1 chapter learning objectives 9 9 1.define the term product. 2. classify consumer products. 3....

1

chap

ter

Learning Objectives

99

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.

2

chap

ter

Learning Objectives (continued)

99

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.

3

Learning Objective 11

Define the term Define the term product.product.

4

Product

Everything, both favorable

and unfavorable, that

a person receives

in an exchange.

11

5

What is a Product?

Promotion

Product Product is

the “heart” ofMarketing

Mix

Product Product is

the “heart” ofMarketing

Mix

Place (Distribution)

Price

11

6

Learning Objective 22

Classify consumer products.Classify consumer products.

7

Product Classifications

BusinessBusinessProductProduct

BusinessBusinessProductProduct

Consumer Consumer ProductProduct

Consumer Consumer ProductProduct

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

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

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

Product bought to satisfy an individual’s personal wants

22

8

Types of Consumer Products

UnsoughtProducts

UnsoughtProducts

SpecialtyProductsSpecialtyProducts

ShoppingProducts

ShoppingProducts

ConvenienceProducts

ConvenienceProducts

ConsumerProducts

ConsumerProducts

BusinessProductsBusinessProducts

PRODUCTSPRODUCTS

22

9

Types of Consumer Products

22

ConvenienceProduct

ConvenienceProduct

ShoppingProduct

ShoppingProduct

SpecialtyProduct

SpecialtyProduct

UnsoughtProduct

UnsoughtProduct

A relatively inexpensive item that merits little shopping effort.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 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 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.

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

10

Types of Consumer Products

SpecialtyProducts

ConvenienceProducts

ShoppingProducts

UnsoughtProducts

22

11

Learning Objective

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

33

12

Product Items, Lines, and Mixes

Product ItemProduct Item

Product LineProduct Line

Product MixProduct Mix

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

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.

A group of closely-related product items.

All products that an organization sells.

All products that an organization sells.

33

13

Gillette’s Product Lines and Mix

33

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

De

pth

of

the

pro

du

ct

line

sD

ep

th o

f th

e p

rod

uc

t lin

es

14

Benefits of Product Lines

Equivalent QualityEquivalent Quality

Efficient Sales andDistribution

Efficient Sales andDistribution

Standardized Components

Standardized Components

Package UniformityPackage Uniformity

Advertising EconomiesAdvertising Economies

Why Form Why Form Product Lines?Product Lines?

Why Form Why Form Product Lines?Product Lines?

33

15

Product Mix Width

Diversifies risk Capitalizes on established reputations

33

The number of product lines

an organization offers.

16

Product Line Depth

Attracts buyers with different preferencesIncreases sales/profits by further

market segmentation Capitalizes on economies of scaleEvens out seasonal sales patterns

33

The number of product items

in a product line.

17

Adjustments

Product Modification

Product Modification

ProductRepositioning

ProductRepositioning

Product LineExtension or Contraction

Product LineExtension or Contraction

Adjustments to Adjustments to Product Items,Product Items,

Lines, and MixesLines, and Mixes

Adjustments to Adjustments to Product Items,Product Items,

Lines, and MixesLines, and Mixes

33

18

Product Modifications 33

Types of Types of Product Product

ModificationsModifications

Types of Types of Product Product

ModificationsModifications

Quality Modification

Quality Modification

Functional ModificationFunctional

Modification

Style Modification

Style Modification

19

Planned Obsolescence

The practice of modifying

products so those that

have already been sold

become obsolete before they

actually need replacement.

33

20

Repositioning

Changing Demographics

Changing Demographics

Declining SalesDeclining Sales

Changes in Social Environment

Changes in Social Environment

Why reposition Why reposition established brands?established brands?

Why reposition Why reposition established brands?established brands?

33

21

Product Line Extension

Adding additional products to

an existing product line in

order to compete more

broadly in the industry.

33

22

Product Line Contraction

33

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

Symptoms of Symptoms of Product Line Product Line

OverextensionOverextension

23

Learning Objective

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

44

24

Brand

A name, term, symbol,

design, or combination

thereof that identifies a

seller’s products and

differentiates them from

competitors’ products.

44

25

Branding

Brand Name

Brand Name

BrandMark

BrandMark

Brand EquityBrand Equity

MasterBrand

MasterBrand

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

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

The elements of a brand that cannot be spoken.

The elements of a brand that cannot be spoken.

