Setting Product StrategyMarketing Management, 13th ed12

Chapter QuestionsWhat are the characteristics of products and how do marketers classify products? How can companies differentiate products?How can a company build and manage its product mix and product lines?

Chapter Questions (cont.)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?

What is a Product?A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.

Components of the Market OfferingValue based pricesProduct features and qualityServices mix and quality

Five Product LevelsCore benefitBasic productExpected productAugmented productPotential product

Product Classification SchemesDurabilityTangibilityUse

Durability and TangibilityNondurable goodsDurable goodsServices

Consumer Goods ClassificationConvenienceShoppingSpecialtyUnsought

Industrial Goods ClassificationMaterials and partsCapital itemsSupplies/business services

Product DifferentiationProduct formFeaturesCustomizationPerformanceConformanceDurabilityReliabilityRepairabilityStyle

Service DifferentiationOrdering easeDeliveryInstallationCustomer trainingCustomer consultingMaintenance and repairReturns

The Product HierarchyNeed familyProduct familyProduct classProduct lineProduct typeItem

Product Systems and MixesProduct systemProduct mixProduct assortmentDepthLengthWidthConsistency

Product Line AnalysisCore productStaplesSpecialtiesConvenience items

Line StretchingDown-market stretchUp-market stretchTwo-way stretch

Product-Mix PricingProduct-line pricingOptional-feature pricingCaptive-product pricingTwo-part pricingBy-product pricingProduct-bundling pricing

What is the Fifth P?Packaging, sometimes called the 5th P, is all the activities of designing and producing the container for a product.

Factors Contributing to the Emphasis on PackagingSelf-serviceConsumer affluenceCompany/brand imageInnovation opportunity

Packaging ObjectivesIdentify the brandConvey descriptive and persuasive informationFacilitate product transportation and protectionAssist at-home storageAid product consumption

Functions of LabelsIdentifiesGradesDescribesPromotes