windell de vera ch. 12

www.windelldevera.blogspot.com

TOP 10 LEARNING CONCEPTS

Ch. 12: Setting Product Strategy

Windell de Vera

May 11, 2012


1. Know the Five Product Levels2. Distinguish the Product

Classification Schemes3. Compare the Consumer and

Industrial Goods Classification4. Understand Product

Differentiation5. Learn Service Differentiation

Outline: Top 10 Concepts of Product Strategy

To Market the Products Effectively:


6. Consider Product Hierarchy7. Deal with the Product

Systems and Mixes8. Use the Product Line Analysis 9. Master the Product-Mix

Pricing10. Emphasize Packaging




Concept 1:

Know the Five Product Levels

Core benefit

Basic product

Expected product

Augmented product

Potential product

Reference: Philip Kotler, Marketing Management, 13th edition


Concept 1:

Core benefit: It is the fundamental level. It is the benefit the customer is really buying.

Core benefit

Basic product

Expected product

Augmented product

Potential product


e.g. A customer buys a cell phone in order to communicate.


Concept 1:

The marketer has to turn the core benefit into the basic product.

Core benefit

Basic product

Expected product

Augmented product

Potential product


e.g. A marketer sells a cell phone can be used to communicate with others.


Concept 1:

Expected product is a set of attributes and conditions buyers normally expect when they purchase this product.

Core benefit

Basic product

Expected product

Augmented product

Potential product


e.g. A customer buys a cell phone that can be used for call and text.


Concept 1:

Augmented product is a product that exceeds customer expectations.

Core benefit

Basic product

Expected product

Augmented product

Potential product


e.g. The cell phone also features camera, radio and internet.


Concept 1:

Potential product encompasses all the possible augmentations and transformations the product or offering might undergo in the future.

Core benefit

Basic product

Expected product

Augmented product

Potential product


e.g. A holographic cell phone that features the images in 3D and runs at 4G.


Concept 2:

Distinguish the Product Classification Schemes


Durability

Tangibility

Use


Concept 2:

Non-durable goods are tangible normally consumed in one or a few uses.


Durability

Tangibility

Use

The appropriate strategy is to make it available in many locations, charge a small markup and advertise heavily to induce trial.


Concept 2:

Durable goods are tangible goods that survive many uses.


Durability

Tangibility

Use

These normally require more personal selling and service, command a higher margin, and require more seller guarantees.


Concept 3:

Compare the Consumer and Industrial Goods Classification


Consumer Goods Classification

Convenience

Shopping

Specialty

Unsought


Concept 3:

Consumer Goods Classification are classified according to consumer shopping habits.



Convenience

Shopping

Specialty

Unsought


Concept 3:

Convenience goods are usually purchased frequently, immediately, and with little effort.



Convenience

Shopping

Specialty

Unsought


Concept 3:

Shopping goods are goods that the customer, in the process of selection and purchase, compares on the basis of suitability, quality, price and style.



Convenience

Shopping

Specialty

Unsought


Concept 3:

Specialty goods are goods with unique characteristics or brand identification for which consumers spend exceptional buying effort.



Convenience

Shopping

Specialty

Unsought


Concept 3:

Unsought goods are those products or services that consumers are not readily aware of or do not normally consider buying..



Convenience

Shopping

Specialty

Unsought

http://images.search.yahoo.com/images/view;_ylt=A0PDoV53jqpPOV0A.x2JzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http://images.search.yahoo.com/search/images?p=cell+phone+in+clip+art&n=30&ei=utf-8&fr=yfp-t-701&tab=organic&ri=46&w=425&h=425&imgurl=www.easyvectors.com/assets/images/vectors/afbig/no-cell-phones-allowed-clip-art.jpg&rurl=http://www.easyvectors.com/browse/other/no-cell-phones-allowed-clip-art&size=47.6+KB&name=No+Cell+Phones+Allowed+clip+art+-+Download+free+Other+vectors&p=cell+phone+in+clip+art&oid=32804abb96dc6c6c5c43581e0a9c5c7e&fr2=&fr=yfp-t-701&tt=No+Cell+Phones+Allowed+clip+art+-+Download+free+Other+vectors&b=31&ni=72&no=46&ts=&tab=organic&sigr=127okbvov&sigb=13igjhfhl&sigi=12jrh47re&.crumb=epTdL.GMVkq


Concept 3:

Industrial goods are those products used in the production of other goods.


