7.1 The Product Mix

Objectives Define product mix, product extension, and product enhancement. List and describe the components of the product mix.

What is Product Mix product mix –the total assorted features associated with the product brand name various products offered under the brand product packaging

Products Tangible Parts: –Physical features that can be seen or touched Intangible Parts: –Non-physical service features ServiceQualityValueSatisfaction

Product Extensions Items added to a product to make it more attractive to the target market –Examples: GuaranteesWarranties Instructional CDs

Product Extensions Example: –Cars with 100,000 mile warranties

Product Extension Example –“Unconditional replacement or cash back warranty for the life of the product”…

Basic vs. Enhanced Product Enhancement: –Features added to the basic product that satisfy additional needs and wants with the same purchase

Product Enhancements Examples:Car –Comfortable controls, upgraded fabrics, sunroof Nike Shoes –Air cushioned soles, Lightweight fabric Stadium Seats –Back supports, AC Suites, Sky box

Product Enhancement Example –May be unnecessary of some, but important to others Must have both options available

Product Mix A products total assorted features –1. Product line –2. Packaging –3. Brand

1. Product Line A group of similar products with slight variations to satisfy the different needs of customers

Product Line Goal: –Achieve the greatest amount of sales possible by satisfying the needs of a diverse target market

Product line Example –Coca Cola Meet different tastes and diets needs/wants –Coke Classic –Diet Coke –Caffeine Free Diet Coke –Coke Zero –Coke with vanilla, lime, lemon or cherry

2. Packaging Ease of use Safety Consumer attraction Accessibility for stores Environmental friendliness –Influence sales!

Packaging Different packaging attracts different buyers…

3. Brand The name symbol, word, design or combination of these elements that identifies a product, service or company

Brand Represents the company’s: –Reputation of quality –Reliability –Status in market place

Brand What do you think of each?

Brand Trademark: –Legal protection of words and symbols used by a company

Brand Illegal for other companies to use a brand name Companies receives 8-12% of merchandised sold…

Brand Licensed Brand –Well known name and/or symbol established by one company and sold for use by another company to promote its products College and professional teams Mascots and logos

Brand Licensed brand –Ex. Walt Disney Co. Sells licenses so that other companies can use character names/images on clothing and toys

Brand 5 Stages of brand recognition 1. Non-recognition 2. Rejection 3. Recognition 4. Preference 5. Insistence

Brand Non-recognition Stage –Unable to identify brands –Ex. New brand of basketball shoes –Do not trust the brand

Brand Rejection stage –Will not purchase product due to brand Ex. Sporting Goods –Poor quality –Safety recalls

Brand Recognition stage –Know of brand –Brand has little influence on their purchases

Brand Preference stage –Brand is valuable –Purchase brand if available –If not available, will purchase another

Brand Insistence stage –Value the brand –Reject other brands if not available –Go to great lengths to purchase brand –Will do without, rather than buy competitors Companies strive to reach this level.

Top Sports/ Entertainment Brands of Microsoft $55 billion 2.Apple $24.7 billion 3.Disney $22.5 billion 4.Sony $11.3 billion 5.Nike $10.3 billion