ch. 12 - setting product strategy
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SETTING PRODUCT SETTING PRODUCT STRATEGYSTRATEGY
CHAPTER 12MARKETING MANAGEMENT
13TH EDITIONby Philip Kotler & Kevin Keller
v49 MARKETING MANAGEMENT MBA in Health, Batch 8
Ateneo Graduate School of Business
Anna Sofia Victoria S. Fajardo, M.D.
May 15, 2010
http://riafajardo.blogspot.com
OVERVIEW
• PRODUCT CHARACTERISTICS & CLASSIFICATIONS
• DIFFERENTIATION
• PRODUCT & BRAND RELATIONSHIPS
• PACKAGING, LABELING, WARRANTIES & GUARANTEES
PRODUCT
• ANYTHING OFFERED TO MARKET
• TO SATISFY A WANT OR NEED– Goods, services,
experiences, events, persons, places, organizations, ideas
• MOST IMPORTANT ELEMENT OF MARKETING MIX
PRODUCT CHARACTERISTICS
MARKET OFFERING
PRICE
PRODUCT SERVICES
5 PRODUCT LEVELS
CORE BENEFIT
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT
5 PRODUCT LEVELSCORE BENEFIT HEALTHY FOOD
BASIC PRODUCT FRUITS & VEGETABLES
EXPECTED PRODUCT FRESH FRUITS & VEGGIES, JUICES, CANNED GOODS
AUGMENTED PRODUCT VEGGIES PREPARED WITH DIPS, FRUITS IN BASKETS
POTENTIAL PRODUCT NEW WAYS TO SATISFY CUSTOMERS
PRODUCT CLASSIFICATION
DURABILITY & TANGIBILITY
1. NON-DURABLE GOODS– Tangible, few uses – Induce trial & build preference– Ex. Beer, soap
PRODUCT CLASSIFICATION
2. DURABLE GOODS– Tangible, many uses– Personal selling &
service– Ex. Refrigerators,
clothing
PRODUCT CLASSIFICATION
3. SERVICES– Intangible,
inseparable, variable
– Quality control, supplier credibility
– Ex. Legal advice, health services
PRODUCT DIFFERENTIATION
PRODUCT DIFFERENTIATION
• FORM
• FEATURES
• CUSTOMIZATION
• PERFORMANCE QUALITY
PRODUCT DIFFERENTIATION
• CONFORMANCE QUALITY– All products identical & meet specifications
• DURABILITY– Product’s expected operating life
• RELIABILITY– Product will not malfunction or fail within
specified time period
PRODUCT DIFFERENTIATION
• REPAIRABILITY– Ease of fixing a
product – DIY
• STYLE– Product’s look and
feel to the buyer
DESIGN
• WELL-DESIGNED PRODUCT– Pleasant to look at– Easy to open– Install, repair & dispose of
SERVICES DIFFERENTIATION
ORDERING EASE
INSTALLATION
DELIVERY
SERVICES DIFFERENTIATION
CUSTOMER
CONSULTING
CUSTOMER TRAINING
SERVICES DIFFERENTIATION
• MAINTENANCE & REPAIR– Ex. HP offers “e-
support”
• RETURNS– Unavoidable reality
of doing business
PRODUCT & BRANDRELATIONSHIPS
PRODUCT HIERARCHY
NEED FAMILY SECURITY
PRODUCT FAMILY SAVINGS & INCOME
PRODUCT CLASS FINANCIAL INSTRUMENTS
PRODUCT LINE LIFE INSURANCE
PRODUCT TYPE TERM LIFE INSURANCE
ITEM PRUDENTIAL RENEWABLE TERM LIFE INSURANCE
PRODUCT SYSTEMS & MIXES PROCTOR & GAMBLE
PRODUCT-
MIX
WIDTH
DETERGENTS TOOTHPASTE BAR SOAP DISPOSABLE
DIAPERS
PAPER
PRODUCTS
PRODUCT
LINE
LENGTH
Ivory Snow (1930)
Tide (1946)
Gleem (1952)
Crest (1955)
Ivory (1879)
Camay (1926)
Zest (1952)
Safeguard (1963)
Oil of Olay (1993)
Pampers (1961)
Luvs (1976)
Charmin (1928)
Bounty (1965)
PACKAGING, LABELING, WARRANTIES &GUARANTEES
PACKAGING
• All activities of designing and producing the container for a product.
• 3 LEVELS OF MATERIALS
1. Primary Package
2. Secondary Package
3. Shipping Package
OBJECTIVES OF PACKAGING
1. IDENTIFY THE BRAND
2. CONVEY DESCRIPTIVE & PERSUASIVE INFORMATION
3. FACILITATE PRODUCT TRANSPORTATION & PROTECTION
4. ASSIST AT-HOME STORAGE
5. AID PRODUCT CONSUMPTION
MARKETING TOOL
• SELF-SERVICE– Ex. Shopper in
supermarket
• CONSUMER AFFLUENCE– Ex. Customer willing
to pay more for better packaging
MARKETING TOOL
• COMPANY & BRAND IMAGE– Ex. Garnier Fructis -
bright green hair care packaging
• INNOVATION OPPORTUNITY– Ex. Heinz EZ Squirt
ketchup & upside-down bottle
LABELING
1. IDENTIFIES PRODUCT
2. DESCRIBE PRODUCT
3. PROMOTE PRODUCT
WARRANTIES & GUARANTEES
• All sellers are legally responsible for buyer’s normal or reasonable expectations.
• WARRANTIES– Formal statements of expected product
performance by manufacturer.– Products can be returned to manufacturer
for repair, replacement, or refund.
WARRANTIES & GUARANTEES
• EXTENDED WARRANTIES– Best Buy & Circuit City
• GENERAL & SPECIFIC GUARANTEES– P&G - product returned if customer
satisfaction not met– CROSS - pens & pencils guaranteed for
life
SUMMARY
1. PRODUCT CHARACTERISTICS
2. 5 PRODUCT LEVELS
3. DURABILITY & TANGIBILITY
4. PRODUCT DIFFERENTIATION
5. SERVICE DIFFERENTIATION
SUMMARY
6. PRODUCT HIERARCHY
7. PRODUCT SYSTEMS & MIXES
8. PACKAGING
9. PACKAGING AS MARKETING TOOL
10.WARRANTIES & GUARANTEES
SETTING PRODUCT SETTING PRODUCT STRATEGYSTRATEGY
CHAPTER 12MARKETING MANAGEMENT
13TH EDITIONby Philip Kotler & Kevin Keller
v49 MARKETING MANAGEMENT MBA in Health, Batch 8
Ateneo Graduate School of Business
Anna Sofia Victoria S. Fajardo, M.D.
May 15, 2010
http://riafajardo.blogspot.com
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