Industrial Goods Classification

Materials and Parts

Capital Items

Supplies/business services


Concept 3:

Raw material products include farm products and natural products, manufactured materials and parts include component materials and component parts.



Materials and Parts

Capital Items


http://images.search.yahoo.com/images/view;_ylt=A0PDoV5Uj6pPKl0AG8KJzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http://images.search.yahoo.com/search/images?p=parts+of+cell+phone+in+clip+art&n=30&ei=utf-8&fr=yfp-t-701&tab=organic&ri=23&w=634&h=502&imgurl=img.alibaba.com/wsphoto/v0/287413141/Cheap-Mini-Mobile-Phone.jpg&rurl=http://www.wholesale-in-china.org/Wholesale-Multi-function-Cell-Phone/Wholesale-Mini-Cell-Phones/&size=34.5+KB&name=Wholesale+in+China+-+Multi-function+Phone+>+Mini+Cell+Phones&p=parts+of+cell+phone+in+clip+art&oid=0db5df103ac17233402dd9b36291c7ad&fr2=&fr=yfp-t-701&tt=Wholesale+in+China+-+Multi-function+Phone+%26gt%3B+Mini+Cell+Phones&b=0&ni=72&no=23&ts=&tab=organic&sigr=131p576vd&sigb=13rn55len&sigi=120ppdj0l&.crumb=epTdL.GMVkq


Concept 3:

Capital items: installations and equipments.



Materials and Parts

Capital Items



Concept 3:

Supplies include maintenance and repair items and operating supplies. Business services include maintenance and repair services and business advisor services.



Materials and Parts

Capital Items


http://images.search.yahoo.com/images/view;_ylt=A0PDoQ4kkKpPWxEAZmWJzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http://images.search.yahoo.com/search/images?p=repairs+of+cell+phone+in+clip+art&n=30&ei=utf-8&tab=organic&ri=28&w=135&h=150&imgurl=l.thumbs.canstockphoto.com/canstock7929741.jpg&rurl=http://www.canstockphoto.com/vector-clipart/check.html&size=7.3+KB&name=Cell+phone+health+check+concept+Vector+Clip+Art&p=repairs+of+cell+phone+in+clip+art&oid=e91a6feb7193b03d208e766d8ca80594&fr2=&fr=&tt=Cell+phone+health+check+concept+Vector+Clip+Art&b=0&ni=72&no=28&ts=&tab=organic&sigr=11m6mec7l&sigb=13g5gsqad&sigi=11e13nbaf&.crumb=epTdL.GMVkq





Differentiation5. Learn the Service Differentiation




Concept 4:

Understand Product Differentiation


Product Form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style


Concept 4:

Form: The size, shape, or physical structure of a product.


Product Form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style


Concept 4:Features: Most products can be offered with varying features that supplement its basic function.


Product Form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style


Concept 4:Customization: It refers to the tailoring of the campaign according to the needs of an individual or groups of individuals.


Product Form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style


Concept 4:Performance: It is the level at which product’s primary characteristics operates.


