Chapter 09 Web

7/29/2019 Chapter 09 Web

1/39

www.mhhe.com/fourps

CHAPTER NINE

For use only with

Perreault/Cannon/McCarthy

or Perreault/McCarthy texts.

2008 McGraw-Hill

Companies, Inc.

McGraw-Hill/Irwin

Elements of ProductPlanning for Goods

and Services


2/39

1. Understand what Product really means.2. Know the key differences between goods and

services.

3. Understand how product classes can help a

marketing manager plan marketing strategies.4. Know the differences among the various

consumer and business product classes.

5. Understand what branding is and how to use it in

strategy planning.

When we finish this lecture you should


3/39

6. Understand the importance ofpackaging instrategy planning.

7. Understand the role ofwarranties in strategyplanning.

When we finish this lecture you should


4/39

Product Decisions for Marketing Strategy Planning(Exhibit 9-1)

e.g. my diet pizza


5/39

Productidea

Productclasses

Brand Package Warranty

Product Decisions for Marketing Strategy Planning(Exhibit 9-1)

CH 10: Product

Management &

New-Product

Development

CH 9: Elements of

Product Planning forGoods & Services


6/39

Product Quality and Customer Needs

1. A Product is a need-satisfying offering of a frim2. Quality means a products ability to satisfy customer needs


7/39

Relative Quality


8/39

Goods and/or Services Are the Product (Exhibit 9-2)


9/39

Differences in Goods and Services

Devoted toerasing

stereotypes

Goods have a physical existence. Services are deeds performed for a customer.

Products are produced first, then sold for later consumption. Services are produced and

consumed at the same time.

Services cannot be stored or transported to another location for sale.


10/39

Whole Product Lines Must Be Developed Too

A product assortment is the set of all product lines and individual products

that a firm sells. A product line is a set of individual products that are closelyrelated. An individual product is a particular product within a product line.

Discussion Question:Think about Sony, an electronics manufacturer.Can you describe its: a.) product assortment; b.) product lines; and c.)

individual products?

A


11/39

Product Classes Help Plan Marketing Strategy

Consumer Products Business Products


12/39

Homogeneous

Shopping Products

Heterogeneous

Shopping Products

Shopping Products

Homogeneous

Shopping Products

Heterogeneous

Shopping Products

Shopping Products

Specialty Products

Convenience Products Impulse Products

Emergency Products

Staples

New Unsought

Products

Regular Unsought

Products

Unsought Products

Convenience Products Impulse Products

Emergency Products

Specialty Products

Staples

Consumer Product Classes

Product comparisons are made

Purchased quickly with little effort

No close substitutes

A

D


13/39

One Product May Be Seen Several Ways


14/39

Jack White wanted to purchase a new dress shirt. He wentto a local department store, toured the mens department,

and thought all the brands looked about the same. He

decided to buy the store brand shirt, because it was the

cheapest. For Jack, the new shirt was a(n):

A. convenience product.

B. heterogeneous shopping product.

C. specialty product.D. homogeneous shopping product.

E. impulse product.

Checking your knowledge


15/39

Jack White wanted to purchase a new dress shirt. He wentto a local department store, toured the mens department,

and thought all the brands looked about the same. He

decided to buy the store brand shirt, because it was the

cheapest. For Jack, the new shirt was a(n):

A. convenience product.

B. heterogeneous shopping product.

C. specialty product.D.homogeneous shopping product.

E. impulse product.


B i P d A Diff


16/39

Inelastic Industry DemandInelastic Industry Demand

Derived DemandDerived Demand

Business Products Are Different

Tax Treatments Differ

B i P d Cl H Th A D fi d


17/39

Business Product Classes How They Are Defined

MRO SuppliesMRO Supplies

Component

Parts &Materials

Component

Parts &Materials

Raw

Materials

Raw

Materials

AccessoriesAccessories

InstallationsInstallations

Professional

Services

BusinessProductClasses


18/39

Branding Needs a Strategy Decision, Too (Exhibit 9-5)

