1. Chapter 10 Product Concepts MKTG10 Lamb, Hair, and McDaniel
© 2016 Cengage Learning. All Rights Reserved.

2. © 2016 Cengage Learning. All Rights Reserved.
Chapter 10 Product Concepts
LEARNING OUTCOMES
10-1 Define the term product
10-2 Classify consumer products
10-3 Define the terms product item, product line, and product mix
10-4 Describe marketing uses of branding
© 2016 Cengage Learning. All Rights Reserved.

3. © 2016 Cengage Learning. All Rights Reserved.
Chapter 10 Product Concepts
LEARNING OUTCOMES
10-5 Describe marketing uses of packaging and labeling
10-6 Discuss global issues in branding and packaging
10-7 Describe how and why product warranties are important marketing tools
© 2016 Cengage Learning. All Rights Reserved.

4. Define the term product
Chapter 10 Product Concepts
What Is a Product?
10-1
Define the term product
© 2016 Cengage Learning. All Rights Reserved.

5. © 2016 Cengage Learning. All Rights Reserved.
Chapter 10 Product Concepts
What Is a Product?
Everything, both favorable and unfavorable, that a person receives in an exchange.
Tangible Good
Service
Idea
Notes:
1. The product offering, the heart of an organization’s marketing program, is usually the starting point in creating a marketing mix.
2. To most people, the term product means a tangible good. However, services and ideas are also products.
© 2016 Cengage Learning. All Rights Reserved.

6. © 2016 Cengage Learning. All Rights Reserved.
Chapter 10 Product Concepts
What Is a Product?
Promotion
Place (Distribution)
Price
Product
Notes:
Price, distribution, and promotion strategies can not be determined until the firm has a product to sell.
Well-conceived price, distribution, and promotion strategies have little value without a strong product offering.
© 2016 Cengage Learning. All Rights Reserved.

7. Classify consumer products
Chapter 10 Product Concepts
Types of
Consumer Products
10-2
Classify consumer products
© 2016 Cengage Learning. All Rights Reserved.

8. Types of Products Business Product Consumer
Chapter 10 Product Concepts
Types of Products
Business
Product
Consumer
A product used to manufacture other goods or services, to facilitate an organization’s operations, or to resell to other customers
A product bought to satisfy an
individual’s personal wants
Notes:
Products can be classified as either business (industrial) or consumer products. The classification as a business or consumer product depends on the buyer’s intentions.
© 2016 Cengage Learning. All Rights Reserved.

9. Types of Consumer Products
Chapter 10 Product Concepts
Unsought
Products
Specialty
Shopping
Convenience
Consumer
Business
Notes:
Chapter 7 examined seven categories of business products: major equipment, accessory equipment, component parts, processed materials, raw materials, supplies, and services.
Consumer products are classified into four types: convenience products, shopping products, specialty products, and unsought products. This approach classifies products by how much effort is used to shop for them.
© 2016 Cengage Learning. All Rights Reserved.

10. Types of Consumer Products
Chapter 10 Product Concepts
Types of Consumer Products
Market
Development
Convenience
Product
Shopping
Specialty
Unsought
A relatively inexpensive item that merits little shopping effort
A product that requires comparison shopping, because it is usually more expensive and found in fewer stores
A particular item for which consumers search extensively and are reluctant to accept substitutes
A product unknown to the potential buyer or a known product that the buyer does not actively seek
Discussion/Team Activity:
Name products and services that fall into each of the consumer product categories:
Convenience: Candy, soft drinks, deodorant, aspirin, hardware, and dry cleaning.
Shopping: Homogeneous shopping products include washers, dryers, and televisions. Heterogeneous shopping products include furniture, clothing, housing, and universities.
Specialty: Fine watches, expensive automobiles, and gourmet restaurants.
Unsought: New products, insurance, burial plots, and encyclopedias.
© 2016 Cengage Learning. All Rights Reserved.

11. Define the terms product item, product line,
Chapter 10 Product Concepts
Product Items,
Lines, and Mixes
10-3
Define the terms product item, product line,
and product mix
© 2016 Cengage Learning. All Rights Reserved.

