Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–1 Part 3: The marketing mix Chapter 8: Product planning Step 5: Design the marketing strategy

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–2 When we finish this lecture you should Understand the meaning of the term ‘product’ Appreciate the differences between goods and services Recognise the differences between the various consumer and business product classes Understand how product classes can assist a marketing manager in planning marketing strategies Understand the concept of branding and how it is used in strategy planning Understand the importance of packaging and warranties in strategy planning Know more about the international aspects of product planning

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–3 Product defined Product – Need-satisfying offerings of an organisation Product attributes – Features or characteristics of a product or service Product quality – The ability of a product to satisfy a customer’s needs or requirements

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–4 Figure 8.1 Strategy planning for products Target Market Brand Manufacturer or intermediary

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–5 Figure 8.2 Examples of possible blends of physical goods and services in a product Steel Pipe

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–6 Figure 8.3 The four characteristics of services and their implications for marketing

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–7 Product mix and product lines Product assortment or product mix – The set of all product lines and individual products that a company sells Product line – A set of individual products that are closely related Individual product – A particular item within a product line – A ‘stock keeping unit’

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–8 Product classes Two broad product classes – Consumer products – Business products Product classes help in developing new marketing mixes and evaluating present mixes Product classes are based on how the customer views the product – How consumers think about and shop for products – How business/organisational buyers think about products and how these products will be used

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–9 Figure 8.4 Product classes

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–10 Figure 8.5 Consumer product classes and marketing mix planning

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–11 International variations It is important to keep in mind that consumer attitudes in different countries vary significantly A shopping product in Australia/New Zealand might be a specialty product in other countries ‘A convenient place to shop’ means different things in different countries It’s important to consider products from the target customer’s view, not from the marketer’s view

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–12 Business product classes Tax treatment – Capital item – Expense item Derived demand Inelastic demand faced by whole industry

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–13 Figure 8.6 Business product classes and marketing mix planning

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–14 Branding defined Branding – The use of a name, term, symbol or design, or a combination of these, to identify a product Brand name – A word, letters, and/or numbers that can be vocalised Trademark or brand mark – Those words, symbols or marks that are legally registered for use by a single company Service mark – Those words, symbols or marks that are legally registered for use by a single company to refer to a service offering

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–15 Conditions favourable to branding Product is easy to identify by brand Consistent quality can be maintained Widespread availability is possible Demand for the product class is large Price can be high enough to support branding Economies of scale are possible Favourable shelf locations can be obtained

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–16 Levels of brand familiarity Brand rejection (unfavourable) Brand non-recognition Brand recognition Brand preference Brand insistence (favourable)

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–17 Selecting the right brand name Figure 8.8 Characteristics of a good brand name

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–18 Brand equity and protecting brand names and trademarks Brand equity – The value, to a company, of a brand’s overall position in the market Protecting brand names and trademarks – The Trade Marks Act 1955 (Cwlth) (Australia) – The Trade Marks Act 1953 (New Zealand) – Common law protection – Trade Practices Act (Australia) – Fair Trading Act (New Zealand)

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–19 Types of brands and manufacturer brands versus private labels What kinds of brands to use – Family brands – Licensed brands – Individual brands – Generic products Who does the branding – Manufacturer brands – Private labels/house brands The battle of the brands

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–20 Figure 8.9 Examples of alternative brand

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–21 Packaging Opportunity to promote the product – At the point of purchase – Links product to earlier promotion – At the point of consumption Opportunity to protect the product – Reduce costs of shipping and storing – Reduce theft, spoiling and so on Improve the basic product – Easier to use, more convenient – Appeal to new target markets

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–22 Product warranties Warranty—What the seller promises about its product Covered by both common and statutory laws – Goods sold must be of merchantable quality and fit for their purpose Implied warranties – Go with the product and cannot be excluded, restricted or modified Written (or expressed warranty) – Additional warranty offered that is over and above what is required by law

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 8–23 What we will be doing in the next chapter In the following chapter we will be discussing product management and new-product development, including – Product life cycles – The new-product development process – Product adoption by consumers