10Product Concept

Professor Close

Product Planning • Product: - Anything a customer gets in an exchange (good, bad)

– Need satisfying offerings (Hallmark)– Can be a good or a service– Services are “products” too

Good

Tangible

In advance

Possible

Possible

Consistent

Some Characteristics

Nature

Production simultaneity

Storage/ Perishability

Transport

Quality/ Heterogeneity

Service (def) deed for another

Intangible

“Close” to the customer

Impossible

Impossible

Inconsistent

Product Planning • Quality (What does it mean?)

– Product’s ability to satisfy customer’s needs/requirements.

– Consistency (McDonalds and what other companies?)

– Relative quality – similar products against each other

What do you think are some What do you think are some quality products? Why?quality products? Why?

Consumer Products

• General classification: what types of customers will use them?

• Businesses B2B or consumers B2C• Consumer products:

• For “final” users• Classifying consumer products

• How consumers shop• How consumers think about them

– Perception usage varies (among food items and what other product categories?)

4 Types of Consumer Products

1. Convenience– Little time/effort; frequent purchase– Intense distribution– Substitutes acceptable– Low price (grocery products)

2. Shopping: time comparing alternatives; less frequent purchase, low loyalty– Homogeneous: seen as same; want bargain – Heterogeneous: seen as different; want quality;

salespeople help desired – Marketing: fewer outlets, higher markups

4 Types of B2C Products, cont.

3. Specialty: is shopping an end, pleasurable; willingness makes it specialty

• Planned purchase: strong desire and effort (collectors); alternatives unacceptable

• Amount of search (Beanie Babies; xmas toys)

• Limited availability is OK; high markups

4. Unsought (tombstones; towing; dentists)

• Only want “in a pinch;” infrequent and no effort; lack knowledge or desire

• Promotion; sales (Dentists for phobic patients)

• What are your unsought products? What are your unsought products?

What type of product?

What type of product?

B2B Products

• Businesses (B2B):– Use to make other products– Bought and resold– Used for corporate or organization’s use– Less shopping is involved (vs. B2C)– Classify via:

• How buyers think about the product• What type of customer will use the product• How the product is used

Product Items, Lines, and Mixes

• Item: version of a product (Diet Coke)• Line: group of closely related products (Coca-

Colas soft drinks)• Mix: all the products a company offers (water,

energy drinks, soda)• Modify and reposition (Old Navy)

Should Old Navy Reposition???

Branding – Identify product via letters, terms, designs– Branding strategies:

– Brand name – letters associated with product– Trademark/servicemark – words, symbols for

one firm (legally protected)– Co-brand (apple ipod and coach)– Family – one brand, many products

(Hershey’s, Campbell’s)– Generics – no brand (signal of savings)– Dealer/private label: by store– National/manufacturer: by vendor

Hot or not…What are the most equitable brands?

Equitable Brands

1. Apple

2. Blackberry

3. Google

4. Amazon

5. Yahoo

6. eBay

7. Red Bull

8. Starbucks

9. Pixar

10. Coach

11. Whole Foods

12. EA Sports/Games

13. MTV

14. Samsung

15. Victoria’s Secret

16. Nike

Branding

• Brand equity: financial value of the brand name

– Value (are we just paying for the name?)• Consumer – familiarity • Seller- be authentic, true to your people

– Less promotion (Reese’s)– Legal protection (Coke; Olympic rings)

Better Branding; Less Promotion

Packaging

• Defined as:– Container or wrapping

• Elements:

1. Function (fridgepack; pill bottles)

2. Promotion (L’eggs pantyhose; square Chanel)• Issues:

- UPC codes needed– Information: government guidelines (good or bad??)– Waste (kids lunches)– Size (changing??)

Labeling

• Ethics (size of drink and sodium, calories)• Warrantees• Persuasive labeling (little information; focus on

logo)• Informational labeling (helps your buying

decision; lessens cognitive dissonance)• Your examples of each type of labeling?Your examples of each type of labeling?

Summary

• Global branding issues

• Cobranding

• Trademarks/service marks

• Brand equity

• Branding strategies

• Product packaging/labeling