pricing.

2.8 Brand strategy and Brand awareness

The American Marketing Association (AMA) definition of a brand is "a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors"(Keller 2004, p.3). Within this view the author asserts that a brand refers to a product and that each new feature or benefit added in order to differentiate the brand somehow from others products designed to satisfy the same need. According to the definition a brand can be seen, as simple and clear function identifiers.

Supporting Keller's view of a brand linking it to the tangibles of the brand, Doyle (2002) states that brand is a particular name, symbol or design or generally an amalgamation of these that is utilized to differentiate a specific product offered by a firm. Duncan (2005, p.6) defines a brand from a marketing communications perception resulting from experience with the brand. Beside a brand is a part of the product and communications strategy worked more effectively towards the brand exposure. A brand is also a compounded symbol and referred to six dimensions of its significance that communicate the brand such as consumers, benefits, cultures, characters, values and attributes (Aaker, 2007). Whereas Kotler (2000, p.404) mentions branding as "a major issues in product strategy".

From the above definitions, a brand can be defined as either a product or a service differentiated by its positioning relative to the competition. Also a brand refers as an identifier to permit consumers to identify one product from another related product.

Kotler and Keller (2006, p.174) argue that "successful brand identity strategies require that organizations fully connect with their consumers". Consequently employing a healthy marketing direction comprises a good knowledge of buyer's opinions. Understanding the acquisition and utilisation of information from outer sources by buyers is essential to plan a strategy for brand identity (Belch and Belch, 2004). From this point of view marketers should analyses in which way consumers confer with external source and get a variety of sources of information. Similarly, Nandan (2004) argued that the brand identity is arranged by the marketer to which describes the significance of the brand and the attempts to communicate the brand.

A brand strategy is a strategic decision making tool and the brand strategy focuses on the form of brand image and traits that should used to convey, the appropriate target groups and how will the brand be communicated with. "A brand strategy is the translation of the business strategy for the marketplace" (Osler, 2003, p.435). Kotler and Keller (2006, p.296) state that the branding strategy for a firm reflects the number and the nature of common and distinctive brand elements applied to the different products sold by the firm.

The proposition and promise of the brand strategy is not merely important to understand by company management. But the proposition must be strengthened and repeated all over the whole organization. Kotler and Keller (2006, p.297) outline that once a firm decides to brand its products or services, it chooses from four general strategies, namely, individual brands, blanket family name, a separate family name for all products, and a corporate name combined with individual product names.

2.9 Product attributes

Attributes are the characteristics or features that an object may or may not have and includes both intrinsic and extrinsic (Mowen and Minor, 1998).There are attributes or characteristics associated with every product that have an impact on its marketable

success. (Trinka, Sinclair and Marcin, 1992) Each product embodied a bundle of attributes and consumer choice is based on increasing the utility and satisfaction from the attributes subject to budget constraints. Kotler (1997) states that consumers make product choices based on the combination of product attributes best meets their needs based on dimensions of value, cost, and prior satisfaction. Moreover, according to Romariuk and Sharp (2003) no proof is found that certain attributes are linked to customer loyalty than others.

In general the attributes of a product can be either tangible or intangible. And normally tangible attributes are those that relate to a physical existence and intangible attributes referred to attributes that cannot be readily perceived by human senses. Similarly Myers (2003) asserts that a tangible and intangible attributes of a product are evenly imperative to select a brand or a product.

The product's attributes is a common method, adapted by many firms to differentiate them from those of the competitor. According to Loudon and Della Bitta (1993) the attributes of a product are significant for consumer while they convey the benefits that consumer are expected from the product offered. In line with the author attributes are often qualities that consumers describe and also the effect that it may provide. Myers (1996) suggests that a careful consideration of product attributes support the seller in offering the right product to the right target groups at the right moment and place and facilitate the task of the seller to position the products to the current competition.

Product attributes are surrounded by general benefits and also various requirements (Rangan, Shapiro and Moriarty, 1995). General benefits or universal benefits are features that each consumer required. Various requirements or diverse specifications are features that are not required by all customers and little are those customers that look for those features.

