Mkt Chapter+12+Product

8/8/2019 Mkt Chapter+12+Product

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MARKETING MANAGEMENT

12

Setting Product

Strategy


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At the heart of a great brand is a

great product


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Product

Anything that can be offered to a market to

satisfy a want or need.


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Levels of Product

BrandName

Quality

Level

Packaging

Design

Features

Delivery& Credit

Installation

Warranty

After-Sale

Service

CoreBenefit orService

CoreBenefit orService

Actual Product

Actual Product Core Product

Core Product

Augmented Product

Augmented Product


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Five Product Levels

Core benefit service or benefit (e.g., hotel guest is buying

rest and sleep)

Basic product turn core benefit into basic product (e.g.,

hotel room includes a bed, bathroom, towels, desk, dresser,

and closet)

Expected product set of attributes and conditions buyers

normally expect (e.g., clean bed, fresh towels, working

lamps)

Augmented productexceeds customer expectations(e.g., free health spar)

Potential productall the possible augmentations and

transformations (e.g., free internet connections and use)


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Product Classification Schemes

Durability

Use

Tangibility


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Durability and Tangibility

NondurableGoods:

Consumed in one or few uses.

Purchased frequently.

Availability is important.

Services:

Perishable, intangible,

inseparable, variable.

Durable Goods:

Survive many uses.Require more personal selling & service.

Command higher margins.

Require guarantees..


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Unsought ProductsUnsought Products

New innovations Products consumers dontwant to think about these product Require much advertising &personal selling

i.e Life insurance, blood donation

Product Classifications

Consumer Products

Specialty ProductsSpecialty Products

Special purchase efforts High price Unique characteristics Brand identification Few purchase locations

i.e can be anything

Shopping ProductsShopping Products

Buy less frequently Higher price Fewer purchase locations

Comparison shopi.e Clothing, appliances

Convenience ProductsConvenience Products

Buy frequently & immediately Low priced Mass advertising Many purchase locationsi.e Candy, newspapers


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redo

MRO Supplies

MR& Operating

SuppliesSupplies for Maintenance,

Repair, and Operating

MR& Operating

SuppliesSupplies for Maintenance,

Repair, and Operating

Component

Parts &Materials

Component

Parts &Materials

Manufacture

Materials &

parts:Componentmaterials &

component parts.

Raw

Materials

Raw Materialsunprocessed expense

items that become a

physical part of a physical

good. Farm & Natural.

Raw Materialsunprocessed expense

items that become a

physical part of a physical

good. Farm & Natural.

AccessoriesAccessoriesEquipment:Short-lived capital itemstools & productionequipment

InstallationsInstallationsInstallations:Buildings & heavy

equipment.

Installations:Buildings & heavy

equipment.

Professional

Servicesspecialized services to

support a firms

operations--consulting

services

Professional

Servicesspecialized services tosupport a firms

operations--consulting

services

Business

Product

Classes

Business

Product

Classes

Capital Items


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Differentiation:

Process by which companiesmanufacture & design products in a way

that makes customers perceive them as

different from that of competitors.


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Product Differentiation

Product formsize, shape, or physical structure Featuressupplement basic functions

Customizationindividual versus mass Performancelevel at which the products primary

characteristics operate

Conformancedegree to which all the produced units areidentical and meet the promised specifications

Durabilityproducts operating life Reliabilityprobability that a product will not malfunction or fail

& consistent.

Repairabilitythe ease of fixing a product when it malfunctionor fails

Styleproducts look and feel to the buyer. Design: is the totality of features that affect how a product

looks, feels, & functions in terms of customer requirements.


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Design: Integrating Force:


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iPod embodiment: form, feature, function and cost


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Smart Phones Design:

The antenna is built into the bottom ofthe phone.

For two reasons:

To meet requirements regarding thespecific absorption rate (how muchradiation is allowed to enter the

human body). Extending antenna went out of style

several years ago.

Smart phone makers constraints

To make increasingly smaller phones.

Fit larger batteries and more powerfulprocessors into smaller packages.

Use flashy materials, and specificaesthetic.


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iPhone 4

They moved the antenna to the vicinity of theband

The iPhone 4, has two antennas built veryclose to the metal band running around the

exterior of the device. The one running on the left side of the phone

is for Bluetooth and Wi-Fi, the one on the rightis for cellular reception.

The phone if gripped in a way that touches theleft bottom area of the phone, receptiondegrades or disappears in some cases.


