2. BASIC MARKETING For use only with Perreault/Cannon/ McCarthy texts, © 2011 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Chapter 9 Elements of Product Planning for Goods and Services

3. At the end of this presentation, you should be able to: 1.Understand what “Product” really means. 2.Know the key differences between goods and services. 3.Understand what branding is and how to use it in strategy planning. 4.Understand the importance of packaging in strategy planning. 5.Understand the role of warranties in strategy planning.

4. At the end of this presentation, you should be able to: 6.Know the differences among the various consumer and business product classes. 7.Understand how product classes can help a marketing manager plan marketing strategies. 8.Understand important new terms.

5. Product Quality and Customer Needs

6. Examples of Possible Blends of Physical Goods and Services in a Product Restaurant meal, cell phone, automobile tune-up 100% service emphasis 100% physical good emphasis Blend of physical good and service Canned soup, steel pipe, paper towels Satellite radio, hair styling, postal service

7. Differences in Goods and Services

8. Product Assortment (set all product lines and individual products), Product Line (set of closely related products ) or Individual Product (a particular product within a product line)? © 2011 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

9. Recognized Trademarks and Symbols (legally registered) Help in Promotion

10. Conditions Favorable to Branding Market price can be high Product quality easy to maintain and best value for price Easy to label and identify by brand or trademark Easy to label and identify by brand or trademark Key Issues Key Issues Favorable shelf or display space Dependable, widespread availability Economies of scale

11. Achieving Brand Familiarity Is Not Easy Brand Rejection Brand Non- Recognition Brand Recognition Brand Preference Brand Insistence

12. Brand Familiarity

13. The Right Brand Name Can Help (respected name builds brand equity) Short & Simple Easy to Spell & Read Easy to Recognize & Remember Easy to Pronounce Can Pronounce in Only One Way Can Pronounce in All Languages Suggests Product Benefits Adapts to Packaging/Labeling Needs No Undesirable Imagery Always Timely Adapts to Any Advertising Medium Legally Available for Use

14. A Good Brand Name? © 2011 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

15. You Must Protect Your Own—if becomes a generic descriptive word for a product category, protection is lost Lanham Act—determines marks and brand names that can be protected Counterfeiting Is Accepted In Some Cultures, especially in developing nations Protecting Brand Names & Trademarks

16. Individual Brand (e.g., General Mills— Bisquick, Gold Meal Flour) Individual Brand (e.g., General Mills— Bisquick, Gold Meal Flour) Family Brand (e.g., Sunkist) Family Brand (e.g., Sunkist) Brand Choices Generic “Brand” Generic “Brand” What Kind of Brand to Use? Licensed Brand Licensed Brand

17. Licensing © 2011 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

18. Who Should Do the Branding? Battle of the Brands Manufacturer Brands Manufacturer Brands Also called national brands Created/owned by producers Dealer Brands Also called private brands or store brands Created/owned by intermediaries

19. Checking Your Knowledge Target’s “Cherokee” brand of men’s clothing is available only at Target stores. The brand provides a low-cost alternative to other men’s fashions available at department stores and via catalogs. The Cherokee brand is a(n): A. manufacturer brand. B. dealer brand. C. licensed brand. D. national brand. E. generic brand.

20. The Strategic Importance of Packaging Packaging Can Lower Distribution Costs (e.g., save space and weight) Packaging Can Lower Distribution Costs (e.g., save space and weight) UPC Codes Speed Handling (e.g., improves inventory monitoring) UPC Codes Speed Handling (e.g., improves inventory monitoring) Packaging Sends a Message (e.g., nutritional information on food products) Packaging Sends a Message (e.g., nutritional information on food products) Packaging Can Enhance the Product (e.g., make easier or safer to use) Packaging Can Enhance the Product (e.g., make easier or safer to use)

21. Ways Packaging Benefits Consumers and Marketers Benefits Promoting (product information) Protecting (shipping & storing; tampering: shoplifting; spoiling) Enhancing (convenience in use)

22. What Is Socially Responsible Packaging? Federal Fair Packaging and Labeling Act; clearly labeled in easy-to- understand terms Federal Fair Packaging and Labeling Act; clearly labeled in easy-to- understand terms Consumer Evaluation of Eco Impacts; consumers often don’t know Consumer Evaluation of Eco Impacts; consumers often don’t know Packaging Can Hurt Environment Packaging Can Hurt Environment Ethical Decisions Remain (e.g., downsized products; dealer branded products package to look similar to manufacturer brands Ethical Decisions Remain (e.g., downsized products; dealer branded products package to look similar to manufacturer brands Socially Responsible Packaging Issues

23. Checking Your Knowledge Heinz has a new ketchup bottle that has the cap on the bottom, instead of the top. The bottle uses gravity to help the consumer get every last drop of ketchup out of the bottle. The cap is also designed to pour cleanly, so that dried ketchup does not accumulate around the opening. This new bottle demonstrates how packaging can: A. promote product. B. protect the product. C. lower distribution costs. D. incorporate UPC codes. E. enhance product usage.

24. Warranty Policies Are a Part of Strategy Planning (seller’s promise about product in writing) May Improve Marketing Mix (reassuring to customers) Promises in Writing Promises in Writing Magnuson- Moss Act (provide clearly written warranty) Service Guarantees (satisfaction & expectations) Support May Be Costly

25. Checking Your Knowledge McDonald’s announced that at select locations, if drive-through customers do not get exactly what they want within two minutes of placing the order, their next meal will be free. This promise by McDonald’s is a good example of a(n): A. service guarantee. B. warranty. C. unit price. D. limited warranty. E. no-fault insurance policy.

26. Product Classes Help Plan Marketing Strategy Consumer ProductsBusiness Products

27. Consumer Product Classes Homogeneous Heterogeneous Shopping Products Specialty Products Convenience Products Impulse Emergency New Unsought Regularly Unsought Unsought Products Staples

28. One Product May Be Seen Several Ways

29. Checking Your Knowledge Jack White wanted to purchase a new dress shirt. He went to a local department store, toured the men’s department, and thought all the brands looked about the same. He decided to buy the store brand shirt, because it was the cheapest. For Jack, the new shirt was a(n): A. convenience product. B. heterogeneous shopping product. C. specialty product. D. homogeneous shopping product. E. impulse product.

30. Business Product Classes – How They Are Defined Installations; important capital items Accessories; short lived capital items Raw Materials; unprocessed expense items Component Parts & Materials; expense items that become a part of the final product MRO Supplies Professional Services Business Product Classes

31. Interactive Exercise: Business Product Classes

32. Inelastic Industry Demand; price increase might not reduce the quantity ordered Derived Demand Tax Treatments Differ; expense vs. capital items Business Products Are Different

33. Which of the following is a "product"? A. a used car B. a bus ride C. a haircut D. a dental exam E. all of the above Study Question 1

34. Which of the following would NOT be favorable to successful branding? A. The product offers superior customer value B. Product quality fluctuates due to variations in raw materials C. Dependable and widespread availability D. Economies of scale in production E. Favorable shelf locations are available Study Question 2

35. Carl refuses to buy Billy Goat brand of beer, his attitude toward this brand is called _____. A. brand rejection. B. brand familiarity. C. brand non-recognition. D. brand recognition. E. brand positioning. Study Question 3

36. Good packaging: A. Can make a product easier or safer to use. B. Can be an important promotional tool. C. Can lower distribution costs. D. Can make products easier to handle and display. E. All of the above. Study Question 4

37. Which of the following would be a convenience product for most consumers? A. Gold jewelry B. Butter C. Stereo TVs D. Dress shoes E. Bicycles Study Question 5