Product Form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style

http://images.search.yahoo.com/images/view;_ylt=A0PDoTHfJ6tPTn8AmN2JzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dcell%2Bphones%2Bin%2Bclip%2Bart%26fr%3Dyfp-t-701%26fr2%3Dpiv-web%26tab%3Dorganic%26ri%3D27&w=530&h=800&imgurl=primoclipart.com%2Ffiles%2Fpreview%2Fbig%2F674%2FCellular%2520Phone%2520Cartoon%2520Clip%2520Art.jpg&rurl=http%3A%2F%2Fprimoclipart.com%2Fview-clipart%2Fcellular-phone-cartoon-clip-art&size=50.7+KB&name=Cellular+Phone+Clip+Art+-+Royalty+Free+Clipart+-+Vector+Cartoon&p=cell+phones+in+clip+art&oid=20d201c6c6fcb60aec0c98570492e330&fr2=piv-web&fr=yfp-t-701&tt=Cellular%2BPhone%2BClip%2BArt%2B-%2BRoyalty%2BFree%2BClipart%2B-%2BVector%2BCartoon&b=0&ni=72&no=27&ts=&tab=organic&sigr=124m2gubt&sigb=13hqmq8aq&sigi=12i04q3mh&.crumb=epTdL.GMVkq


Concept 4:Conformance: It is the degree to which all the produced units are identical and meet the promised specifications.


Product Form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style


Concept 4:Durability: A measure of the product’s expected operating life under natural conditions, is a valued attribute for certain products.


Product Form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style


Concept 4:Reliability: A measure of the probability that a product will not malfunction or fail within a specified time period.


Product Form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style

http://images.search.yahoo.com/images/view;_ylt=A0PDoTHfJ6tPTn8Alt2JzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dcell%2Bphones%2Bin%2Bclip%2Bart%26fr%3Dyfp-t-701%26fr2%3Dpiv-web%26tab%3Dorganic%26ri%3D25&w=450&h=450&imgurl=www.imageenvision.com%2F450%2F26643-clip-art-graphic-of-a-gray-cell-phone-cartoon-character-holding-a-telephone-by-toons4biz.jpg&rurl=http%3A%2F%2Fwww.imageenvision.com%2Fclipart%2F26643-clip-art-graphic-of-a-gray-cell-phone-cartoon-character-holding-a-telephone-by-toons4biz&size=162.6+KB&name=26643+Clip+Art+Graphic+of+a+Gray+Cell+Phone+Cartoon+Character+Holding+...&p=cell+phones+in+clip+art&oid=3278b8a0bd5bf14362321b643cfe12c3&fr2=piv-web&fr=yfp-t-701&tt=26643%2BClip%2BArt%2BGraphic%2Bof%2Ba%2BGray%2BCell%2BPhone%2BCartoon%2BCharacter%2BHolding%2B...&b=0&ni=72&no=25&ts=&tab=organic&sigr=143pc1oh0&sigb=13he1gtnh&sigi=13sgbious&.crumb=epTdL.GMVkq


Concept 4:Repairability: It is a measure of the ease of fixing a product when it malfunctions or fails.


Product Form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style

http://images.search.yahoo.com/images/view;_ylt=A0PDoTEcKKtPniYA3.mJzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dcell%2Bphones%2Bin%2Bclip%2Bart%26fr%3Dyfp-t-701%26fr2%3Dpiv-web%26tab%3Dorganic%26ri%3D72&w=400&h=420&imgurl=www.illustrationsof.com%2Froyalty-free-cell-phone-clipart-illustration-53656.jpg&rurl=http%3A%2F%2Fwww.illustrationsof.com%2F53656-royalty-free-cell-phone-clipart-illustration&size=30.7+KB&name=Cell+Phone+Clipart+%2353656+by+Julos+%7C+Royalty-Free+%28RF%29+Stock+...&p=cell+phones+in+clip+art&oid=fdb2814d82fcbfe144541b8863171956&fr2=piv-web&fr=yfp-t-701&tt=Cell%2BPhone%2BClipart%2B%252353656%2Bby%2BJulos%2B%257C%2BRoyalty-Free%2B%2528RF%2529%2BStock%2B...&b=61&ni=72&no=72&ts=&tab=organic&sigr=12hiritbr&sigb=13h7a346f&sigi=12edmqdai&.crumb=epTdL.GMVkq


Concept 4:Style: It described the product’s look and feel to the buyer.


