Presentation on theme: "Dr. S. Borna MBA 671. Lecture Outline 1. Some basic terminology related to product related to product A. Meaning of Product B. Product vs. Product Offering."— Presentation transcript:
WHAT DO WE MEAN BY PRODUCT? NEED-SATISFYING “OFFERING” OF A FIRM
INCLUDED IN THE OFFERING INCLUDED IN THE OFFERING OF A FIRM: OF A FIRM: PHYSICAL AND NON-PHYSICAL ATTRIBUTES OF A PRODUCT AND CONDITIONS SURROUNDING ITS SALES.
Kotler’s Definition A product is anything that can be offered to a market for attention, use, acquisition or consumption that might satisfy a want or need.
Examples: Poster Pepsi Cola (consumed) Car (used) Lawyer (performance) Florida, London (attention) Tangible Service Places (acquisition, attention) Organization (performance)
Three Levels of Product Core benefit Warranty FreeDeli-very Serv.Maint.Syst. Installation Augmented Product Augmented Product Formal Product Core Product Packaging BrandName Quality Styling Features
Kotler adds two more levels Potential productAugmented product Expected product Basic product Core benefit
Expected Product A set of attributes and conditions that buyers normally expect from a product In a hotel: clean towels and rooms etc.
Potential Product All the augmentations and transformations the product might ultimately under go in the future.
CLASSIFICATION OF PRODUCTS NEED FOR A TAXONOMY OF PRODUCTS NOTE: CLASSIFICATION OF CONSUMER PRODUCTS IS BASED ON CONSUMPTION BEHAVIOR OF THE CONSUMERS. PHYSICAL CHARACTERISTICS OF PRODUCTS ARE NOT A DETERMINANT FACTOR
PRODUCTS CONVENIENCE P. SHOPPING P. SPECIALTY UNSOUGHT P. STAPLES IMPULSE P. EMERGENCY P. HOMOGENEOUSHETEROGENEOUS NEW REGULAR
THE CHARACTERISTICS OF GOODS THEORY Products Characteristics red orange yel-low repl.rate grossmargin adj. time/cons. srchtime H M L L M H L M H L M H L M H
Conceptual Representation of a Product Mix Prod. line 1 Prod. line 2 Prod. line 3 Prod. line 4 length width 1a 1b 1c 2a 3a 3b 3c 3d 3e 4a 4b 4c Number of Items: 12 Number of lines: 4 Average: 3
Product-Mix Decisions Width (how many product lines) Length (number of items in the line) Internal Consistency (how closely product lines are related in end use, production, distribution and so one.
Product Mix Decisions It is mainly a portfolio Decision: To add a new product line or delete an existing one, shorten its product line, etc.
Product Line Decisions Product Line Analysis: 1. Sales and Profit analysis 1. Sales and Profit analysis 2. Product Line Market 2. Product Line Market Profile (Product’s position Profile (Product’s position relative to the competing relative to the competing brands). brands).
Product Line Decisions Product Line Length Decisions -Upward Stretch -Downward Stretch -Two Way Stretch -Line Filling( adding items within the present range) within the present range) -Positioning (repositioning) Product Drop Decisions Product Drop Decisions
Branding Strategies and Decisions Some basic definitions (brand, brand name, brand mark, trade mark)
A brand is a name, term sign, symbol, or design or a combination of them, intended to identify the goods and services of one seller or a group of sellers, and to differentiate them from those of the competitors. A Definition of Brand
Brand Mark, Brand Name and Trade Mark Sounds as trademarks! Branding in illicit markets
A brand is a complex symbol: A brand is a complex symbol: It may say something about the attributes of a product, its values, culture of the country, and personality of producer and user. Deep vs shallow brands
Benefits of Branding 1. Provides useful information for the consumer for the consumer 2. Helps the seller to segment its market its market 3. Legal protection
The Concept of Brand Equity Brand equity is the value consumers assign to a brand above and beyond any specific functional characteristics of of the product.
refers to: capitalizing on brand equity by placing the existing brand name onto new products. (family branding, brand extension etc.) Brand Leverage:
Coca Cola $36 Billion Marlboro $33 Billion Advantages of brand equity The world’s valuable brands:
Branding Decisions Branding Decisions Brand-sponsor Decision Manufacturers brands vs. Distributors brands (The battle of brands)
Individual brand vs Family brand (P&G and GE) Separate Family brand names (Sears for example) (Sears for example) Company Trade name combined with individual brand names (Kellogg for example) Brand Name Decisions
Types of brands Manufacture Retailer PromotionalActivities Promotes the brand Does not promote the brand Sources of brand identification NationalBrandControlledBrand GenericBrandPrivateBrand
Brand Identification Strategies Brand Name Corp. Name SingleBrand Multibrand IndividualBrand CorporateBrandName Product-lineBranding FamilyName
Good Brand Names: Suggest Product Benefits Distinctive Lack Poor Foreign Language Meanings Suggest Product Qualities Easy to: Pronounce Recognize Remember
Packaging Strategy and Decisions Packaging Strategy and Decisions Advantages: 1. Aid new product strategy 2. Provide access to channels 3. Support pricing strategy 4. Serve as part of promotion 5. Provide protection and containment containment 6. Provide information to consumers
Packaging Functions of packaging: 1. Containment - hold for transportation transportation 2. Protection (from content: acid) acid)
3. Facilitating Function (usage assistance and information. assistance and information. 3. Promotion 4. Miscellaneous, reusability of package, ecological package, ecological requirements legal regulations. requirements legal regulations. Functions of packaging: Cont.
Packaging Concept The packaging concept defines what the package should basically be or do for the particular product.
A note on: Planned Obsolescence 2. Planned Functional Obsolesce- ence ence 3. Planned Style Obsolescence 1. Planned Material Obsolescence