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Designing and ManagingProducts
Mrs. Jocel D. Ripdos,MBA
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Product and Its Classification
Objectives:
Design your own product.
Define the term product. Determine the different classification
of product by giving examples each.
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Product?
A physical object
A service
A place
An organization
An idea like pro-life or the
preservation of the ozone layer
A personality
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Product define:
A product is anything offered forsale by a firm to buyers to satisfy their
physical, social, symbolic, and
psychological wants and needs
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Classification of Products
Consumer goodsRate of consumption and tangibility
Consumers shopping habits
Industrial goodsInstallations
Accessory equipment
Raw materialsComponent parts and materials
Supplies
Services
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Consumer Goods
Rate of Consumption andTangibility
Durable goods are tangible goods
which normally survive many uses.Nondurable goods are tangible
products which are consumed in one or a
few users.
Services are intangible goods like
activities, benefits, or satisfactions which
are offered for sale
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Consumer Goods
Consumers Shopping HabitsConvenience goods are those which are
purchased with a minimum of effort.
Shopping goods are those that are bought onlyafter an effort to compare with other goods ismade.Specialty goods are those that the consumers
seek to buy and they are not willing or they are notable to accept substitutes.
Unsought goods are those that are not yetwanted by or are still unknown to the consumer.New unsought goods are really new ideas or products
that the consumer still have to know to be motivated tobuy.
Regular unsought goods are those that stayunsought but not unbought forever.
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Industrial Goods
Installations are industrial productswith long life, are generally expensive,
and they form part of the major capital
equipment of an industrial firm. Accessory Equipment are
industrial goods that are used as aids
in the production process. Raw Materials - are unprocessed
goods that will become part of another
product.
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Industrial Goods
Component Parts and Materialsare processed industrial goods that
will still be used and become an actual
part of the finished product. Supplies are items that are used as
aids in the operating process but do
not become part of the finished goods. Services are expense items that
assist in the operations.
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Quiz: 1/4
Identification:
1. These are tangible goods which normallysurvive many uses.
2. These are industrial products with long life, are
generally expensive, and they form part of themajor capital equipment of an industrial firm.
3. These are processed industrial goods that willstill be used and become an actual part of thefinished product.
4. These are items that are used as aids in theoperating process but do not become part ofthe finished goods.
5. These are unprocessed goods that will becomepart of another product.
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Enumeration
A. Industrial goods (6 pts.)
B. Consumer goods - Consumers
Shopping Habits (4 pts.)
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AnswersIdentification:
1. Durable goods
2. Installations
3. Component Partsand Materials
4. Supplies5. Raw materials
Enumeration
A 1.Installations2. Accessoryequipment
3. Raw materials
4. Component parts
and materials5. Supplies
6. Services
B. 1. Convenience
goods2. Shopping goods
3. Specialty goods
4. Unsought goods
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Quiz: 1 whole
How are you going to differentiate
your product?
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Tools in Product
Differentiation Branding Quality
Image
Product features Packaging
Location
Promotion Innovation
Different service levels
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Branding
- a marketing action which identifies and helpsdifferentiate the goods and services of one seller from
those of another.
Brand is a name, term, sign, symbol, or design, ora combination of these elements, that is intended to
identify the goods or services of one seller or a group
of sellers.
a. Legally registered are provided with legalprotection called trademark.
b. Not legally registered
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Distinct Parts:
1. Brand Name refers to that part of
a brand consisting of words, letters,
and/or numbers that can bevocalized.
2. Brand Mark refers to that part of a
brand that appears in the form of asymbol, design, or distinctive
coloring or lettering, and which
cannot be vocalized.
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Criteria for a Good Brand
1. It should suggest something about theproducts benefits and qualities.
2. It should easy to pronounce, recognize,spell, and remember.
3. It should be distinctive.4. It must be adaptable to additional
product lines.5. It must be capable of being legally
registered. Names that sound like analready registered name is no longeracceptable for copyright registration.
