Chapter 12SETTING PRODUCT STRATEGY

Sunshine V. VillanuevaAteneo Graduate School of Business

ph.linkedin.com/in/sunshinevillanueva

This presentation will discuss the following:

1. Product characteristics2. Five product levels3. Product classifications4. Product/service differentiation5. Product design importance 6. Managing multiple products7. Other elements of product strategy

A product satisfies a need or want.

Physical goods

Services Experiences

Events Properties Information

This presentation will discuss the following:

1. Product characteristics2. Five product levels3. Product classifications4. Product/service differentiation5. Product design importance 6. Managing multiple products7. Other elements of product strategy

Marketers address 5 product levels

This presentation will discuss the following:

1. Product characteristics2. Five product levels3. Product classifications4. Product/service differentiation5. Product design importance 6. Managing multiple products7. Other elements of product strategy

Products are classified based on…

A. Durability and tangibility

Products are classified based on…

B. Use

This presentation will discuss the following:

1. Product characteristics2. Five product levels3. Product classifications4. Product/service differentiation5. Product design importance 6. Managing multiple products7. Other elements of product strategy

Products can be differentiated in…

…while services differ in…

• Ordering ease• Delivery• Installation• Customer training• Customer consulting• Maintenance and repair• Returns (policy)

This presentation will discuss the following:

1. Product characteristics2. Five product levels3. Product classifications4. Product/service differentiation5. Product design importance 6. Managing multiple products7. Other elements of product strategy

Design influences customer decisions

• Design is the totality of features that affect how a product looks, feels, and functions to a consumer.

• A well-designed product means…

To the company: To the customer:

- easy to manufacture- easy to distribute

- pleasant to look at- easy to open, install, etc.

This presentation will discuss the following:

1. Product characteristics2. Five product levels3. Product classifications4. Product/service differentiation5. Product design importance 6. Managing multiple products7. Other elements of product strategy

Reviewing the product mix is a must!

• Product mix – is the set of all products and

items a seller offers for sale.– has several dimensions:

• Width• Length• Depth• Consistency

Company objectives influence product lines

• Upsell• Cross-sell• Create a product line that protects

against economic ups and downs

Product lines can be lengthened by:

• Line stretching– Down-market stretch– Up-market stretch– Two-way stretch

• Line filling

Good product mix pricing maximizes profit

• Product line pricing• Optional-feature pricing• Captive-product pricing• Two-part pricing• By-product pricing• Product-bundling pricing

This presentation will discuss the following:

1. Product characteristics2. Five product levels3. Product classifications4. Product/service differentiation5. Product design importance 6. Managing multiple products7. Other elements of product strategy

The fifth P: Packaging

• Packaging includes all the activities of designing and producing the container for a product

• It is increasingly used as a marketing tool, together with labeling

Warranties and guarantees offer further assurance to customers

• Warranties– Formal statements of expected product performance

by manufacturer

• Guarantees– Reduce the buyer’s perceived risk– Suggest that the product is of high quality

This presentation discussed the following:

1. Product characteristics2. Five product levels3. Product classifications4. Product/service differentiation5. Product design importance 6. Managing multiple products7. Other elements of product strategy

Conclusion

At the heart of a great brand is a great product. To achieve market leadership, firms must offer products and services that provide unsurpassed value.

Chapter 12SETTING PRODUCT STRATEGY

Sunshine V. VillanuevaAteneo Graduate School of Business

ph.linkedin.com/in/sunshinevillanueva