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Service Differentiation

Ordering easehow easy to place an order Deliveryhow well product or service is brought to the customer

Installationwork done to make a product operational

Customer trainingtraining the customers employees to operate

the vendors equipment properly and efficiently

Customer consultingdata, information, systems, and advice that

the seller offers to buyers

Maintenance and repairservice programs for helping customers

keep purchased products in good working order

Returns


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The Product HierarchyNeed Family to satisfy a need feet protection

Productfamily

All product classes thatsatisfy a core need.

Productclass/category

a family of productshaving certainfunctional coherence

Only shoes

Product line a group of productswith closely related

functions

sports shoes, formal shoes

Product typeproducts within a linehaving similar form

Football Shoes

Item SKU


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Product Systems and Mixes

Product systemgroup of diverse but related

items

Product mix or assortmentvarious product

lines Depthvariants of each product

Lengthtotal number of items in the mix

Widthnumber of different product lines Consistencyhow closely related various

product lines are in some way


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Product Line:

A product line is a group of productsthat are closely related, because they

function in a similar manner, are sold to

the same customer groups, aremarketed through the same types of

outlets, or fall within given price ranges.


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Product-mix Width & Product-Line Length

for Hindustan Lever Products

Product Mix WidthSoap Tea Fabric Wash

Product LineLength DoveLux

Liril

Le Sancy

Pears

Jai

Moti

BruRed label

Green label

Taaza

3 Roses

Taj Mahel

RinSurf

Wheel

Sunlight

Li St t hi L th i d t


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Line Stretching: Lengthening product

line beyond current range.

Down-Market StretchDown-Market Stretch

Up-Market StretchUp-Market Stretch

Two-Way StretchTwo-Way Stretch
http://www.gallosonoma.com/


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Down-market Stretch: Baskin Robbins small town entry with

sticks and cones priced low.

SKumars World Players launched inSouth is a BOP brand priced at Rs99-

Rs499.

Up market Stretch: Dollar premium innerwear designed

by Rohit BAL.


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Line Filling

T W P d t Li


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Two-Way Product-Line

Stretch: Marriott Hotels

QualityEconomy SuperiorStandard Good

Pr

ice

Pr

ice

High

Aboveaverage

Average

Low Fairfield Inn

(Vacationers)

Courtyard(Salespeople)

Marriott(Middle

managers)

MarriottMarquis

(Topexecutives)


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Product-Mix Pricing

Product-line pricing (various levels: Rs200, Rs400, andRs600)

Optional-feature pricing (sunroof, theft protection)

Two-part pricing (fixed fee plus variable usage fee:

telephone service) By-product pricing (production of certain goods often

result in by-products;

meat and skin (sold to leather producers)

Whey from cheese manufacturing. Asphalt from crude oil.

Product-bundling pricingoffer products only in abundle: product plus service

C ti d t i i ( i th


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Captive-product pricing (require the use

of ancillary products: razors, films)


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Co Branding:

Dual branding or brand bundling twoor more well known brands are

combined into a joint product or

marketed together in some fashion.


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Benefits:

To generate sales. To reduce advertising expenditure.

To provide customers with greater value;

To create awareness and positive image.

To create operational advantages.

To introduce one company's products and

services to the loyalists of another.


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Same Company Co branding:

Gillette Fusion Power with AAA


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Gillette Fusion Power with AAA

Duracell battery


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JV Co branding:

brings together twodifferent companies,

usually in a business-to-

business situation, tostrengthen an offering.


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One world Alliance

One world offers a widerange of unique air travel

options and benefits by

bringing together eleven ofthe world's biggest and

best airlines.

American, British Airways,Cathay Pacific, Qantas,


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Aston Martin & Nokia


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Fiat & Mattel


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Multiple Sponsor Co branding:

Retail Co branding: using same


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Retail Co branding: using same

location to optimize space & profits.

Promotional


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Promotional

Co branding

In Europe Coke &

Bacardi advertisetogether.


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Ingredient Branding:

Creating brand equityfor materials,

components or parts.

Self branding:Trademark own

branded ingredients.


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Packaging: The 5th P

Packaging, sometimes called the

5th P, is all the activities ofdesigning and producing

the container for a product.


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Levels of Packaging:

Primary.

Secondary. Shipping.


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Packaging has been influenced by

Self-serviceSelf-service

Consumer affluenceConsumer affluence

Company/brand imageCompany/brand image

Innovation opportunityInnovation opportunity


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Improving


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Improving

functionality:


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Packaging Objectives

Identify the brand Convey descriptive and persuasive

information

Facilitate product transportation andprotection

Assist at-home storage

Aid product consumption


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Functions of Labels

Identifies

Grades

Describes

Promotes


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Frustration Free Packaging.

ioneered by

mazon.com


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W i


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Warranties

A formal statement of expected productperformance by the manufacturer.

Reduce perceived risk.


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Thank You.

Date post:	10-Apr-2018
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