Product Concepts

1
Product Concepts
8
Prepared by Deborah Baker Texas Christian
University Revised by Dr. R. BaurAgricultural
Technical Institute
chapter
2
Chapter 7 Review

• 1. Concept purpose of a marketing decision
  support system.
• 2. Define marketing research explain its
  importance to marketing decision making.
• Steps involved a marketing research project.
• Impact of the Internet on marketing research.
• Importance of scanner-based research.
• Concept of competitive intelligence.

7
chapter
3
Chapter 8 Learning Objectives

• 1. Define the term product.
• Classify consumer products.
• Discuss the importance of services
• Identify differences between services goods.
• Explain why services marketing is important to
  manufacturers
• Define product item, product line, and product
  mix
• Describe marketing uses of branding
• Describe marketing uses of packaging labeling.
• Describe how and why product warranties are
  important marketing tools.

8
chapter
4
Product
264
Learning Objective
1
Define the term product.
Everything, both favorable and unfavorable, that
a person receives in an exchange.
Tangible
Intangible
Product
Sellers Image
Service
Sellers Reputation
Idea
Product Image
5
What is a Product?
Learning Objective
1
Define the term product.
Product
isthe heart ofMarketing Mix
Promotion
Price
Place (Distribution)
6
Learning Objective
264
2
Classify consumer products
A product used to (1) manufacture other goods or
services, (2) facilitate an organizations
operations, or to (3) resell to other consumers.
A. Business Product
Classification of Business Products1. Major
Equip, 2. Accessory Equip, 3. Components
Parts,4. Processed Mat., 5. Raw Mat., 6.
Supplies, 7. Services
B. Consumer Product
Product bought to satisfy an individuals
personal wants
7
Types of Consumer Products
Learning Objective
264
2
Classify consumer products
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.
Involvement?
Little
Moderate
Involvement?
8
Learning Objective
265
2
Classify consumer products
3. Specialty Products
4. Unsought Products
A particular item that consumers search
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.
Involvement?
Extensive
None
Involvement?
9
Service
265
Learning Objective
Discuss the importance of services to the economy
3
The result of applying human or mechanical
efforts to people or objects.
10
The Importance of Services
266
Learning Objective
Discuss the importance of services to the economy
3
79 of workers are in service sector
Services account for 76 of U.S. GDP
Service occupations will be responsible for all
job growth through 2005
11
Learning Objective
267
Discuss the differences between services and
goods
4
1. Intangibility
Services that cannot be touched, seen, tasted,
heard, or felt in the same manner as goods.
2. Inseparability
A characteristic of services that allows them to
be produced and consumed simultaneously.
3. Heterogeneity
A characteristic of services that makes them less
standardized and uniform than goods.
4. Perishability
A characteristics of services that prevents them
from being stored, warehoused, or inventoried.
12
Learning Objective
Define product item, product line, and product
mix
269
5
1. Product Mix
All products that an organization sells.
PG Family, Personal Household Care Products
2. Product Line
A group of closely-related product items.
PG Beauty Products
A specific version of a product that can be
designated as a distinct offering among an
organizations products.
3. Product Item
PG Olay
13
Benefits of Product Lines
Learning Objective
270
Define product item, product line, and product
mix
5
1. Advertising Economies
Campbells m-m-good
2. Package Uniformity
Campells Cans
3. Standardized Components
Handles for Garden Tools
Efficient Sales Distribution
Multiple Items Fr Supplier
Equivalent Quality
Campbells Soups
14
Product Mix Width
270
Learning Objective
Define product item, product line, and product
mix
5
The number of product lines an organization
offers and the number of markets the organization
is in

• Diversifies risk
• Capitalizes on established reputations

15
Product Line Depth
270
Learning Objective
Define product item, product line, and product
mix
5
The number of product items in a product line

• Attracts buyers with different preferences
• Increases sales/profits by further market
  segmentation
• Capitalizes on economies of scale
• Evens out seasonal sales patterns

16
Learning Objective
Define product item, product line, and product
mix
5
AMES TOOLS
Width of the product mix
RAKES
SHOVELS
HOES
ROUND PT
LEAF
MORTAR
Depth of the product lines
FLAT
GARDEN
GARDEN
SCOOP
MINI
PLASTIC/METAL
SNOW
48/ 60
48/ 60
48/ 60
17
Learning Objective
Define product item, product line, and product
mix
271
5
Adjustments to Product Items,Lines, and Mixes
A. Product Modification
C. Product Line Extension or Contraction
B. ProductRepositioning
Plastic insteadof Metal SnowShovels
Getting into Z-Turn Mowers
Hyundai
18
271
Learning Objective
Define product item, product line, and product
mix
5
1. Quality Modification
HYUNANDI CARS
A. Types of Product Modifications
2. Functional Modification
KETCHUPQUEEZE BOTTLES
3. Style Modification
CLOTHINGCARS
19
Planned Obsolescence
271
Learning Objective
Define product item, product line, and product
mix
5
The practice of modifying products so those that
have already been sold become obsolete before
they actually need replacement.
20
B. Repositioning
Learning Objective
271
Define product item, product line, and product
mix
5
Why reposition established brands?
1. Changing Demographics
3. Changes in Social Environment
2. Declining Sales
TARGETING FRITOS FROM ALL AGES TO 9 18 AGE GROUP
TAKING PHOSPATEOUT OF LAUNDRYDETERGENT TO MAKE
IT GREEN
21
C. Product Line Extension
272
Learning Objective
Define product item, product line, and product
mix
5
D. Product Line Contraction