12. Product Items, Lines, and Mixes
Chapter 10 Product Concepts
Product Items, Lines, and Mixes
Product Item
Product Line
Product Mix
A specific version of a product that can be designated as a distinct offering among an organization’s products.
A group of closely-related product items.
All products that an organization sells.
Notes:
Rarely does a company sell a single product. Instead, it sells a variety of product items that may be categorized into product lines and product mixes.
Product mix width (or breadth) refers to the number of product lines an organization offers.
Product line depth is the number of product items in a product line.
© 2016 Cengage Learning. All Rights Reserved.

13. 10.1 Campbell’s Product Lines and Product Mix
Chapter 10 Product Concepts
Notes:
All of Campbell’s products constitute its product mix. Each product in the product mix may require a separate marketing strategy.
In some cases, product lines and mixes share some marketing strategy components.
An example of Campbell’s product lines and product mix is shown in Exhibit 10.1.
Discussion/Team Activity:
Identify a few companies with extensive product lines and product mixes. Pick one and create a matrix similar to Exhibit Evaluate the marketing strategies in use.
Source: Campbell's Web site:

14. Benefits of Product Lines
Chapter 10 Product Concepts
Benefits of Product Lines
Equivalent Quality
Efficient Sales and Distribution
Standardized
Components
Package Uniformity
Advertising Economies
Notes:
Advertising economies: Product lines provide economies of scale in advertising.
Package uniformity: Packages in the product line may have a common look but maintain their individual identities.
Standardized components: Reductions in manufacturing and inventory costs.
Efficient sales and distribution: A product line enables a full range of choices to customers, and as a result, better distribution and retail coverage.
Equivalent quality: All products in a line are perceived as having similar quality.
Discussion/Team Activity:
Discuss product lines that demonstrate the above benefits. Some ideas include: Gillette, General Motors, Procter & Gamble, Mary Kay Cosmetics
© 2016 Cengage Learning. All Rights Reserved.

15. Describe marketing uses of branding
Chapter 10 Product Concepts
Branding
10-4
Describe marketing uses of branding
© 2016 Cengage Learning. All Rights Reserved.

16. Branding Brand Name Mark Equity
Chapter 10 Product Concepts
Branding
Brand
Name
Mark
Equity
That part of a brand that can be spoken, including letters, words, and numbers
The elements of a brand that
cannot be spoken
The value of company and brand names
Global Brand
A brand where at least a third of the earnings come from outside its home country
Notes:
A brand is a name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products.
Discussion/Team Activity:
What attributes make a good brand name, based on the names of strongly recognized brands?
Discuss examples of strong global brands.
© 2016 Cengage Learning. All Rights Reserved.

17. Product Identification
Chapter 10 Product Concepts
Benefits of Branding
Product Identification
Repeat Sales
New-product Sales
Notes:
1. Branding has three main purposes: product identification, repeat sales, and new-product sales. The most important purpose is product identification.
2. Brand equity refers to the value of company and brand names.
3. Global brand refers to a brand that obtains at least a third of its earnings from outside its home country, is recognizable outside its home base of customers, and has publicly available marketing and financial data.
4. Brand loyalty, a consistent preference for one brand over all others, is quite high in some product categories.
© 2016 Cengage Learning. All Rights Reserved.

18. © 2016 Cengage Learning. All Rights Reserved.
Chapter 10 Product Concepts
Branding Strategies
Brand
No Brand
Manufacturer’s Brand
Private Brand
Individual Brand
Family Brand
Combi- nation
Notes:
The lack of a brand name, a generic product, can be a selling point.
If a brand is used, the choice is made between a manufacturers’ brand, a private brand, or both.
With either a manufacturers’ brand or a private brand, a decision is made among:
Individual brand—different brands for different products
Family brand—common names for different products
Combination of individual branding and family branding.
Co-branding entails placing two or more brand names on a product or its package.
Discussion/Team Activity:
Name brands that fall into each of the categories shown on this slide.
© 2016 Cengage Learning. All Rights Reserved.

19. Branding Strategies Manufacturers’ Brand Private
Chapter 10 Product Concepts
Manufacturers’
Brand
Private
The brand name of a manufacturer.
A brand name owned by a wholesaler or a retailer. Also known as a private label or store brand.
Captive
A brand manufactured by a third party for exclusive retailer, without evidence of a that retailer’s affiliation.
© 2016 Cengage Learning. All Rights Reserved.

