unit 3 product, branding, packaging and service decisions
TRANSCRIPT
Products, Services, and ExperiencesProducts, Services, and Experiences
Market offerings, pure tangible goods, pure Market offerings, pure tangible goods, pure services, experiencesservices, experiences
What is a Product ?What is a Product ?
Product Product DefinitionsDefinitions
Whatever is offered for “sale” in a Whatever is offered for “sale” in a marketing exchangemarketing exchange
ProductProduct Anything tangible offered to a market for Anything tangible offered to a market for
attention, acquisition, use, or consumption attention, acquisition, use, or consumption that might satisfy a need or want.that might satisfy a need or want.
ServiceService Any activity or benefit that one party can Any activity or benefit that one party can
offer to another that is essentially offer to another that is essentially intangible and does not result in ownership intangible and does not result in ownership of anything.of anything.
Tangible
Produced Then Sold
Intangible
Sold Then Produced and/or Consumed Same Time
Can Store and Transport
Often Produced SeparateFrom Consumer
Perishable
Often Produced InConsumer's Presence
Goods Services
BrandName
QualityLevel
Packaging
Design
Features
Delivery& Credit
Installation
Warranty
After-Sale
Service
CoreBenefit orService
CoreBenefit orService
ActualProduct
ActualProduct
CoreProduct
CoreProduct
AugmentedProduct
AugmentedProduct
Levels of Levels of ProductsProducts
Classification of ProductsClassification of ProductsHow Long the Products Will LastHow Long the Products Will Last
Durable GoodsProvide Long-Term Benefits
(cars, furniture, home appliances)
Durable GoodsProvide Long-Term Benefits
(cars, furniture, home appliances)
Nondurable GoodsProvide Short-Term Benefits
(newspapers, food)
Nondurable GoodsProvide Short-Term Benefits
(newspapers, food)Low
InvolvementDecisions
High Involvement Decisions
Product ClassificationsProduct Classifications
Consumer productsConsumer products
Industrial productsIndustrial products
ConvenienceConvenience
ShoppingShopping
SpecialtySpecialty
UnsoughtUnsought
Frequent purchases Frequent purchases bought with minimal bought with minimal buying effort and little buying effort and little comparison shoppingcomparison shopping
Low priceLow price
Widespread Widespread distributiondistribution
Mass promotion by Mass promotion by producerproducer
Examples: toothpaste, Examples: toothpaste, tea, laundry tea, laundry detergents etc. detergents etc.
Types of Types of Consumer Consumer ProductsProducts
ConvenienceConvenience ShoppingShopping
SpecialtySpecialty
UnsoughtUnsought
Less frequent Less frequent purchases requiring purchases requiring more shopping effort more shopping effort and price, quality, and and price, quality, and style comparisons. style comparisons.
Higher pricingHigher pricing
Selective distribution in Selective distribution in fewer outletsfewer outlets
Advertising and Advertising and personal personal selling/representation selling/representation by producer and by producer and resellerreseller
Examples: television, Examples: television, geyser, cooking stove, geyser, cooking stove, furniture etc. furniture etc.
Types of Types of Consumer Consumer Products Products
ConvenienceConvenience
ShoppingShopping SpecialtySpecialty
UnsoughtUnsought
Strong brand Strong brand preference and loyalty, preference and loyalty, requires special requires special purchase effort, little purchase effort, little brand comparisons, brand comparisons, and low price and low price sensitivitysensitivity
High priceHigh price
Exclusive distributionExclusive distribution
Carefully targeted Carefully targeted promotion by promotion by producers and resellersproducers and resellers
Examples: Rolex Examples: Rolex watches, ARY gold Etc.watches, ARY gold Etc.
Types of Types of Consumer Consumer Products Products
ConvenienceConvenience
ShoppingShopping
SpecialtySpecialty UnsoughtUnsought
Little product awareness Little product awareness and knowledge (or if and knowledge (or if aware, sometimes aware, sometimes negative interest)negative interest)
Pricing variesPricing varies
Distribution variesDistribution varies
Aggressive advertising Aggressive advertising and personal selling by and personal selling by producers and resellersproducers and resellers
Examples: life insurance, Examples: life insurance, blood donations etc.blood donations etc.