• Some products have low sales or cannibalize sales
  of other items
• Resources are disproportionately allocated to
  slow-moving products
• Items have become obsolete because of new product
  entries

Adding additional products to an existing product
line in order to compete more broadly in the
industry.
AMES ADDINGPRUNING SHEARS
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Brand
272
Learning Objective
Describe marketing uses of branding.
6
A name, term, symbol, design, or combination
thereof that identifies a sellers products and
differentiates them from competitors products.
23
Branding
Learning Objective
Describe marketing uses of branding.
272
6
That part of a brand that can be spoken,
including words letters, and numbers.
Brand Name
Campbells, WD-40
Brand Mark
The elements of a brand that cannot be spoken.
Brand Equity
The value of company and brand names.
Master Brand
A brand so dominant that it comes to mind
immediately when a product category, use,
attribute, or benefit is mentioned.
Band-Aid
Adhesive Bandages
24
A. Benefits of Branding
273
Learning Objective
Describe marketing uses of branding.
6
1. Product Identification
3. New Product Sales
2. Repeat Sales

Hey Mabel,Black Label
25
An Effective Brand Name
273
Learning Objective
Describe marketing uses of branding.
6

• 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

26
B. Branding Strategies
Learning Objective
Describe marketing uses of branding.
275
6
No Brand(Generic)
Brand
Private Brand
Owned by the Seller
Owned by the Maker
Manufacturers Brand
IndividualBrand
Family Brand
Combi-nation
IndividualBrand
Family Brand
Combi-nation
SearsCrafts-man
Campbell
New Era
Post Bran Flakes
Pennys
Shearers
27
Advantages of Manufacturers Brands
276
Learning Objective
Describe marketing uses of branding.
6

• Develop customer loyalty
• Attract new customers
• Enhance prestige
• Offer rapid delivery, can carry less inventory
• Ensure dealer loyalty

I would walk a mile for a Camel
28
Advantages of Private Brands
276
Learning Objective
Describe marketing uses of branding.
6

• Earn higher profits
• Less pressure to mark down prices
• Manufacturer may drop a brand or become a direct
  competitor to dealers
• Ties to wholesaler or retailer
• No control over distribution of manufacturers
  brands

29
Individual Brands Vs Family Brands
277
Learning Objective
Describe marketing uses of branding.
6
Individual Brand
Family Brand
Using different brand names for different
products to target different mkt segments
Marketing several different products under the
same brand name.
Holiday Inn Express Holiday Inn Select Holiday
Inn ResortHoliday Inn Garden
CourtyardResidence InnFairfield Inn
Marriott
30
C. Cobranding
Learning Objective
Describe marketing uses of branding.
277
6
Types of Cobranding
3. Complementary Branding
1. IngredientBranding
2. Cooperative Branding
Coupon for Buns on Hot Dogs
31
D. Trademarks
278
Learning Objective
Describe marketing uses of branding.
6
A Trademark is the exclusive right to use a brand

• Many parts of a brand and associated symbols
  qualify for trademark protection
• The mark has to be continuously protected
• Rights continue for as long as it is used

32
Types of Trademarks
Learning Objective
Describe marketing uses of branding.
278
6
SHAPES
ORNAMENTAL DESIGN

CATCHY PHRASES
ABBREVIATIONS
BUD
AA
WE ARE BULLISHON AMERICA
33
Learning Objective
279
Describe marketing uses of packaging and labeling
7
Contain and Protect
Breakage, spillage, heat/cold, sterility
Promote
Functions of Packaging
Brand, differentiate, get attention
Facilitate Storage, Use, Conv
Easy to handle, open, pour, reseal
Facilitate Recycling, Reuse
Biodegradable, Pumps, Refillable
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Labeling
Learning Objective
Describe marketing uses of packaging and labeling
281
7
Informational
Persuasive

• Helps make proper selections
• Lowers cognitive dissonance
• Includes use/care

• Focuses on promotional theme
• Information is secondary

35
Universal Product Codes
281
Learning Objective
Describe marketing uses of packaging and labeling
7
A series of thick and thin vertical lines (bar
codes), readable by computerized optical
scanners, that represent numbers used to track
products.
36
Learning Objective
Describe how why product warranties are
important marketing tools
281
8
Warranty
A confirmation of the quality or performance of a
good or service.
A written guarantee.
Express Warranty
An unwritten guarantee that the good or service
is fit for the purpose for which it was sold.
(UCC)
Implied Warranty
37
Chapter 8 Summary

• 1. Define the term product.
• Classify consumer products.
• Discuss the importance of services
• Identify differences between services goods.
• Why services marketing is important to
  manufacturers
• Define product item, product line, and product
  mix
• Marketing uses of branding
• Marketing use of packaging labeling.
• How why product warranties are important
  marketing tools.

8
chapter
38
NEXT TOPIC

• CHAPTER 9
• DEVELOPING
• AND
• MANAGING
• PRODUCTS