Product Form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style

http://images.search.yahoo.com/images/view;_ylt=A0PDoTEcKKtPniYA3umJzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dcell%2Bphones%2Bin%2Bclip%2Bart%26fr%3Dyfp-t-701%26fr2%3Dpiv-web%26tab%3Dorganic%26ri%3D71&w=357&h=450&imgurl=images.clipartof.com%2Fsmall%2F1049475-Royalty-Free-RF-Clip-Art-Illustration-Of-A-3d-Black-Cell-Phone-Character-Jumping.jpg&rurl=http%3A%2F%2Fwww.clipartof.com%2Fportfolio%2Fjulos%2Fillustration%2F3d-black-cell-phone-character-jumping-1049475.html&size=34.4+KB&name=Royalty-Free+%28RF%29+Clip+Art+Illustration+of+a+3d+Black+Cell+Phone+...&p=cell+phones+in+clip+art&oid=997e7ab82db439ae643467cb08006b6f&fr2=piv-web&fr=yfp-t-701&tt=Royalty-Free%2B%2528RF%2529%2BClip%2BArt%2BIllustration%2Bof%2Ba%2B3d%2BBlack%2BCell%2BPhone%2B...&b=61&ni=72&no=71&ts=&tab=organic&sigr=13800aibg&sigb=13hkj7bdo&sigi=13ni8pq45&.crumb=epTdL.GMVkq


Concept 5:

Learn Service Differentiation


Ordering ease Delive

ry

Installation

Customer training

Customer consulting

Maintenance and repair

Returns


Concept 5:Ordering ease: It refers to how easy it is for the customer to place an order with company.


Ordering ease

Delivery

Installation

Customer

training

Customer consultin

g


Returns

http://images.search.yahoo.com/images/view;_ylt=A0PDoTHuJ6tPTn8AYt.JzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dcell%2Bphones%2Bin%2Bclip%2Bart%26fr%3Dyfp-t-701%26fr2%3Dpiv-web%26tab%3Dorganic%26ri%3D51&w=490&h=525&imgurl=www.clipartheaven.com%2Fclipart%2Fpeople%2Fcartoons_%28t_-_z%29%2Fwoman_on_cell_phone_3.gif&rurl=http%3A%2F%2Fwww.clipartheaven.com%2Fshow%2Fclipart%2Fpeople%2Fcartoons_%28t_-_z%29%2Fwoman_on_cell_phone_3-gif.html&size=10.7+KB&name=woman_on_cell_phone_3+clipart+-+woman_on_cell_phone_3+clip+art&p=cell+phones+in+clip+art&oid=32004ead0f73aeb0d4a6b37494ffe8cf&fr2=piv-web&fr=yfp-t-701&tt=woman_on_cell_phone_3%2Bclipart%2B-%2Bwoman_on_cell_phone_3%2Bclip%2Bart&b=31&ni=72&no=51&ts=&tab=organic&sigr=130vc9gos&sigb=13hu9s1uf&sigi=12f9krgp4&.crumb=epTdL.GMVkq


Concept 5:Delivery: It refers to how well the product or service is delivered to the customer.


Ordering ease

Delivery

Installation

Customer

training

Customer consultin

g


Returns

http://images.search.yahoo.com/images/view;_ylt=A0PDoTEcKKtPniYA3OmJzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dcell%2Bphones%2Bin%2Bclip%2Bart%26fr%3Dyfp-t-701%26fr2%3Dpiv-web%26tab%3Dorganic%26ri%3D69&w=150&h=149&imgurl=www.imageenvision.com%2Fsm%2F0025-0803-0816-3536_clip_art_graphic_of_a_gray_cell_phone_cartoon_character_running.jpg&rurl=http%3A%2F%2Fwww.imageenvision.com%2Fcollection%2Fcell_phone.html&size=67.2+KB&name=Clip+Art+Graphic+of+a+Gray+Cell+Phone+Cartoon+Character+Running&p=cell+phones+in+clip+art&oid=a6d8992155ea86184818f74c813c8a85&fr2=piv-web&fr=yfp-t-701&tt=Clip%2BArt%2BGraphic%2Bof%2Ba%2BGray%2BCell%2BPhone%2BCartoon%2BCharacter%2BRunning&b=61&ni=72&no=69&ts=&tab=organic&sigr=11n2h33n9&sigb=13hhudap5&sigi=13gth3eim&.crumb=epTdL.GMVkq


Concept 5:Installation: It refers to the work done to make a product operation in its planned location.


