Lecture OutlineLecture Outline
1. Some basic terminology1. Some basic terminology related to productrelated to product
A. Meaning of ProductA. Meaning of ProductB. Product vs. Product OfferingB. Product vs. Product OfferingC. Core, Formal, and AugmentedC. Core, Formal, and Augmented ProductsProducts
D. D. Product ClassProduct Class, Product Line,, Product Line, Item or BrandItem or Brand
E. Product Mix, Product Depth,E. Product Mix, Product Depth, Product Width andProduct Width and ConsistencyConsistency
Lecture OutlineLecture Outline
Lecture Outline cont.Lecture Outline cont.
2. Classification of Consumer 2. Classification of Consumer GoodsGoods
A. AMA’s ClassificationA. AMA’s Classification
B. Aspinwall’s ClassificationB. Aspinwall’s Classification
3. Developing a Product Policy:3. Developing a Product Policy:
Product Mix DecisionsProduct Mix Decisions
Product Line DecisionsProduct Line Decisions
Item DecisionsItem Decisions
Lecture outline cont.Lecture outline cont.
A. Mass MarketingA. Mass Marketing
B. Target MarketingB. Target Marketing
Product Strategy ConstraintsProduct Strategy Constraints
single segment vs. multi-single segment vs. multi-
segmentsegment ((One product forOne product for multiple segments)multiple segments)
imitative strategyimitative strategy
Effect of Positioning StrategiesEffect of Positioning Strategieson Product Decisionson Product Decisions
(introduction of a fighter(introduction of a fighterbrand to discourage brand to discourage competitors from enteringcompetitors from enteringthe market.the market.
anticipatory strategyanticipatory strategy
defensive strategydefensive strategy
WHAT DO WE MEAN BY WHAT DO WE MEAN BY PRODUCT?PRODUCT?
NEED-SATISFYING NEED-SATISFYING ““OFFERING” OF A FIRMOFFERING” OF A FIRM
INCLUDED IN THE OFFERING INCLUDED IN THE OFFERING OF A FIRM:OF A FIRM:
PHYSICAL AND NON-PHYSICALPHYSICAL AND NON-PHYSICALATTRIBUTES OF A PRODUCT ATTRIBUTES OF A PRODUCT ANDAND CONDITIONS CONDITIONS SURROUNDING ITS SALES.SURROUNDING ITS SALES.
Kotler’s DefinitionKotler’s Definition
A product is anything that can A product is anything that can be offered to a market forbe offered to a market forattention, use, acquisition attention, use, acquisition or consumption that mightor consumption that mightsatisfy a want or need.satisfy a want or need.
Examples:Examples:
PosterPoster
Pepsi Cola (consumed)Pepsi Cola (consumed)Car (used)Car (used)Lawyer (performance)Lawyer (performance)Florida, London (attention)Florida, London (attention)
TangibleTangible
ServiceServicePlacesPlaces
(acquisition, attention)(acquisition, attention)
OrganizationOrganization (performance)(performance)
Three Levels of ProductThree Levels of Product
Core benefitCore benefit
WarrantyWarranty
FreeFreeDeli-Deli-veryvery
Serv.Serv.Maint.Maint.Syst.Syst.
InstallationInstallation
Augmented ProductAugmented ProductFormal ProductFormal Product Core ProductCore Product
PackagingPackagingBrandBrandNameName
Quality Styling FeaturesQuality Styling Features
Kotler adds two more levelsKotler adds two more levelsKotler adds two more levelsKotler adds two more levels
Potential product
Augmented product
Expected product
Basic product
Core benefit
Expected ProductExpected Product
A set of attributes andA set of attributes andconditions that buyersconditions that buyersnormally expect from a normally expect from a productproductIn a hotel: clean towelsIn a hotel: clean towelsand rooms etc.and rooms etc.
Potential ProductPotential Product
All the augmentations andAll the augmentations andtransformations the producttransformations the productmight ultimately under gomight ultimately under goin thein the future.future.
CLASSIFICATION OF PRODUCTSCLASSIFICATION OF PRODUCTS
NEED FOR A TAXONOMY OFNEED FOR A TAXONOMY OFPRODUCTSPRODUCTS
NOTE: CLASSIFICATION OF CONSUMERNOTE: CLASSIFICATION OF CONSUMERPRODUCTS IS BASED ON CONSUMPTIONPRODUCTS IS BASED ON CONSUMPTIONBEHAVIOR OF THE CONSUMERS.BEHAVIOR OF THE CONSUMERS.PHYSICAL CHARACTERISTICS OF PRODUCTSPHYSICAL CHARACTERISTICS OF PRODUCTSARE NOT A DETERMINANT FACTOR ARE NOT A DETERMINANT FACTOR
PRODUCTSPRODUCTS
CONVENIENCE P.CONVENIENCE P.
