Product Strategy

1
Chapter 8

• Product Strategy

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What is a Product?

• A Product is anything that can be offered to a
  market for attention, acquisition, use, or
  consumption and that might satisfy a want or
  need.
• Includes
• Physical Objects
• Services
• Events
• Persons
• Places
• Organizations
• Ideas
• Combinations of the above

3
What is a Service?

• A Service is a form of product that consist of
  activities, benefits, or satisfactions offered
  for sale that are essentially intangible and do
  not result in the ownership of anything.
• Examples include
• Banking
• Hotels
• Tax Preparation
• Home Repair Services

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Products, Services, and Experiences
Service With Accompanying Minor Goods
Tangible Good With Accompanying Services
Pure Tangible Good
Pure Service
Hybrid Offer
Auto With Accompanying Repair Services
Airline Trip With Accompanying Snacks
Soap
Restaurant
Doctors Exam
The Product-Service Continuum
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Levels of Product
Delivery Credit
After- Sale Service
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Product Classifications

• Durability and Tangibility
• Nondurable goods
• Durable goods
• Services

• Consumer Goods Classification
• Convenience goods
• Shopping goods
• Specialty goods
• Unsought goods

• Industrial Goods Classification
• Materials and parts
• Capital Items
• Supply and business services

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Consumer Goods Classification

• Convenience Products
• Buy frequently immediately
• Low priced
• Mass advertising
• Many purchase locations
• i.e Candy, newspapers

8
Individual Product Decisions
Product Attributes
Branding
Labeling
Packaging
Product Support Services
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Product Attributes
Developing a product or service involves defining
the benefits that it will offer such as
Product Quality
Ability of a Product to Perform Its Functions
Includes Level Consistency
Product Features
Help to Differentiate the Product from Those of
the Competition
Product Style Design
Process of Designing a Products Style Function
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What is a brand?

• A name, term, sign, symbol, design or a
  combination of these intended to
• identify goods or services of a seller
• differentiate a seller from its competitors
• Desirable Qualities for a brand name
• Suggest something about the products benefits
  and qualities
• Easy to pronounce, recognize, and remember
• Distinctive
• Translate easily into foreign languages
• Can be registered and legally protected.

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Top 10 Brands

• 1(1) Coca-Cola (67,000)
• 2(2) Microsoft (56,927)
• 3(3) IBM (56,201)
• 4(4) GE (48,907)
• 5(5) Intel (32,319)
• 6(6) Nokia (30,131)
• 7(9) Toyota (27,941)
• 8(7) Disney (27,848)
• 9(8) McDonalds (27,501)
• 10(11)Mercedes (21,795)

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Attributes Shared By The Strongest Brands

• Brands excel at delivering the benefits consumers
  truly desire.
• Brand stays relevant.
• Pricing strategy is based on consumers
  perception of value.
• Brand is properly positioned.
• Brand is consistent.
• Brand portfolio and hierarchy makes sense.
• Brand makes use of and coordinates a full
  repertoire of marketing activities to build brand
  equity.
• Brands managers understand what the brand means
  to consumers.
• Brand is given proper and sustained support.
• Company monitors sources of brand equity.

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Major Branding Decisions

• Brand Name
• Decision
• Individual names
• Blanket family
• Separate family
• Company-individual

• Brand
• Sponsor
• Manufacturers
• Private
• Licensed
• Co-branding

• Branding
• Decision
• Brand
• No Brand

• Brand
• Repositioning
• Repositioning
• No repositioning

• Brand
• Strategy
• Line Extensions
• Brand Extensions
• Multibrands
• New Brands

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Four Brand Strategies
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Brand Strategy Line Extensions
Brown and Red Colors
Not real chocolate
Candy
Chocolate taste
Cheap
Chewy
dance
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Packaging

• Activity of designing and producing the container
  or wrapper for a product.
• Packaging used to just contain and protect the
  product.
• Packing now has promotional value and marketers
  should
• Establish a packaging concept,
• Develop specific elements of the package,
• Tie together elements to support the positioning
  and marketing strategy.

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Labeling

• Printed information appearing on or with the
  package.
• Performs several functions
• Identifies product or brand
• Describes several things about the product
• Promotes the product through attractive graphics.

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Product - Support Services

• Companies should design its support services to
  profitably meet the needs of target customers and
  gain competitive advantage.
• Step 1. Survey customers to assess the value of
  current services and to obtain ideas for new
  services.
• Step 2. Assess costs of providing desired
  services.
• Step 3. Develop a package of services to delight
  customers and yield profits to the company.

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Product Line Decisions
Product Line Length Number of Items in the
Product Line
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Product Mix Decisions
Width - number of different product lines
Length - total number of items in product lines
Product Mix - all the product lines items
offered
Depth - number of versions of each product
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Product Mix Decisions Example
Detergents
Toothpaste
Bar Soaps
Diapers
Paper Products
17 product lines
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Product Life Cycle
Sales and Profits Over the Products Life From
Inception to Demise
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Introduction Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
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Growth Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
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Growth Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
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Maturity Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
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Maturity Stage of the PLC
Strategies Market Modification
Volume Number of Brand Users X Usage Rate
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Maturity Stage of the PLC
Strategies Product Modification
Quality Improvements increasing the products
functional performance
Feature Improvements expand the products
versatility, safety or convenience
Style Improvements increase the products
aesthetic appeal
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Maturity Stage of the PLC
Strategies Marketing Mix Modification
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Decline Stage of the PLC
Summary of Characteristics, Objectives,
Strategies
31
Problems Using the PLC
The PLC Concept can help in developing good
marketing strategies for different stages of the
Product Life-Cycle, however some problems can
arise