PRODUCT Kotler, P. & Armstrong, G., 2006, Principles of Marketing, New Jersey: Pearson Education, Inc., Ch.8

What is a Product? A Product is anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need. Includes: Physical Objects Services Events Persons Places Organizations Ideas Combinations of the above

What is a Service? A Service is a form of product that consist of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. Examples include: Banking Hotels Tax Preparation Home Repair Services

Levels of Product Core Benefit or Installation Packaging Brand Name Quality Level Packaging Design Features Delivery & Credit Installation Warranty After- Sale Service Core Benefit or Actual Product Core Product Augmented Product

Product Classifications Consumer Products Convenience Products Buy frequently & immediately Low priced Mass advertising Many purchase locations i.e Candy, newspapers Shopping Products Buy less frequently Higher price Fewer purchase locations Comparison shop i.e Clothing, cars, appliances Unsought Products New innovations Products consumers don’t want to think about these products Require much advertising & personal selling i.e Life insurance, blood donation Specialty Products Special purchase efforts High price Unique characteristics Brand identification Few purchase locations i.e Lamborghini, Rolex

Product Classifications Industrial Products Materials and Parts Capital Items Supplies and Services

Product Classifications Other Marketable Entities Activities undertaken to create, maintain, or change the attitudes and behavior toward the following: Organizations - Profit (businesses) and nonprofit (schools and churches). Persons – Politicians, entertainers, sports figures, doctors and lawyers. Places - Business sites and tourism. Ideas (social ideas marketing) – public health campaigns, environmental campaigns, and others such as family planning, or human rights.

Individual Product Decisions Product Attributes Branding Labeling Packaging Product Support Services

Product Attributes Product Quality Product Features Product Style Developing a Product or Service Involves Defining the Benefits that it Will Offer Such as: Product Quality Product Features Product Style & Design Ability of a Product to Perform Its Functions; Includes Level & Consistency Help to Differentiate the Product from Those of the Competition Process of Designing a Product’s Style & Function

BRAND BRAND NAME* BRAND MARK* TRADEMARK* A name, term, sign, symbol, or design, or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. BRAND NAME* Words, letters, and/or number that can be vocalized. BRAND MARK* Part of the brand that appears in the form of a symbol, design, or distinctive color or lettering. TRADEMARK* A brand that has been adopted by a seller and given legal protection. * Stanton, W.J., Etzel, M.J., & Walker, B.J., 1994, Fundamentals of Marketing, USA: McGraw-Hill, Inc., p. 262

Branding Consistency Quality & Value Attributes Identification Advantages of Brand Names Brand Equity High Brand Loyalty Strong Brand Association Name Awareness Perceived Quality

Major Branding Decisions Brand Name Selection Selection Protection Major Branding Decisions Brand Sponsor Manufacturer’s Brand Private Brand Licensed Brand Co-branding Brand Strategy Line Extensions Brand Extensions Multibrands New Brands

Packaging Activity of designing and producing the container or wrapper for a product. Packaging used to just contain and protect the product. Packing now has promotional value and marketers should: Establish a packaging concept, Develop specific elements of the package, Tie together elements to support the positioning and marketing strategy.

Labeling Printed information appearing on or with the package. Performs several functions: Identifies product or brand Describes several things about the product Promotes the product through attractive graphics.

PRODUCT MIX (OR PRODUCT ASSORTMENT) PRODUCT LINE A group of products that are 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 MIX (OR PRODUCT ASSORTMENT) The set of all product lines and items that a particular seller offer for sale.

PROCTER & GAMBLE’S PRODUCT PORTFOLIO PRODUCT LINES PROCTER & GAMBLE’S PRODUCT PORTFOLIO

Product Mix Decisions Consistency Width - number of different product lines Consistency Length - total number of items in product lines Product Mix - all the product lines & items offered Depth - number of versions of each product

PRODUCT LIFE CYCLE Sales/Profit Sales + Profit Period - I II III IV

PRODUCT LIFE-CYCLE SALES COSTS PER CUSTOMER PROFITS CUSTOMERS COMPETITORS INTRODUCTION LOW HIGH NEGATIVE INNOVATORS FEW GROWTH RAPIDLY RISING AVERAGE RISING EARLY ADOPTERS GROWING NUMBER MATURITY PEAK MIDDLE MAJORITY STABLE NUMBER – BEGIN TO DECLINING DECLINE DECLIN-ING DECLINING LAGGARDS DECLINING NUMBER

PRODUCT LIFE-CYCLE MARKETING OBJECTIVES PRODUCT PRICE DISTRIBUTION INTRODUCTION CREATE PRODUCT AWARENESS & TRAIL OFFER BASIC PRODUCT USE COST-PLUS BUILD SELECTIVE DISTRIBUTION GROWTH MAXIMIZE MARKET SHARE OFFER PRODUCT EXTENSIONS, SERVICE, WARRANTY PRICE TO PENETRATE MARKET BUILD INTENSIVE DISTRIBUTION MATURITY MAXIMAZE PROFIT WHILE DEFNDING MARKET SHARE DIVERSIFY BRAND & MODELS PRICE TO MATCH/BEAT COMPETITORS BUILD MORE INTENSIVE DISTRIBUTION DECLINE REDUCE EXPENDITURE & MILK THE BRAND PHASE OUT WEAK ITEMS CUT PRICE GO SELECTIVE PHASE OUT UNPROFITABLE OUTLETS

PRODUCT LIFE-CYCLE ADVERTISING SALES PROMOTION INTRODUCTION GROWTH BUILD PRODUCT AWARENESS AMONG EARLY ADAPTORS & DEALERS USE HEAVY SALES PROMOTION TO ENTICE TRIAL GROWTH BUILD AWARENESS & INTEREST IN THE MASS MARKET REDUCE THE TAKE ADVANTAGE OF HEAVY CONSUMER DEMAND MATURITY STRESS BRAND DIFFERENCES & BENEFITS INCREASE TO ENCOURAGE BRAND SWITCHING DECLINE REDUCE THE LEVEL NEEDED TO RETAIN HARD-CORE LOYALS REDUCE TO MINIMAL LEVEL

NEW PRODUCT DEVELOPMENT STAGES IDEA GENERATION INTERNAL IDEA SOURCES FORMAL R&D EXECUTIVES & EMPLOYEES EXTERNAL IDEA SOURCES CUSTOMERS COMPETITORS DISTRIBUTORS & SUPPLIERS

NEW PRODUCT DEVELOPMENT STAGES IDEA SCREENING CONCEPT DEVELOPMENT & TESTING MARKETING STRATEGY DEVELOPMENT BUSINESS ANALYSIS PRODUCT DEVELOPMENT TEST MARKETING COMMERCIALIZATION