Instructor: Amir Ekhlassi (5) Product strategy

What is product? Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Broadly defined, products include physical objects, services, events, persons, places, organizations, ideas, or mixes of these entities. 2 ©Compiled by: Amir Ekhlassi

Brand Name Quality Level Packaging Design Features Delivery& Credit Installation Warranty After- Sale Service Core Benefit or Service Core Benefit or Service Actual Product Actual Product Core Product Core Product Augmented Product Augmented Product Levels of product 3 ©Compiled by: Amir Ekhlassi

Levels of product Core product: addresses the question what is the buyer really buying? It consists of the core, problem-solving benefits that consumers seek when they buy a product or service. Actual product: may have as many as five characteristics: a quality level, features, design, a brand name, and packaging. Augmented product: offering additional consumer services and benefits. 4 ©Compiled by: Amir Ekhlassi

Product classification Consumer products: bought by final consumers for personal consumption. Convenience products Shopping products Specialty products Unsought products Industrial products: purchased for further processing or for use in conducting a business. Materials and Parts Capital items Supplies and services 5 ©Compiled by: Amir Ekhlassi

Consumer products Convenience products: are consumer and services products that the customer usually buys frequently, immediately, and with a minimum of comparison and buying effort. Convenience products are usually low priced, and marketers place them in many locations to make them readily available when customers need them. (Ex: Soap, candy, newspapers,…) 6 ©Compiled by: Amir Ekhlassi

Consumer products (cont’d) Shopping products: are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style. When buying shopping products and services, consumers spend much time and effort in gathering information and making comparisons. (Ex: Furniture, clothing, used cars, …) 7 ©Compiled by: Amir Ekhlassi

Consumer products (cont’d) Specialty products: are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. (Ex: specific brands and types of cars) 8 ©Compiled by: Amir Ekhlassi

Consumer products (cont’d) Unsought products: are consumer products that the consumer either does not know about or knows about but does not normally think of buying. Most major new innovations are unsought until the consumer becomes aware of them through advertising. By their very nature, unsought products require a lot of advertising, personal selling, and other marketing efforts. 9 ©Compiled by: Amir Ekhlassi

Product Attributes Branding Packaging Labeling Product Support Services Individual product decision 10 ©Compiled by: Amir Ekhlassi

Product attributes Quality Level Consistency (conformance quality, ROQ) Features Style (eye-catching) Design (more than skin deep, usefulness) 11 ©Compiled by: Amir Ekhlassi

Brand Brand: Brand: is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service. Consumers view a brand as an important part of a product, and branding can add value to a product. Branding has become so strong that today hardly anything goes unbranded. 12 ©Compiled by: Amir Ekhlassi

Brand (cont’d) Branding helps buyers in many ways: Identification of products Tell something about quality Legal protection Helps to segment markets 13 ©Compiled by: Amir Ekhlassi

Brand (cont’d) Brand equity: Brand equity: the value of a brand, based on the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand associations, and other assets such as patents, trademarks, and channel relationships. A brand with strong brand equity is a very valuable asset. Measuring the actual equity of a brand name is difficult. 14 ©Compiled by: Amir Ekhlassi

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Brand (cont’d) Brand name selection Brand name selection It should suggest some thing about the product’s benefits and qualities. (I can’t believe it its not a butter) It should be easy to pronounce, recognize, and remember. The brand name should be distinctive. (Kodak, Oracle) It should be extendable. (amazon.com) The name should translate easily into foreign languages. (Exxon: Standard oil of New Jersey)) It should be capable of registration and legal protection. 16 ©Compiled by: Amir Ekhlassi

Brand (cont’d) Brand sponsor Manufacturer’s brand (or national brand) Ex: IBM, Kellogg Private brand ( or store brand, or distributor brand) Licensed brands Co-brand 17 ©Compiled by: Amir Ekhlassi

Brand (cont’d) Manufacturer’s brands VS. Private brands In the battle of the brands between manufactures and private brands, retailers have many advantages: They control what products they stock Where they go on the shelf Slotting fees 18 ©Compiled by: Amir Ekhlassi