Branding means the use of a name, term, symbol, or design to identify a product

my diet pizza branded as Hungry Girl diet pizza

C diti F bl t B di
http://www.hungry-girl.com/index.phphttp://www.hungry-girl.com/index.php


19/39

Conditions Favorable to Branding

Economies of

Scale

Economies of

Scale

Market Price

Can Be HighEnough

Market Price

Can Be HighEnough

Dependable,

Widespread

Availability

Dependable,

Widespread

Availability

Best Value forthe Price

Best Value forthe Price

Easy to Label

and Identify

Easy to

Label and

Identify

Favorable

Shelf orDisplay Space

KeyIssues

A hi i B d F ili it I N t E


20/39

Brand Rejection

Brand Non-Recognition

Brand

Recognition

BrandPreference

Achieving Brand Familiarity Is Not Easy

Brand

Insistence

Brand familiarity means how well customers recognize and accept a companys brand.

A


21/39

Brand Familiarity

More of yourcustomers askfor Fix-A-Flat

by name thanall of our

competitorscombined.

You just cant

buy that kindof brand

recognition,but you can

sell it. Fix-A-Flat: SpareYourself.

Th Ri ht B d N C H l


22/39

Short & SimpleShort & Simple

Easy to Spell & ReadEasy to Spell & Read

Easy to Recognize & RememberEasy to Recognize & Remember

Easy to PronounceEasy to Pronounce

Can Pronounce in Only One WayCan Pronounce in Only One WayCan Pronounce in All LanguagesCan Pronounce in All Languages

Suggests Product BenefitsSuggests Product Benefits

Meets Packaging/Labeling NeedsMeets Packaging/Labeling Needs

No Undesirable ImageryNo Undesirable Imagery

Always TimelyAlways Timely

Adapts to Any Advertising MediumAdapts to Any Advertising Medium

Legally Available for Use

The Right Brand Name Can Help(Exhibit 9-6)

P t ti B d N & T d k


23/39

You Must Protect

Your Own

You Must Protect

Your Own

Lanham ActLanham Act

Counterfeiting Is Accepted

In Some Cultures

Protecting Brand Names & Trademarks

Lanham Act spells out what kinds of marks (including brand names) can be

protected and the exact method of protecting them.D

What Kind of Brand to Use?
http://forum.tayyar.org/f7/funny-counterfeit-brand-names-counterfeit-items-pictures-please-38796/http://forum.tayyar.org/f7/funny-counterfeit-brand-names-counterfeit-items-pictures-please-38796/http://forum.tayyar.org/f7/funny-counterfeit-brand-names-counterfeit-items-pictures-please-38796/


24/39

Individual

BrandIndividual

Brand

Licensed

BrandLicensed

BrandFamily Brand

BrandChoices

Family Brand

What Kind of Brand to Use?

Generic

Brand

Who Should Do the Branding?


25/39

Battleof the

Brands

ManufacturerBrands

Also called

national brands

Created/owned

by producers

Develop demand

across manymarkets

Dealer Brands

Also called

private brands

or store brands Created/owned

by middlemen

Create highermargins for

dealers

Who Should Do the Branding?



26/39

Targets Cherokee brand of mens clothing is available

only at Target stores. The brand provides a low-costalternative to other mens fashions available at department

stores and via catalogs. The Cherokee brand is a(n):

A. manufacturer brand.

B. dealer brand.

C. licensed brand.

D. national brand.E. generic brand.




27/39

Targets Cherokee brand of mens clothing is available

only at Target stores. The brand provides a low-costalternative to other mens fashions available at department

stores and via catalogs. The Cherokee brand is a(n):

A. manufacturer brand.

B. dealer brand.

C. licensed brand.

D. national brand.E. generic brand.


The Strategic Importance of Packaging


28/39

Packaging Can

Lower

Distribution Costs

Packaging Can

Lower

Distribution Costs

Packaging Sends

a Message

Packaging Sends

a Message

Packaging Can

Enhance the

Product

Packaging Can

Enhance the

Product

The Strategic Importance of Packaging

UPC Codes

Speed Handling

D

What Is Socially Responsible Packaging?
http://justjared.buzznet.com/2008/08/20/michael-phelps-kelloggs-corn-flakes/http://justjared.buzznet.com/2008/08/20/michael-phelps-kelloggs-corn-flakes/http://justjared.buzznet.com/2008/08/20/michael-phelps-kelloggs-corn-flakes/


29/39

Fair Packaging & Labeling Act

What Is Socially Responsible Packaging?