2.10 Product packaging

Package and packaging have different significances, designed to communicate different images. The package is the physical unit that essentially holds the product. Packaging is the combination of the physical aspects through technology to create the package (Brody and Lord, 2000, p.153-154). According to Ahmed and Salman (2005), packaging is viewed as a critical tool in current marketing actions and one basic to any combined marketing strategy. Rundh (2009) packaging characterizes the product and supplied by the manufacturers with the aim to protect the product during transportation and storage.

Prendergast and Pitt (1996, p. 68) stated that "a package must protect what it sells and sell what it protects." Prendergast and Pitt (1996) assess the essentials roles of packaging, and classify packaging by either logistics or marketing. And the logistical purpose of packaging is to keep the product during transportation through distribution channels. However in the marketing purpose, packaging offers an attractive method to communicate messages concerning product attributes to consumers.

The two package functions may be difficult to separate, as they worked together. The package sells the product by attracting attention, communicating, and also allows the product to be contained, apportioned, unitized, and protected. An individual's intention to purchase depends on the degree to which consumers expect the product to satisfy them when they consume it (Kupiec and Revell, 2001).

Generally features of the package can emphasize the uniqueness and originality of the product. Moreover, quality verdict are mainly influenced by product characteristics followed by packaging. If the packaging communicates high quality, then consumers assume that the product is of high quality. According to Rundh (2009) the important aspects in concluding potential success of packaging design, depends on external driving forces and the potential to convert them into attractive packaging design and also how consumers recognize it. And high-quality packaging attracts the attention of consumers in competitive market. Therefore, manufactures should use well-designed packaging to highlight their goods

Packaging is a main marketing tool in the expansion of a product's strategy (Ampuero and Vila, 2006). And when applying packaging as a marketing tool of the product it normally forms part of the strategic plan. The matter concerning packaging must be linked to the company's general strategic procedure (Czinkota and Ronkainen, 2007).

Packaging design is the administration of the product in terms of size, color, shape, graphic design.

2.11 Product quality and product price.

Olson (1977) argued that consumers employ a selection of cues to assume product quality. And product quality is evaluated according to the criteria such as reliability, design, appearance and life expectancy. Deming (1988) defined quality as a multidimensional to produce a product or a service that meets the customer's expectations to ensure customer satisfaction.

Thus, because of customer value and satisfaction, quality supports market share and return on investment. For that reason, firms are making some modifications in product designs, development processes, and marketing strategies for product quality enhancement. And Buzzel and Gale (1987) state that in long term the most essential factor influencing a business unit's performance is the quality of its products and services, in comparison to those of rivals.

The price of a product is a fundamental component of the whole product strategy and sets up consumer expectations about the quality of the product However price is another form of attribute utilized by consumers to estimate a product. Price and quality have diverse and discrepancy effects on perceived value for money (Ernest, Retha and Kotzé, 2003).

According to Mowen and Minor (1998) price referred as an indicator of quality, with a higher price indicating higher quality. In line with Mowen and Minor, Leavitt (1954) asserts that price is use to evaluate a product. That is, more expensive products are likely to be judged as better quality than cheaper products. Consumers reassure themselves about the high quality of each firm's output by verifying that the price charged and quantity produced are consistent with high quality's being more profitable than low quality (Franklin, 1984).

However Siu and Wong (2002) assert that consumers perceive that a higher price can be attributed to the higher cost of quality control. Some consumers are highly price sensitive, whereby a high price may shift consumers to competitive brands (Mowen and Minor, 1998). Therefore price can have a positive or negative impact on consumers.

2.12 Product diversification

Ansoff was the first to mention the meaning of diversification strategy somewhat certainly from the perspective of business growth strategy and to define the diversification with increasing product types. And yet product diversification is a focused and strategic decision made by managers.

Nevertheless, the definition of diversification has been developed by other authors in numerous dimensions. Diversification is defined as markets differentiation and pursuing above one target market (Dundas and Richardson, 1980). According to Chandler (1977), diversification strategy is while an organisation has the occasions to develop in market structure and technology as well as opportunity for growth in basic business unit of the organisation. Kotler (2003) states that product diversification is a main strategic management model to attain long-term performance at the same time diminishing the risk. Tanriverdi and Lee (2008) stressed that product diversification assign to intra-industry diversification, yet illustrates as a company's presence in various product lines within a single industry.

