am_7 product concepts.ppt

7/27/2019 AM_7 Product Concepts.ppt

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Product Concepts


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Product

Everything, both

favorable and

unfavorable, that

a person receives

in an exchange.


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What Is a Product?

Promotion

Place (Distribution)

Price

ProductProduct is theheart of

Marketing Mix


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Product Classifications

BusinessProduct

Consumer

Product

A product used to manufacture othergoods or services, to facilitate an

organizations operations, or to resellto other consumers.

Product bought to satisfy an

individuals personal wants


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Types of Consumer Products

UnsoughtProducts

SpecialtyProducts

ShoppingProducts

ConvenienceProducts

ConsumerProducts

BusinessProducts

PRODUCTS


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Types of Consumer Products

ConvenienceProduct

ShoppingProduct

Specialty

Product

UnsoughtProduct

A relatively inexpensive item thatmerits little shopping effort.

A product that requires comparisonshopping, because it is usually moreexpensive and found in fewer stores.

A particular item that consumerssearch extensively for and are

reluctant to accept substitutes.

A product unknown to the potentialbuyer or a known product that thebuyer does not actively seek.


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Product Items, Lines, and Mixes

Product Item

Product Line

Product Mix

A specific version of a productthat can be designated as adistinct offering among anorganizations products.

A group of closely-relatedproduct items.

All products that anorganization sells.


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Gillettes Product Lines and Mix

Blades and Writingrazors Toiletries instruments Lighters

Mach 3 Series Paper Mate CricketSensor Adorn Flair S.T. DupontTrac II ToniAtra Right GuardSwivel SilkienceDouble-Edge Soft and Dri

Lady Gillette FoamySuper Speed Dry LookTwin Injector Dry IdeaTechmatic Brush Plus

Width of the product mix

Deptho

ftheprodu

ctlines


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Example: Retail Product Strategy

What you offer to the consumer

(product/product mix/core

product/augmented product)

How you offer it (packaging, pricing,

range, door delivery, hours of

operation, etc)

From where you offer it (the shelving

pattern, location of the product on the

shelf, etc)

Equals Sales and Profits


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Benefits of Product Lines

Equivalent Quality

Efficient Sales andDistribution

StandardizedComponents

Package Uniformity

Advertising Economies


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Product Mix Width

Diversifies risk

Capitalizes on

established reputations

The number of product

lines an organization

offers.


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Product Line Depth

Attracts buyers with differentpreferences

Increases sales/profits by further

market segmentation Capitalizes on economies of scale

Evens out seasonal sales patterns

The number of product

items in a product line.


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Adjustments

ProductModification

ProductRepositioning

Product LineExtension orContraction

Adjustments to

Product Items,

Lin es, and Mixes


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Types of Product Modifications

QualityModification

FunctionalModification

StyleModification


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Planned Obsolescence

The practice of modifying

products so those that

have already been sold

become obsolete before

they actually needreplacement.


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Repositioning

ChangingDemographics

Declining Sales

Changes inSocial

Environment

Why reposi t ion

establ ished brands?


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Product Line Extension

Adding additional

products to an existing

product line in order to

compete more broadly

in the industry.


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Product Line Contraction

Some products have low sales orcannibalize sales of other items

Resources are disproportionately allocated

to slow-moving products

Items have become obsolete because of

new product entries

Symptoms ofProduct LineOverextension


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Brand

A name, term, symbol,

design, or combination

thereof that identifies a

sellers products and

differentiates them from

competitors products.


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Branding

BrandName

BrandMark

Brand

Equity

That part of a brand that can be spoken,including letters, words, and numbers.

The elements of a brand thatcannot be spoken.

The value of company and brand names.


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Benefits of Branding

ProductIdentification

Repeat SalesNew Product

Sales


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An Effective Brand Name

Is easy to pronounce

Is easy to recognize and remember

Is short, distinctive, and unique

Describes the product, use, and benefits

Has a positive connotation

Reinforces the product image Is legally protectable


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Branding Strategies

Brand No Brand

ManufacturersBrand

Private Brand

IndividualBrand

FamilyBrand

Combi-nation

IndividualBrand

FamilyBrand

Combi-nation


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Generic Brand

A no-frills, no-brand-

name, low-cost productthat is simply identified

by its product category.


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Manufacturers Brands Versus

Private Brands

ManufacturersBrand

Private

Brand

The brand name of amanufacturer.

A brand name owned by awholesaler or a retailer. Also

known as a private label or storebrand.


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Advantages of

Manufacturers Brands

Develop customer loyalty

Attract new customers

Enhance prestige

Offer rapid delivery, can carry less

inventoryEnsure dealer loyalty

Ad f


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Advantages of

Private Brands

Earn higher profits

Less pressure to mark down prices

Manufacturer may drop a brand orbecome a direct competitor to dealers

Ties customer to wholesaler or retailer

No control over distribution ofmanufacturers brands

di id l d


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Individual Brands Versus

Family Brands

IndividualBrand

Family

Brand

Using different brand names fordifferent products.

Marketing several differentproducts under the same

brand name.


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Cobranding

IngredientBranding

Cooperative

Branding

ComplementaryBranding

Types o f Cobranding


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Trademarks

Many parts of a brand and associatedsymbols qualify for trademark protection

The mark has to be continuouslyprotected

Rights continue for as long as it is used

A Trademark is th e

exclus ive r igh t to

use a brand


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Packaging

Functionsof

Packaging

Contain and Protect

Promote

Facilitate Storage, Use,and Convenience

Facilitate Recycling


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Labeling

Persuasive

Focuses onpromotionaltheme

Information issecondary

Informational

Helps make properselections

Lowers cognitivedissonance

Includes use/care


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Universal Product Codes

A series of thick and

thin vertical lines (bar

codes), readable bycomputerized optical

scanners, that represent

numbers used

to track products.


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Product Warranties

Warranty

ExpressWarranty

ImpliedWarranty

A confirmation of the quality orperformance of a good or service.

A written guarantee.

An unwritten guarantee that the

good or service is fit for the purposefor which it was sold. (UCC)


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Product Warranties

Warranties

Written Guarantee

ImpliedWarranty

ExpressWarranty

Unwritten Guarantee

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