Types of Types of Consumer Consumer Products Products
Industrial productsIndustrial products Materials and partsMaterials and parts
Capital itemsCapital items
Supplies and servicesSupplies and services
Individual Product/Service Individual Product/Service DecisionsDecisions
Product Attributes
Branding
Packaging
Labeling
Product Support Services
QualityQualityQualityQuality FeaturesFeaturesFeaturesFeatures
Style & DesignStyle & DesignStyle & DesignStyle & Design
Product AttributesProduct Attributes Developing a Product or Service Involves Defining Developing a Product or Service Involves Defining the Benefits that it Will Offerthe Benefits that it Will Offer
Product Quality Product Quality
Product FeaturesProduct Features
Product Style & Design
Product Style & Design
Ability of a Product to Perform Its Functions; Includes Level &
Consistency
Ability of a Product to Perform Its Functions; Includes Level &
Consistency
Help to Differentiate the Product from Those in the Competition
Help to Differentiate the Product from Those in the Competition
Process of Designing a Product’s Style & Function
Process of Designing a Product’s Style & Function
BrandingBranding
Individual Product/Service Individual Product/Service DecisionsDecisions
Product Attributes
Branding
Packaging
Labeling
Product Support Services
BrandBrand
A name, term, sign, symbol, or design, or a A name, term, sign, symbol, or design, or a combination of these, intended to identify combination of these, intended to identify the goods or services of one seller or group the goods or services of one seller or group of sellers and to differentiate them from of sellers and to differentiate them from those competitorsthose competitors
What is a Brand?What is a Brand?
It’s who you are...and what you stand for.It’s who you are...and what you stand for.
B E T on J azz
C hildren’s C able N et
KnowledgeTV
MuseumC hannel
Booknet
ArenaC lassical
Music
T ravel C hannel
D IY
C lass ic A rtsS howcase
A nimalP lanet
N ew S cienceN etwork
B LO O M B E R GN E W S IN F O R M A T IO N
C -S P A N
Noggin
T heaterC hannel
AnthropologyP&E
OvationOvation
Arts & Antiques
S C IE N C E
K ID SC IV IL IZA T IO N
E O P
Why? Why?
Because...A Strong Brand is the Heart and “Soul” Because...A Strong Brand is the Heart and “Soul” of an Organization!of an Organization!
What Branding Is?What Branding Is?
A clear identity in the consumer's mindA clear identity in the consumer's mind Who you are: Product/service qualityWho you are: Product/service quality What you stand for: Values/promise - Can be What you stand for: Values/promise - Can be
registered and legally protected registered and legally protected A set of associations and feelings - market A set of associations and feelings - market
segmentationsegmentation
To Brand or Not to Brand?To Brand or Not to Brand?
Product attributes (lowest level)Product attributes (lowest level) BenefitsBenefits Beliefs and values Beliefs and values
Branding strategies:Branding strategies: i) Brand Positioning i) Brand Positioning
Branding strategies:Branding strategies: ii) ii) Brand Name Selection Brand Name Selection
• Short and simple• Suggestive of product benefits• Legally available• No negative imagery• Easy to spell, read, and
pronounce• Adaptable for international
markets• Adaptable to packaging/labeling
needs• Adaptable to any advertising
medium
A GoodBrand Name
Is...
A GoodBrand Name
Is...
Generic name: A brand name that has Generic name: A brand name that has become a generally descriptive term become a generally descriptive term ““for a class of products”for a class of products”..
If this occurs, the original owner loses If this occurs, the original owner loses exclusive right to the brand name exclusive right to the brand name (which is very bad for marketers).(which is very bad for marketers).
Examples: nylon, aspirin, escalator, Examples: nylon, aspirin, escalator, kerosene, etc.kerosene, etc.
Manufacturer brandsManufacturer brands Private (store) brandsPrivate (store) brands Licensed brandsLicensed brands Co-brandingCo-branding
Branding strategies:Branding strategies: iii) Brand iii) Brand SponsorshipSponsorship
Line Extension
Multibrands
Brand Extension
New BrandsBra
nd N
ame
Existing New
Product Category
Existing
New
Branding strategies:Branding strategies: iv) Brand iv) Brand DevelopmentDevelopment
BrandingBranding
Rejection
Non-recognition
Recognition
Preference
Insistence
Change Position
Increase Awareness
Continue Education
Maintain Availability
Develop High Brand Equity
Focus:
Focus:
Focus:
Focus :
Focus :
Individual Product/Service Individual Product/Service DecisionsDecisions
Product Attributes
Branding
Packaging
Labeling
Product Support Services
PackagingPackaging
Activity of designing and producing the Activity of designing and producing the containercontainer or or wrapperwrapper for a product. for a product.
