Marketing for MOSTModule 07 – Product Strategies

技術経営コンソーシアム

開発担当者 ： Ritsumeikan Asia Pacific University 　教授 : Takamoto, Akihiro

更新日 October, 2003

Marketing for MOST: Module 7 – Product Strategies

Product Strategies

1. What is a Product

2. Product Classification

3. Product Strategy

4. Branding

5. Brand / Product Positioning

6. Service

7. Intangible Products

8. Product Life Cycle

9. Innovation

10. Practice

Marketing for MOST: Module 7 – Product Strategies

What is a Product

Reaching a clear understanding

of what a product is,

is essential

to the deep understanding

of

Marketing.

Marketing for MOST: Module 7 – Product Strategies

What is a Product

A Product is more than a tangible thing.

It is not merely manufactured goods.

A Product is more than a simple set of tangible features.

Marketing for MOST: Module 7 – Product Strategies

What is a Product

An automobile is not simply a tangible machine for movement, visibly or

measurably differentiated by design, size, color, options, horsepower, or

miles per gallon.

It is also a complex symbol denoting status, taste, rank, achievement, and aspiration.

Marketing for MOST: Module 7 – Product Strategies

What is a Product

But the customer buys even more than these.

The enormous efforts of the auto companies to cut the time between placement and the delivery of an order and to select,

train, supervise, motivate, and enhance their dealerships suggest that these too are integral parts of “the product” people

buy and are therefore ways by which they may be differentiated.

Marketing for MOST: Module 7 – Product Strategies

What is a Product

In the same way a computer is not simply a machine for data storage, processing,

calculation, or retrieval.

It is also an operating system with special software protocols for use and special

accompanying possibilities for and promises of maintenance and repair.

Marketing for MOST: Module 7 – Product Strategies

What is a Product

People buy products (whether purely tangible products, purely intangible

products, or hybrids of the two)

in order to solve problems.

Products are problem-solving tools.

Marketing for MOST: Module 7 – Product Strategies

What is a Product

A product is, to the potential buyer,

a complex cluster of value satisfactions.

Marketing for MOST: Module 7 – Product Strategies

What is a Product

The ‘product’ is what the product does;

it is

the total package of benefits

the customer receives when he buys

Marketing for MOST: Module 7 – Product Strategies

What is a Product

The dots inside each ring represent specific activities or tangible attributes. For example, inside the “Expected Product” are

delivery conditions, installation services, post-purchase services, maintenance, spare parts, training,

packaging convenience, and the like.

Marketing for MOST: Module 7 – Product Strategies

What is a Product

The “generic product” is

the rudimentary substantive “thing”

without which there is no chance to

play the game of market participation.

– For the steel producer it is the steel itself.

– In the case of a bank, it is loanable finds.

– For a realtor, it is “for sale” properties.

– For a retailer it is a store with a certain mix of vendables.

– For a lawyer it’s having passed the bar exam.

Marketing for MOST: Module 7 – Product Strategies

What is a Product

The previous figure represents the “expected product” as everything inside the smallest circle,

including the “generic product.”

This represents the customer’s minimal expectations.

Though these vary by customers, conditions, industries, and the like, every customer has minimal purchase

conditions that exceed the generic product itself.

Marketing for MOST: Module 7 – Product Strategies

What is a Product

The “augmented product” offers the customer

more than they think they need

or have become accustomed to expect.

Marketing for MOST: Module 7 – Product Strategies

What is a Product

The “potential product” consists of everything potentially feasible to attract and hold

customers.

Whereas the “augmented product” means everything that has been or is being done, the “potential product” refers to what may

remain to be done, that is, what is possible.

Marketing for MOST: Module 7 – Product Strategies

What is a Product

The 3 Levels of Product according to P. Kotler:

Marketing for MOST: Module 7 – Product Strategies

Product Classification

Classification of a Product

Marketing for MOST: Module 7 – Product Strategies

Product Classification

Classification of Goods

Marketing for MOST: Module 7 – Product Strategies

Product Classification

Product Classification by the ratio of

tangible and intangible components.

