1. Product Strategy

2. What is a Product?
Anything that can be offered to a market for attention, acquisition, use or consumption.
Satisfies a want or a need.
Includes:
Physical Products
Services
Persons
Places
Organizations
Ideas
Combinations of the above

3. Product
A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or some other unit of value

4. Product Line
A product line is a group of products that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same type of outlets, or fall within a given price range

5. Product Mix
The product mix is the number of product lines offered by a company

6. Product Items, Lines, and Mixes
Product Line
Product Mix
A specific version of an organization’s products.
A group of closely-related product items.
All products that an organization sells.

7. Levels of Product Core Benefit or Service Augmented Product
Product Levels
This CTR corresponds to Figure 8-1 on p. 239 and relates to the material on pp
Levels of Product
Installation
Packaging
Brand
Name
Features
Delivery
& Credit
After-
Sale
Service
Core
Benefit or
Service
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. Products can be physical objects, services, persons, places, organizations, and ideas.
Product Levels
Core Product. This concept refers to the use-benefit, problem-solving service that the consumer is really buying when purchasing a product.
Actual Product. The actual product is the tangible product or intangible service that serves as the medium for receiving core product benefits. Five characteristics:
Quality Level refers to product performance.
Features include combinations of product attributes.
Design consists of aesthetic or ergonomic aspects of the product.
Brand Name may help consumers position and identify the product.
Packaging serves to both protect the product and to promote it to consumers.
Augmented Product. The augmented consists of the measures taken to help the consumer put the actual product to sustained use. Measures can include installation, delivery & credit, warranties, and after sale service.
Quality
Level
Design
Warranty
Actual
Product
Core
Product

8. Classifying Products Type of Use Consumer goods Business Goods
Degree of Tangibility
Nondurable Good-used up in a few uses
Durable Good-lasts over many uses

9. Consumer Goods
Consumer goods are products purchased by the final consumer

10. Business Goods
Business goods are products that assist directly or indirectly in providing products for resale.

11. Services
Services are intangible activities or benefits that an organization provides to consumers in exchange for money or something else of value

12. Product Classifications Consumer Products
Convenience
Product
A relatively inexpensive item that requires little shopping effort.
Shopping
A product that requires comparison shopping, because it is usually more expensive and found in fewer stores.
Specialty
A particular item that consumers
search extensively for and are reluctant to accept
substitutes
Unsought
A product unknown to the potential buyer or a known product that the buyer does not actively seek

13. Product Classifications Consumer Products
Consumer Product Classifications
This CTR corresponds to Table 8-1 on p. 240 and relates to the material on pp
Product Classifications Consumer Products
Shopping Products
Buy less frequently
Gather product information
Fewer purchase locations
Compare for:
Suitability & Quality
Price & Style
Convenience Products
Buy frequently & immediately
Low priced
Many purchase locations
Includes:
Staple goods
Impulse goods
Emergency goods
Specialty Products
Special purchase efforts
Unique characteristics
Brand identification
Few purchase locations
Unsought Products
New innovations
Products consumers don’t
want to think about
Require much advertising &
personal selling
Consumer Goods
Consumer products are those bought by final consumers for personal consumption. Marketers typically classify these products based on how consumer go about buying them. Classifications include:
Convenience Products. These products are purchased frequently with a minimum of comparison and buying effort. Convenience products may be further divided:
Staples. Staples are products that consumers buy on a regular basis.
Impulse Products. Impulse products are purchased “on the spur of the moment” and without much, if any, prior consideration.
Emergency Products. Emergency products are purchased to fill an urgent and immediate need. These products are prompted by some unexpected external event like a flood or heavy snow fall.
Shopping Products. These products are compared on such bases as suitability, quality, price, and style. Shopping products may be further distinguished homogeneous and heterogeneous shopping products. Price negotiation is more common for homogeneous shopping products.
Specialty Products. These products have unique characteristics or identification with buyers and are generally specifically sought by the consumer.
Unsought Products. These products may be unknown to the buyer or not normally considered for purchase. Unsought goods require special marketing effort.

