Product Concepts and Strategies

1
Product Concepts and Strategies
2
Product Concept
AUGMENTED
Tangible
Delivery
Return Recycling
Packaging
Styling
Core Benefit
Repair Service
Quality
Features
Warranty
Brand Name
Terms, conditions credit
Installation
9-1
1999 by Prentice-Hall, Inc.
C
3
Brand
Other Intangible Benefits
Label/ Package
Components of a Product
Service After Sale
Warranty
Total Product
Prestige, Image
Services
Product Features
Safety
Physical Attributes
4
Identify the Components (or Attributes) that
Customers Value

• Sports car
• Minivan
• College of Business
• Fast Food Restaurant
• Plumbing Services
• Airline
• Hospital
• Bread

5
Some Important Product Management Decisions

• What Products to Carry
• Items Lines Mix
• Width Depth Consistency
• How to Position
• Attributes to focus on
• Managing marketing mix to build the position
• Branding
• Manufacturer vs. Private Label vs.
  Generic
• Name, trademark, logo, trade character,
  trademark, etc.
• Attributes, Benefits, Values, Personality

6
Laundry Detergents
Tooth- pastes
Bar Soaps
Deod- orant
Sham- poos
Coffees
Oxydol 1914 Ivory Snow 1930 Dreft 1933 Tide
1946 Cheer 1950 Dash 1954 Bold 1965 Gain 1966 Era
1972 Solo 1979 Liquid Tide 1984 Liquid Bold-3
1985 Liquid Cheer 1986 Liquid Lemon dash
1987 Tide with bleach 1988 Liquid Dreft
1989 Liquid Ivory Snow 1989
Gleem 1952 Crest 1955 Denquel 1980
Folgers (vacuumpacked) 1850 Instant
Folgers (coffee crystals) 1963 Instant High
Point 1975 Folgers (decaffeinated)
1984 Instant Folgers (decaffeinated)
1984 Folgers (Special Roast Flaked)
1986 Folgers (Gourmet Supreme) 1989
Ivory 1879 Kirks 1885 Lava 1893 Camay 1926 Zest
1952 Safeguard 1963 Coast 1974
Prell 1946 Head Shoulders 1961 Pert Plus
1979 Ivory 1983
Secret 1956 Sure 1972
Product line depth
Product mix width
7
Product Line/Mix Dimensions
PRODUCT MIX BREADTH (WIDTH)
Narrow
Broad
Many different product lines with a few items in
each
Few product lines with a few items in each
Shallow
PRODUCT LINE DEPTH
Few product lines with several items in each
Many different product lines with several items
in each
Deep
1999 by Prentice-Hall, Inc.
9-5
C
8
Positioning

• Positioning starts with a product. A piece of
  merchandise, a service, a company, an
  institution, or even a person ... But positioning
  is not what you do to a product. Positioning is
  what you do to the mind of the prospect. That
  is
• You position the product
• in the mind of the prospect.

9
Product Positioning

• The decisions and activities intended to create
  and maintain a firms product concept in
  customers minds.
• Products are positioned relative to competing
  products. Can position to meet competition or
  avoid it.

10
Positioning Map
Expensive
Excedrin
Nuprin
Bufferin
Advil
Anacin
Tylenol
For Body Aches
For Head Aches
Motrin
Bayer
Medipren

St. Josephs
Inexpensive
11
Positioning Map
Expensive
Excedrin
B
Nuprin
Bufferin
Advil
Anacin
Tylenol
C
A
For Body Aches
For Head Aches
Motrin
Bayer
Medipren

St. Josephs
Inexpensive
12

• Differentiation
• The act of designing a set of meaningful
  differences to distinguish the companys offering
  from competitors offerings.

13
Differentiation Variables

• Product/Services
• Channel (How you get the product to the customer)
• Image (Created largely with advertising,
  promotion)
• Price
• Customer Service
• Personnel

14
Value Proposition (or Unique Selling
Proposition)

• A short phrase or sentence that summarizes what
  you really have to offer to the customer
• Must show how your product uniquely (different
  and better than any other alternative) meets a
  need of a target customer.

15
Value Propositions

• Good positioning strategies start with a value
  proposition that is clearly and consistently
  communicated to target customers.
• Volvo The safest, most durable car in which
  your family can ride.
• Dominos A good, hot pizza delivered to your
  door within 30 minutes of ordering at a moderate
  price.
• Dell Computer A custom-made computer delivered
  right to your door with excellent support
  service, all for a low price.

16
What is a Brand?

• A name, term, design, symbol, or any other
  feature that identifies one sellers good or
  service as distinct from those of other sellers.
• A sellers promise to deliver consistently a
  specific set of features, benefits, and services
  to buyers.

17
Four Levels of Meaning for a Brand

• Attributes
• Benefits
• Values
• Personality

18
Reasons New Products Fail

• Lack of Product Uniqueness
• Poor Planning. (research, positioning, etc.)
• Improper Timing
• Technical Problems
• Loss of Objectivity
• Unexpected High Product Cost
• Competition
• Company Politics

19
New ProductSuccess Factors

• Clear Product Advantage
• Proficiency of Predevelopment Activities
• Strategy. (Clear target market, positioning,
  understand customer needs, etc.)

20
Other Success Factors

• Technical and Production skills
• Good research and communication
• Good fit with companys resources, RD skills,
  marketing skills
• Being in a large, high-need, growth market