Ordering ease

Delivery

Installation

Customer

training

Customer consultin

g


Returns

http://images.search.yahoo.com/images/view;_ylt=A0PDoTHfJ6tPTn8Ajd2JzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dcell%2Bphones%2Bin%2Bclip%2Bart%26fr%3Dyfp-t-701%26fr2%3Dpiv-web%26tab%3Dorganic%26ri%3D16&w=347&h=450&imgurl=i459.photobucket.com%2Falbums%2Fqq316%2Fevplreference%2Fcellphone.jpg&rurl=http%3A%2F%2Fevpl.org%2Fcommunity%2Fblogs%2Fresearch%2Farchive%2F2009%2F04%2F07%2Frecycling-your-old-gadgets.aspx&size=14.5+KB&name=cell+phone+clip+art&p=cell+phones+in+clip+art&oid=6e5d08ae7ddfb55976274eec8d681a44&fr2=piv-web&fr=yfp-t-701&tt=cell%2Bphone%2Bclip%2Bart&b=0&ni=72&no=16&ts=&tab=organic&sigr=12r99531q&sigb=13hb208nj&sigi=11tomi9s0&.crumb=epTdL.GMVkq


Concept 5:Customer training: It refers to training the customer’s employees to use the vendor’s equipment properly and efficiently.


Ordering ease

Delivery

Installation

Customer

training

Customer consultin

g


Returns

http://images.search.yahoo.com/images/view;_ylt=A0PDoTHuJ6tPTn8AaN.JzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dcell%2Bphones%2Bin%2Bclip%2Bart%26fr%3Dyfp-t-701%26fr2%3Dpiv-web%26tab%3Dorganic%26ri%3D57&w=400&h=420&imgurl=www.illustrationsof.com%2Froyalty-free-cell-phone-clipart-illustration-35044.jpg&rurl=http%3A%2F%2Fwww.illustrationsof.com%2F35044-royalty-free-cell-phone-clipart-illustration&size=43.6+KB&name=Cell+Phone+Clipart+%2335044+by+beboy+%7C+Royalty-Free+%28RF%29+Stock+...&p=cell+phones+in+clip+art&oid=6b0bee2c21428b64ba52eb673ce5e959&fr2=piv-web&fr=yfp-t-701&tt=Cell%2BPhone%2BClipart%2B%252335044%2Bby%2Bbeboy%2B%257C%2BRoyalty-Free%2B%2528RF%2529%2BStock%2B...&b=31&ni=72&no=57&ts=&tab=organic&sigr=12hnnn94k&sigb=13ht6vr3n&sigi=12ehinqr6&.crumb=epTdL.GMVkq


Concept 5:Customer consulting: It refers to data, information systems, and advice services that the seller offers to buyers.


Ordering ease

Delivery

Installation

Customer

training

Customer consultin

g


Returns


Concept 5:Maintenance and repair: It describes the service program for helping the customers keep purchased products in good working order.


Ordering ease

Delivery

Installation

Customer

training

Customer consultin

g


Returns


Concept 5:Returns: Sold merchandise returned by customers for refund.


Ordering ease

Delivery

Installation

Customer

training

Customer consultin

g


Returns


Concept 6:

Consider Product Hierarchy


Item

Product Type

Product line

Product class

Product family

Need family


Concept 6:Need family – the basic need underlying the existence of a product family.


Item

Product Type

Product line

Product class

Product family

Need family


Concept 6:Product family – all the product classes that can satisfy a basic need effectively.


Item

Product Type

Product line

Product class

Product family

Need family


Concept 6:Product class – a group of products within a product family.


Item

Product Type

Product line

Product class

Product family

Need family


Concept 6:Product line – a group of products within a product class.


Item

Product Type

Product line

Product class

Product family

Need family


Concept 6:Product type – a group of items within a product line that function in a similar manner.


