Product Concepts

1
Product Concepts
9
chapter
Prepared by Deborah Baker Texas Christian
University
2
Learning Objectives
1. Define the term product. 2. Classify
consumer products. 3. Define the terms product
item, product line, and product mix. 4. Describe
marketing uses of branding.
9
chapter
3
Learning Objectives (continued)
5. Describe marketing uses of packaging and
labeling. 6. Discuss global issues in branding
and packaging. 7. Describe how and why product
warranties are important marketing tools.
9
chapter
4
Learning Objective
1
Define the term product.
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Product
1
Everything, both favorable and unfavorable, that
a person receives in an exchange.
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What is a Product?
1
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Learning Objective
2
Classify consumer products.
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Product Classifications
2
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Types of Consumer Products
2
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Types of Consumer Products
2
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Types of Consumer Products
2
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Learning Objective
3
Define the terms product item, product line, and
product mix.
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Product Items, Lines, and Mixes
3
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Gillettes Product Lines and Mix
3
15
Benefits of Product Lines
3
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Product Mix Width
3
The number of product lines an organization
offers.

• Diversifies risk
• Capitalizes on established reputations

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Product Line Depth
3
The number of product items in a product line.

• Attracts buyers with different preferences
• Increases sales/profits by further market
  segmentation
• Capitalizes on economies of scale
• Evens out seasonal sales patterns

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Adjustments
3
Adjustments to Product Items,Lines, and Mixes
Product Modification
Product Line Extension or Contraction
ProductRepositioning
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Product Modifications
3
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Planned Obsolescence
3
The practice of modifying products so those that
have already been sold become obsolete before
they actually need replacement.
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Repositioning
3
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Product Line Extension
3
Adding additional products to an existing product
line in order to compete more broadly in the
industry.
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Product Line Contraction
3
Symptoms of Product Line Overextension

• 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

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Learning Objective
4
Describe marketing uses of branding.
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Brand
4
A name, term, symbol, design, or combination
thereof that identifies a sellers products and
differentiates them from competitors products.
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Branding
4
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Benefits of Branding
4
Branding distinguishes products from competition
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An Effective Brand Name
4

• 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

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Master Brands
4
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Branding Strategies
4
Brand
No Brand
Manufacturers Brand
Private Brand
IndividualBrand
Family Brand
Combi-nation
IndividualBrand
Family Brand
Combi-nation
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Generic Brand
4
A no-frills, no-brand-name, low-cost product that
is simply identified by its product category.
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Manufacturers Brands VersusPrivate Brands
4
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Advantages of Manufacturers Brands
4

• Develop customer loyalty
• Attract new customers
• Enhance prestige
• Offer rapid delivery, can carry less inventory
• Ensure dealer loyalty

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Advantages of Private Brands
4

• 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

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Individual Brands VersusFamily Brands
4
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Cobranding
4
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Trademarks
4
A Trademark is the exclusive right to use a brand

• 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

TM
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Learning Objective
5
Describe marketing uses of packaging and
labeling.
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Packaging
5
40
Labeling
5
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Universal Product Codes
5
A series of thick and thin vertical lines (bar
codes), readable by computerized optical
scanners, that represent numbers used to track
products.
UPCs
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Learning Objective
6
Discuss global issues in branding and packaging.
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Global Issues in Branding
6
44
Global Issues in Packaging
6
45
Learning Objective
7
Describe how and why product warranties are
important marketing tools.
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Product Warranties
7
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Product Warranties
7
Express Warranty
Written Guarantee
Warranties
Implied Warranty
Unwritten Guarantee