1. Chapter 11 Setting Product Strategy

2. What is a Product?
A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

3. Product Levels
Core Benefit: The service or benefit the consumer is really buying.
Basic Product: Marketers are turning the core benefit into a basic product.
Expected Product: A set of attributes and conditions buyers normally expect when they purchase the product.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

4. Augmented Product: Attributes that exceed customer expectations.
Potential Product: Attributes that encompasses all the possible augmentations and transformations the product might undergo in the future.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

5. Product Classification Schemes
Durability: Durable OR Non-Durable
Tangibility: Tangible OR Intangible
Use: Consumer OR Industrial
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

6. Durability and Tangibility
Nondurable goods
Durable goods
Services
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

7. Consumer Goods Classification
Convenience: Staple/Impulse/Emergency
Shopping: Homogeneous/Heterogeneous
Specialty
Unsought
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

8. Industrial Goods Classification
Materials and parts: Goods that enter the manufacturer’s product completely. Ex: Cotton, wheat, vegetables, small motors etc.
Capital items: Long lasting goods that facilitate developing or managing the finished product. Ex: factory, generator, elevator etc.
Supplies/business services: Short-term goods and services that facilitate developing or managing the finished product. Ex: paint, window cleaning, legal consultation etc.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

9. Product Differentiation
Product form
Features
Customization
Performance Quality
Conformance Quality
Durability
Reliability
Repairability
Style
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

10. Service Differentiation
Ordering ease
Delivery
Installation
Customer training
Customer consulting
Maintenance and repair
Returns
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

11. Design
It refers to the totality of features that affect how a products looks, feels, and functions to a customers.
A well-designed product is pleasant to look at and easy to open, install, use, repair, and dispose of.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

12. The Product Hierarchy
Need Family: The core need that underlies the existence of a product family. Ex: Communication.
Product Family: All the product classes that can satisfy a core need with reasonable effectiveness. Ex: Technology and Income.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

13. The Product Hierarchy (cont…)
Product Class: A group of products within the product family recognized as having a certain functional coherence, also known as product category. Ex: Communication devices.
Product Line: A group of products within a product class that are closely related because they perform a similar function, are sold to the customer groups, are marketed through the same outlets or channels, or fall within given price ranges. Ex: Tab, Land/Cell Phone, Desktop, Laptop etc.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

14. The Product Hierarchy (cont..)
Product Type: A group of items within a product line that share one of several possible forms of the product. Ex: Smart phone.
Item: A distinct unit within a brand or product line distinguishable by size, price, appearance, or some other attribute. Ex: Samsung Galaxy S6
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

15. Product Systems and Mixes
A product system is a group of diverse but related items that function in a compatible manner.
A product mix is a set of all products and items a particular seller offers for sale. A product mix consists of various product lines.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

16. Product Mix: Width, Length, Depth, Consistency
Width: How many different product lines
Length: Total number of items in the mix/line
Depth: How many variants of each product in the line
Consistency: how closely related different product lines in terms of production requirement, distribution channels etc.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

17. Product Line Length: Line Stretching
Down-Market Stretch
Up-Market Stretch
Two-Way Stretch
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

18. Product-Mix Pricing Product-line pricing Optional-feature pricing
Captive-product pricing
Two-part pricing
By-product pricing
Product-bundling pricing
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

19. Co-Branding
Co-Branding (Dual Branding/Brand Bundling) occurs when 2 or more well-known brands are combined into a joint product and marketed together in some fashion.
Same company co-branding
Joint-venture co-branding
Retail co-branding
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

20. Ingredient Branding
When materials, components or parts that are necessarily contained within other branded products.
Example: Carl Zeiss lenses in Nokia mobile phones or in Sony Digital cameras.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

21. What is the Fifth P?
Packaging, sometimes called the 5th P, is all the activities of designing and producing the container for a product.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

22. Factors Contributing to the Emphasis on Packaging
Self-service
Consumer affluence
Company/brand image
Innovation opportunity
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

23. Packaging Objectives Identify the brand
Convey descriptive and persuasive information
Facilitate product transportation and protection
Assist at-home storage
Aid product consumption
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

24. Labeling
Label is a simple tag or elaborately designed graphic that is part of the package.
Labels help to identify, describe and promote the product.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

25. Warranties and Guarantees
Warranties are formal statements of expected product performance by the manufacturer. Products under warranty can be repaired, replaced or refunded within a specific time period.
Guarantees are formal assurance that a certain condition will be fulfilled, specially in case of product quality.
Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall