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Tema 6: Product policy

1. Marketing concept of the product and product classification

2. individual product decisions

3. Product line and mix decisions

4. Product life cycle stages

=1=

A product is anything that can be offered to a market for attention, acquisition, use orconsumption that might satisfy a want or need. It includes physical objects, services, persons places,

organizations and ideas. Product planners need to think about the product on 3 levels:

1. Core level It addresses the question what is the buyer really buying. It consists of the problem solving

services or benefits the consumer obtains when he buys the product. It answers to the question why?

2. Actual product level It may have 5 characteristics:

a) Quality level,

b) Features,

c) Style,

d) Brand name,

e) Packaging3. Augmented level This level offers additional consumer services and benefits such as:

a) After sale service

b) Delivery

c) Warranty

d) Credit selling

This level is optional.

Product classifications:

Products can be classified into 3 groups according to the durability or tangibility.

1) Non durable goods goods that are tangible and are normally consumed in one or a few uses.

2) Durable goods tangible goods that normally survive many uses.(masa, scaun)3) Services activities, benefits or satisfactions that are offered for sale. They are not tangible.

1 core

level

2 Actual

product level

3 Augmented

level

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According to the final users products can be:

1) Consumer goods are goods bought by final consumers for personal consumption. Consumer

goods include:

a) Convenience goods consumer goods that the customer buys frequently,

immediately and with a minimum of buying effort. Convenience goods include:

a.1.) Staple goods that are purchased on a regular basis.

a.2.) Impulse goods are purchased with little planning and search effort. Thesegoods are normally placed next to checkout counters.

a.3.) Emergency goods are purchased when the need is urgent

b) Shopping goods consumer goods that the customer, in the process of

selection and purchase usually compares on such basis as: Quality, Price, Style and

suitability. Shopping goods can be:

b.1) Uniform similar in quality but different in price

b.2) Non uniform goods similar price but different features.

c) Specialty goods goods that have unique characteristics or brand identification

d) Unsought goods goods that the consumer does not know about or knows about butdoes not think of buying.

2) Industrial goods those goods bought by individuals and organizations for use in conducting a

business. Industrial goods include:

a) Materials and parts Industrial goods that enter the manufacturers product completely.

b) Capital items industrial goods that enter the finished product partially. They include:

Installations and accessory equipment.

c) Supplies and services goods that do not enter the finished product at all

=2=

Individual product decisions

Developing a product involves defining the benefits that the product will offer. These benefits

are communicated and delivered by tangible product attributes such as: Quality, design, brand,

labeling and packaging.

1) Quality is one of the marketers positioning tools for the quality tends for the ability

of a product to perform its functions. The quality can be analyzed from 2 points of

view:

a) Actual quality includes the products durability, ease of use and repair,

precision and reliability.

b) Perceived quality how well the product satisfies the needs of consumers.

The perceived quality is measured in satisfaction.

2) Design considers the appearance of the product but also creates products that are

easy, safe, inexpensive to use and service and simple in to produce and distribute.

3) Branding A brand is a name, term, sign, symbol or design used to identify the

goods or services of one producer from those of competitors. A brand consists of:

a) Brand name part of a brand that can be vocalized

b) Brand mark part of a brand which can be recognized such as: color,

symbol, sign, lettering but that is not vocalized.

c) Trademark part of a brand that is given legal protection.

There are several branding strategies:1) The company may decide to produce a generic product(no brand, low cost

product) or a branding product.

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2) A company may use manufacturers brand or private brand(a brand name owned

by wholesalers or retailers

3) The company may use individual brand using different brands for different

products. Marketing several different products under the same brand.

4) Packaging includes the activities of designing and producing the container or a

product. The package may include:a) The products immediate container

b) Secondary package(usually thrown away when the product is about to be

used)

c) Shipping package(deseori consumatorul nu-l vede) that is necessary for

storing and shipping the product

Packaging has the following functions:

A) Containing and protecting products

B) Promoting products

C) Facilitating storage, use and convenience

D) Facilitating receiving and reducing the environmental damage.

5) Labeling The label is a part of any packaging. Labeling takes 2 parts:

a) persuasive labeling that focuses on promotional in this case consumer

information is secondary

b) Informational labeling Is designed to help consumers make product

selections and offers such information as: The instruction, How to use a

product, the durability of a product, construction of, components ingredients

and other information.

=3=

A product item is a specific version of a product that can be designed as a distinct that is offered

among an organizations product.

A product line is a group of closely related product items.

Product mix includes all the products that an organization sells. The product mix decisions

are:

1) The length of the product mix refers to the total number of items the company produces

2) The depth of the product mix refers to how many versions are offered of each product in the

line.

3) The product bread refers to how many product lines the organization offers.

Product life cycle

Product life cycle is a concept that provides a way to trace the stages of a products acceptance. The

product life cycle has 4 stages:1) Introduction stage The launch of the new product into a market place. The marketing costs in the

introduction stage are high because of intense distribution, advertising and production costs.

2) Growth stage in this stage sales typically grow at al increasing rate. Many competitors enter the

same market and some large companies may start to acquire small parts. Profits rise quickly on the

growth stage and reach their peak. Distribution becomes very important during this stage and also

and aggressive advertising is recommended.

3) Maturity stage is a period during which sales increase at a decreasing rate. This stage is normally

the longest stage of the life cycle. Prices and profits continue to fall. Heavy consumer promotion is

required to maintain the market share.

4) Decline stage is a long run , drop in sales. The company has to decide when is the moment to delete

the product from product line. It reduces all promotional costs