What is a Product?2
Promotion
Product Product is
the “heart” ofMarketing
Mix
Place (Distribution)
Price
1
Product Levels
Customer Value Hierarchy Core benefit: the benefit the customer buys Basic product: provides the core benefit Expected product: attributes that customers
normally expect with the product Augmented product: features / benefits
beyond what is expected Potential product: anything possible for the
future to satisfy the customer
Product Augmentation
Each augmentation adds cost Augmented benefits soon become
expected and necessary ‘point-of-parity’ Competition offers ‘stripped down’ versions Competition level and competitive
strategies depend upon PLC stage
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1. Intangibility - “u can’t touch this”
2. Production (or performing the service) and Consumption (using the service) - happens at the same time3. Heterogeneity - services are not always delivered the same way
4. Perishability - cannot be put in inventory or stored for later useie. You can’t buy 2 haircuts
4 Characteristics of Services
PRODUCT MIX12
WidthWidth - number of different product lines
LengthLength - total number of items
within the lines
Depth Depth - number of versions of each
product
Product Mix - Product Mix - all the product
lines offered
Con
sist
ency
Product Items, Lines, and Mixes
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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.
Benefits of Product Lines14
Equivalent Quality
Efficient Sales andDistribution
Standardized Components
Package Uniformity
Advertising Economies
Why Form Why Form Product Lines?Product Lines?
Product Mix Width15
Diversifies risk Capitalizes on established reputations
6
The number of product lines an organization offers.
Product Line Depth16
Attracts buyers with different preferencesIncreases sales/profits by further
market segmentation Capitalizes on economies of scaleEvens out seasonal sales patterns
6
The number of product items in a product line.
PRODUCT: CLASSIFICATION
18
Degree of Tangibility/Durability Nondurable good -- an item consumed in one or
a few uses. Durable good -- one that usually lasts for an
extended number of uses. Type of User Consumer goods -- products purchased by the
ultimate consumer. Industrial goods -- products used in the
production of other products for ultimate consumers.
Five Factors influencing Decisions
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1. Level of consumer involvement2. Length of time to make decision3. Cost of good or service4. Degree of information search5. Number of alternatives considered
Types of Consumer Products
20
ConvenienceProduct
ShoppingProduct
SpecialtyProduct
UnsoughtProduct
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 that consumerssearch extensively for and are reluctant to accept substitutes.
A product unknown to the potential buyer or a known product that the buyer does not actively seek.
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Brand: name, term, sign, symbol, or design intended to identify the products or services and to differentiate them from the products offered by competitors.
• Brand: a psychological concept (or set of associations)
• Brand(ing): The art of taking something common and improving on it in ways that make it more valuable and meaningful.
25
Customer’s viewpoint
Authenticates the source of goods and promises value
Reduces risksFunctional PhysicalFinancialSocialTime
26
Firm’s viewpoint
Differentiates the product Creates barriers to entry Simplifies product handling ,
inventory management Brand building decreases
customer sensitivity to price Brand loyalty assures demand for
the product Speeds up process of decision
making
27
Classification Functional brands – superior economy
and/or superior performance Example
Gillette razors Ariel and tide McDonald’s Dell Computers
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Image brands – offer unique set of associations
Example Colas Cigarettes Parker pens Nike shoes Lux
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Experiential Brands – focus on how consumers feel when interacting with the brand
Example Disney Barista , CCD PVR cinemas
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Branding strategy No brand Corporate brand Family brand Individual brand Private brands vs Manufacturers brand
Can anything be branded?
An Overview ofBranding Decisions
BrandingDecision
•Brand•No brand
Brand-SponsorDecision•Manu-facturerbrand
•Distribu-tor(private)brand
•Licensedbrand
Brand-Name
Decision•Individualbrandnames•Blanketfamilyname•Separatefamilynames•Company-individualnames
Brand-Repositioning
Decision
•Reposi-tioning
•Noreposi-tioning
Brand-StrategyDecision•Lineextension•Brandextension•Multi-brands•Newbrands•Cobrands
Brand Strategies
BrandExtension-Dettol
New
Bra
nd N
ame
Product Category
LineExtension-
lays chips,Zen
Existing
Existing
Multibrands-HUL soaps
New NewBrands- Sunfeast
Brand Image
The set of beliefs about a brand (Kotler) The set of associations – tangible /
functional + soft attributes, product category, corporate parentage, user profile (Alex Biel)
Sum of all impressions + perceptions – features, benefits, packaging, user profile, advertising, events etc
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