ch09

Chapter 9 Version 6e 1©2002 South-Western

chapterProduct ConceptsProduct Concepts

9

Prepared byPrepared byDeborah BakerDeborah Baker

Texas Christian UniversityTexas Christian University


chapter

Learning ObjectivesLearning Objectives

9

1.1. Define the term Define the term product.product.

2. Classify consumer products.2. Classify consumer products.

3. Define the terms 3. Define the terms product item, product line, product item, product line, andand product mix product mix..

4.4. Describe marketing uses of branding.Describe marketing uses of branding.


chapter

Learning Objectives (continued)Learning Objectives (continued)

9

5. Describe marketing uses of packaging 5. Describe marketing uses of packaging and labeling.and labeling.

6. Discuss global issues in branding 6. Discuss global issues in branding and packaging.and packaging.

7.7. Describe how and why product warranties Describe how and why product warranties are important marketing tools.are important marketing tools.


Learning Objective Learning Objective 1

Define the term Define the term product.product.


ProductProduct

Everything, both favorable and unfavorable, that

a person receives in an exchange.

1


What is a Product?What is a Product?

Promotion

Product Product is

the “heart” ofMarketing

Mix

Place (Distribution)

Price

1



Classify consumer products.Classify consumer products.


Product ClassificationsProduct Classifications

BusinessBusinessProductProduct

Consumer Consumer ProductProduct

A product used to manufacture other goods or services, to facilitate an

organization’s operations, or to resell to other consumers.

Product bought to satisfy an individual’s personal wants

2


Types of Consumer ProductsTypes of Consumer Products

UnsoughtProducts

SpecialtyProducts

ShoppingProducts

ConvenienceProducts

ConsumerProducts

BusinessProducts

PRODUCTS

2


Types of Consumer ProductsTypes of Consumer Products2

ConvenienceProduct

ShoppingProduct

SpecialtyProduct

UnsoughtProduct

A relatively inexpensive item that merits little shopping effort.

A product that requires comparison shopping, because it is usually more expensive and found in fewer stores.

A particular item that consumerssearch extensively for and are reluctant to accept substitutes.

A product unknown to the potential buyer or a known product that the buyer does not actively seek.


Types of Consumer ProductsTypes of Consumer Products

SpecialtyProducts

ConvenienceProducts

ShoppingProducts

UnsoughtProducts

2


Learning Objective Learning Objective

Define the terms Define the terms product item, product item, product line, product line, andand product mix product mix..

3


Product Items, Lines, and MixesProduct Items, Lines, and Mixes

Product Item

Product Line

Product Mix

A specific version of a product that can be designated as a distinct offering among an organization’s products.

A group of closely-related product items.

All products that an organization sells.

3


Gillette’s Product Lines and MixGillette’s Product Lines and Mix3

Blades and Writingrazors Toiletries instruments Lighters

Mach 3 Series Paper Mate CricketSensor Adorn Flair S.T. Dupont Trac II ToniAtra Right GuardSwivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry LookTwin Injector Dry Idea Techmatic Brush Plus

Width of the product mixWidth of the product mix

Dep

th o

f the

pro

duct

line

sD

epth

of t

he p

rodu

ct li

nes


Benefits of Product LinesBenefits of Product Lines

Equivalent Quality

Efficient Sales andDistribution

Standardized Components

Package Uniformity

Advertising Economies

Why Form Why Form Product Lines?Product Lines?

3


Product Mix WidthProduct Mix Width

Diversifies risk Capitalizes on established reputations

3

The number of product lines an organization offers.


Product Line DepthProduct Line Depth

Attracts buyers with different preferencesIncreases sales/profits by further

market segmentation Capitalizes on economies of scaleEvens out seasonal sales patterns

3

The number of product items in a product line.


Adjustments Adjustments

Product Modification

ProductRepositioning

Product LineExtension or Contraction

Adjustments to Adjustments to Product Items,Product Items,

Lines, and MixesLines, and Mixes

3


Product ModificationsProduct Modifications3

Types of Types of Product Product

ModificationsModifications

Quality Modification

Functional Modification

Style Modification


Planned ObsolescencePlanned Obsolescence

The practice of modifying products so those that have already been sold become obsolete before

they actually need replacement.

3


RepositioningRepositioning

Changing Demographics

Declining Sales

Changes in Social Environment

Why reposition Why reposition established brands?established brands?

3


Product Line ExtensionProduct Line Extension

Adding additional products to an existing product line in order to compete more broadly in the industry.