20. Individual Brands Versus Family Brands
Chapter 10 Product Concepts
Individual Brands Versus Family Brands
Individual
Brand
Family
Using different brand names for different products.
Marketing several different
products under the same
brand name.
Notes:
Companies use individual brands when their products vary greatly in use or performance. For instance, it would not make sense to use the same brand name for a pair of dress socks and a baseball bat.
© 2016 Cengage Learning. All Rights Reserved.

21. © 2016 Cengage Learning. All Rights Reserved.
Trademarks
Chapter 10 Product Concepts
A Trademark is the exclusive right to use a brand. A service mark performs the same function for services.
Many parts of a brand and associated symbols qualify for trademark protection.
Trademark right comes from use rather than registration.
The Digital Millennium Copyright Act (DMCA) explicitly applies trademark law to the digital world.
Companies that fail to protect their trademarks face the possibility that their product names will become generic.
Notes:
A trademark is the exclusive right to use a brand or part of a brand. Others are prohibited to use without permission.
A service mark performs the same function for services.
Parts of a brand or other product identification may qualify for trademark protection.
Companies that fail to protect trademarks face the risk of product names becoming generic. This list includes aspirin, cellophane, thermos, monopoly, cola, and shredded wheat.
Discussion/Team Activity:
Discuss some heavily-protected product brands that are used generically in conversations. Examples might include Kleenex, Xerox, Band-Aid Brand Adhesive Bandages, etc.
© 2016 Cengage Learning. All Rights Reserved.

22. Describe marketing uses of packaging and labeling
Chapter 10 Product Concepts
Packaging
10-5
Describe marketing uses of packaging and labeling
© 2016 Cengage Learning. All Rights Reserved.

23. Functions of Packaging
Chapter 10 Product Concepts
Functions of Packaging
Contain and Protect
Promote
Facilitate Storage, Use,
and Convenience
Facilitate Recycling
Notes:
The three most important functions of packaging are to contain and protect products; promote products; facilitate the storage, use and convenience of products, and facilitate recycling and reduce environmental damage.
© 2016 Cengage Learning. All Rights Reserved.

24. © 2016 Cengage Learning. All Rights Reserved.
Chapter 10 Product Concepts
Labeling
Persuasive
Focuses on promotional theme
Consumer information is secondary
Informational
Helps make proper selections
Lowers cognitive dissonance
Notes:
Package labeling takes one of two forms: persuasive or informational.
© 2016 Cengage Learning. All Rights Reserved.

25. issues in branding and packaging
Chapter 10 Product Concepts
Global Issues in Branding
and Packaging
10-6
Discuss global
issues in branding and packaging
© 2016 Cengage Learning. All Rights Reserved.

26. Global Issues in Branding
Chapter 10 Product Concepts
Global Issues in Branding
Adaptations & Modifications
Global Options for Branding
One Brand Name Everywhere
Different Brand Names in Different Markets
Notes:
When entering a foreign market with an existing product a firm has three options for handling the brand name:
One brand name everywhere. Coca-Cola uses this strategy in 195 countries around the world. This strategy allows greater recognition of the product and easier promotional coordination from market to market.
Adaptations and modifications are used when the name cannot be pronounced or interpreted successfully in a different language.
Different brand names for different markets: Local brand names are used when translation or pronunciation problems occur, when the marketer wants the brand to appear to be a local brand, or when regulations require localization.
© 2016 Cengage Learning. All Rights Reserved.

27. Global Issues in Packaging
Chapter 10 Product Concepts
Global Issues in Packaging
Aesthetics
Global Considerations for Packaging
Climate Considerations
Labeling
Notes:
The major labeling concern is proper translation of ingredient, promotional, and instructional information on labels.
Package aesthetics are important from a cultural perspective. For example, colors may have different connotations in different countries. Package size is influenced by availability of refrigeration, amount of storage space, and even the purchasing power of buyers.
Extreme climates and long-distance shipping necessitate sturdier packages. Packages may need a longer shelf life.
© 2016 Cengage Learning. All Rights Reserved.

28. and why product warranties are important
Chapter 10 Product Concepts
Product Warranties
10-7
Describe how
and why product warranties are important
marketing tools
© 2016 Cengage Learning. All Rights Reserved.

29. A confirmation of the quality or performance of a good or service.
Chapter 10 Product Concepts
Product Warranties
Warranty
Express
Implied Warranty
A confirmation of the quality or performance of a good or service.
A written guarantee.
An unwritten guarantee that the good or service is fit for the purpose for which it was sold.
© 2016 Cengage Learning. All Rights Reserved.