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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.

Setting Product Strategy

Components of the Market Offering


Value-based prices

Five Product Levels

Attractiveness of the market offering Product features and quality Services mix and quality

The CORE Product


Is NOT the tangible, physical product. You can't touch it. That's because the core product is the BENEFIT of the product that makes it valuable to you.

The AUGMENTED Product


Is the non-physical part of the product. Consists of lots of added value, for which a premium may or may not be paid

Consumer Goods Classification

Types of Consumer Products


Convenience Shopping Specialty Unsought Frequent purchases bought with minimal buying effort and little comparison shopping Low price Widespread distribution Mass promotion by producer

Convenience

Shopping

Specialty

Unsought

Types of Consumer Products


Convenience Shopping Specialty Unsought Less frequent purchases More shopping effort for comparisons. Higher than convenience good pricing Selective distribution in fewer outlets Advertising and personal selling

Types of Consumer Products


Convenience Shopping Specialty Unsought
Strong brand preference and loyalty, requires special purchase effort, little brand comparisons, and low price sensitivity High price Exclusive distribution Carefully targeted promotions

Types of Consumer Products


Convenience Shopping Specialty Unsought
Little product awareness and knowledge (or if aware, sometimes negative interest) Pricing varies Distribution varies Aggressive advertising and personal selling by producers and resellers

Product Differentiation
Product form Features Customization Performance Conformance Durability Reliability Repairability Style

Product Quality
Ability to perform its functions Its overall durability, reliability, precision, ease of operation It is a major positioning tool

TQM
It is a management strategy aimed at embedding awareness of quality in all organizational processes.

The Eight Elements Ethics Integrity Trust Training Teamwork Leadership Recognition Communication

Quality Dimensions
Level Consistency First determine the level of quality in support of the position Quality here refers to performance quality

Quality Dimensions
Level Consistency High quality means high levels of quality consistency It refers to conformance quality

Service Differentiation
Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair Returns

Developing products for rural markets


Products should be designed keeping in mind the rural conditions Packaging is one of the key drivers of success in rural areas

Issue of transfer and storage: Rugged packing The issue of affordability: small-unit packs
Brand elements should be decided keeping in mind rural consumers

Product and Service Classifications


Organizations, persons, places, and ideas
Organizational marketing makes use of corporate image advertising Person marketing applies to political candidates, entertainment sports figures, and professionals Place marketing relates to tourism Social marketing promotes ideas

Product and Service Classifications


Organizations, persons, places, and ideas
Organizational marketing makes use of corporate image advertising Person marketing applies to political candidates, entertainment sports figures, and professionals Place marketing relates to tourism Social marketing promotes ideas

Product and Service Classifications


Organizations, persons, places, and ideas
Organizational marketing makes use of corporate image advertising Person marketing applies to political candidates, entertainment sports figures, and professionals Place marketing relates to tourism Social marketing promotes ideas

Product and Service Classifications


Organizations, persons, places, and ideas
Organizational marketing makes use of corporate image advertising Person marketing applies to political candidates, entertainment sports figures, and professionals Place marketing relates to tourism

Social marketing promotes ideas

Social Marketing
The design, implementation, and control of programs seeking to increase the acceptability of social idea, cause, or practice among a target group

Product Systems and Mixes


Product system Product mix / Product assortment Depth Length Width Consistency

Product and Service Decisions


Individual Product Product Line Product Mix
Product line

Product and Service Decisions


Individual Product Product Line Product Mix
Product line length

A group of products that are closely related because they may:


function in a similar manner be sold to the same customer groups, be marketed through the same types of outlets fall within given price ranges

Line stretching: adding products that are higher or lower priced than the existing line Line filling: adding more items within the present price range

Line Stretching
Down-Market Stretch Up-Market Stretch Two-Way Stretch

Product Line Stretching


A company can lengthen its product line by line stretching or line filling Stretching occurs when a company lengthens its product line beyond its current range Stretching can be down ward, upward or both ways

Up-selling
Getting the customer to buy a larger, more expensive, or more comprehensive product or service.

Cross-selling
The strategy of selling other products to a customer who has already purchased (or signaled their intention to purchase) a product from the vendor. Cross-selling is designed to increase the customer's reliance on the company and decrease the likelihood of the customer switching to a competitor.

Product Line Mix


Individual Product Product Line Product Mix Product mix Also known as product assortment Consists of all the product lines and items that a particular seller offers for sale

Product Mix Decisions


Individual Product Product Line Product Mix
Product mix width:
Number of different product lines carried by company

Product mix depth:


Number of different versions of each product in the line

Product mix length:


Total number of items in product line

Product mix consistency


Proximity of product lines

Pruning
Pruning weak brands can strengthen the remaining brands in the line

What is the Fifth P?


Packaging, sometimes called the fifth P, is all the activities of designing and producing the container for a product.

Factors Contributing to the Emphasis on Packaging


Self-service Consumer affluence Company/brand image Innovation opportunity

Packaging
The activities of designing and producing the container or wrapper for a product.
Includes primary container Secondary package (outer container) Shipping package Labeling

Packaging
Original intention was to contain & protect contents Clutter on retail shelf changing packagings role

Packaging
Good packaging creates instant brand recognition Packaging now is an important selling medium

Packaging Objectives
Identify the brand Convey descriptive and persuasive information Facilitate product transportation and protection Assist at-home storage Aid product consumption

Labeling
Labels identify a particular product or brand It might describe the product It may also promote the product

Labeling
Labeling today has some legal requirements that have to be complied with. Price, date of manufacture, manufacturers names etc are requisite information