Item

Product Type

Product line

Product class

Product family

Need family


Concept 6:Item – a unit within a product line which is distinguished by size, price, orsome other characteristic of element.


Item

Product Type

Product line

Product class

Product family

Need family


Concept 7:

Deal with the Product Systems and Mixes


Product system

Product mix

Product

assortmen

t

Depth

Length

Width

Consistency


Concept 7:A product system is a group of diverse but related items that function in a compatible manner.


Product system

Product mix

Product

assortmen

t

Depth

Length

Width

Consistency

http://images.search.yahoo.com/images/view;_ylt=A0PDoTB9L6tPJ1MAmnaJzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dcell%2Bphones%2Bin%2Bclip%2Bart%26n%3D30%26ei%3Dutf-8%26fr%3Dyfp-t-701%26tab%3Dorganic%26ri%3D52&w=438&h=450&imgurl=images.clipartof.com%2Fsmall%2F1045804-Royalty-Free-RF-Clip-Art-Illustration-Of-A-Cartoon-Businessman-Handling-Multiple-Cell-Phones.jpg&rurl=http%3A%2F%2Fwww.clipartof.com%2Fportfolio%2Ftoonaday%2Fillustration%2Fcartoon-businessman-handling-multiple-cell-phones-1045804.html&size=73.4+KB&name=-free+clipart+picture+of+a+businessman+handling+multiple+cell+phones+...&p=cell+phones+in+clip+art&oid=3b349dbc94b5723a8a5a5b790a126927&fr2=&fr=yfp-t-701&tt=-free%2Bclipart%2Bpicture%2Bof%2Ba%2Bbusinessman%2Bhandling%2Bmultiple%2Bcell%2Bphones%2B...&b=31&ni=72&no=52&ts=&tab=organic&sigr=13n05ps9g&sigb=13jtv1gp6&sigi=143vh3u4d&.crumb=epTdL.GMVkq


Concept 7: A product mix is the sell of all products and items a particular seller offers for sale.


Product system

Product mix

Product

assortmen

t

Depth

Length

Width

Consistency


http://images.search.yahoo.com/images/view;_ylt=A0PDoX6DL6tPpxcAJu6JzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dcell%2Bphones%2Bin%2Bclip%2Bart%26n%3D30%26ei%3Dutf-8%26fr%3Dyfp-t-701%26tab%3Dorganic%26ri%3D89&w=426&h=470&imgurl=image.shutterstock.com%2Fdisplay_pic_with_logo%2F56041%2F56041%2C1137525126%2C26%2Fstock-vector-communication-icons-cell-phones-894047.jpg&rurl=http%3A%2F%2Fwww.shutterstock.com%2Fpic-894047%2Fstock-vector-communication-icons-cell-phones.html&size=48.3+KB&name=Communication+Icons%3A+Cell+Phones+2+Stock+Vector+894047+%3A+Shutterstock&p=cell+phones+in+clip+art&oid=c31f3910cbc9f37af545e6e36fd19c6a&fr2=&fr=yfp-t-701&tt=Communication%2BIcons%253A%2BCell%2BPhones%2B2%2BStock%2BVector%2B894047%2B%253A%2BShutterstock&b=61&ni=72&no=89&ts=&tab=organic&sigr=12o8nenl7&sigb=13jujt7cm&sigi=13ur5hbmk&.crumb=epTdL.GMVkq


Concept 7: A company’s product assortment has a certain width, length, depth, and consistency.