Normally, a company strategy is one of the most complicated decisions for a company to make during its development and progress. From the perspective of company strategy, whether or not to adopt diversified operation is a subject that value great attention for the management. Rumelt (1974), the most important motive for diversification might well be connected to the aspects of present environmental situation of the company as for competition in the market and decrease in sales

From a product diversification perspective, global organisations may employ a strategy that needs to develop or purchase a new product. Firms engaging in such a product-based strategy is looking to enhance profits by adding additional products and thus, expanding their current product line. The addition of a new product represents the desire for a company to develop new markets or enter markets that are presently not in their business portfolio.

2.13 Customer satisfaction and product strategy

According to Camacho and Dume (2004), a marketing strategy defines how a firm plans to compete in a chosen market research and the marketing strategy consists of the product strategy which helps to determine what the company wants to offer to the customers. Consequently product strategy is viewed as a core component of the overall marketing strategy. While building a marketing strategy, consumer satisfaction is actually the main objective and a strategy that does not meet the needs of the consumers is a poor marketing strategy.

Hence, the connection between marketing strategy and customer satisfaction have been a central concept for both academics and practitioners, in view of the fact that repeat purchase tend to decrease (Smith and Bolton, 2002).

Gundersen, Heide and Olsson (1996) assert that customer satisfaction is used up as an evaluative judgment about a particular product or service. And in the core of marketing strategies customer satisfaction is essential.

Therefore many companies are engaged to revise, assess and employ marketing strategies to increasing customer satisfaction and upgrade share of customers in view of the positive outcome on the economic performance of the company. Angelova and Zekiri (2011) point out that customer satisfaction is the result considered by consumers that have experienced a company's marketing strategy that have met their expectations. Marketing strategies focus on the market, customer satisfaction and their relations, as they formed part of business strategies. Furthermore the most significant purposes of building a marketing strategy is to increase customer satisfaction level.

2.14 Conclusion

The chapter encompassed a detailed description of the product strategy and some important elements that are linked to the subject matter. Firstly the marketing concept is defined then, pursuing with the description of a product that is the core element in marketing mix. Then product strategy was explored stressing on the product line and the others aspects that get involved to develop and implement the product strategy. In order to achieve the strategy of a product, the literature highlight the significance of the following aspects such as market segmentation, product development, product differentiation, product attributes, brand strategy and brand awareness, product packaging, product quality, product price product diversification, and customer satisfaction for company to realise a successful product strategy. Furthermore the impact of product strategy on customer satisfaction has been highlighted.

In the next chapter the company profile of Diesel Jeans Company will be reviewed.

CHAPTER 3

Company Profile

3.1 Introduction

This chapter is based on the historical background of the company and the history of the Diesel Jeans in Mauritius. The chapter covered also the company profile which includes the organizational structure, the mission statement of the company, the target market, the brand positioning, the products offering and the financial report of the company.

3.2 Historical background of Diesel Jeans

Diesel Jeans was founded by Renzo Rosso in 1978 to become one of the greatest and most renowned denim and jeans designer in the world within five years. The brand is internationally recognized and accepted as a pioneer in jeans architecture and in the fashion industry in general.

Diesel Jeans made its whole existence about the passion for what it does. With a creator who sees his effort as an art and not a science, the organisation has redefined how a brand sees and communicates with its customers since 1978. According to a review of the "The 100 Times business case study" (www.thetimes100.co.uk), Diesel Jeans is an international clothing and lifestyle brand. With a history stretching back over 30 years, the company now employs 2,200 people globally with a turnover of €1.3 billion and its products are available in more than 5,000 outlets together with online shops

3.3 History of Diesel Jeans in Mauritius

In 1994, Diesel Mauritius opened its first shop, operating as a franchisee of Diesel, in the northern part of Mauritius, a region with high tourist frequency and resorts areas known as Grand Bay, the tourist city of the country. The main target market was tourists and expatriates living in Mauritius. After one year a second shop was opened on the waterfront of Port Louis known as Le Caudan. The company experiences a phenomenal sales growth to reach as high as MUR36 million in 2008, yearly sales increases at an average of 14%. The company opened a third shop in 2008 in the west of the country to position itself strategically on the territory after opening in the north and the city centre. And the competitors of Diesel operating in Mauritius are Calvin Klein, Guess, Celio, and Levi's. And it is to be noted that there are 130 employees that work within the company.