Examples:Soap

Clothes

Purely

Tangible

Cars

TV’s

Mostly

Tangible

Restaurant

Computer

Half and Half

Air Tickets

Sightseeing Tour

Mostly

Intangible

Medicare

Music Concert

Purely

Intangible

Marketing for MOST: Module 7 – Product Strategies

Product Strategy

Individual product decisions

• Product Attributes – (Product Quality, Product Features, Product Style and Design)

• Branding

• Brand extensions

• Packaging

• Labeling

Marketing for MOST: Module 7 – Product Strategies

Product Strategy

• Product Line Decision

– Product line stretching

– Downward

– Upward

– Both directions

• Product Line Filling

Marketing for MOST: Module 7 – Product Strategies

Product Strategy

High

HighLow

Low

PRICE

PRODUCT BENEFIT

DOWNWARD STRETCHING

Marketing for MOST: Module 7 – Product Strategies

Product Strategy

High

HighLow

Low

PRICE

PRODUCT BENEFIT

UPWARD STRETCHING

Marketing for MOST: Module 7 – Product Strategies

Product Strategy

High

HighLow

Low

PRICE

PRODUCT BENEFIT

TWO-WAY STRETCHING

Marketing for MOST: Module 7 – Product Strategies

Product Strategy

High

HighLow

Low

PRICE

PRODUCT BENEFIT

PRODUCT LINE FILLING

Marketing for MOST: Module 7 – Product Strategies

Product Strategy

WIDTH

PRODUCT MIX DECISIONS

DEPTH

LENGTH

Produ

ct A

Produ

ct B

Produ

ct C

Produ

ct D

Marketing for MOST: Module 7 – Product Strategies

Brand Strategy

• A brand is a name, term, design, symbol, or other feature that identifies one seller’s good or service as distinct from those of other sellers.

• The legal term for brand is trademark.

• A brand may identify one item, a family of items, or all items of that seller.

Marketing for MOST: Module 7 – Product Strategies

Brand Strategy

• A product is something that is made in a factory;

• A brand is something that is bought by a customer.

• A product can be copied by a competitor;

• A brand is unique.

• A product can be quickly outdated;

• A successful brand is timeless. Stephen King/WPP Group, London

Marketing for MOST: Module 7 – Product Strategies

Brand Strategy

The Six dimensions of a brand according to Philip Kotler:

Values

Uses

Culture

Personality

Attributes

Benefits(functional and emotional)

Marketing for MOST: Module 7 – Product Strategies

Brand Strategy

• Brand Equity

– A set of brand assets and liabilities linked to a brand,its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firms customers.

– (David Aarker)

Marketing for MOST: Module 7 – Product Strategies

Brand Strategy

(David Aarker)

Marketing for MOST: Module 7 – Product Strategies

Brand Strategy

The Value of Brand Loyalty (David Aarker)

Marketing for MOST: Module 7 – Product Strategies

Brand Strategy

Creating and Maintaining Brand Loyalty (David Aarker)

Marketing for MOST: Module 7 – Product Strategies

Brand Strategy

The Brand Awareness Pyramid (David Aarker)

Marketing for MOST: Module 7 – Product Strategies

Brand Strategy

The Value of Brand Awareness (David Aarker)

Marketing for MOST: Module 7 – Product Strategies

Brand Strategy

(David Aarker)

Marketing for MOST: Module 7 – Product Strategies

Brand/Product Positioning

• General Motors:

– “We make a car for every ‘person, purse, and personality’ ”

• Chrysler:

– “Advantage: Chrysler”

• Ford:

– “Quality is job one”

• Mazda:

– “Just feels right”

Marketing for MOST: Module 7 – Product Strategies

Brand/Product Positioning

• Jaguar:

– “A blending of art and machine”

• Saab:

– “The most intelligent car ever built”

• Lincoln Town Car:

– “What a luxury car should be”

• Bentley:

– “The closest a car can come to having wings”

Marketing for MOST: Module 7 – Product Strategies

Brand/Product Positioning

• Mercedes:

– “Engineered like no other car in the world”

• BMW:

– The ultimate driving machine

– “Our cars are not made to offer something to everyone but something more to some.”

Marketing for MOST: Module 7 – Product Strategies

Brand/Product Positioning

Marketing for MOST: Module 7 – Product Strategies

Brand/Product Positioning

Marketing for MOST: Module 7 – Product Strategies

Brand/Product Positioning

Marketing for MOST: Module 7 – Product Strategies

Brand/Product Positioning

Marketing for MOST: Module 7 – Product Strategies

Brand/Product PositioningAffluent Market Perceptions:

Marketing for MOST: Module 7 – Product Strategies

Brand/Product Positioning

Marketing for MOST: Module 7 – Product Strategies

Service

What is a Service?

• A service is any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.

Marketing for MOST: Module 7 – Product Strategies

Service

4 Characteristics of Service:

Variable

InseperablePerishable

Intangible

SERVICE

Marketing for MOST: Module 7 – Product Strategies

Service

Service intangibility:

• A major characteristic of services—they cannot be seen, tasted, felt, heard, or smelled before they are bought.

Marketing for MOST: Module 7 – Product Strategies

Service

Service inseparability:

• A major characteristic of services—they are produced and consumed at the same time and cannot be separated from their providers, whether the providers are people or machines.