3


Product Line ContractionProduct Line Contraction3

Some products have low sales or cannibalize sales of other items

Resources are disproportionately allocated to slow-moving products

Items have become obsolete because of new product entries

Symptoms of Symptoms of Product Line Product Line

OverextensionOverextension



Describe marketing uses of branding.Describe marketing uses of branding.

4


BrandBrand

A name, term, symbol, design, or combination thereof that identifies a seller’s products and

differentiates them from competitors’ products.

4


BrandingBrandingBrand Name

BrandMark

Brand Equity

MasterBrand

That part of a brand that can be spoken, including letters, words, and numbers.

The elements of a brand that cannot be spoken.

The value of company and brand names.

A brand so dominant that it comes to mind immediately when a product category,

use, attribute, or benefit is mentioned.

4


Benefits of BrandingBenefits of Branding4

Product Identification

Repeat Sales

New Product Sales

Branding Branding distinguishes distinguishes products from products from competitioncompetition


An Effective Brand NameAn Effective Brand Name

Is easy to pronounce Is easy to recognize and remember Is short, distinctive, and unique Describes the product, use, and benefits Has a positive connotation Reinforces the product image Is legally protectable

4


Master BrandsMaster BrandsBaking Soda Adhesive Bandages

Rum

Gelatin

Soup

Cream Cheese

Crayons

Petroleum Jelly

Arm & Hammer Band-Aid

Bacardi

Jell-O

Campbell’s

Philadelphia

Crayola

Vaseline

4


Branding StrategiesBranding Strategies

Brand No Brand

Manufacturer’s Brand Private Brand

IndividualBrand

Family Brand

Combi-nation

IndividualBrand

Family Brand

Combi-nation

4


Generic BrandGeneric Brand

A no-frills, no-brand-name, low-cost product that is simply identified by its

product category.

4


Manufacturers’ Brands VersusManufacturers’ Brands VersusPrivate BrandsPrivate Brands

Manufacturers’ Manufacturers’ BrandBrand

Private Private BrandBrand

The brand name of a manufacturer.

A brand name owned by a wholesaler or a retailer.

4


Advantages of Advantages of Manufacturers’ BrandsManufacturers’ Brands

Develop customer loyalty Attract new customers Enhance prestige Offer rapid delivery, can carry less

inventory Ensure dealer loyalty

4


Advantages of Advantages of Private BrandsPrivate Brands

Earn higher profits Less pressure to mark down prices Manufacturer may drop a brand or

become a direct competitor to dealers Ties to wholesaler or retailer No control over distribution of

manufacturers’ brands

4


Individual Brands VersusIndividual Brands VersusFamily BrandsFamily Brands

Individual Individual BrandBrand

Family Family BrandBrand

Using different brand names for different products.

Marketing several different products under the same

brand name.

4


CobrandingCobranding

IngredientBranding

Cooperative Branding

Complementary Branding

Types of CobrandingTypes of Cobranding

4


TrademarksTrademarks

Many parts of a brand and associated symbols qualify for trademark protection

The mark has to be continuously protected

Rights continue for as long as it is used

A Trademark is the exclusive A Trademark is the exclusive right to use a brandright to use a brand

4



Describe marketing uses of Describe marketing uses of packaging and labeling.packaging and labeling.

5


PackagingPackaging

Contain and Protect

FunctionsFunctionsofof

PackagingPackaging

Promote

Facilitate Storage, Use, and Convenience

Facilitate Recycling

5


LabelingLabeling

Persuasive

Focuses on promotional theme

Information is secondary

Informational

Helps make proper selections

Lowers cognitive dissonance

Includes use/care

5


Universal Product CodesUniversal Product Codes

A series of thick and thin vertical lines (bar codes), readable by computerized

optical scanners, that represent numbers used

to track products.

5



Discuss global issues in Discuss global issues in branding and packaging.branding and packaging.


Global Issues in BrandingGlobal Issues in Branding

Adaptations & Modifications

Global Options Global Options for Brandingfor Branding

One Brand NameEverywhere

Different Brand Names for

Different Markets

6


Global Issues in PackagingGlobal Issues in Packaging

Aesthetics

Global Global Considerations Considerations for Packagingfor Packaging

Climate Considerations

Labeling

6



Describe how and why Describe how and why product warranties are product warranties are

important marketing tools.important marketing tools.

7


Product WarrantiesProduct Warranties

Warranty

ExpressWarranty

Implied Warranty

A confirmation of the quality or performance of a good or service.

A written guarantee.

An unwritten guarantee that the good or service is fit for the purpose for which it was sold. (UCC)

7


Product WarrantiesProduct Warranties

WarrantiesWarranties

Written Guarantee

Implied Implied WarrantyWarranty

Express Express WarrantyWarranty

Unwritten Guarantee

7

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