1. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 1 chapter 9 Prepared by Angela Zigras, Seneca College Deborah Baker, Texas Christian University PRODUCT CONCEPTS

2. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 2 You will learn to... 1.Define the term product. 2. Classify consumer products. 3. Define the terms product item, product line, and product mix. 4.Describe marketing uses of branding.

3. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 3 You will learn to... 5. Describe marketing uses of packaging and labelling. 6. Discuss global issues in branding and packaging. 7.Describe how and why product warranties are important marketing tools.

4. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 4 Product Everything, both favourable and unfavourable, that a person receives in an exchange.

5. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 5 What is a Product? Promotion Product Product is the “heart” of Marketing Mix Product Product is the “heart” of Marketing Mix Place (Distribution) Price

6. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 6 Product Classifications BusinessProduct ConsumerProduct A product used to manufacture other goods or services, to facilitate an organization’s operations, or to resell to other consumers. Product bought to satisfy an individual’s personal wants

7. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 7 Types of Consumer Products Unsought Products Unsought Products Specialty Products Specialty Products Shopping Products Shopping Products Convenience Products Convenience Products ConsumerProductsConsumerProductsBusinessProductsBusinessProducts PRODUCTSPRODUCTS

8. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 8 Types of Consumer Products Convenience Product Convenience Product Shopping Product Shopping Product Specialty Product Specialty Product Unsought Product Unsought Product 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. A particular item that consumers search extensively for and are reluctant to accept substitutes. 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.

9. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 9 Types of Consumer Products Specialty Products Convenience Products Shopping Products Unsought Products

10. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 10 Product Items, Lines, and Mixes Product Item Product Line Product Mix A specific version of a product that can be designated as a distinct offering among an organization’s products. A group of closely-related product items. All products that an organization sells.

11. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 11 Gillette’s Product Lines and Mix Blades andWriting razorsToiletriesinstrumentsLighters Mach 3 Series Paper Mate Cricket SensorAdorn Flair S.T. Dupont Trac IIToni Atra Right Guard Swivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry Look Twin Injector Dry Idea Techmatic Brush Plus Venus Width of the product mix Depth of the product lines

12. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 12 Benefits of Product Lines Equivalent Quality Efficient Sales and Distribution Standardized Components Standardized Components Package Uniformity Advertising Economies Why Form Product Lines?

13. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 13 Product Mix Width  Diversifies risk  Capitalizes on established reputations The number of product lines an organization offers

14. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 14 Product Line Depth  Attracts buyers with different preferences  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

15. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 15Adjustments Product Modification Product Repositioning Product Line Extension or Contraction Product Line Extension or Contraction Adjustments to Product Items, Lines, and Mixes

16. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 16 Product Modifications Types of Product Modifications Quality Modification Functional Modification Style Modification

17. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 17 Planned Obsolescence The practice of modifying products so those that have already been sold become obsolete before they actually need replacement.

18. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 18 Repositioning Changing Demographics Declining Sales Changes in Social Environment Why reposition established brands?

19. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 19 Product Line Extension Adding additional products to an existing product line in order to compete more broadly in the industry.

20. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 20 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 Symptoms of Product Line Overextension

21. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 21Brand A name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products.

22. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 22 Benefits of Branding Product Identification Repeat Sales New Product Sales Branding distinguishes products from competition

23. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 23Branding Brand Name Brand Name Brand Mark Brand Mark Brand Equity Brand Equity Master Brand Master Brand That part of a brand that can be spoken, including letters, words, and numbers. The elements of a brand that cannot be spoken. The value of company and brand names. A brand so dominant that it comes to mind immediately when a product category, use, attribute, or benefit is mentioned. A brand so dominant that it comes to mind immediately when a product category, use, attribute, or benefit is mentioned.

24. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 24 Master Brands Baking Soda Adhesive Bandages Rum Gelatin Soup Cream Cheese Crayons Petroleum Jelly Arm & Hammer Band-Aid Bacardi Jell-O Campbell’s Philadelphia Crayola Vaseline

25. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 25 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

26. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 26 Brand Loyalty A consistent preference for one brand over all others. Once consumers are convinced of the quality and value of a particular brand, it takes a lot of money and effort to change their minds.

27. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 27 Branding Strategies Branded Name Generic Manufacturers’ Brand Private Brand Individual Brand Family Brand Combi- nation Individual Brand Family Brand Combi- nation

28. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 28 Generic Brand A no-frills, no-brand-name, low-cost product that is simply identified by its product category.

29. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 29 Manufacturers’ Brands Versus Private Brands Manufacturers’BrandManufacturers’Brand PrivateBrandPrivateBrand The brand name of a manufacturer. A brand name owned by a wholesaler or a retailer.

30. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 30 Advantages of Manufacturers’ Brands  Develop customer loyalty  Attract new customers  Enhance prestige  Offer rapid delivery, can carry less inventory  Ensure dealer loyalty

31. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 31 Advantages of Private Brands  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

32. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 32 Individual Brands Versus Family Brands IndividualBrand FamilyBrand Using different brand names for different products. Marketing several different products under the same brand name.

33. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 33Co-branding Ingredient Branding Cooperative Branding Complementary Branding Types of Co-branding

34. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 34 Trademarks  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 A Trademark is the exclusive right to use a brand

35. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 35 Packaging Functions Contain and Protect FunctionsofPackagingFunctionsofPackaging Promote Facilitate Storage, Use, and Convenience Facilitate Storage, Use, and Convenience Facilitate Recycling

36. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 36 Labelling Persuasive  Focuses on promotional theme  Information is secondary Informational  Helps make proper selections  Lowers cognitive dissonance  Includes use/care

37. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 37 Universal Product Codes A series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products.

38. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 38 Global Issues in Branding Adaptations & Modifications Global Options for Branding One Brand Name Everywhere Different Brand Names for Different Markets

39. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 39 Global Issues in Packaging Aesthetics Global Considerations for Packaging Climate Considerations Labelling

40. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 40 Product Warranties Warranty Express Warranty Express Warranty Implied Warranty A confirmation of the quality or performance of a good or service. A written guarantee. An unwritten guarantee that the good or service is fit for the purpose for which it was sold. (UCC) An unwritten guarantee that the good or service is fit for the purpose for which it was sold. (UCC)

41. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 99 - 41 Product Warranties WarrantiesWarranties Written Guarantee Implied Warranty ExpressWarrantyExpressWarranty Unwritten Guarantee