SHOPPING P.SHOPPING P.
SPECIALTYSPECIALTY
UNSOUGHT P.UNSOUGHT P.
STAPLESSTAPLES
IMPULSE P.IMPULSE P.
EMERGENCY P.EMERGENCY P.HOMOGENEOUS HOMOGENEOUS HETEROGENEOUSHETEROGENEOUS
NEWNEWREGULARREGULAR
THE CHARACTERISTICS OF GOODSTHE CHARACTERISTICS OF GOODSTHEORYTHEORY
PPrroodduuccttss
CharacteristicsCharacteristics
redred
oranorangege
yel-yel-lowlow
repl.repl.raterate
grossgrossmarginmargin
adj.adj. time/time/cons.cons.
srchsrchtimetime
HH
MM
LL
LL
MM
HH
LL
MM
HH
LL
MM
HH
LL
MM
HH
Conceptual Representation of a Conceptual Representation of a Product MixProduct Mix
Prod. line 1Prod. line 1
Prod. line 2Prod. line 2
Prod. line 3Prod. line 3
Prod. line 4Prod. line 4
lengthlength
wwiiddtthh
1a1a 1b 1c1b 1c
2a2a
3a 3b 3c 3d 3e3a 3b 3c 3d 3e
4a 4b 4c4a 4b 4c
Number of Items: 12Number of Items: 12Number of lines: 4Number of lines: 4 Average: 3Average: 3
Product-Mix Decisions Product-Mix Decisions
Width (how many product lines)Width (how many product lines)
Length (number of items in theLength (number of items in theline)line)
Internal Consistency (how Internal Consistency (how closely product lines are relatedclosely product lines are relatedin end use, production,in end use, production,distribution and so one.distribution and so one.
Detergents Toothpaste Bar SoapDetergents Toothpaste Bar Soap
Ivory Snow ‘30Ivory Snow ‘30Dreft 1933Dreft 1933Tide 1946Tide 1946Cheer 1950Cheer 1950Oxydol 1952Oxydol 1952Dash 1954Dash 1954Bold 1965Bold 1965Gain 1966Gain 1966Era 1972Era 1972Solo 1979Solo 1979
Gleem 1952Gleem 1952Crest 1955Crest 1955Denquel 1980Denquel 1980
Ivory 1879Ivory 1879Kirk’s 1885Kirk’s 1885Lava 1893Lava 1893Camay ‘26Camay ‘26Zest 1952Zest 1952SafeguardSafeguard19631963Coast 1974Coast 1974
Disposable Diapers Tissue Disposable Diapers Tissue
Pampers 1961Pampers 1961Luvs 1976Luvs 1976
Charmin 1928Charmin 1928White Cloud ‘58White Cloud ‘58Puffs 1960Puffs 1960Banner 1982Banner 1982
Product Mix DecisionsProduct Mix Decisions
It is mainly a portfolio It is mainly a portfolio Decision:Decision:To add a new product line orTo add a new product line ordelete an existing one,delete an existing one,shorten its product line, etc.shorten its product line, etc.
Product Line DecisionsProduct Line Decisions
Product Line Analysis:Product Line Analysis:
1. Sales and Profit analysis1. Sales and Profit analysis 2. Product Line Market2. Product Line Market Profile (Product’s positionProfile (Product’s position relative to the competingrelative to the competing brands). brands).
Product Line DecisionsProduct Line Decisions
Product Line Length DecisionsProduct Line Length Decisions--Upward StretchUpward Stretch--Downward StretchDownward Stretch--Two Way StretchTwo Way Stretch--Line FillingLine Filling((adding itemsadding items
within the present range)within the present range)
--PositioningPositioning (repositioning)(repositioning) Product Drop DecisionsProduct Drop Decisions
Individual Product DecisionsIndividual Product Decisions
1. Product Quality1. Product Quality
2. Product Features2. Product Features
3. Product Design3. Product Design
(Item Decisions)(Item Decisions)
Branding Strategies and Branding Strategies and DecisionsDecisions
Some basic definitions (brand,Some basic definitions (brand,brand name, brand mark, tradebrand name, brand mark, trademark)mark)
A brand is a name, termA brand is a name, termsign, symbol, or design or asign, symbol, or design or acombination of them, intendedcombination of them, intendedto identify the goods andto identify the goods andservices of one seller or a services of one seller or a group of sellers, and to group of sellers, and to differentiate them from thosedifferentiate them from thoseof the competitors.of the competitors.