The value of company and brand names.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.

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

use, attribute, or benefit is mentioned.

44

26

Benefits of Branding 44

Product Identification

Product Identification

Repeat SalesRepeat Sales

New Product Sales

New Product Sales

Branding Branding distinguishes distinguishes products from products from

competitioncompetition

Branding Branding distinguishes distinguishes products from products from

competitioncompetition

27

An 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

44

28

Master Brands

Baking Soda Baking Soda

Adhesive BandagesAdhesive Bandages

RumRum

GelatinGelatin

SoupSoup

Cream CheeseCream Cheese

CrayonsCrayons

Petroleum Jelly Petroleum Jelly

Arm & Hammer Arm & Hammer

Band-AidBand-Aid

BacardiBacardi

Jell-OJell-O

Campbell’sCampbell’s

PhiladelphiaPhiladelphia

CrayolaCrayola

Vaseline Vaseline

44

29

Branding Strategies

BrandBrand No BrandNo Brand

Manufacturer’s Brand

Manufacturer’s Brand Private BrandPrivate Brand

IndividualBrand

IndividualBrand

Family Brand

Family Brand

Combi-nation

Combi-nation

IndividualBrand

IndividualBrand

Family Brand

Family Brand

Combi-nation

Combi-nation

44

30

Generic Brand

A no-frills, no-brand-name,

low-cost product that is simply

identified by its product

category.

44

31

Manufacturers’ Brands VersusPrivate Brands

Manufacturers’ Manufacturers’ BrandBrand

Manufacturers’ Manufacturers’ BrandBrand

Private Private BrandBrand

Private Private BrandBrand

The brand name of a manufacturer.The brand name of a manufacturer.

A brand name owned by a wholesaler or a retailer.

A brand name owned by a wholesaler or a retailer.

44

32

Advantages of Manufacturers’ Brands

• Develop customer loyalty

• Attract new customers

• Enhance prestige

• Offer rapid delivery, can carry less inventory

• Ensure dealer loyalty

44

33

Advantages of Private 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

44

34

Individual Brands VersusFamily Brands

Individual Individual BrandBrand

Individual Individual BrandBrand

Family Family BrandBrand

Family Family BrandBrand

Using different brand names for different products.

Using different brand names for different products.

Marketing several different products under the same

brand name.

Marketing several different products under the same

brand name.

44

35

Cobranding

IngredientBranding

IngredientBranding

Cooperative Branding

Cooperative Branding

Complementary Branding

Complementary Branding

Types of CobrandingTypes of CobrandingTypes of CobrandingTypes of Cobranding

44

36

Trademarks

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

44

37

Learning Objective

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

55

38

Packaging

Contain and ProtectContain and Protect

FunctionsFunctionsofof

PackagingPackaging

FunctionsFunctionsofof

PackagingPackaging

PromotePromote

Facilitate Storage, Use, and Convenience

Facilitate Storage, Use, and Convenience

Facilitate RecyclingFacilitate Recycling

55

39

Labeling

PersuasivePersuasive

Focuses on promotional theme

Information is secondary

InformationalInformational

Helps make proper selections

Lowers cognitive dissonance

Includes use/care

55

40

Universal Product Codes

A series of thick and thin

vertical lines (bar codes),

readable by computerized

optical scanners, that

represent numbers used

to track products.

55

41

Learning Objective 66

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

42

Global Issues in Branding

Adaptations & Modifications

Adaptations & Modifications

Global Options Global Options for Brandingfor Branding

One Brand NameEverywhere

One Brand NameEverywhere

Different Brand Names for

Different Markets

Different Brand Names for

Different Markets

66

43

Global Issues in Packaging

AestheticsAesthetics

Global Global Considerations Considerations for Packagingfor Packaging

Climate Considerations

Climate Considerations

LabelingLabeling

66

44

Learning Objective

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

important marketing tools.important marketing tools.

77

45

Product Warranties

WarrantyWarranty

ExpressWarrantyExpressWarranty

Implied WarrantyImplied

Warranty

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

A written guarantee.A written guarantee.

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

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

77

46

Product Warranties

WarrantiesWarrantiesWarrantiesWarranties

Written Guarantee

Implied Implied WarrantyWarrantyImplied Implied WarrantyWarranty

Express Express WarrantyWarrantyExpress Express WarrantyWarranty

Unwritten Guarantee

77