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Product ConceptsProduct Concepts

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Product

Everything, both favorable and

unfavorable, that

a person receives

in an exchange.

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What Is a Product?

PromotionPromotion

Place (Distribution)Place (Distribution)

PricePrice

Product Product Product is the “heart” of

Marketing Mix

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Product Classifications

BusinessBusinessProductProduct

BusinessBusinessProductProduct

Consumer Consumer ProductProduct

Consumer Consumer ProductProduct

A product used to manufacture other goods or services, to facilitate an

organization’s operations, or to resell to other consumers.

A product used to manufacture other goods or services, to facilitate an

organization’s operations, or to resell to other consumers.

Product bought to satisfy an individual’s personal wants

Product bought to satisfy an individual’s personal wants

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Types of Consumer Products

UnsoughtProducts

UnsoughtProducts

SpecialtyProductsSpecialtyProducts

ShoppingProducts

ShoppingProducts

ConvenienceProducts

ConvenienceProducts

ConsumerProducts

ConsumerProducts

BusinessProductsBusinessProducts

PRODUCTSPRODUCTS

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Types of Consumer Products

ConvenienceProduct

ConvenienceProduct

ShoppingProduct

ShoppingProduct

SpecialtyProduct

SpecialtyProduct

UnsoughtProduct

UnsoughtProduct

A relatively inexpensive item that merits little shopping effort.A relatively inexpensive item that merits little shopping effort.

A product that requires comparison shopping, because it is usually more expensive and found in fewer stores.

A product that requires comparison shopping, because it is usually more expensive and found in fewer stores.

A particular item that consumerssearch extensively for and are reluctant to accept substitutes.

A particular item that consumerssearch extensively for and are reluctant to accept substitutes.

A product unknown to the potential buyer or a known product that the buyer does not actively seek.

A product unknown to the potential buyer or a known product that the buyer does not actively seek.

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Product Items, Lines, and Mixes

Product ItemProduct Item

Product LineProduct Line

Product MixProduct Mix

A specific version of a product that can be designated as a distinct offering among an organization’s products.

A specific version of a product that can be designated as a distinct offering among an organization’s products.

A group of closely-related product items.

A group of closely-related product items.

All products that an organization sells.

All products that an organization sells.

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Gillette’s Product Lines and Mix

Blades and Writingrazors Toiletries instruments Lighters

Mach 3 Series Paper Mate CricketSensor Adorn Flair S.T. Dupont Trac II ToniAtra Right GuardSwivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry LookTwin Injector Dry Idea Techmatic Brush Plus

Width of the product mixWidth of the product mix

De

pth

of

the

pro

du

ct

line

sD

ep

th o

f th

e p

rod

uc

t lin

es

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Example: Retail Product Strategy What you offer to the consumer

(product/product mix/core product/augmented product)

How you offer it (packaging, pricing, range, door delivery, hours of operation, etc)

From where you offer it (the shelving pattern, location of the product on the shelf, etc)Equals Sales and Profits

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Benefits of Product Lines

Equivalent QualityEquivalent Quality

Efficient Sales andDistribution

Efficient Sales andDistribution

Standardized Components

Standardized Components

Package UniformityPackage Uniformity

Advertising EconomiesAdvertising Economies

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Product Mix Width

Diversifies risk

Capitalizes on established reputations

The number of product lines an organization

offers.

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Product Line Depth

Attracts buyers with different preferences

Increases sales/profits by further market segmentation

Capitalizes on economies of scale

Evens out seasonal sales patterns

The number of product items in a product line.

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Adjustments

Product Modification

Product Modification

ProductRepositioning

ProductRepositioning

Product LineExtension or Contraction

Product LineExtension or Contraction

Adjustments to Adjustments to Product Items,Product Items,

Lines, and MixesLines, and Mixes

Adjustments to Adjustments to Product Items,Product Items,

Lines, and MixesLines, and Mixes

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Types of Product Modifications

Quality Modification

Quality Modification

Functional ModificationFunctional

Modification

Style Modification

Style Modification

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Planned Obsolescence

The practice of modifying products so those that have already been sold become obsolete before

they actually need replacement.

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Repositioning

Changing Demographics

Changing Demographics

Declining SalesDeclining Sales

Changes in Social

Environment

Changes in Social

Environment

Why reposition Why reposition established brands?established brands?

Why reposition Why reposition established brands?established brands?

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Product Line Extension

Adding additional products to an existing product line in order to compete more broadly

in the industry.

