PRODUCTObjectives
• Define product and the major classification of products and services
•Describe the decisions companies make regarding their individual products and services, product
lines, product mixes• Describe product development
• Identify stages of product life cycle•Discuss social responsible product decision making
and international product and services marketing.• By: JC,MBA
What is a Product?
Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.
Services are also a form of product. These maybe an activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything
Products, Services, Experiences
Products are key element in overall market offering
In extreme, products can be pure tangible products or pure services
Products and services are being commoditized.
What do you think differentiate products and services from one another to attract more customers?
Levels of Products and Services
Core customer value-what is the customer really buying?
Actual product-the product designed according to the core customer value
Augmented product- additional consumer services and benefits that will add more value and more customer satisfaction
Products and Services Classification (Consumer Products)
MARKETING CONSIDERATIONS
CONVENIENCE
SHOPPING SPECIALTY UNSOUGHT
Customer buying behavior
Frequent purchase; little planning, little comparison or shopping effort; low customer involvement
Less frequent purchase; much planning and shopping effort; comparison of brands on price, quality, and style
Strong brand preference and loyalty; special purchase effort; little comparison of brands; low price sensitivity
Little product awareness; knowledge or if aware little or no interest
Price distributio
Low price Higher price High price Varies
Products and Services Classification
MARKETING CONSIDERATIONS
CONVENIENCE
SHOPPING SPECIALTY UNSOUGHT
Distribution Widespread distribution; convenient locations
Selective distribution if fewer outlets
Exclusive distribution in only one or few outlets per market area
Vaies
Promotion Mass promotion by the producer
Advertising and personal selling by both the producer and resellers
More carefully targeted promotes by both the producer and resellers
Aggressive advertising and personal selling by the producer and resellers
Examples Toothpaste, detergent, dishwashing liquids, magazines
Major appliances, TVs, furniture, and clothing
Luxury goods, designer goods
Life insurance and red cross blood donations
Products and Services Classification (Industrial)
Materials and parts (raw materials (natural and farm products) and manufactured parts)
Capital Items (installations and accessory equipment)
Supplies and services
Organizations, Persons, Places, and Ideas (as products)
Sell the organization, person, or place itself Organization marketing Person marketing Place marketing Social marketing (Ideas) – to bring about
change using marketing concepts and tool
PRODUCT AND SERVICE DECISION
3 Levels of of marketing decisions for products and services› Individual product decision› Product line decisions› Product mix decisions
Individual Product and Service Decisions
Product and Service attributes › Product Quality› Product Features› Product Style and Design
Branding Packaging Labeling Product Support Services
› These items should create core customer value
Product Line Decisions
A group of products closely related 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.› Product Line Length› Expansion of product lines can be done by Line Filling
or Line Stretching. The direction can be going up the market or going down.
The goal of product lines is to increase profit by covering more market share and satisfy the needs of the customers (upgrading)
Product Mix Decisions
The set of all product lines and items that a particular seller offers for sale.› Width – number of different product lines a
company carries› Length-number of products within a product line› Depth- refers to the number of versions offered
for each product› Consistency-how closely related the various
product lines
Service Marketing
Service industry is growing fast. It is estimated that 4 out of 5 jobs are in the service industry.
Services industries vary greatly. Government services, banking, healthcare, insurance, security, real-state, telecommunications, legal, and more.
The Nature and Characteristics of a Service
Services Marketing
Service Profit Chain› Internal Service Quality› Satisfied and productive service employees› Greater service value› Satisfied and loyal customers› Healthy service profits and growth
Internal Marketing Interactive Marketing
Managing Service Quality
How can you manage the quality of your services? What steps can you do as manager?
JD Powers and Associate Newsweek Time Magazine
Manage Service Productivity
As a marketer or leader of your organization, what are the ways you can increase productivity?
Workforce management Industrialize the service
Branding Strategy
Brand Equity› What’s the advantage of KFC, McDonalds,
Google, Apple, and Coca Cola vs not so popular brands like Pop Cola, Bing, Chikboy?
Building Strong Brands
Brand Positioning
Brand Name Selection
Brand Sponsorship
Brand Development
Attributes , Benefits, and values
Selection Protection
Manufacturer’s brand, private brand, licensing, co-branding
Line extensions, brand extensions, multibrands, new brands
Managing Brands
Creat brad awareness through advertising and build preference and loyalty
BRAND EXPERIENCE
The New Product Development Process
Idea Generation
Idea Screening
Concept development and testing
Marketing strategy and development
Business analysis
Product Development
Test Marketing
Commercialization
Idea Generation
Internal Idea sources (Tradition research and development)
External Idea sources› Customers › Competitors› Employees
Crowd sourcing
Idea Screening
Is it Real? Can we Win? Is it worth Doing?
Concept development and Testing
Product Concept-a detailed version of the new product idea stated in a meaningful consumer term.
Concept Testing-testing the new product concept with a group of target consumers to find out if the concepts have strong consumer appeal
Marketing Strategy Development
Description of the target Market Outline the product’s planned price,
distribution, and marketing budget for the first year
Description of the planned long-run sales, profit goals, and marketing mix strategies
Business Analysis
Review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objective. This can be done by comparing the history of a similar product.
Product Development
Developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering.
Creation of a prototype that will attract potential consumers
Product testing by the company or outsourced group
Test Marketing
The stage of the new-product development in which the product and its proposed marketing program are tested in realistic market settings.
Data is collected by introducing products in a controlled manner or in a laboratory (i.e. online shops, a single store, beta versions)
Commercialization
Formal introduction of a new product to the market.
Advertising –increasing public awareness
Meeting demands that may require additional facilities to produce the product to meet demands
TIMING AND WHERE TO INTRODUCE (MARKET ROLL OUT) IS VERY CRITICAL
Customer Centered New-Product Development
Latest trend in developing new products Tends to be more successful that traditional
R&D Satisfies the needs of the consumers , more
consumer value propositions, and solved major problems (P&G Strategy)
Involvement of consumers are a priority
Product Life Cycle and Strategies
Product development Introduction Growth Maturity Decline
Product Decisions and Social Responsibility
Laws and regulations to follow How will it affect the environment Is it sustainable Is our product safe for use? Did we do
enough testing? Are we following ethical standards? How will it affect our consumers?
International Products and Services Marketing
There’s a lot to be considered when going international
Companies must understand cultures and the demand of a local market over costs and standardization of image (for example flavoring, meat inclusion, colors, packaging)
Example are Nestle, KFC, McDonalds, and Toyota
End
Principles of Marketing by Philip Kotler and Gary Armstrong, 14th Edition