A Definition of BrandA Definition of Brand
Brand Mark, Brand NameBrand Mark, Brand Nameand Trade Markand Trade Mark
Sounds as trademarks!Sounds as trademarks!Branding in illicit marketsBranding in illicit markets
A brand is a complex symbolA brand is a complex symbol::
ItIt may say somethingmay say somethingabout the attributes of aabout the attributes of aproduct, its values, culture of product, its values, culture of the country, and personalitythe country, and personalityof producer andof producer and user.user.DeepDeep vsvs shallowshallow brandsbrands
Benefits of BrandingBenefits of Branding
1. Provides useful information1. Provides useful information for the consumerfor the consumer2. Helps the seller to segment2. Helps the seller to segment its marketits market3. Legal protection3. Legal protection
The Concept of Brand EquityThe Concept of Brand Equity
Brand equity is the valueBrand equity is the valueconsumers assign to a brandconsumers assign to a brandabove and beyond any specificabove and beyond any specificfunctional characteristics of functional characteristics of of the product.of the product.
refers to:refers to:capitalizing on brand equitycapitalizing on brand equityby placing the existing brandby placing the existing brandname onto new products.name onto new products.(family branding, brand(family branding, brandextension etc.)extension etc.)
Brand Leverage:Brand Leverage:
Coca Cola $36 BillionCoca Cola $36 BillionMarlboro $33 BillionMarlboro $33 Billion
Advantages of brand equityAdvantages of brand equity
The world’s valuable brands:The world’s valuable brands:
Branding DecisionsBranding Decisions
Brand-sponsor DecisionBrand-sponsor Decision
Manufacturers brands vs. Manufacturers brands vs. Distributors brandsDistributors brands
(The battle of brands)(The battle of brands)
Individual brand vs Family brandIndividual brand vs Family brand(P&G and GE)(P&G and GE)Separate Family brand namesSeparate Family brand names (Sears for example)(Sears for example)
Company Trade name combinedCompany Trade name combinedwith individual brand nameswith individual brand names(Kellogg for example)(Kellogg for example)
Brand Name DecisionsBrand Name Decisions
Types of brandsTypes of brands
Manufacture RetailerManufacture RetailerPromotionalPromotionalActivitiesActivities
Promotes Promotes the brandthe brand
Does not Does not promotepromotethe brandthe brand
Sources of brand identificationSources of brand identification
NationalNationalBrandBrand
ControlledControlledBrandBrand
GenericGenericBrandBrand
PrivatePrivateBrandBrand
Brand Identification StrategiesBrand Identification Strategies
Brand Name Corp. NameBrand Name Corp. Name
SingleSingleBrandBrand
MultibrandMultibrand
IndividualIndividualBrandBrand
CorporateCorporateBrand Brand NameName
Product-Product-linelineBrandingBranding
Family Family NameName
Good Brand Names:Good Brand Names:Good Brand Names:Good Brand Names:
SuggestProductBenefits
Distinctive
Lack PoorForeign
LanguageMeanings
SuggestProductQualities
Easy to:PronounceRecognizeRemember
Packaging Strategy and Decisions Packaging Strategy and Decisions
Advantages:Advantages:1. Aid new product strategy1. Aid new product strategy2. Provide access to channels2. Provide access to channels3. Support pricing strategy3. Support pricing strategy4. Serve as part of promotion4. Serve as part of promotion5. Provide protection and 5. Provide protection and containmentcontainment66. . Provide information to consumersProvide information to consumers
PackagingPackaging
Functions of packaging:Functions of packaging:
1. Containment - hold for1. Containment - hold for transportationtransportation
2. Protection (from content:2. Protection (from content: acid)acid)
3. Facilitating Function (usage3. Facilitating Function (usage assistance and information. assistance and information.
3. Promotion3. Promotion
4. Miscellaneous, reusability of4. Miscellaneous, reusability of package, ecologicalpackage, ecological requirements legal regulations.requirements legal regulations.
Functions of packaging:Functions of packaging:Cont.Cont.
Packaging ConceptPackaging Concept
The packaging concept definesThe packaging concept defineswhat the package shouldwhat the package shouldbasically be or do for the basically be or do for the particular product.particular product.