14. Product Classifications Other Marketable Entities
Organizations - Profit (businesses) and nonprofit (schools and churches).
Person - Political and sports figures, entertainers, doctors and lawyers.
Place - Cities and tourism.
Social - Reduce smoking, clean air,

15. Individual Product Decisions
Product Attributes (Quality, Features, Style and Design)
Branding
Packaging
Labeling
Product Support Services

16. New-Product Process
The new-product process consists of seven stages a firm goes through to identify business opportunities and convert them to a salable good or service

17. New Product Development
Idea Generating
Screening and Evaluation
Business Analysis
Development
Market testing
Commercialization

18. Reasons for New Product Failures
Bad Timing
Too Little Market Attractiveness
Poor Marketing Mix
No Access to Buyers
Insignificant Point of Difference
Poor Product Quality
Insensitivity to Customer Needs on Critical Factors

19. Product Life Cycle
The product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline

20. Product Life Cycle Sales Growth Stage Maturity Stage Decline Stage
Introductory
Stage
Growth
Stage
Maturity
Stage
Decline
Stage
Sales
Profits
Dollars
Time

21. Introductory Stage High failure rates Little competition
Frequent product modification
Limited distribution
High marketing and production costs
Negative profits
Promotion focuses on awareness and information
Intensive personal selling to channels

22. Growth stage Increasing rate of sales Entrance of competitors
Market consolidation
Initial healthy profits
Promotion emphasizes brand ads
Goal is wider distribution
Prices normally fall
Development costs are recovered

23. Maturity Stage Declining sales growth Saturated markets
Extending product line
Stylistic product changes
Heavy promotions to dealers and consumers
Marginal competitors drop out
Prices and profits fall
Niche marketers emerge

24. Decline Stage Long-run drop in sales Large inventories of unsold items
Elimination of all nonessential marketing expenses

25. How stages of the product life cycle relate to firm’s marketing objectives & marketing mix actions
INTRODUCTION
GROWTH
MATURITY
DECLINE
Product
Strategy
Limited models
Frequent
changes
More models
Frequent changes.
Large number of models.
Eliminate unprofitable models
Limited Wholesale/ retail distributors
Expanded dealers. Long-
term relations
Extensive.
Margins drop.
Shelf space
Phase out unprofitable outlets
Awareness.
Stimulate
demand.Sampling
Aggressive ads.
Stimulate demand
Advertise. Promote
heavily
Phase out promotion
Higher/recoup development costs
Fall as result of
competition & efficient produc-
tion.
Prices fall (usually).
Prices
stabilize at low level.
Distribution
Strategy
Promotion
Strategy
Pricing
Strategy

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

27. Branding Brand Name That part of a brand that can be spoken,
including letters, words, and numbers
Mark
The elements of a brand that
cannot be spoken
Equity
The value brand names give to a product beyond the functional benefits provided. i.e.-why you pay more for Versache

28. Private Brand
Often called store brand, a private brand is a manufacturer brand of product sold under the name of the retailer

29. Manufacturer Brand
Manufacturer brands are often called national brands and are carry the brand name of a maker of the goods

30. Value of Brand Equity
Listed as an intangible asset when computing company worth. Makes brand name companies sell for more than unbranded companies
Can command larger licensing fees because the product is a definite seller
Can sell the use brand name on non-core products like Ralph Lauren paint or Harley Davidson clothing

31. Branding and Brand Management
Picking a Good Brand Name
Suggest the Product Benefits
Be Memorable, Distinctive, and Positive
Fit the Company or Product Image
Have No Legal or Regulatory Restrictions
Be Simple and Emotional
International: Be Nonmeaningful

32. Brand Strategy Product Category Line Brand Extension Extension
This CTR corresponds to Figure 8-4 on p. 251 and relates to the discussion on pp
Brand Strategy
Line
Extension
Brand
Extension
Product Category
Existing
New
Multibrands
New
Brands
Brand Strategy
Companies may implement at least four brand-name strategies, including:
Line Extension. This strategy occurs when a company introduces additional items in a given product category under the same brand name. The vast majority of new product introductions are line extensions.
Brand Extension. This strategy seeks to extend existing brand qualities to launch new products or modified products in a new category.
Multibrand. This strategy develops two or more products in the same product category. P & G pioneered multibranding.
New Brands. Here a company creates a new brand name when it enters a new product category for which none of the company’s current brand names are appropriate.
Existing
Brand Name
New

33. Packaging Competitive Advantages Sales Tasks Product Safety Identifies
Describes
Promotes