MAR 3023 PRINCIPLES OF MARKETING

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MAR 3023 PRINCIPLES OF MARKETING

• Dr. Jaishankar Ganesh
• BA2 308G
• Product Concepts, Branding,
• New Product Process
• October 15, 20, 22, 2003

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What is a Product?

• A product may be a tangible good, a service, an
  idea, or any combination of these three.
• Product features include packaging, style, color,
  options, and size.
• Service features include the sellers image, the
  manufacturers reputation, and the way consumers
  believe others will view the product.

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What Is a Product?
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Issues in Product Management

• What is a product?
• Product Classification (goods vs services,
  durable vs nondurable, consumer vs industrial,
  etc.)
• Levels of a product (core, actual, and augmented)
• PLC and Managing the product through its Life
  Cycle
• Product Portfolio Analysis Basic Growth
  Strategies

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Types of Products
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Types of Consumer Products
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Classification of consumer goods
Type of Consumer Good
Basis ofcomparison
Convenience
Shopping
Specialty
Unsought
Toothpaste,cake mix, handsoap,
laundrydetergent Relativelyinexpensive Widesprea
dmany outlets Price,availability,and
awarenessstressed
Cameras, TVsbriefcases,appliances,clothing Fai
rlyexpensive Large numberof selectiveoutlets Di
fferentiationfromcompetitorsstressed
Rolls Roycecars,Rolex watches Usually
veryexpensive Very limited Uniqueness ofbrand
andstatus stressed
Burial Plots,Insurance Varies Often
limited Awareness isessential
Product
Price
Place(distribution)
Promotion
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Classification of consumer goods
Type of Consumer Good
Basis ofcomparison
Convenience
Shopping
Specialty
Unsought
Aware ofbrand, but willacceptsubstitutes Freque
ntpurchases little time andeffort
spentshoppingroutinedecision
Prefer specificbrands, butwill
acceptsubstitutes Infrequentpurchasescomparsio
nshoppinguses decisiontime
Very brandloyal will notacceptsubstitutes Infr
equentpurchasesextensive timespent to
decideand get theitem
Will acceptsubstitutes Very
infrequentpurchasessomecomparisonshopping
Brand loyaltyof consumers
Purchasebehavior ofconsumers
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Levels of Total Product
3. Augmented Product Additional services
benefits (unexpected)
Product is a complex bundle of benefits
Installation
Packaging
Style
Brand name
Delivery credit
After- sale service
Core good or service
Design
1. Core product What the consumer is really
buying
Warranty
2. Actual Product
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Product Life Cycle
A concept that provides a way to trace the stages
of a products acceptance, from its introduction
(birth) to its decline (death).
PLC
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Product Life Cycle
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Stages in the PLC

• Introduction
• Low awareness levels
• Heavy promotion distribution costs
• Negative cash flow
• Growth
• Experience curve efficiency
• Economies of scale benefits
• Increasing brand awareness
• Increasing profits

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• Maturity
• Intense competition
• Stabilizing market
• Product modification/niching
• Maintain market share profits
• Decline
• Declining market
• Reduced promotion efforts
• Rejuvenate the product

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Stages in a Product life cycle
Marketing objective
Gain Awareness
Stress differentiation
Maintain brand loyalty
Harvesting, deletion
Product
One
More versions
Full product line
Best sellers
Price
Skimming or penetration
Gain share, deal
Defend share, profit
Stay profitable
Place(distribution)
Limited
More outlets
Maximum outlets
Fewer outlets
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Marketing Strategies for PLC
Limited models Frequent changes
More models Frequent changes.
Large number of models.
Eliminate unprofitable models
LimitedWholesale/retail distributors
Expanded dealers. Long- term relations
Phase out unprofitable outlets
Extensive. Margins drop. Shelf space
Phase outpromotion
Advertise. Promote heavily
Awareness. Stimulate demand.Sampling
Aggressive ads. Stimulatedemand
Fall as result of competition efficient
produc- tion.
Higher/recoupdevelopment costs
Prices fall (usually).
Prices stabilize at low level.
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Extending the PLC

• Change product
• Change product use
• Change product image
• Change product positioning

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Product Life Cycles for Styles, Fashions, and
Fads
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Issues in Product Management

• Product Item, Line, Mix
• Product Mix Decisions
• Product Line Decisions
• Line Stretching (upward, downward, 2-way, etc.)
• Line Filling (JND)
• Line Pruning, etc.
• Product Design, Packaging, Labeling Warranty
  Decisions

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Product Items, Lines, and Mixes
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Product Mix
Product Line 1
Product Line 2
Product Line 3

• TABLES
• Kitchen
• Dining Room
• End
• Coffee
• Outdoor
• Conference
• Computer

• CHAIRS
• Dining Room
• Living Room
• Bed Room
• Outdoor
• Desk

• LAMPS
• Table
• Ceiling
• Track
• Desk

The total group of products that an organization
makes available to customers.

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Depth
Product Line 1
Product Line 2
Product Line 3

• LAMPS
• Table
• Ceiling
• Track
• Desk

• TABLES
• Kitchen
• Dining Room
• End
• Coffee
• Outdoor
• Conference
• Computer

• CHAIRS
• Dining Room
• Living Room
• Bed Room
• Outdoor
• Desk

number of different products offered in each
product line.

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Width
Product Line 1
Product Line 2
Product Line 3

• CHAIRS
• Dining Room
• Living Room
• Bed Room
• Outdoor
• Desk

• TABLES
• Kitchen
• Dining Room
• End
• Coffee
• Outdoor
• Conference
• Computer

• LAMPS
• Table
• Ceiling
• Track
• Desk

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Gillettes Product Lines and Mix
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Product Line Decisions
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Types of Product Modifications
Change in products dependability or durability
change in a products versatility, effectiveness,
convenience, or safety
an aesthetic product change, rather than a
quality or functional change (Planned
Obsolescence)
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Repositioning
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Product Line Extension

• Adding additional products to an existing product
  line in order to compete more broadly in the
  industry.
• Line Stretching (upward, downward, 2-way, etc.)
• Line Filling (JND)
• Line Pruning, etc.

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Product Line Contraction
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Packaging
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Labeling
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Universal Product Codes
A series of thick and thin vertical lines (bar
codes), readable by computerized optical
scanners, that represent numbers used to track
products.
UPCs
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Product Warranties
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Product Warranties
Limited-coverage warranty
Extent of coverage
Full warranty
Express warranty
Extent of formality
Implied warranty
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Product Warranties
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Issues in Product Management

• Branding Decisions
• Brand Equity, Branding Strategies
• Brand Extensions
• Co-Branding Bundling
• New Product Development
• Diffusion of Innovations
• Pioneering Advantage