3.4 Organisational structure

Organisation structure indicates the professional relations in terms of supervision, accountability and responsibility within an organisation. Such invisible framework is intended to promote co-ordination in the functions and activities of members of the group. Figure 3.1 illustrates the way in which the organization operates.

Managing Director (Mrs: ESPITALIER-NOEL)

Figure 3.1: Organisational Structure of Diesel Jeans Company in Mauritius.

General Manager

(Mr: DIXON.L)

Sales Manager

(Mrs: CARVALHO)

Sales Supervisors

Grand Bay Black River Le Caudan

( Mrs: K. Yasmine) (Mrs: R. Ornella) (Mrs : B. Avnee)

Sales persons

Source: Fieldwork

3.5 Mission of the Company

The mission statement is "To be different and avoid following traditional fashion but offer a supreme clothing line for inviduals and defied everyday fashion trends".

3.6 Target group of Diesel Jeans

Generally Diesel Jeans mostly targets 18 to 35 years old age group and also provides clothing line for children. But in Mauritius Diesel Jeans targets young Mauritian group, foreigners and tourists. The targets market includes both men and women, as they both figure in the advertising campaigns of Diesel Jeans. And Diesel Jeans is successful because it knows the lifestyle of the target audience.

3.7 Positioning

Diesel Jeans is positioned as a fashion brand with casual fashionable style and taste. The main differentiating feature is that the brand promises to entertain and to introduce customers to new, experimental experiences (The Times 100 in 2010). Diesel Jeans keeps a leadership position on the jeans market and the brand is positioned at the higher end of the "denim and leisure clothes segment.

3.8 Product line of Diesel Jeans in Mauritius.

The product line of Diesel Jeans in Mauritius is shown in detail in Table 3.1 below.

Table 3.1: Product line of Diesel Jeans in Mauritius

Brands Target groups

1. Diesel Age 20-50

2. 55DSL Age 14-20

3. Diesel Black Gold Very high salaried

4. Diesel lifestyle (Helmets, accessories, bags and shoes) Diesel Lovers

Source: Fieldwork

As can be seen in the Table 3.1, Diesel Jeans offers only four types of brands locally that are classified into Diesel, 55DSL, Diesel Black Gold and Diesel lifestyle. The first brand is a seasonal collection concentrating primarily on denim for both sex and the brand targets customers aged between 20 to 50 years old. The next, 55DSL is the most recent and strong brand within the Diesel product line categorized as sportswear and street casual collection which targets those aged between 14 to 20 years old. The Diesel Black Gold is viewed as the critical Rock Chic for consumers who appreciate recognize casual-luxury clothes and reserved for those with high salaried. And the last one includes all the accessories, bags, helmets and shoes and targeted groups relate to those that are addicted to Diesel.

3.9 Financial report

The financial report was obtained from the General Manager of the company and the details were limited to the year 2009 as it is shown in Figures below, because for the following years the information needed are not yet prepared. However the sales through months for each shop and years are given in Appendix 1.

Figure 3.2 and Figure 3.3 show the sales of the two shops respectively which are Grand Bay and Le Caudan as from the year 2006 to 2009.

Figure 3.2: Grand Bay sales as from 2006 to 2009

Source: Fieldwork

Figure 3.3: Le Caudan sales as from 2006 to 2009

Source: Fieldwork

Figure 3.4 shows the sales of Ruisseau Creole shops' for only the years 2008 and 2009 because the shop opened it door in year 2008.

Figure 3.4: Ruisseau Creole sales for 2009

Source: Fieldwork

3.10 Conclusion

This chapter describes the company including the background history of the brand and the history of the company in Mauritius, the number of shop in Mauritius, the target group and the positioning of the brand, the products offering and product strategy in Mauritius and the mission statement of the company. And hence, a report of the company finance is included based on four years consecutives. The next chapter will define the research methodology for this study.