12 Setting Product Strategy 1

12-2 Chapter Questions What are the characteristics of products and how can they be classified? How can companies differentiate products? How can a company build and manage its product mix and product lines? How can companies combine products to create strong co-brands or ingredient brands? How can companies use packaging, labeling, warranties, and guarantees as marketing tools?

12-3 Product Anything that can be offered to a market to satisfy a want or need.

12-4 Figure 12.2 Five Product Levels Core benefit Basic product Expected product Augmented product Potential product

12-5 Product Classification Schemes Durability Tangibility Use

12-6 Durability and Tangibility Nondurable goods Durable goods Services

12-7 Consumer Goods Classification Convenience Shopping Specialty Unsought (e.g., smoke detectors)

12-8 Industrial Goods Classification Materials and parts Capital items Supplies/business services

12-9 Product Differentiation Product form Features Performance Conformance Durability Reliability Reparability Style Design Ordering ease Delivery Installation Customer training Customer consulting Maintenance

12-10 The Product Hierarchy Need family (e.g., security) Product family (e.g., savings and income) Product class (e.g., financial instruments) Product line (e.g., life insurance) Product type (e.g., term life insurance) Item (SKU or product variant)

12-11 Product Systems and Mixes Product system Product mix Product assortment Depth Length Width Consistency

12-12 Product Line Analysis (i.t.o. sales, profit, & market profile) Core product Staples Specialties Convenience items Product line managers need to know the sales and profits of each item in their line in order to determine which items to build, maintain, harvest, and divest.

12-13 Line Stretching Down Market Stretch Up-Market Stretch Two-Way Stretch

12-14 Product-Mix Pricing Product-line pricing Optional-feature pricing Captive-product pricing Two-part pricing By-product pricing Product-bundling pricing

Ingredient Branding

12-16 Packaging: The 5 th P All the activities of designing and producing the container for a product.

12-17 Branding a commodity via packaging

12-18 Packaging has been influenced by: Self-service Consumer affluence Company and brand image Innovation opportunity

12-19 Functions of Labels Identifies Grades Describes Promotes

Creative packaging designs (1) 12-20

12-21 Shorts with Meat Patterns

Reebok Extra Grip Packaging 12-22

Wine Can This unusual wine packaging, designed by Jens Andersson and Jonas Forsman, has won the 2006 Swedish packaging design award

Milk Packaging Incredible milk packaging concept designed by Julien De Repentigny and Gabriel Lefebvre

Banana Guard Packaging A robust case that ensures your banana survives your travels in perfect condition

Resealable Soda Can Creative packaging concept that allows for a soda can to be resealed called Soda- Seal

Nike Stadium Packaging Limited number of Nike shoeboxes were transformed to house a stadium within by inserting a printed sheet of the stadium interior with embedded sound chips. So you could hear the crowd go wild when the box was opened

Anti-Theft Lunch Bags Sandwich bags that have green splotches printed on both sides, making your freshly prepared lunch look spoiled. Don’t suffer the injustice of having your sandwich stolen again! 12-28