MARKETING MANAGEMENT 12th edition

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MARKETING MANAGEMENT12th edition

• 12
• Setting Product Strategy

Kotler Keller
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Chapter Questions

• 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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At the heart of a great brand is a great product
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Product
Anything that can be offered to a market to
satisfy a want or need.
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Figure 12.1 Components of the Market Offering
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Figure 12.2 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

• Style
• Design
• Ordering ease
• Delivery
• Installation
• Customer training
• Customer consulting
• Maintenance

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

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Dunkin Donuts Differentiation
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Design Differentiation
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Maintenance and Repair
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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
Specialties
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Figure 12.3 Product-Item Contributions to a
Product Lines Total Sales and Profits
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Figure 12.4 Product Map
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Line Stretching
Down-Market Stretch
Up-Market Stretch
Two-Way Stretch
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Line Filling
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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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Product Line Pricing
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Two-Part Pricing
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Co-branding
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Ingredient Branding
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Packaging The 5th P
All the activities of designing and producing the
container for a product.
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Packaging has been influenced by
Self-service
Consumer affluence
Company/brand image
Innovation opportunity
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Innovations in Packaging
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Functions of Labels
Identifies
Grades
Describes
Promotes
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Warranties and Guarantees
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Marketing Debate

• With products, is it form or function?
• Take a position
• Product functionality is the key to brand
• success.
• 2. Product design is the key to brand
• success.

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Marketing Discussion

• Consider the different means
• of differentiating products and
• services. Which ones have the
• most impact on your choices?
• Why?