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Product Line Contraction

Some products have low sales or cannibalize sales of other items

Resources are disproportionately allocated to slow-moving products

Items have become obsolete because of new product entries

Symptoms of Symptoms of Product Line Product Line

OverextensionOverextension

Symptoms of Symptoms of Product Line Product Line

OverextensionOverextension

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Brand

A name, term, symbol, design, or combination thereof that identifies a

seller’s products and differentiates them from competitors’ products.

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Branding

Brand Name

Brand Name

BrandMark

BrandMark

Brand EquityBrand Equity

That part of a brand that can be spoken, including letters, words, and numbers.

That part of a brand that can be spoken, including letters, words, and numbers.

The elements of a brand that cannot be spoken.

The elements of a brand that cannot be spoken.

The value of company and brand names.The value of company and brand names.

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Benefits of Branding

Product Identification

Product Identification Repeat SalesRepeat Sales New Product

SalesNew Product

Sales

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An Effective Brand Name Is easy to pronounce

Is easy to recognize and remember

Is short, distinctive, and unique

Describes the product, use, and benefits

Has a positive connotation

Reinforces the product image

Is legally protectable

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Branding Strategies

BrandBrand No BrandNo Brand

Manufacturer’s Brand

Manufacturer’s Brand Private BrandPrivate Brand

IndividualBrand

IndividualBrand

Family Brand

Family Brand

Combi-nation

Combi-nation

IndividualBrand

IndividualBrand

Family Brand

Family Brand

Combi-nation

Combi-nation

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Generic Brand

A no-frills, no-brand-name, low-cost product that is simply identified by its product category.

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Manufacturers’ Brands VersusPrivate Brands

Manufacturers’ Manufacturers’ BrandBrand

Manufacturers’ Manufacturers’ BrandBrand

Private Private BrandBrand

Private Private BrandBrand

The brand name of a manufacturer.

The brand name of a manufacturer.

A brand name owned by a wholesaler or a retailer. Also

known as a private label or store brand.

A brand name owned by a wholesaler or a retailer. Also

known as a private label or store brand.

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Advantages of Manufacturers’ Brands

Develop customer loyalty

Attract new customers

Enhance prestige

Offer rapid delivery, can carry less inventory

Ensure dealer loyalty

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Advantages of Private Brands

Earn higher profits

Less pressure to mark down prices

Manufacturer may drop a brand or become a direct competitor to dealers

Ties customer to wholesaler or retailer

No control over distribution of manufacturers’ brands

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Individual Brands VersusFamily Brands

Individual Individual BrandBrand

Individual Individual BrandBrand

Family Family BrandBrand

Family Family BrandBrand

Using different brand names for different products.

Using different brand names for different products.

Marketing several different products under the same

brand name.

Marketing several different products under the same

brand name.

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Cobranding

IngredientBranding

IngredientBranding

Cooperative Branding

Cooperative Branding

Complementary Branding

Complementary Branding

Types of CobrandingTypes of CobrandingTypes of CobrandingTypes of Cobranding

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Trademarks

Many parts of a brand and associated symbols qualify for trademark protection

The mark has to be continuously protected

Rights continue for as long as it is used

A Trademark is the A Trademark is the exclusive right to exclusive right to

use a branduse a brand

A Trademark is the A Trademark is the exclusive right to exclusive right to

use a branduse a brand

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Packaging

FunctionsFunctionsofof

PackagingPackaging

FunctionsFunctionsofof

PackagingPackaging

Contain and ProtectContain and Protect

PromotePromote

Facilitate Storage, Use, and Convenience

Facilitate Storage, Use, and Convenience

Facilitate RecyclingFacilitate Recycling

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Labeling

PersuasivePersuasive

Focuses on promotional theme

Information is secondary

InformationalInformational

Helps make proper selections

Lowers cognitive dissonance

Includes use/care

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Universal Product Codes

A series of thick and thin vertical lines (bar

codes), readable by computerized optical

scanners, that represent numbers used

to track products.

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Product Warranties

WarrantyWarranty

ExpressWarrantyExpressWarranty

Implied WarrantyImplied

Warranty

A confirmation of the quality or performance of a good or service.A confirmation of the quality or performance of a good or service.

A written guarantee.A written guarantee.

An unwritten guarantee that the good or service is fit for the purpose for which it was sold. (UCC)

An unwritten guarantee that the good or service is fit for the purpose for which it was sold. (UCC)

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Product Warranties

WarrantiesWarrantiesWarrantiesWarranties

Written Guarantee

Implied Implied WarrantyWarrantyImplied Implied WarrantyWarranty

Express Express WarrantyWarrantyExpress Express WarrantyWarranty

Unwritten Guarantee