Product system

Product mix

Product

assortmen

t

Depth

Length

Width

Consistency



http://images.search.yahoo.com/images/view;_ylt=A0PDoQwxMKtPFWsAYfuJzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dcell%2Bphones%2Bin%2Bclip%2Bart%26n%3D30%26ei%3Dutf-8%26fr%3Dyfp-t-701%26tab%3Dorganic%26ri%3D121&w=450&h=450&imgurl=www.imageenvision.com%2F450%2F26652-clip-art-graphic-of-a-gray-cell-phone-cartoon-character-looking-through-a-magnifying-glass-by-toons4biz.jpg&rurl=http%3A%2F%2Fwww.imageenvision.com%2Fclipart%2F26652-clip-art-graphic-of-a-gray-cell-phone-cartoon-character-looking-through-a-magnifying-glass-by-toons4biz&size=156.1+KB&name=26652+Clip+Art+Graphic+of+a+Gray+Cell+Phone+Cartoon+Character+Looking+...&p=cell+phones+in+clip+art&oid=6a88ca80096ff395369bd43f284d03cc&fr2=&fr=yfp-t-701&tt=26652%2BClip%2BArt%2BGraphic%2Bof%2Ba%2BGray%2BCell%2BPhone%2BCartoon%2BCharacter%2BLooking%2B...&b=121&ni=72&no=121&ts=&tab=organic&sigr=14ib8ksk3&sigb=13k9te34e&sigi=14b44sm2f&.crumb=epTdL.GMVkq


Concept 7:The depth of a product mix refers to how many variants are offered of each product in the line.


Product system

Product mix

Product

assortmen

t

Depth

Length

Width

Consistency





Concept 7: The length of a product mix refers to the total number of items in the mix.


Product system

Product mix

Product

assortmen

t

Depth

Length

Width

Consistency




http://images.search.yahoo.com/images/view;_ylt=A0PDoX3jL6tPLX4A.imJzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dcell%2Bphones%2Bin%2Bclip%2Bart%26n%3D30%26ei%3Dutf-8%26fr%3Dyfp-t-701%26tab%3Dorganic%26ri%3D109&w=490&h=534&imgurl=www.bloggingpro.com%2Fwp-content%2Fuploads%2F2010%2F03%2Fcellphoneclipart.gif&rurl=http%3A%2F%2Fwww.bloggingpro.com%2Farchives%2F2010%2F03%2F25%2Fthe-art-of-mobile-blogging-how-to-blog-from-any-cell-phone%2F&size=14.1+KB&name=The+Art+Of+Mobile+Blogging+%28How+To+Blog+From+Any+Cell+Phone+...&p=cell+phones+in+clip+art&oid=a6ca983fb1811ae7511e847793785d5f&fr2=&fr=yfp-t-701&tt=The%2BArt%2BOf%2BMobile%2BBlogging%2B%2528How%2BTo%2BBlog%2BFrom%2BAny%2BCell%2BPhone%2B...&b=91&ni=72&no=109&ts=&tab=organic&sigr=13auv76tu&sigb=13kv10onr&sigi=123lfqddf&.crumb=epTdL.GMVkq


Concept 7: The width of a product mix refers to how many different product lines the company carries.


Product system

Product mix

Product

assortmen

t

Depth

Length

Width

Consistency






Concept 7: The consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way.


Product system

Product mix

Product

assortmen

t

Depth

Length

Width

Consistency






Concept 8:

Use the Product Line Analysis


Core product

Staples

Specialties

Convenience items


Concept 8:

Core product is the basic product.


Core product

Staples

Specialties

Convenience items


Concept 8:

Staples are items with lower salesvolume but not promoted.


Core product

Staples

Specialties

Convenience items


Concept 8:

Specialties are items with lowersales volume but highlypromoted.


Core product

Staples

Specialties

Convenience items


Concept 8:

Convenience items are peripheral items.


Core product

Staples

Specialties

Convenience items



Concept 9:

Master the Product-Mix Pricing

Product –line pricing

Optional-feature pricing

Captive-product pricing

Two-part pricing

By-product pricing

Product-bundling pricing



Concept 9:

Product–line pricing is setting price steps between product line items.