Marketing for MOST: Module 7 – Product Strategies

Service

Service variability:

• A major characteristic of service—their quality may vary greatly, depending on who provides them and when, where, and how.

Marketing for MOST: Module 7 – Product Strategies

Service

Service perishability:

• A major characteristic of services—they cannot be stored for later sale or use.

Marketing for MOST: Module 7 – Product Strategies

Service

Three Levels of Service:

Proactive

Reactive

Primary

Marketing for MOST: Module 7 – Product Strategies

Intangible Products

• People

• Organisation

• Place

• Nation

• University

• Orchestra

There is nothing to

which the principles

of Marketing cannot be applied!

Marketing for MOST: Module 7 – Product Strategies

Intangible Products

• “Everyone is living by selling something.Life is selling; Selling is Life”

• If that is true, why don’t you master marketing that is far more powerful than selling?

– (Aki Takamoto)

Marketing for MOST: Module 7 – Product Strategies

Intangible Products

• Ogilvy on Jamaica

Marketing for MOST: Module 7 – Product Strategies

Product Lifecycle

– Sales and Profits (Paul Kotler)

Marketing for MOST: Module 7 – Product Strategies

Product Lifecycle

– (Paul Kotler)

Marketing for MOST: Module 7 – Product Strategies

Product Lifecycle

Varying Wave-lengths of Product Life Cycle

Sales

Time

Marketing for MOST: Module 7 – Product Strategies

Product Lifecycle

Product Life-cycles of Typing Machines

Sales

TimeManual TypewriterElectric TypewriterWord ProcessorPersonal Computer

Marketing for MOST: Module 7 – Product Strategies

Product Lifecycle

Various Product Life-cycles patterns

Sales

Time

Marketing for MOST: Module 7 – Product Strategies

Product Lifecycle

• Question:

– Find examples corresponding to various P.L.C lifecycles.

– Show some other patterns of P.L.C.

Marketing for MOST: Module 7 – Product Strategies

Innovation

• Innovation Defined:

– According to Webster:

• A new idea, method or device a novelty

– According to Kuczmarski

• A mindset, a pervasive attitude

• Or a way of thinking focused beyond the present into the future.

•Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

Marketing for MOST: Module 7 – Product Strategies

Innovation

•Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

Marketing for MOST: Module 7 – Product Strategies

Innovation

•Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

Marketing for MOST: Module 7 – Product Strategies

Innovation

•Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

Marketing for MOST: Module 7 – Product Strategies

Innovation

•Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

Marketing for MOST: Module 7 – Product Strategies

Financial Screens

•Size of Opportunity•Impact on existing business•Return Potential

Consumer Screens

•Need Intensity•Uniqueness / Differentiation

Innovation

• Innovation Evaluation and Screening Questions according to T.D. Kuczmarski

•Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

Strategic Screens

•Fit with Strategic Objectives•Exploits Internal Strategies•Source of Competitive Advantage

Marketing for MOST: Module 7 – Product Strategies

Strategic Screens

•Fit with Strategic Objectives•Exploits Internal Strategies•Source of Competitive Advantage

Innovation

• Innovation Evaluation and Screening Questions according to T.D. Kuczmarski

•Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

Financial Screens

•Size of Opportunity•Impact on existing business•Return Potential

Consumer Screens

•Need Intensity•Uniqueness / Differentiation

Marketing for MOST: Module 7 – Product Strategies

Strategic Screens

•Fit with Strategic Objectives•Exploits Internal Strategies•Source of Competitive Advantage

Innovation

• Innovation Evaluation and Screening Questions according to T.D. Kuczmarski

•Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

Consumer Screens

•Need Intensity•Uniqueness / Differentiation

Financial Screens

•Size of Opportunity•Impact on existing business•Return Potential

Marketing for MOST: Module 7 – Product Strategies

Innovation

Marketing for MOST: Module 7 – Product Strategies

Innovation

• Discipline of Innovation– (Peter Drucker)

• Entrepreneurship refers to a certain type of activity:

– INNOVATION

• Innovation – the effort to create a purposeful focused change.

Marketing for MOST: Module 7 – Product Strategies

Innovation

• Innovation Opportunities within a company

– Unexpected occurrences – Rogaine, heart medicine

– Incongruities – growth of e-business & no profits (consulting)

– Process needs – efficiency;

– Industry and Market changes

• Further Innovation Opportunities

– Demographic Changes – baby boomers, retirement homes etc.

– Changes in Perception – 4 wheel drive, perception is now that many people need it, previously few people felt the need.

– New Knowledge – superstars, but a small % of new business.

– Peter Drucker

Marketing for MOST: Module 7 – Product Strategies

Practice

• Read the comments made by APU Students on Brand, Product and Service and discuss them

• What are your comments in relation to the contents of this module?