Managing Product

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Chapter 14
Managing Product Lines, Brands, and Packaging
Dr. S. Borna MBA 671
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Lecture Outline
1. Some basic terminology related to
product A. Meaning of Product B. Product vs.
Product Offering C. Core, Formal, and Augmented
Products
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Lecture Outline
D. Product Class, Product Line, Item or
Brand E. Product Mix, Product Depth, Product
Width and Consistency
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Lecture Outline cont.
2. Classification of Consumer Goods A.
AMAs Classification B. Aspinwalls
Classification
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Lecture outline cont.
3. Developing a Product Policy Product Mix
Decisions Product Line Decisions Item
Decisions
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Product Strategy Constraints
A. Mass Marketing B. Target Marketing
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Effect of Positioning Strategies on Product
Decisions
single segment vs. multi- segment (One product
for multiple segments) imitative strategy
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defensive strategy
(introduction of a fighter brand to discourage
competitors from entering the market.
anticipatory strategy
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Product Life-Cycle Constraints
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WHAT DO WE MEAN BY PRODUCT?
NEED-SATISFYING OFFERING OF A FIRM
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INCLUDED IN THE OFFERING OF A
FIRM PHYSICAL AND NON-PHYSICAL ATTRIBUTES OF A
PRODUCT AND CONDITIONS SURROUNDING ITS SALES.
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Kotlers Definition
A product is anything that can be offered to a
market for attention, use, acquisition or
consumption that might satisfy a want or need.
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Examples
Poster
(acquisition, attention)
Tangible
Pepsi Cola (consumed) Car (used) Lawyer
(performance) Florida, London (attention)
Service
Places
Organization
(performance)
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Augmented Product
Formal Product
Core Product
Installation
Packaging
Free Deli- very
Brand Name
Serv. Maint. Syst.
Core benefit
Quality Styling Features
Warranty
Three Levels of Product
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Kotler adds two more levels
Core benefit
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Expected Product
A set of attributes and conditions that
buyers normally expect from a product In a
hotel clean towels and rooms etc.
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Potential Product
All the augmentations and transformations the
product might ultimately under go in the future.
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CLASSIFICATION OF PRODUCTS
NEED FOR A TAXONOMY OF PRODUCTS NOTE
CLASSIFICATION OF CONSUMER PRODUCTS IS BASED ON
CONSUMPTION BEHAVIOR OF THE CONSUMERS. PHYSICAL
CHARACTERISTICS OF PRODUCTS ARE NOT A DETERMINANT
FACTOR
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PRODUCTS
STAPLES
IMPULSE P.
CONVENIENCE P.
EMERGENCY P.
HOMOGENEOUS HETEROGENEOUS
SHOPPING P.
SPECIALTY
NEW
UNSOUGHT P.
REGULAR
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THE CHARACTERISTICS OF GOODS THEORY
Characteristics
P r o d u c t s
repl. rate
srch time
gross margin
time/ cons.
adj.
H
L
L
L
L
red
oran ge
M
M
M
M
M
yel- low
L
H
H
H
H
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Conceptual Representation of a Product Mix
length
Prod. line 1
1a
1b 1c
w i d t h
Prod. line 2
2a
Prod. line 3
3a 3b 3c 3d 3e
4a 4b 4c
Prod. line 4
Number of Items 12 Number of lines 4
Average 3
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Product-Mix Decisions
Width (how many product lines)
Length (number of items in the line)
Internal Consistency (how closely product lines
are related in end use, production, distribution
and so one.
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Detergents Toothpaste Bar Soap
Ivory Snow 30 Dreft 1933 Tide 1946 Cheer
1950 Oxydol 1952 Dash 1954 Bold 1965 Gain
1966 Era 1972 Solo 1979
Gleem 1952 Crest 1955 Denquel 1980
Ivory 1879 Kirks 1885 Lava 1893 Camay 26 Zest
1952 Safeguard 1963 Coast 1974
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Disposable Diapers Tissue
Pampers 1961 Luvs 1976
Charmin 1928 White Cloud 58 Puffs 1960 Banner
1982
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Product Mix Decisions
It is mainly a portfolio Decision To add a new
product line or delete an existing one, shorten
its product line, etc.
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Product Line Decisions
Product Line Analysis 1. Sales and Profit
analysis 2. Product Line Market Profile
(Products position relative to the
competing brands).
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Product Line Decisions
Product Line Length Decisions -Upward
Stretch -Downward Stretch -Two Way
Stretch -Line Filling(adding items
within the present range) -Positioning
(repositioning) Product Drop Decisions
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Individual Product Decisions
(Item Decisions)
1. Product Quality 2. Product Features 3.
Product Design
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Branding Strategies and Decisions
Some basic definitions (brand, brand name, brand
mark, trade mark)
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A Definition of Brand
A brand is a name, term sign, symbol, or design
or a combination of them, intended to identify
the goods and services of one seller or a group
of sellers, and to differentiate them from
those of the competitors.
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Brand Mark, Brand Name and Trade Mark Sounds as
trademarks! Branding in illicit markets
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A brand is a complex symbol It may say
something about the attributes of a product, its
values, culture of the country, and
personality of producer and user. Deep vs shallow
brands
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Benefits of Branding
1. Provides useful information for the
consumer 2. Helps the seller to segment its
market 3. Legal protection
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The Concept of Brand Equity
Brand equity is the value consumers assign to a
brand above and beyond any specific functional
characteristics of of the product.
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Brand Leverage
refers to capitalizing on brand equity by
placing the existing brand name onto new
products. (family branding, brand extension etc.)
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The worlds valuable brands
Coca Cola 36 Billion Marlboro 33
Billion Advantages of brand equity
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Branding Decisions Brand-sponsor
Decision Manufacturers brands vs. Distributors
brands
(The battle of brands)
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Brand Name Decisions
Individual brand vs Family brand (PG and
GE) Separate Family brand names (Sears for
example) Company Trade name combined with
individual brand names (Kellogg for example)
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Types of brands
Manufacture Retailer
Promotional Activities
National Brand
Controlled Brand
Promotes the brand Does not promote the brand
Generic Brand
Private Brand
Sources of brand identification
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Brand Identification Strategies
Brand Name Corp. Name
Corporate Brand Name
Single Brand
Individual Brand
Product- line Branding
Family Name
Multibrand
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Good Brand Names
Distinctive
Lack Poor Foreign Language Meanings
Suggest Product Benefits
Suggest Product Qualities
Easy to Pronounce Recognize Remember
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Packaging Strategy and Decisions
Advantages 1. Aid new product strategy 2.
Provide access to channels 3. Support pricing
strategy 4. Serve as part of promotion 5. Provide
protection and containment 6. Provide
information to consumers
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Packaging
Functions of packaging 1. Containment - hold
for transportation 2. Protection (from
content acid)
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Functions of packaging Cont.
3. Facilitating Function (usage assistance
and information. 3. Promotion 4.
Miscellaneous, reusability of package,
ecological requirements legal regulations.
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Packaging Concept
The packaging concept defines what the package
should basically be or do for the particular
product.
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A note on Planned Obsolescence
1. Planned Material Obsolescence
2. Planned Functional Obsolesce- ence 3.
Planned Style Obsolescence