Setting Product Strategy

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Setting Product Strategy
Chapter12 Lecture 7
Marketing Management, European edn
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Questions for this week

• What are the characteristics of products and how
  can they be classified?
• How can companies differentiate products?
• How can a company build and manage its product
  mix and product lines?
• How can companies combine products to create
  strong co-brands or ingredient brands?
• How can companies use packaging, labeling,
  warranties, and guarantees as marketing tools?

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Product
Anything that can be offered to a market to
satisfy a want or need. Kotler
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Components of the Market Offering
Value-based prices
Attractiveness of the market offering
Product features and quality
Services mix and quality
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Five Product Levels
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Product Classification Schemes
Durability
Tangibility
Use
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Durability and Tangibility
Nondurable goods
Services
Durable goods
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Consumer Goods Classification
Convenience
Shopping
Unsought
Specialty
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Industrial Goods Classification
Materials and parts
Supplies/ business services
Capital items
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Product Differentiation

• Product form
• Features
• Customization
• Performance
• Conformance
• Durability
• Reliability
• Reparability
• Style

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Service Differentiation

• Ordering ease
• Delivery
• Installation
• Customer training
• Customer consulting
• Maintenance and repair
• Returns

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The Product Hierarchy
Item
Product type
Product line
Product class
Product family
Need family
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Product Systems and Mixes

• Product system
• Product mix
• Product assortment
• Depth
• Length
• Width
• Consistency

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Product Line Analysis
Core product
Staples
Convenience items
Specialities
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Product-Item Contributions to a Product Lines
Total Sales and Profits
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Product Map
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Line Stretching
Down-Market Stretch
Up-Market Stretch
Two-Way Stretch
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Product-Mix Pricing

• Product-line pricing
• Optional-feature pricing
• Captive-product pricing
• Two-part pricing
• By-product pricing
• Product-bundling pricing

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Factors Contributing to the Emphasis on Packaging
Self-service
Consumer affluence
Company/brand image
Innovation opportunity
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Packaging Objectives

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

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Packaging has been influenced by

• Self-service
• Consumer affluence
• Company and brand image
• Innovation opportunity
• ECR Lean Management
• WRAP UK Govt Waste Recycling And Packaging.

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Functions of Labels

• Identifies
• Differentiates
• Grades
• Describes
• Promotes

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Brand

• A trademark or distinctive name identifying a
  product or a manufacturer.
• A product line so identified a popular brand of
  soap.
• A distinctive category a particular kind a
  brand of comedy that I do not care for.
• A mark indicating identity or ownership, burned
  on the hide of an animal with a hot iron.
• A mark burned into the flesh of criminals.
• Has no value in accounting terms
• Brand has an associated image

A name, term, sign, symbol or design, or a
combination of these, intended to identify the
goods or services of one seller or a group of
sellers and to differentiate them from those of
competitors Kotler, 2001
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