Packaging used to Packaging used to containcontain and and protectprotect the the product.product.
Goals of PackagingGoals of Packaging
Protection against damage, spoilage, Protection against damage, spoilage, tampering etc.tampering etc.
Assistance in marketing the Assistance in marketing the product product
Cost effectiveness (and good for the Cost effectiveness (and good for the environment)environment)
LabelingLabeling
Individual Product/Service Individual Product/Service DecisionsDecisions
Product Attributes
Branding
Packaging
Labeling
Product Support Services
LabelingLabeling
LabelingLabeling
Printed information appearing on or with the Printed information appearing on or with the package.package.
Performs several functions:Performs several functions: Identifies product or brandIdentifies product or brand Describes several things about the productDescribes several things about the product Promotes the product through attractive Promotes the product through attractive
graphics.graphics.
Universal Product Code Universal Product Code (UPC)(UPC)
AA bar code on a product’s package that provides bar code on a product’s package that provides information read by optical scanners.information read by optical scanners.
UPC codes provide several advantages:UPC codes provide several advantages: labor labor saving, improve inventory control, and help with saving, improve inventory control, and help with marketing research.marketing research.
79400 80740
PromotesIdentifies
Competitive Advantages
Describes
SalesTasks
Product Safety
Packaging
Labeling
Packaging
Labeling
Functions of packaging & Functions of packaging & labelinglabeling
Individual Product DecisionsIndividual Product Decisions
Product Attributes
Branding
Packaging
Labeling
Product Support Services
Companies should design its support services to Companies should design its support services to profitably meet the needs of target customers profitably meet the needs of target customers
and gain competitive advantage.and gain competitive advantage.
Product - Support ServicesProduct - Support Services
How?How?Step 1.Step 1. Survey customers to assess the value of Survey customers to assess the value of current services and to obtain ideas for new current services and to obtain ideas for new services.services.Step 2. Step 2. Assess costs of providing desired services.Assess costs of providing desired services.Step 3.Step 3. Develop a package of services to delight Develop a package of services to delight customers and yield profits to the company.customers and yield profits to the company.
How?How?
Service marketing Service marketing
Product Line StrategiesProduct Line Strategies
Product Line ExtensionsProduct Line ExtensionsProduct Line ExtensionsProduct Line Extensions
StretchingStretching
Adding new items to line
FillingFilling
Adding sizes or styles
Downward
Upward
Contracting aContracting aProduct LineProduct Line
Dropping items
Contracting aContracting aProduct LineProduct Line
Dropping items
Two-way
New Product Development New Product Development
The development of original products, product The development of original products, product improvements, product modifications, and new improvements, product modifications, and new
brands through the firm’s own R&D efforts.brands through the firm’s own R&D efforts.
Major Stages in New-Product Major Stages in New-Product DevelopmentDevelopment
IdeaGeneration
IdeaScreening
ConceptDevelopmentand Testing
MarketingStrategy
BusinessAnalysis
ProductDevelopment
TestMarketing
Commercialization
Sources of New-Product IdeasSources of New-Product Ideas
EmployeesEmployees CustomersCustomers ResellersResellers Suppliers/ vendorsSuppliers/ vendors CompetitorsCompetitors Advertising agenciesAdvertising agencies
Marketing research firmsMarketing research firms Other manufacturersOther manufacturers InternationalInternational
Stage 2: Idea ScreeningStage 2: Idea Screening Ideas are evaluated against criteria; most are Ideas are evaluated against criteria; most are
eliminated.eliminated.
It is done to avoid:It is done to avoid:
Product development costs increase Product development costs increase substantially in later stages.substantially in later stages.
Stage 3: Concept Development and Stage 3: Concept Development and TestingTesting
Concept tests ask target consumers to Concept tests ask target consumers to evaluate product concepts.evaluate product concepts.
Because: Because:
Product concepts provide detailed versions Product concepts provide detailed versions of new product ideas.of new product ideas.
