chapter 13kisi.deu.edu.tr/banu.atrek/mba 5011 strategic marketing management... · sunsilk shampoo,...

Copyright © 2016 Pearson Education Ltd. 13-1

Chapter 13

SettingProduct Strategy


Product Characteristicsand Classifications

• Product– Anything that can be

offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas


Product Levels: The Customer-Value Hierarchy

• Figure 13.2: Five Product Levels


FIVE PRODUCT LEVELS

• Core benefit: the service or benefit the customer is really buying (Automobile-transportation)

• Basic product: components that make up a basic product (Automobile-engine, wheels, steering wheel..)

• Expected product: set of attributes and conditions buyers normally expect when they purchase this product (Automobile- quality, good design, aftersales service..)

• Augmented product: attributes that exceeds customer expectations (Automobile- glass ceiling, bank loan support..)

• Potential product: encompasses all the possible augmentations and transformations the product or offering might undergo in the future


Product Classifications

Durability

Tangibility

Use-consumer-industrial


Durability and Tangibility

Nondurable goods – cosmetics, cigarette, cleaning products, food Availability - Small markup - Heavy advertisement

Durable goods – computers, refrigeratorsPersonal selling – Higher margin - Guarantees

Services – haircuts, legal adviceQuality control – Supplier credibility


Consumer-Goods Classification

Convenience

Shopping

Specialty

Unsought

Staples: regular basis

Impulse goods: Without plan

Emergency goods


Industrial-Goods Classification

Materials and parts

Capital items

Supplies and business services


MATERIALS AND PARTS

• Raw materials– farm products (wheat, cotton, livestock, fruits, and vegetables)– natural products (fish, lumber, crude petroleum)

• Manufactured materials and parts – component materials : fabricated further (iron, yarn, cement,

wires) – component parts: no further change in form (small motors, tires)

Enter the manufacturer’s product completely


CAPITAL ITEMS

• Installations: consist of buildings (factories, offices)

• Heavy equipment (generators, drill presses, mainframe computers, elevators)– portable factory equipment and tools (hand

tools, lift trucks)– office equipment (desktop computers, desks)

Long-lasting goods that facilitate developing or managing the finished product


SUPPLIES AND BUSINESS SERVICES

• Supplies– Maintenance and repair items (paint, nails,

brooms) – Operating supplies (lubricants, writing paper,

pencils)• Business services

– Maintenance and repair services (window cleaning, copier repair)

– Business advisory services (legal, management consulting, advertising)

Short-term goods and services that facilitate developing or managing the finished product


Product Differentiation• Form• Features• Performance quality• Conformance quality• Durability

• Reliability• Repairability• Style• Customization


Services Differentiation

Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair Returns


Design

• Design– The totality of

features that affect the way a product looks, feels, and functions to a consumer


Luxury brands

• Quality• Uniqueness• Craftsmanship• Heritage• Authenticity• History


Marketing Luxury Brands


Environmental Issues

• Environmental issues are also playing an increasingly important role in product design and manufacturing


THE PRODUCT HIERARCHY

1. Need family

2. Product family

3. Product class

4. Product line

5. Product type

6. Item

having a certain functional coherence

product classes that can satisfy a core need

The core need Computation

similar functioning, sold to the same customer groups, are marketed through the same channels, or fall within given price ranges

A group of items within a product line that share one of several possible forms of the product

A distinct unit within a brand or product line distinguishable by size, price, appearance or some other attributes


Need Family: Personal care

Sunsilk Example

Product Family: Hair care

Product Class: Shampoo

Product Line: SunsilkProduct Type: Yellow colour- dream and soft sunsilk shampoo, pink colour- lusciously thick and long shampoo, orange colour- damaged hair reconstruction shampoo, blue colour- anti dandruff shampoo

Item: 50ml, 100ml, 350ml etc


Product Lines of Apple


Product Systemsand Mixes

• Product system• Product

mix/assortment– Width– Length– Depth– Consistency


Product line length

• Line stretching (lengthening the product line beyond current range)

– Down-market stretch– Up-market stretch– Two-way stretch

• Line filling(within the present range)


Reasons for Up-Market Stretch


RISKS IN UP-MARKET STRETCH


DOWN MARKET STRETCH


Co-Branding

• Two or more well-known brands are combined into a joint product or marketed together in some fashion

Same-company Joint-venture Multiple-sponsor Retail


JOINT VENTURE CO-BRANDING

• two or more companies going for a strategic alliance to present a product to the target audience

https://www.youtube.com/watch?v=HmVkx5wTxtk


Citibank/ American Airlines/ Visa credit card partnership


INGREDIENT BRANDING

• Co-branding that creates brand equity for parts that are necessarily contained within other branded products


Packaging

• All the activities of designing and producing the container for a product


Packaging

Used as a marketing tool• Self-service• Consumer affluence• Company and brand image• Innovation opportunity

Packaging objectives• Identify the brand• Convey descriptive and

persuasive information• Facilitate product

transportation and protection

• Assist at-home storage• Aid product consumption


Packaging


Labeling, Warranties, and Guarantees

• Labeling– Identifies, describes, and promotes the

product• Warranties

– Formal statements of expected product performance by the manufacturer

• Guarantees– Promise of general or complete satisfaction

chapter 13kisi.deu.edu.tr/banu.atrek/mba 5011 strategic marketing management... · sunsilk shampoo,...

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