08 The Product

At the heart of a great brand is a great product

Definitions Product Service Anything offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want. Service A form of product that consists of activities, benefits or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.

What is a Product? Products, Services, and Experiences Market offerings may consist of a combination of goods and services Experiences are used to differentiate offerings Levels of Product and Services Core benefit, actual and augmented product Product and Service Classifications Consumer products and industrial products

Three Levels of Product

Product Classification Schemes Durability Tangibility Use

Durability and Tangibility Nondurable goods Durable goods Services

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, appliances Specialty Products Special purchase efforts High price Unique characteristics Brand identification Few purchase locations i.e can be anything 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

Product and Service Classifications Consumer products Industrial products Materials and parts Capital items Supplies and services

Product and Service Decisions Key Decisions Product attributes Quality, features, style and design Branding Packaging Labeling Product support services Individual Product Product Line Product Mix

Packaging: The 5th P All the activities of designing and producing the container for a product.

Packaging has been influenced by… Self-service Consumer affluence Company/brand image Innovation opportunity

Functions of Labels Identifies Grades Describes Promotes

Product and Service Decisions Key Decisions Product line A group of products that are closely related because they may: function in a similar manner be sold to the same customer groups, be marketed through the same types of outlets fall within given price ranges Individual Product Product Line Product Mix

Product and Service Decisions Key Decisions Product line length Line stretching: adding products that are higher or lower priced than the existing line Line filling: adding more items within the present price range Individual Product Product Line Product Mix

Product and Service Decisions Key Decisions Product mix Also known as product assortment Consists of all the product lines and items that a particular seller offers for sale Individual Product Product Line Product Mix

Product and Service Decisions Key Decisions Product mix width: Number of different product lines carried by company Product line depth: Number of different versions of each product in the line Product mix consistency Individual Product Product Line Product Mix

Product width/length PRODUCT MIX WIDTH PRODUCT LINE LENGTH A company’s product mix has four dimensions: width, length, depth, and consistency. Product mix width refers to the number of different product lines the company carries. Product mix length refers to the total number of items the company carries within its product lines. Product mix depth refers to the number of versions offered of each product in the line. Product mix consistency refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. The company can increase its business in four ways. 1. It can add new product lines, widening its product mix. 2. It can lengthen its existing product lines. 3. It can add more versions of each product, deepening its product mix. 4. It can pursue more product line consistency. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

Brand A name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

The Role of Brands Identify the maker Simplify product handling Organize accounting Offer legal protection

The Role of Brands Signify quality Create barriers to entry Serve as a competitive advantage Secure price premium

Brand Equity The differential effect that brand knowledge has on consumer response to the marketing of that brand.

Branding Strategy Brands with strong equity have many competitive advantages: High consumer awareness Strong brand loyalty Helps when introducing new products Less susceptible to price competition

The 10 Most Valuable Brands (Source: Millward Brown) 2011 Brand Value (Billions) Apple $153 Google $115 IBM $101 McDonalds $78 CocaCola AT&T Marlboro $74 $70 $68 China Mobile $57 GE $50 ICBC $44

Brand Elements Brand names URLs Slogans Elements Logos Characters Symbols

Brand Elements

Brand Elements Companies often create product icons to develop an identity for their products. Many made-up creatures and personalities, such as Çelik, Sütaş İnek and Yumoş Ayı, are widely recognized figures in popular culture.

Brand Element Choice Criteria Memorable Meaningful Likeability Transferable Adaptable Protectible

Slogans Like a good neighbor, State Farm is there Just do it Nothing runs like a Deere Help is just around the corner Save 15% or more in 15 minutes or less We try harder We’ll pick you up Nextel – Done Zoom Zoom I’m lovin’ it Innovation at work This Bud’s for you Always low prices

Slogans Adını unutabilirsiniz, tadını asla! “Hayaaaatın tadıııı!” Farkı, fiyatı! Yok aslında birbirimizden farkımız, ama biz Osmanlı Bankası’yız. Ne biçim lastik buuu? Honda, hayat onda. Çakar çakmaz çakan çakmak. Bira bu kapağın altındadır. Citroen gelir, hayat değişir. Türkiye’nin motosikleti. Erkek sünnet olur, askerlik yapar, Permatik kullanır! Philips hayatımızı kolaylaştıracak. Kirlenmek güzeldir. Tefal, ne varsa sende var. Arçelik demek yenilik demek. Kalebodur, seramik budur.

Brand Strategy Key Decisions Three levels of positioning: Product attributes Least effective Benefits Beliefs and values Taps into emotions Brand Positioning Brand Name Selection Brand Sponsorship Brand Development

Brand Strategy Key Decisions Brand Positioning Brand Name Selection Good Brand Names: Suggest something about the product or its benefits Are easy to say, recognize and remember Are distinctive Are extendable Translate well into other languages Can be registered and legally protected Key Decisions Brand Positioning Brand Name Selection Brand Sponsorship Brand Development

Brand Strategy Key Decisions Manufacturer brands Private (store) brands Costly to establish and promote Higher profit margins Licensed brands Name and character licensing has grown Co-branding Advantages / disadvantages Brand Positioning Brand Name Selection Brand Sponsorship Brand Development

Arçelik New Refrigerators Four Brand Strategies Line Extension Arçelik New Refrigerators Multibrands Arçelik - Beko Brand Extension Arçelik TV-A/C New Brands OYAK - Tukaş Brand Name Existing New Product Category

Services Marketing Services Account for 74% of U.S. gross domestic product. Service industries include business organizations, government, and private not-for-profit organizations.

Four Services Characteristics

Nature and Characteristic of a Service Intangibility Inseparability Can’t be seen, tasted, felt, heard, or smelled before purchase. Can’t be separated from service providers. Quality depends on who provides them and when, where and how. Can’t be stored for later sale or use. Variability Perishability