Stage 4: Stage 4:
Marketing Strategy DevelopmentMarketing Strategy Development Strategy statements describe:Strategy statements describe:
– The target market, product positioning, and sales, The target market, product positioning, and sales, share, and profit goals for the first few years.share, and profit goals for the first few years.
– Product price, distribution, and marketing budget Product price, distribution, and marketing budget for the first year.for the first year.
– Long-run sales and profit goals and the marketing Long-run sales and profit goals and the marketing mix strategy.mix strategy.
Stage 7: Test MarketingStage 7: Test Marketing
Standard test marketsStandard test markets
Controlled test marketsControlled test markets
Simulated test marketsSimulated test markets
StandardTest Market
Full marketing campaignin a small number of representative cities.
StandardTest Market
Full marketing campaignin a small number of representative cities.
SimulatedTest Market
Test in a simulated shopping environment
to a sample of consumers.
SimulatedTest Market
Test in a simulated shopping environment
to a sample of consumers.
Controlled Test Market
A few stores that have agreed to carry newproducts for a fee.
Controlled Test Market
A few stores that have agreed to carry newproducts for a fee.
Stage 8 Stage 8 CommercializationCommercialization
New-Product Development New-Product Development ManagementManagement
KeyIssues
Top LevelSupport
Market-GuidedR & D
Integration &Coordination
Authority
IdeaGeneration
IdeaScreening
ConceptDevelopmentand Testing
MarketingStrategy
BusinessAnalysis
ProductDevelopment
TestMarketing
Commercialization
New Product Development New Product Development
New-To-The WorldNew-To-The World
RepositioningsRepositionings
Product Line Additions
Product Line Additions
New Category Entries
New Category Entries
Product Improvements
Product Improvements
Types of New Products IncludeTypes of New Products Include
Communicate Availability Communicate Availability
Communicate Benefits Communicate Benefits
Emphasize Advantages Emphasize Advantages
Motivate Consumers Motivate Consumers
Ensure Satisfaction Ensure Satisfaction
Strategy
Strategy
Strategy
Strategy
Strategy
AwarenessAwareness
InterestInterest
EvaluationEvaluation
TrialTrial
AdoptionAdoption
Consumer Adoption ProcessConsumer Adoption Process
Time
ProductDevelopment
Stage
Introduction
Profits
Sales
Growth Maturity Decline
Sales andProfits ($)
Sales and Profits Overthe Product’s Life FromInception to Demise
Product Life-Cycle Product Life-Cycle (PLC)(PLC)
The Typical Product Life Cycle (PLC) The Typical Product Life Cycle (PLC) Has Five StagesHas Five Stages
Product Development, Introduction, Product Development, Introduction, Growth, Maturity, DeclineGrowth, Maturity, Decline
Not all products follow this cycleNot all products follow this cycle
Some products move rapidly through the Some products move rapidly through the product life cycle, while others pass product life cycle, while others pass through those stages over long time through those stages over long time periods.periods.
Product Life-Cycle StrategiesProduct Life-Cycle Strategies
Time
ProductDevelopment
Stage
Introduction
Profits
Sales
Growth Maturity Decline
Sales andProfits ($)
Sales and Profits Overthe Product’s Life FromInception to Demise
Product Development StageProduct Development Stage
Product Product developmentdevelopment
IntroductionIntroduction
GrowthGrowth
MaturityMaturity
DeclineDecline
Begins when the Begins when the company develops a company develops a new-product ideanew-product idea
Sales are zeroSales are zero Investment costs are Investment costs are
highhigh Profits are negativeProfits are negative
PLC Stages PLC Stages
Introduction StageIntroduction Stage
Product developmentProduct development IntroductionIntroductionGrowthGrowth
MaturityMaturity
DeclineDecline
Low salesLow sales High cost per High cost per
customer acquiredcustomer acquired Negative profitsNegative profits Innovators are Innovators are
targetedtargeted Little competitionLittle competition
PLC Stages PLC Stages
SalesSales
CostsCosts
ProfitsProfits
Marketing ObjectivesMarketing Objectives
ProductProduct
PricePrice
Low sales Low sales
High cost per customerHigh cost per customer
NegativeNegative
Create product awareness and trial
Create product awareness and trial
Offer a basic productOffer a basic product
Use cost-plus Use cost-plus