Brand (cont’d) Co-branding: the practice of using the established brand names of two different companies on the same product. (Ex: Nabisco + Pillsbury) Co-branding offers many advantages: The combined brand create broader consumer appeal Allows a company to expand its existing brand into a category it might otherwise have difficulty entering alone. 19 ©Compiled by: Amir Ekhlassi

Brand (cont’d) Co-branding also has limitations: Involve complex legal contracts and licenses Co-branding partners must carefully coordinate their marketing efforts Each partner must trust the other will take good care of its brand 20 ©Compiled by: Amir Ekhlassi

Line ExtensionBrand Extension MultibrandsNew Brands Brand Strategy Brand Name Existing New Existing New Product Category 21 ©Compiled by: Amir Ekhlassi

Brand Strategy (cont’d) Line Extensions: Line Extensions: occur when a company introduces additional items in a given product category under the same brand name, such as new flavors, forms, colors, ingredients, or package sizes. A company might introduce line extensions as a low-cost, low-risk way to introduce new products in order to meet consumer desires for variety, to utilize excess capacity, or simply to command more shelf space from resellers. 22 ©Compiled by: Amir Ekhlassi

Brand Strategy (cont’d) Brand extension: Brand extension: involves the use of a successful brand name to launch new or modified products in a new category. A brand extension gives a new product instant recognition and faster acceptance. It also saves the high advertising costs usually required to build a new brand name. at the same time, a brand extension strategy involves some risk. If a brand extension fails, it may harm consumer attitudes toward the other products carrying the same brand name. Further, a brand name may not be appropriate to a particular new product, even if It is well made and satisfying. 23 ©Compiled by: Amir Ekhlassi

Brand Strategy (cont’d) Multibrands: Multibrands: offers a way to establish different features and appeal to different buying motives. It also allows a company to lock up more reseller shelf space. Or the company may want to protect its major brand by setting up flanker or fighter brands. A major drawbacks of multibranding is that each brand might obtain only a small market share, and none may be very profitable. 24 ©Compiled by: Amir Ekhlassi

Brand Strategy (cont’d) New brands: New brands: a company may create a new brand name when it enters a new product category for which none of the company’s current brand is appropriate. 25 ©Compiled by: Amir Ekhlassi

Packaging Packaging Packaging involves designing and producing the container or wrapper for a product. The package may include: Primary container Secondary package Shipping package 26 ©Compiled by: Amir Ekhlassi

Packaging (cont’d) The primary function of the package was to: Contain the product Protect the product Increased competition means that packages must now perform many sales tasks: Attracting attention Describing the product 27 ©Compiled by: Amir Ekhlassi

Packaging (cont’d) Developing a good package for a new product requires making many decisions: Packaging concept The use of the package The elements of the package Product safety Environmental concern Elements must support marketing strategy Fortunately, many companies have gone green 28 ©Compiled by: Amir Ekhlassi

labeling Labels Labels may range from simple tags to products to complex graphics that are part of the package. They perform several functions: Identifying the product or brand Describing several thing about the product Promoting the product 29 ©Compiled by: Amir Ekhlassi

Labeling (cont’d) Labeling has been affected in recent time by: Unit pricing Open dating Nutritional labeling 30 ©Compiled by: Amir Ekhlassi

Product Line Length Number of Items in the Product Line Product Line Length Number of Items in the Product Line Stretching Lengthen beyond current range Filling Lengthen within current range Downward Upward Product line decision 31 ©Compiled by: Amir Ekhlassi

Product mix decisions product mixproduct assortment A product mix (or product assortment) consists of all the product lines and items that a particular seller offers. A company’s product mix has four important decisions: Width Length Depth Consistency 32 ©Compiled by: Amir Ekhlassi

Width Width - number of different product lines Length Length - total number of items within the lines Length Length - total number of items within the lines Depth Depth - number of versions of each product Product Mix - all the product lines offered Product Mix - all the product lines offered Consistency 33 ©Compiled by: Amir Ekhlassi

Thank You For Your Patience & Attention 34