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Principles of Marketing
NICK C. SATUR JR.BATAS-NSJ
What is a Product?• A productproduct is anything that can be offered to a
market for attention, acquisition, use, or consumption and that might satisfy a want or need.
• Includes: Physical Objects Services Events Persons Places Organizations Ideas
Five Product Levels
Product Hierarchy• Product need—the core need that underlies the
existence of a product family. To satisfy a need e.g. feet protection
• Product class—a family of products having similar function e.g. all shoes
• Product line—a group of products with closely related functions e.g. sports shoes
• Product type—products within a line having similar form e.g. basket-ball shoes
• Brand—a name representing a product or line e.g. Nike
• Item (Stock Keeping Unit)—a unit item e.g. one pair of Nike basket-ball shoe
Product Classification
Durability
Use
Tangibility
Durability and Tangibility
Nondurable
goods
ServicesDurable
goods
Durable goods
- Are tangible goods that normally survive many uses. Durables have long intervals of repeat purchase.
Non Durables
- Repeat purchase is usually strong.These are tangible goods normally consumed in one or few uses
Services
- Are intangible,inseperable variable, and perishable products that do not result to the ownership of anything.
Consumer Goods Classification
The vast array of goods consumers buy can be classified on the basis
of shopping habits.
Convenience Goods
• Are those that customer ussually purchases frequently, immediately and with a minimum of effort.
• Lowest risk, lowest effort
Ex. Soap, tobacco
Shopping Goods
• Are goods that the customer, in the process of selection and purchase, characteristically compares on such basis as suitability,price, quality and style.
• Ex. Clothings, used cars, furnitures
Specialty Goods
• Goods that have a unique characteristics or brand identification for which a sufficient number of buyers is willing to make a special purchasing effort.
Ex Mercedes, paintings by known artists,
Unsought Goods
• Those that the consumer does not know about or does not normally think of buying.
Consumer Goods Classification
Convenience
Unsought
Shopping
Specialty
USE
• Industrial Goods Classification
- These goods can be classified by how they enter the production process and their relative costliness.
1.Materials & Parts
2.Capital Items
3.Supplies and Business Services
2 Classes of Materials & Parts
• Raw Materials
- Natural Products
- Farm Products
• Manufactured material parts
Component Parts-Enter the finished product with no further change in form
Component Materials-fabricated Further ex iron
Supplies and Business Services
- Are short-lasting goods and services that facilitate, developing or managing the finished product.
Supplies
• Maintenance & Repair Items
• Operating Supplies
Business Service
• Maintenance & Repair Services
• Business Advisory Services
Definition of New Products
1. Products new to the world; usually revolutionary products resulting from product innovation e.g
• When Creative Technology first introduced the Sound-blaster
• When disposable cameras were first introduced
• When Seiko introduced the Seiko Kinetic Relay, a watch that can go into suspended animation
2. New Product Lines
3. Improvements to existing products e.g. In 1960 Kao introduced shampoo liquid and in 1970
introduced Kao Merit shampoo (anti-dandruff)
4. Additions to existing lines e.g. In 1965 Kao introduced the Kao Tender hair
conditioner
5. Costs reductions
6. re-positionings
Product Mix
• Product Assortment
• Set of all products and Items that a particular seller offers for sale.
Marketing Mix
New Product Development Process
IdeaIdeaGenerationGeneration
ConceptConceptDevelopmentDevelopmentand Testingand Testing
MarketingMarketingStrategyStrategy
DevelopmentDevelopment
IdeaIdeaScreeningScreening
BusinessBusinessAnalysisAnalysis
ProductProductDevelopmentDevelopment
MarketMarketTestingTesting
CommercializationCommercialization
Step 1. Idea Generation
Idea Generation is the Systematic Search for New Product Ideas Obtained Internally From Employees and Also From:
Customers Competitors Distributors Suppliers
Idea Screening• Process to spot good ideas and drop poor ones as soon
as possible. • Many companies have systems for rating and screening
ideas which estimate: Market Size Product Price Development Time & Costs Unit Costs Rate of Return
• Then, the idea is evaluated against a set of general company criteria.
New Product Development Process Step 3. Concept Development
1. Develop New Product Ideas into Alternative Detailed
Product Concepts
2. Concept Testing - Test theNew Product Concepts with Groups of Target Customers
3. Choose the One That Has theStrongest Appeal to Target
Customers
Step 4. Marketing Strategy
Part Three Describes Long-Term:Sales & Profit Goals
Marketing Mix Strategy
Part Two Describes First-Year:Product’s Planned Price
DistributionMarketing Budget
Part One Describes Overall:Target Market
Planned Product PositioningSales & Profit Goals
Market Share
Step 5. Business AnalysisStep 6. Product Development
If No, Eliminate Product Concept
Business AnalysisReview of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives
Business AnalysisReview of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives
If Yes, Move to Product Development
Step 7. Test MarketingTest Marketing is the Stage Where the Product and Marketing Program are Introduced into More Realistic Market Settings.
AdvertisingAdvertising
AtmosphereAtmosphere
ProductProductBudget LevelsBudget Levels
Positioning Positioning
LocationLocationPricingPricing
BrandingBranding
Elements that May be Test
Marketed by a Company
Step 8. CommercializationCommercialization is the Introduction of the
New Product into the Marketplace.
When is the Right Time to
IntroduceProduct?
When is the Right Time to
IntroduceProduct?
Where to Launch a
New Product?
Where to Launch a
New Product?