DistributionDistribution Build selective distributionBuild selective distribution
AdvertisingAdvertising Build product awareness among early adopters and dealers
Build product awareness among early adopters and dealers
Growth StageGrowth Stage
Time
ProductDevelopment
Stage
Introduction
Profits
Sales
Growth Maturity Decline
Sales andProfits ($)
Sales and Profits Overthe Product’s Life FromInception to Demise
Product developmentProduct development
IntroductionIntroduction
GrowthGrowthMaturityMaturity
DeclineDecline
Rapidly rising salesRapidly rising sales Average cost per Average cost per
customercustomer Rising profitsRising profits Early adopters are Early adopters are
targetedtargeted Growing competitionGrowing competition
PLC Stages PLC Stages
SalesSales
CostsCosts
ProfitsProfits
Marketing ObjectivesMarketing Objectives
ProductProduct
PricePrice
Rapidly rising sales Rapidly rising sales
Average cost per customerAverage cost per customer
Rising profitsRising profits
Maximize market shareMaximize market share
Offer product extensions, service, warranty
Offer product extensions, service, warranty
Price to penetrate marketPrice to penetrate market
DistributionDistribution Build intensive distributionBuild intensive distribution
AdvertisingAdvertisingBuild awareness and interest in the
mass marketBuild awareness and interest in the
mass market
Time
ProductDevelopment
Stage
Introduction
Profits
Sales
Growth Maturity Decline
Sales andProfits ($)
Sales and Profits Overthe Product’s Life FromInception to Demise
Maturity StageMaturity Stage
Product developmentProduct development
IntroductionIntroduction
GrowthGrowth
MaturityMaturityDeclineDecline
Sales peakSales peak Low cost per Low cost per
customercustomer High profitsHigh profits Middle majority are Middle majority are
targetedtargeted Competition begins to Competition begins to
declinedecline
PLC Stages PLC Stages
SalesSales
CostsCosts
ProfitsProfits
Marketing ObjectivesMarketing Objectives
ProductProduct
PricePrice
Peak salesPeak sales
Low cost per customerLow cost per customer
High profitsHigh profits
Maximize profit while defending market share
Maximize profit while defending market share
Diversify brand and modelsDiversify brand and models
Price to match or best competitorsPrice to match or best competitors
DistributionDistributionBuild more intensive distributionBuild more intensive distribution
AdvertisingAdvertisingStress brand differences and benefitsStress brand differences and benefits
Decline StageDecline Stage
Time
ProductDevelopment
Stage
Introduction
Profits
Sales
Growth Maturity Decline
Sales andProfits ($)
Sales and Profits Overthe Product’s Life FromInception to Demise
Product developmentProduct development
IntroductionIntroduction
GrowthGrowth
MaturityMaturity
DeclineDecline
Declining salesDeclining sales Low cost per Low cost per
customercustomer Declining profitsDeclining profits Laggards are Laggards are
targetedtargeted Declining Declining
competitioncompetition
PLC Stages PLC Stages
SalesSales
CostsCosts
ProfitsProfits
Marketing ObjectivesMarketing Objectives
ProductProduct
PricePrice
Declining salesDeclining sales
Low cost per customerLow cost per customer
Declining profitsDeclining profits
Reduce expenditure and milk the brandReduce expenditure and milk the brand
Phase out weak itemsPhase out weak items
Cut priceCut price
DistributionDistributionGo selective: phase out unprofitable outletsGo selective: phase out unprofitable outlets
AdvertisingAdvertising Reduce to level needed to retain hard-core loyal customers
Reduce to level needed to retain hard-core loyal customers
Overlap of Life Cycle for Products Overlap of Life Cycle for Products A and BA and B
WINDOWS 95 1991 1995 1996 1997
WINDOWS 3.1
Extending the Product Life CycleExtending the Product Life Cycle
1.1. Increase frequency of use Increase frequency of use by present customersby present customers
2.2. Add new usersAdd new users
3.3. Find new usesFind new uses
4.4. Change product quality or Change product quality or packagingpackaging
Market Modification
Product ModificationProduct Modification
To prevent the product going into To prevent the product going into decline you modify the productdecline you modify the product
Adding new features, variations, model Adding new features, variations, model varieties will change the consumer reaction varieties will change the consumer reaction - create more demand therefore you attract - create more demand therefore you attract more usersmore users