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Branding Strategies
Manufacturing branding
Reseller branding
Mixed branding
Generic branding
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Manufacturing Branding
- Is a branding strategy in which the brandname for a product is designated by the
manufacturer.
Alternative Approaches:1. Multiproduct approach referred to as
blanket or family branding strategy, uses
the same brand name to cover a group of
products.2. Multibrand approach requires a firm to
provide each product with a distinctive
name.
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Reseller Branding
- referred to as private labeling orprivate branding, refers to the
branding strategy of a firm which
manufactures products but sell themunder the brand name of a reseller.
- an advantage is the shifting of
promotional costs from manufacturerto reseller.
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Mixed Branding
- refers to the use of themanufacturer and reseller brands in a
product.
- it is expected that marketsegments attracted to the
manufacturer and to the seller will
patronize the mixed branded product.
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Generic Branding
- is a branding strategy which listsno product name, only a description of
contents
- this approach is applicable to rice,salt, sugar, and charcoal.
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Packaging
- refers to all activities involved indesigning and producing the container
or wrapper for a product.
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Reasons for Packaging
1. It provides protection to productsbefore and after they are in the
possession of the intended users.
2. It provides convenience to theuser.
3. It provides safety.
4. It provides economy to both theseller and the user.
5. It allows sellers to effectively
promote the product.
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Labelling
- it provides information about theproduct and the manufacturer.
- it may be a part of the package, or atag attached to the product.
Types of Label
1. Brand label
2. Descriptive label3. Grade level
4. Promotional label
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Product Warranty- a warrantyis a statement explaining what the seller
promises about the product.- it is a manufacturers written promise as to the extent
of the repair, replacement, or otherwise compensation fordefective goods.
Variations of Warranty1. Express warrantiesare manufacturers written
statement for product deficiencies.a. Limited-coverage warrantyis a manufacturers statement
indicating the bounds of coverage and noncoverage of anydeficiency found in the product.
b. Full warranty a statement of liability by a manufacturer thathas no limits of noncoverage.
2. Implied warranties an assign responsibility forproduct deficiencies to a manufacturer even if the itemwas sold by a retailer.
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Product Life Cycle
- the period between the birth and thedeath of a product.
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Introduction Stage
Characteristics:
Slow growth of sales
Heavy promotional expenditures in
relation to sales
Relatively high prices for the products
Limited product offerings, like limited
variations in sizes, color, and the like.
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Growth Stage
Characteristics:
Sales start climbing rapidly.
The ratio of promotional expenditures
to sales decreases.
Prices tend to remain high except
when demand stimulation is required
and entry of competitors isdiscouraged.
New forms of the product appear, like
new colors, new models, and new
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Maturity Stage
Characteristics:
Sales settle down as the product
becomes well-known
Price reductions are used as a tool ofcompetition
Competition is intensified
The market becomes saturated
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Decline Stage
Characteristics:
A pruning of product models and
variations to eliminate those not
producing profit. Promotional expenses are reduced
Plans for phasing out the product is
made
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Quiz: (20 pts.)Identification:
1. The period between the birth and the death of a product.2. Is a branding strategy of a firm which manufactures products
but sell them under the brand name of a reseller.
3. A statement explaining what the seller promises about theproduct.
4. A marketing action which identifies and helps differentiate thegoods and services of one seller from those of another.
5. Is a branding strategy which lists no product name, only adescription of contents.
6. It refers to that part of a brand consisting of words, letters,and/or numbers that can be vocalized.
7. Is a branding strategy in which the brand name for a productis designated by the manufacturer.
8. It may be a part of the package, or a tag attached to theproduct.
9. It refers to all activities involved in designing and producingthe container or wrapper for a product.
10. It refers to the use of the manufacturer and reseller brands ina roduct.
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Illustration: (10 pts.)
Draw and label the product life cycle.
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AnswersIdentification1. Product life cycle2. Reseller branding3. Warranty
4. Branding5. Generic branding6. Brand name7. Manufacturing branding
8. Labelling9. Packaging10. Mixed branding
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