Laws Reduce Clutter & Confusion

Fair Packaging & Labeling Act

Ethical Decisions Remain

Laws Reduce Clutter & Confusion



30/39

Heinz has a new ketchup bottle that has the cap on the

bottom, instead of the top. The bottle uses gravity to helpthe consumer get every last drop of ketchup out of the

bottle. The cap is also designed to pour cleanly, so that

dried ketchup does not accumulate around the opening.

This new bottle demonstrates how packaging can:

A. promote product.

B. protect the product.

C. lower distribution costs.

D. incorporate UPC codes.E. enhance product usage.




31/39

Heinz has a new ketchup bottle that has the cap on the

bottom, instead of the top. The bottle uses gravity to helpthe consumer get every last drop of ketchup out of the

bottle. The cap is also designed to pour cleanly, so that

dried ketchup does not accumulate around the opening.

This new bottle demonstrates how packaging can:

A. promote product.

B. protect the product.

C. lower distribution costs.

D. incorporate UPC codes.E. enhance product usage.


Warranty Policies Are a Part of Strategy Planning


32/39

May Improve

Marketing Mix

Promises inWriting

Service

Guarantees

Promises inWriting

ServiceGuarantees

May Improve

Marketing Mix

Magnuson-Moss Act

Magnuson-Moss Act

Support May

Be Costly

Warranty Policies Are a Part of Strategy Planning

says that producers must

provide a clearly written warranty

e.g. Sit & Sleep guarantees

http://brainstormtech.blogs.fortune.cnn.com/2009/11/01/mac-share-grew-after-windows-7-debut/http://brainstormtech.blogs.fortune.cnn.com/2009/11/01/mac-share-grew-after-windows-7-debut/


33/39

McDonalds announced that at select locations, if drive-

through customers do not get exactly what they want withintwo minutes of placing the order, their next meal will be

free. This promise by McDonalds is a good example of

a(n):

A. service guarantee.

B. warranty.

C. unit price.

D. limited warranty.E. no-fault insurance policy.




34/39

McDonalds announced that at select locations, if drive-

through customers do not get exactly what they want withintwo minutes of placing the order, their next meal will be

free. This promise by McDonalds is a good example of

a(n):

A. service guarantee.

B. warranty.

C. unit price.

D. limited warranty.E. no-fault insurance policy.


You now


35/39

1. Understand what Product really means.2. Know the key differences between goods and

services.

3. Understand how product classes can help a

marketing manager plan marketing strategies.4. Know the differences among the various

consumer and business product classes.

5. Understand what branding is and how to use it instrategy planning.

You now

You now


36/39

6. Understand the importance of packaging instrategy planning.

7. Understand the role of warranties in strategyplanning.

You now

Key Terms


37/39

Product Quality Service Product assortment

Product line Individual product Consumer products Business products Convenience products Staples Impulse products

Emergency products Shopping products Homogeneous

shopping products

Heterogeneousshopping products Specialty products Unsought products

New unsoughtproducts Regularly unsought

products

Derived demand

Key Terms

Key Terms


38/39

Expense item

Capital item

Installations

Accessories

Raw materials

Farm products

Natural products

Components

Supplies

Professional services

Branding

Brand name

Trademark

Service mark

Brand familiarity

Brand rejection

Brand nonrecognition

Brand recognition

Brand preference

Brand insistence

Brand equity

Lanham Act

Key Terms

Key Terms


39/39

Family brand Licensed brand Individual brands Generic products

Manufacturer brands Dealer brands Private brands Battle of the brands Packaging Universal Product

Code (UPC)

Federal FairPackaging andLabeling Act

Warranty

Magnuson-Moss Act

Key Terms

Documents

Chapter 09 Web