Product –line

pricingOptional-feature pricing


Two-part pricing

By-product pricing


http://images.search.yahoo.com/images/view;_ylt=A0PDoS3tM6tPeCwALH.JzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dprices%2Bof%2Bcell%2Bphones%2Bin%2Bclip%2Bart%26n%3D30%26ei%3Dutf-8%26y%3DSearch%26fr%3Dyfp-t-701%26tab%3Dorganic%26ri%3D35&w=150&h=146&imgurl=www.imageenvision.com%2Fsm%2F0025-0803-0816-3522_clip_art_graphic_of_a_gray_cell_phone_cartoon_character_holding_a_yellow_sales_price_tag.jpg&rurl=http%3A%2F%2Fwww.imageenvision.com%2Fcollection%2Fcell_phone.html&size=64.4+KB&name=Clip+Art+Graphic+of+a+Gray+Cell+Phone+Cartoon+Character+Holding+a+...&p=prices+of+cell+phones+in+clip+art&oid=ef83d4c1e7bc5eed7349d295b043391d&fr2=&fr=yfp-t-701&tt=Clip%2BArt%2BGraphic%2Bof%2Ba%2BGray%2BCell%2BPhone%2BCartoon%2BCharacter%2BHolding%2Ba%2B...&b=31&ni=72&no=35&ts=&tab=organic&sigr=11n2h33n9&sigb=146j1pord&sigi=149fgt5cs&.crumb=epTdL.GMVkq



Concept 9:

Optional-feature pricing is pricing optional or accessory products sold with the main product.

Product –line



Two-part pricing

By-product pricing




Concept 9:

Captive-product pricing is pricing products that must be used with the main product.

Product –line



Two-part pricing

By-product pricing




Concept 9:

Two-part pricing is a strategy in which price is broken into a fixed fee plus a variable usage rate.

Product –line



Two-part pricing

By-product pricing


http://images.search.yahoo.com/images/view;_ylt=A0PDoS3lM6tPonwAwleJzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dprices%2Bof%2Bcell%2Bphones%2Bin%2Bclip%2Bart%26n%3D30%26ei%3Dutf-8%26y%3DSearch%26fr%3Dyfp-t-701%26tab%3Dorganic%26ri%3D27&w=1080&h=1024&imgurl=transparent.clipartof.com%2FRoyalty-Free-Vector-Clip-Art-Illustration-Of-A-Cell-Phone-Character-Making-A-Payment-10241059109.jpg&rurl=http%3A%2F%2Fwww.clipartof.com%2Fportfolio%2Fanyvector%2Fillustration%2Fcell-phone-character-making-a-payment-1059109.html&size=161.5+KB&name=Royalty-Free+Vector+Clip+Art+Illustration+of+a+Cell+Phone+Character+...&p=prices+of+cell+phones+in+clip+art&oid=e810f218c6ad04c0d7c92a64013391d8&fr2=&fr=yfp-t-701&tt=Royalty-Free%2BVector%2BClip%2BArt%2BIllustration%2Bof%2Ba%2BCell%2BPhone%2BCharacter%2B...&b=0&ni=72&no=27&ts=&tab=organic&sigr=13cnam1f2&sigb=146evbr19&sigi=13uf4fm9k&.crumb=epTdL.GMVkq



Concept 9:

By-product pricing is pricing low-value by-products to get rid of them.

Product –line



Two-part pricing

By-product pricing




Concept 9:

Product-bundle pricing is pricing bundles of products sold together.

Product –line



Two-part pricing

By-product pricing



Concept 10:

Emphasize Packaging


Self-service

Consumer affluence

Company/brand image

Innovation opportunit

y


Concept 10: Self-Service – customers would know about the product even without any person present.


Self-service

Consumer affluence

Company/brand image


y


Concept 10: Consumer affluence – customers are willing to pay for better packages.


Self-service

Consumer affluence

Company/brand image


y


Concept 10: Company/brand image – contributes to instant recognition.


Self-service

Consumer affluence

Company/brand image


y


Concept 10: Innovation opportunity – innovative packaging helps improve sales.


Self-service

Consumer affluence

Company/brand image


y






Summary: Top 10 Concepts of Product Strategy



TOP 10 LEARNING CONCEPTS

Ch. 12: Setting Product Strategy

Windell de Vera

May 11, 2012

windell de vera ch. 12

Business

product hierarchy

product systems

product strategy windell

d product potentialand

product line analysis

productmix pricing

philip kotler

marketing management